What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-23 compared with 2023-02-24 · 534 added, 545 removed, 1088 unchanged (50% of the section changed)

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Report of Independent Registered Public Accounting Firm-Grant Thornton LLP (PCAOB ID Number 248 )

Report of Independent Registered Public Accounting Firm-Ernst & Young LLP (PCAOB ID Number 42 )

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Cash Flows

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Summary of Significant Accounting Policies

Long-Lived Asset Impairments

Goodwill Impairment

Property, Plant and Equipment

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Variable Interest Entities

E quity Investments

Revenue From Contracts With Customers

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Segment Information

Subsequent Events

Supplemental Oil & Gas Reserve Information (Unaudited)

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We have audited the accompanying consolidated balance sheets of Alliance Resource Partners, L.P.

(a Delaware limited partnership) and subsidiaries (the “Partnership”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), cash flows and partners’ capital for each of the two years in the period ended December 31, 2022, and the related notes and financial statement schedule included under Item 15(a)(2) (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

(a Delaware limited partnership) and subsidiaries (the “Partnership”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, cash flows and partners’ capital for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule included under Item 15(a)(2) (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Partnership’s internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 23, 2024 expressed an unqualified opinion.

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February 23, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Alliance Resource Management GP, LLC

and the Partners of Alliance Resource Partners, L.P.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Alliance Resource Partners, L.P.

and subsidiaries (the Partnership) as of December 31, 2020, the related consolidated statement of operations, comprehensive income (loss), cash flows and partners’ capital for the year then ended, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Partnership’s management.

Our responsibility is to express an opinion on the Partnership’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Partnership in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We served as the Partnership’s auditor from 2011 to 2021.

Tulsa, Oklahoma

February 23, 2021, except for Note 25, as to which the date is February 25, 2022

ALLIANCE RESOURCE PARTNERS, L.P.

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ARLP Partners' Capital:

Limited Partners - Common Unitholders 127,195,219 units outstanding

Limited Partners - Common Unitholders 127,125,437 and 127,195,219 units outstanding, respectively

General Partner's interest

Accumulated other comprehensive loss

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TOTAL LIABILITIES AND PARTNERS' CAPITAL

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

See notes to consolidated financial statements .

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

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Settlement gain

Asset impairments

Goodwill impairment

Total operating expenses

INCOME (LOSS) FROM OPERATIONS

INCOME FROM OPERATIONS

Interest expense (net of interest capitalized of $ 6,706 , $ 922 and $ 396 , respectively)

Interest income

Equity method investment income

Equity method investment income (loss)

Other income (expense)

INCOME (LOSS) BEFORE INCOME TAXES

INCOME BEFORE INCOME TAXES

INCOME TAX EXPENSE

NET INCOME (LOSS)

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST

NET INCOME (LOSS) ATTRIBUTABLE TO ARLP

NET INCOME ATTRIBUTABLE TO ARLP

GENERAL PARTNER

LIMITED PARTNERS

EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED

WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED

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

See notes to consolidated financial statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

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Year Ended December 31,

NET INCOME (LOSS)

OTHER COMPREHENSIVE INCOME (LOSS):

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Amortization of prior service cost (1)

Net actuarial gain (loss)

Net actuarial gain

Amortization of net actuarial loss (1)

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Net actuarial gain (loss)

Amortization of net actuarial loss (gain) (1)

Amortization of net actuarial loss (1)

Total pneumoconiosis benefits adjustments

OTHER COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME

Comprehensive income attributable to noncontrolling interest

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ARLP

COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP

(1) Amortization of prior service cost and actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 15 and 19 for additional details).

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

See notes to consolidated financial statements.

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization

Non-cash compensation expense

Equity investment income

Coal inventory adjustment to market

Equity method investment loss (income)

Distributions from equity method investments

Net gain on sale of property, plant and equipment

Asset impairment

Goodwill impairment

Change in deferred income tax

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Purchase of equity securities

Payments for acquisitions of businesses

Oil & gas reserve acquisition

JC Resources acquisition

Oil & gas reserve business combinations

Oil & gas reserve asset acquisitions

Net cash used in investing activities

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Payments under securitization facility

Proceeds from equipment financings

Payments on equipment financings

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Payment on line of credit

Payments on finance lease obligations

Cash settlement of grants under deferred compensation plan

Borrowing under long-term debt

Payments on long-term debt

Payment of debt issuance costs

Payments for purchases of units under unit repurchase program

Payments for tax withholdings related to settlements under deferred compensation plans

Excess purchase price over the contributed basis from JC Resources acquisition

Cash retained by JC Resources in acquisition

Distributions paid to Partners

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CASH AND CASH EQUIVALENTS AT END OF PERIOD

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

See notes to consolidated financial statements.

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(In thousands, except unit data)

Limited Partners'

Comprehensive

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Balance at January 1, 2021

Comprehensive income (loss):

Net income (loss)

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive loss

Settlement of deferred compensation plans

Total comprehensive income

Settlement of deferred common unit- based compensation plans

Common unit-based compensation

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Distributions from consolidated company to noncontrolling interest

Cash retained by JC Resources in acquisition - See Note 1

Distributions to Partners

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Total comprehensive income

Settlement of deferred compensation plans

Common unit-based compensation

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Distributions from consolidated company to noncontrolling interest

Profits interest adjustment for noncontrolling interest

Cash retained by JC Resources in acquisition - See Note 1

Distributions to Partners

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Total comprehensive income

Settlement of deferred common unit- based compensation plans

Purchase of units under unit repurchase program

Common unit-based compensation

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Distributions from consolidated company to noncontrolling interest

Profits interest adjustment for noncontrolling interest

JC Resources acquisition - See Note 1

Cash retained by JC Resources in acquisition - See Note 1

Distributions to Partners

Balance at December 31, 2023

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

See notes to consolidated financial statements.

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Significant Relationships Referenced in Notes to 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.

mean Joseph W.

● 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.

● References to "Alliance Minerals"

mean Alliance Minerals, LLC, an indirect wholly owned subsidiary.

● References to "Alliance Resource Properties"

mean Alliance Resource Properties, LLC, an indirect wholly owned subsidiary .

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 ("ARH"), and its subsidiaries.

● 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 .

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 ("ARH"), 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.

Alliance GP, LLC ("AGP"), which is indirectly wholly owned by Mr.

Craft, is the direct owner of MGP.

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On October 13, 2021, we acquired approximately 1,480 oil & gas net royalty acres in the Delaware Basin from Boulders Royalty Corp.

("Boulders") for a purchase price of $ 31.0 million (the "Boulders Acquisition").

On September 9, 2022, we acquired approximately 394 oil & gas net royalty acres in the Delaware Basin from Belvedere Operating, LLC ("Belvedere") for a purchase price of $ 11.4 million (the "Belvedere Acquisition").

On October 26, 2022, we acquired approximately 3,928 oil & gas net royalty acres in the Midland and Delaware Basins from Jase Minerals, LP ("Jase") for a purchase price of $ 81.2 million (the "Jase Acquisition").

The Boulders, Belvedere and Jase Acquisitions enhanced our ownership position in the Permian Basin and furthered our business strategy to grow our Oil & Gas Royalties segment through accretive acquisitions.

("Boulders") for a purchase price of $ 31.0 million (the "Boulders 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.

Recasting for the JC Resources Acquisition increased revenues by $ 13.5 million and $ 9.3 million for the years ended December 31, 2022 and

2021, respectively, and increased income from operations, net income and comprehensive income by $ 9.0 million and $ 4.6 million for the years ended December 31, 2022 and 2021, 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.

On December 7, 2023, we acquired approximately 2,372 oil & gas net royalty acres in the Anadarko, Williston and Delaware Basins from Skyland Minerals, L.P.

("Skyland") and Haymaker Minerals & Royalties II, LLC ("Haymaker") for a purchase price of $ 14.5 million which was funded with cash on hand ("Skyland Acquisition").

The Boulders, Belvedere, Jase, JC Resources and Skyland Acquisitions enhanced our ownership position in various basins and furthered our business strategy to grow our Oil & Gas Royalties segment through accretive acquisitions.

See Note 3 – Acquisitions for more information.

We now hold approximately 61,400 net royalty acres in premier oil & gas resource plays including previous acquisitions and our investment in AllDale Minerals III, LP ("AllDale III").

Change in Tax Status

On March 15, 2022, Alliance Minerals changed its federal income tax status from a pass-through entity to a taxable entity via a "check the box"

election (the "Tax Election"), which became effective January 1, 2022.

This election for Alliance Minerals is anticipated to reduce the total income tax burden on our oil & gas royalties, as Alliance Minerals will pay entity-level taxes at corporate tax rates which are anticipated to be favorable to our unitholders.

For more information on the Tax Election please see Note 9 – Income Taxes.

New Venture Investments

On April 5, 2022, we made a $ 20 million convertible note investment in Francis Renewable Energy, LLC ("Francis").

Francis currently is active in the installation, management and operation of metered-for-fee, public-access electric vehicle ("EV") charging stations.

We now hold approximately 67,700 net royalty acres in premier oil & gas resource plays including previous acquisitions and our investment in AllDale Minerals III, LP ("AllDale III").

Growth Investments and Opportunities

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 a preferred equity interest in Francis.

Francis currently is active in the installation, management and operation of metered-for-fee, public-access electric vehicle ("EV") charging stations.

Francis also develops and constructs EV charging stations for third-party customers.

Our investment in Francis furthers our business strategy to develop strategic relationships and invest in attractive opportunities.

For more information on this investment, please see Note 11 – Variable Interest Entities.

On April 29, 2022, we purchased $ 32.6 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 which have the potential to result in motors that are smaller, lighter, quieter, more efficient and capable of operating at a fraction of the carbon footprint of conventional electric motors.

On November 2, 2022, we purchased an additional $ 9.4 million of Series D Preferred Stock in Infinitum.

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

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

Our investment in Infinitum furthers our business strategy to develop strategic relationships and invest in attractive opportunities.

For more information on this investment, please see Note 14 – Investments.

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

("NGP ETP IV"), a private equity fund sponsored by NGP Energy Capital Management, LLC ("NGP").

NGP ETP IV focuses on investments that are part of the global transition toward a lower carbon economy by partnering with top-tier management teams and investing growth equity in companies that drive or enable the growth of renewable energy, the electrification of our economy or the efficient use of energy.

During 2022, we purchased $ 42.0 million of Series D Preferred Stock in Infinitum Electric, Inc.

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.

For more information on this investment, please see Note 12 – Equity Investments.

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 Energy Capital Management, LLC ("NGP").

NGP ET IV focuses on investments that are part of the global transition toward a lower carbon economy by partnering with top-tier management teams and investing growth equity in companies that drive or enable the growth of renewable energy, the electrification of our economy or the efficient use of energy.

For more information on this investment, please see Note 11 – Variable Interest Entities.

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

For more information on this investment please see Note 12 – Equity Investments.

The Francis, Infinitum, NGP ET IV and Ascend investments further our business strategy to pursue opportunities that support the advancement of energy and related infrastructure and leverage our core competencies and build platforms for future lines of business with long-term growth and cash flow generation.

Change in Tax Status

On March 15, 2022, Alliance Minerals changed its federal income tax status from a pass-through entity to a taxable entity via a "check the box" election (the "Tax Election"), which became effective January 1, 2022.

This election for Alliance Minerals reduced the total income tax burden on our oil & gas royalties, as Alliance Minerals now pays entity-level taxes at corporate tax rates which are favorable to our unitholders.

For more information on the Tax Election please see Note 7 – Income Taxes.

The consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of December 31, 2023 and 2022, and results of our operations, comprehensive income, cash flows and changes in partners' capital for each of the three years in the period ended December 31, 2023.

All of our intercompany transactions and accounts have been eliminated.

Certain immaterial amounts in the prior year have been reclassified to conform to the current year presentation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation —The consolidated financial statements present the consolidated financial position, results of operations and cash flows of ARLP, the Intermediate Partnership, Alliance Coal and other directly and indirectly wholly- and majority-owned subsidiaries of ARLP.

All intercompany transactions and accounts have been eliminated.

Variable Interest Entity ("VIE") —VIEs are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics:

Variable Interest Entity ("VIE")

VIEs are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics:

(a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns.

impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

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When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties.

See Note 13 – Variable Interest Entities for further information.

Estimates —The preparation of consolidated financial statements in conformity with generally accepted accounting principles of the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements.

Business Combinations

A business consists of inputs and processes applied to those inputs that have the ability to contribute to the creation of outputs.

We account for the acquisition of a business as a business combination, where we record the assets acquired, including identified intangible assets and liabilities assumed at their fair value, which in many instances involves estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques.

However, if substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets with the same risk profile, the acquisition is accounted for as an asset acquisition and recorded at cost.

The preparation of consolidated financial statements in conformity with generally accepted accounting principles of the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements.

Actual results could differ from those estimates.

Significant estimates and assumptions include:

● Impairment assessments of investments, property, plant and equipment, and goodwill;

● Asset retirement obligations;

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● Determination of oil & gas revenue accruals

These significant estimates and assumptions are discussed throughout these notes to the consolidated financial statements.

Fair Value Measurements —We apply fair value measurements to certain assets and liabilities.

Fair Value Measurements

We apply fair value measurements to certain assets and liabilities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

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Significant fair value measurements are used in our significant estimates and are discussed throughout these notes.

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.

Cash Management —The cash flows from operating activities section of our consolidated statements of cash flows reflects immaterial adjustments representing book overdrafts.

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 our deposits.

Cash Management

The cash flows from operating activities section of our consolidated statements of cash flows reflects an adjustment for $ 6.7 million representing book overdrafts at December 31, 2023.

We did not have material book overdrafts at December 31, 2022 and 2021.

Inventories —Coal inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis.

Coal inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis.

Supply inventories are stated at an average cost basis, less a reserve for obsolete and surplus items.

Business Combinations —For acquisitions accounted for as a business combination, we record the assets acquired, including identified intangible assets and liabilities assumed at their fair value, which in many instances involves estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques.

Goodwill —Goodwill represents the excess of cost over the fair value of net assets of acquired businesses.

Goodwill is not amortized, but instead is evaluated for impairment periodically.

We evaluate goodwill for impairment annually or more often if events or circumstances indicate that goodwill might be impaired.

The reporting unit or units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated.

A reporting unit is an operating segment or a component that is one level below an operating segment.

During 2020, we recognized an impairment charge of $ 132.0 million consisting of the total carrying amount of goodwill allocated to our Hamilton County Coal, LLC ("Hamilton") reporting unit.

See Note 5 – Goodwill Impairment for more information.

There were no impairments of goodwill during 2022 or 2021.

Property, Plant and Equipment —Expenditures which extend the useful lives of existing plant and equipment assets are capitalized.

Advance Royalties

Rights to coal mineral leases are often acquired and/or maintained through advance royalty payments.

Where royalty payments represent prepayments recoupable against future production, they are recorded as an asset, with amounts expected to be recouped within one year classified as a current asset.

As mining occurs on these leases, the royalty prepayments are charged to operating expenses.

We assess the recoverability of royalty prepayments based on estimated future production.

Royalty prepayments estimated to be nonrecoverable are expensed.

Our advance royalties are summarized as follows:

(in thousands)

Advance royalties, affiliates (see Note 20 – Related-Party Transactions)

Advance royalties, third-parties

Total advance royalties

Property, Plant and Equipment

Expenditures which extend the useful lives of existing plant and equipment assets are capitalized.

Interest costs associated with major asset additions are capitalized during the construction period.

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Exploration expenditures are charged to operating expense as incurred, including costs related to drilling and study costs incurred to convert or upgrade mineral resources to reserves.

Land, machinery and equipment under finance lease agreements are capitalized and amortized over the useful lives of the assets given that in each case, ownership transfers at the end of the lease term.

Preparation plants, processing facilities and mineral rights, assuming current production estimates, are depreciated or depleted using the units-of-production method over a range from 1 to 26 years .

Mining equipment and other plant and equipment assets are depreciated principally using the straight-line method over the estimated useful lives of the assets, ranging from 1 to 26 years , limited by the remaining estimated life of each mine.

Depreciable lives for buildings, office equipment and improvements range from 1 to 26 years .

Processing facilities and mineral rights, assuming current production estimates, are depreciated or depleted using the units-of-production method.

Mining equipment and other plant and equipment assets are depreciated principally using the straight-line method over the remaining estimated life of each mine.

Buildings, office equipment and improvements are amortized straight line over their estimated useful lives.

Gains or losses arising from retirements are included in operating expenses.

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See Oil & Gas Reserve Quantities and Carrying Amounts below for a discussion of our accounting policies for oil & gas properties.

Mine Development Costs —Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable coal mineral reserves.

Mine Development Costs

Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable coal mineral reserves.

Mine development costs represent costs incurred in establishing access to coal mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels.

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Coal extracted during the development phase is incidental to the mine's production capacity and is not considered to shift the mine into the production phase.

Leases —We lease buildings and equipment under operating lease agreements that provide for the payment of minimum rentals.

We also have noncancelable lease agreements with third parties for land and equipment under finance lease obligations.

Some of our arrangements within these agreements have both lease and non-lease components, which are generally accounted for separately.

We have elected a practical expedient to account for lease and non-lease components as a single lease component for leases of buildings and office equipment.

Our leases have approximate lease terms of 1 to 26 years , some of which include automatic renewals up to ten years , which are likely to be exercised and some of which include options to terminate the lease within one year .

We also hold numerous mineral reserve leases with both related parties as well as third parties, none of which are accounted for as an operating lease or as a finance lease.

We review each agreement to determine if an arrangement within the agreement contains a lease at the inception of an arrangement.

Once an arrangement is determined to contain an operating or finance lease with a term greater than 12 months, we recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term based on the present value of lease payments over the lease term.

The lease term includes all noncancelable periods defined in the lease as well as periods covered by options to extend the lease that we are reasonably certain to exercise.

As an implicit borrowing rate cannot be determined under most of our leases, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Expenses related to leases determined to be operating leases will be recognized on a straight-line basis over the lease term including any reasonably assured renewal periods, while those determined to be finance leases will be recognized following a front-loaded expense profile in which interest and amortization are presented separately in the income statement.

The determination of whether a lease is accounted for as a finance lease or an operating lease requires management to make estimates primarily about the fair value of the asset and its estimated economic useful life.

Long-Lived Asset Impairment —We review the carrying value of long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based on estimated undiscounted future cash flows.

To the extent the carrying amount is not recoverable, the amount of impairment is measured by the difference between the carrying value and the fair value of the asset (See Note 4 – Long-Lived Asset Impairments).

Oil & Gas Reserve Quantities and Carrying Amounts —We are wholly dependent on third-party operators to explore, develop, produce and operate the properties associated with our mineral interests.

Oil & Gas Reserve Quantities and Carrying Amounts

We are wholly dependent on third-party operators to explore, develop, produce and operate the properties associated with our mineral interests.

We follow the successful efforts method of accounting for our oil & gas mineral interests.

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Proved reserves are quantities of oil & gas that can be estimated with reasonable certainty to be recoverable in the future from a given date forward, from known reservoirs, under existing economic conditions, operating methods, and government regulations.

Proved developed resources are the quantities expected to be recovered through our operators' existing wells with existing equipment, infrastructure and operating methods.

Proved developed

resources are the quantities expected to be recovered through the Operators' existing wells with existing equipment, infrastructure and operating methods.

We evaluate impairment of our oil & gas mineral interests in proved properties whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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Upon the sale or retirement of an aggregation of interests which make up less than a complete depletable group, the proceeds are credited to accumulated depreciation, depletion and amortization, unless doing so would significantly alter the depreciation, depletion and amortization rate of the depletable group, in which case a gain or loss would be recorded.

Intangibles —Intangibles subject to amortization include customer contracts acquired from other parties and mining permits.

Intangibles other than customer contracts are amortized on a straight-line basis over their useful life.

Intangibles for customer contracts are amortized on a per unit basis over the terms of the contracts.

Amortization expense attributable to intangibles was $ 1.2 million, $ 3.8 million and $ 4.9 million for the years ending December 31, 2022, 2021 and 2020, respectively.

Our intangibles are included in Prepaid expenses and other assets and Other long-term assets on our consolidated balance sheets at December 31, 2022 and 2021.

Our intangibles are summarized as follows:

December 31, 2022

December 31, 2021

Original Cost

(in thousands)

Customer contracts and other

Mining permits

Amortization expense attributable to intangible assets is estimated as follows:

Year Ended December 31,

(in thousands)

Investments —Our investments and ownership interests in equity securities without readily determinable fair values in entities in which we do not have a controlling financial interest or significant influence are accounted for using a measurement alternative other than fair value which is historical cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same entity.

Equity Investments

Our investments and ownership interests in equity securities without readily determinable fair values in entities in which we do not have a controlling financial interest or significant influence are accounted for using a measurement alternative other than fair value which is historical cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same entity.

Distributions received on those investments are recorded as income unless those distributions are considered a return on investment, in which case the historical cost is reduced.

We account for our ownership interests in Infinitum as equity securities without readily determinable fair values.

See Note 14 – Investments for further discussion of this investment.

We account for our ownership interests in Infinitum and Ascend as equity securities without readily determinable fair values.

See Note 12 – Equity Investments for further discussion of these investments.

Our investments and ownership interests in entities in which we do not have a controlling financial interest are accounted for under the equity method of accounting if we have the ability to exercise significant influence over the entity.

Investments accounted for under the equity method are initially recorded at cost, and the difference between the basis of our investment and the underlying equity in the net assets of the joint venture at the investment date, if any, is amortized over the lives of the related assets that gave rise to the difference.

In the event our ownership requires a disproportionate sharing of income or loss, we use the hypothetical liquidation at book value ("HLBV") method to determine the appropriate allocation of income or loss.

Under the HLBV method, income or loss of the investee is allocated based on hypothetical amounts that each investor would be entitled to receive if the net assets held were liquidated at book value at the end of each period, adjusted for any contributions made and distributions received during the period.

We hold equity method investments in AllDale III, Francis and NGP ETP IV.

See Note 13 – Variable Interest Entities and Note 14 – Investments for further discussion of our equity method investments.

We hold equity method investments in AllDale III, Francis and NGP ET IV.

See Note 11 – Variable Interest Entities and Note 12 – Equity Investments for further discussion of our equity method investments.

We review our investments for impairment whenever events or changes in circumstances indicate a loss in the value of the investment may be other-than-temporary.

Advance Royalties —Rights to coal mineral leases are often acquired and/or maintained through advance royalty payments.

Where royalty payments represent prepayments recoupable against future production, they are recorded as an asset, with amounts expected to be recouped within one year classified as a current asset.

As mining occurs on these leases, the royalty prepayments are charged to operating expenses.

We assess the recoverability of royalty prepayments based on estimated future production.

Royalty prepayments estimated to be nonrecoverable are expensed.

Our Advance royalties are summarized as follows:

(in thousands)

Advance royalties, affiliates (see Note 22 – Related-Party Transactions)

Advance royalties, third-parties

Total advance royalties

Asset Retirement Obligations —Our coal mining operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards.

These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan.

We record a liability for the fair value of the estimated cost of future mine asset retirement and closing procedures, escalated for inflation then discounted, on a present value basis in the period incurred or acquired and a corresponding amount is capitalized by increasing the carrying amount of the related long-lived asset.

Those costs relate to permanently sealing portals at underground mines and to reclaiming the final pits and support surface acreage for both our underground mines and past surface mines.

Examples of these types of costs, common to both types of mining, include, but are not limited to, removing or covering refuse piles and settling ponds, water treatment obligations, and dismantling preparation plants, other facilities and roadway infrastructure.

Accounting for asset retirement obligations also requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time.

Depreciation is generally determined on a units-of-production basis and accretion is generally recognized over the life of the producing assets.

As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in anticipated timing of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free interest rate.

Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewed on an annual basis.

See Note 20 – Asset Retirement Obligations for more information.

Pension Benefits —The funded status of our pension benefit plan is recognized separately in our consolidated balance sheets as either an asset or liability.

The funded status is the difference between the fair value of plan assets and the plan's benefit obligation.

Pension obligations and net periodic benefit costs are actuarially determined and impacted by various assumptions and estimates including expected return on assets, discount rates, mortality assumptions, employee turnover rates and retirement dates.

We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary (See Note 17 – Employee Benefit Plans).

The discount rate is determined for our pension benefit plan based on an approach specific to our plan.

The year end discount rate is determined considering a yield curve comprised of high-quality corporate bonds and the timing of the expected benefit cash flows.

The expected long-term rate of return on plan assets is determined based on broad equity and bond indices, the investment goals and objectives, the target investment allocation and on the average annual total return for each asset class.

Unrecognized actuarial gains and losses and unrecognized prior service costs and credits are deferred and recorded in accumulated other comprehensive loss until amortized as a component of net periodic benefit cost.

Unrecognized actuarial gains and losses in excess of 10 % of the greater of the benefit obligation or the market-related value of plan assets are amortized over the participants' average remaining future years of service.

Workers ' Compensation and Pneumoconiosis (Black Lung) Benefits —We are liable for workers' compensation benefits for traumatic injuries and benefits for black lung disease (or pneumoconiosis).

We lease buildings and equipment under operating lease agreements that provide for the payment of minimum rentals.

We also have noncancelable lease agreements with third parties for land and equipment under finance lease obligations.

Some of our arrangements within these agreements have both lease and non-lease components, which are generally accounted for separately.

We have elected a practical expedient to account for lease and non-lease components as a single lease component for leases of buildings and office equipment.

Our leases have approximate lease terms of 1 to 19 years , some of which include automatic renewals up to ten years , which are likely to be exercised and some of which include options to terminate the lease within one year .

We also hold numerous mineral reserve leases with both related parties as well as third parties, none of which are accounted for as an operating lease or as a finance lease.

We review each agreement to determine if an arrangement within the agreement contains a lease at the inception of an arrangement.

The lease term includes all noncancelable periods defined in the lease as well as periods covered by options to extend the lease that we are reasonably certain to exercise.

Common Unit-Based Compensation

We maintain the Long-Term Incentive Plan ("LTIP") for certain key employees and executive officers.

Pursuant to the LTIP, unit awards of non-vested "phantom" or notional units, also referred to as "restricted units," may be granted, which, upon satisfaction of time and performance-based vesting requirements, entitle the LTIP participant to receive ARLP common units.

Certain awards may also contain a minimum-value guarantee payable in ARLP common units or cash that would be paid regardless of whether or not the awards vest, as long as service requirements are met.

Annual grant levels, vesting provisions and minimum-value guarantees of restricted units for designated participants are recommended by Mr.

Craft, subject to review and approval by the compensation committee of our general partner ("Compensation Committee").

The vesting of all restricted units is subject to the satisfaction of certain financial tests.

If it is not probable that the financial tests will be achieved for a particular grant of restricted units, any previously expensed amounts for that grant are reversed, and no future expense will be recognized for that grant.

Assuming the financial tests are met, restricted units issued to LTIP participants generally cliff vest on January 1st of the third year following the issuance of such restricted units.

We expect to settle restricted unit grants by issuing ARLP common units, except for the portion of the restricted units that will satisfy our tax withholding obligations.

We account for forfeitures of non-vested restricted unit grants as they occur.

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

If it is not probable the financial tests for a particular grant of restricted units will be met, any previously paid DER amounts for that grant are reversed from Partners' Capital and recorded as compensation expense and any future DERs, for that grant, if any, will be recognized as compensation expense when paid.

We have utilized the Supplemental Executive Retirement Plan ("SERP") to provide deferred compensation benefits for certain executive officers.

All allocations made to participants under the SERP have been made in the form of "phantom" ARLP units.

We intend to settle any distributions from the SERP in the form of ARLP common units.

The SERP has been administered by the Compensation Committee.

Our directors participate in the MGP Amended and Restated Deferred Compensation Plan for Directors ("Directors' Deferred Compensation Plan").

Pursuant to the Directors' Deferred Compensation Plan, for amounts deferred either automatically or at the election of the director, a notional account is established and credited with notional common units

of ARLP, described in the Directors' Deferred Compensation Plan as "phantom" units.

We intend to settle any distributions from the Directors' Deferred Compensation Plan in the form of ARLP common units.

For both the SERP and Directors' Deferred Compensation Plan, when quarterly cash distributions are made with respect to ARLP common units, an amount equal to such quarterly distribution is credited to each participant's notional account as additional phantom units and recorded as compensation expense.

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

On December 14, 2023, the Compensation Committee and the Board of Directors approved the termination of the SERP and Directors' Deferred Compensation Plan, and authorized distribution of accounts on December 15, 2024 or as soon thereafter as practical.

The accounts will continue to accrue benefits in accordance with plan terms until distributed.

The fair value of restricted common unit grants under the LTIP, SERP and the Directors' Deferred Compensation Plan are determined on the grant date of the award and recognized as compensation expense on a pro rata basis for LTIP and SERP awards, as appropriate, over the requisite service period.

Compensation expense is fully recognized on the grant date for quarterly distributions credited to SERP accounts and Directors' Deferred Compensation Plan awards.

The corresponding liability is classified as equity and included in limited partners' capital in the consolidated financial statements.

Workers ' Compensation and Pneumoconiosis (Black Lung) Benefits

We are liable for workers' compensation benefits for traumatic injuries and benefits for black lung disease (or pneumoconiosis).

Both traumatic claims and pneumoconiosis benefits are covered through our self-insured programs.

In addition, 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 benefits to eligible employees and former employees and their dependents.

We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws.

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Actuarial gains or losses are amortized over the remaining service period of active miners.

See Note 21 – Accrued Workers' Compensation and Pneumoconiosis Benefits for more information on Workers' Compensation and Pneumoconiosis Benefits.

Coal Revenue Recognition —Revenues from coal supply contracts with customers, which primarily relate to sales of thermal coal, are recognized at the point in time when control of the coal passes to the customer.

Pension Benefits

The funded status of our pension benefit plan is recognized separately in our consolidated balance sheets as either an asset or liability.

The funded status is the difference between the fair value of plan assets and the plan's benefit obligation.

We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary.

The discount rate is determined for our pension benefit plan based on an approach specific to our plan.

The year end discount rate is determined considering a yield curve comprised of high-quality corporate bonds and the timing of the expected benefit cash flows.

Asset Retirement Obligations

Our coal mining operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards.

These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan.

Those costs relate to permanently sealing portals at underground mines and to reclaiming the final pits and support surface acreage for both our underground mines and past surface mines.

Accounting for asset retirement obligations also requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time.

Depreciation is generally determined on a units-of-production basis and accretion is generally recognized over the life of the producing assets.

Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewed on an annual basis.

Coal Revenue Recognition

Revenues from coal supply contracts with customers, which primarily relate to sales of thermal coal, are recognized at the point in time when control of the coal passes to the customer.

We have determined that each ton of coal represents a separate and distinct performance obligation.

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Contract liabilities are recognized as revenue at the point in time when control of the good or service passes to the customer.

Oil & Gas Revenue Recognition —Oil & gas royalty revenues are recognized at the point in time when control of the product is transferred to the purchaser by the lessee and collectability of the sales price is reasonably assured.

Oil & Gas Revenue Recognition

Oil & gas royalty revenues are recognized at the point in time when control of the product is transferred to the purchaser by the lessee and collectability of the sales price is reasonably assured.

Oil & gas are priced on the delivery date based on prevailing market prices with certain adjustments related to oil quality and physical location.

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Control of the minerals transfers to the operator when the lease agreement is executed.

At the time we execute the lease agreement, we expect to receive the lease bonus

payment within a reasonable time, though in no case more than one year, such that we do not adjust the expected amount of consideration for the effects of any significant financing component.

At the time we execute the lease agreement, we expect to receive the lease bonus payment within a reasonable time, though in no case more than one year, such that we do not adjust the expected amount of consideration for the effects of any significant financing component.

As a non-operator, we have limited visibility into the timing of when new wells start producing.

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The difference between our estimates and the actual amounts received for oil & gas royalty revenue are immaterial and recorded in the month that payment is received from the third-party purchaser unless new production information is received prior to the payment allowing us to update the estimate recorded.

Common Unit-Based Compensation —We have the Long-Term Incentive Plan ("LTIP") for certain employees and officers of MGP and its affiliates who perform services for us.

As part of the LTIP, unit awards of non-vested "phantom"

or notional units, also referred to as "restricted units", may be granted which upon satisfaction of time and performance-based vesting requirements, entitle the LTIP participant to receive ARLP common units.

Annual grant levels, vesting provisions and minimum-value guarantees of restricted units for designated participants are recommended by Mr.

Craft, subject to review and approval of the compensation committee of our general partner ("Compensation Committee").

Vesting of all restricted units outstanding is subject to the satisfaction of certain financial tests.

If it is not probable the financial tests for a particular grant of restricted units will be met, any previously expensed amounts for that grant are reversed and no future expense will be recognized for that grant.

Assuming the financial tests are met, grants of restricted units issued to LTIP participants are generally expected to cliff vest on January 1st of the third year following issuance of the grants.

We expect to settle restricted unit grants by delivery of newly-issued ARLP common units, except for the portion of the grants that will satisfy employee tax withholding obligations of LTIP participants.

We account for forfeitures of non-vested LTIP restricted unit grants as they occur.

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

We utilize the Supplemental Executive Retirement Plan ("SERP") to provide deferred compensation benefits for certain officers and key employees.

All allocations made to participants under the SERP are made in the form of "phantom"

ARLP units and SERP distributions will be settled in the form of ARLP common units.

The SERP is administered by the Compensation Committee.

Our directors participate in the MGP Amended and Restated Deferred Compensation Plan for Directors ("Directors' Deferred Compensation Plan").

Distributions from the Directors' Deferred Compensation Plan will be settled in the form of ARLP common units.

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

Compensation expense is fully recognized on the grant date for quarterly distributions credited to SERP accounts and Directors' Deferred Compensation Plan awards.

The corresponding liability is classified as equity and included in limited partners' capital in the consolidated financial statements (See Note 18 – Common Unit-Based Compensation Plans).

Income Taxes —We are not a taxable entity for federal or state income tax purposes;

We are not a taxable entity for federal or state income tax purposes;

the tax effect of our activities accrues to our unitholders.

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A valuation allowance is provided for deferred tax assets when it is more likely than not the deferred tax assets will not be realized.

New Accounting Standards Issued and Adopted —In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance ("ASU 2021-10").

ASU 2021-10 increases the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity's financial statements.

New Accounting Standards Issued and Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 primarily requires enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker ("CODM"), the amount and composition of other segment items, and the title and position of the CODM.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted.

We are currently evaluating the impact of adopting ASU 2023-07, but do not expect it to have a material effect on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09").

ASU 2023-09 primarily requires enhanced disclosures to (1) disclose specific categories in the rate reconciliation, (2) disclose the amount of income taxes paid and expensed disaggregated by federal, state, and foreign taxes, with further disaggregation by individual jurisdictions if certain criteria are met, and (3) disclose income

(loss) from continuing operations before income tax (benefit) disaggregated between domestic and foreign.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The adoption of ASU 2021-10 did not have a material impact on our consolidated financial statements.

We are currently evaluating the impact of adopting ASU 2023-09, but do not expect it to have a material effect on our consolidated financial statements.

ACQUISITION S

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The acreage acquired in the Boulders Acquisition was mostly undeveloped.

Because more than 90% of the mineral interests acquired in the acquisition represent undeveloped properties, including proved undeveloped, we have determined that the Boulders Acquisition should be accounted for as an asset acquisition.

We have allocated the purchase price to the acquired reserves as follows:

Because more than 90% of the mineral interests acquired in the acquisition represent undeveloped properties with a similar risk profile, including proved undeveloped, we have determined that the Boulders Acquisition should be accounted for as an asset acquisition.

The following table summarizes the purchase price allocation of the assets acquired in the Boulders Acquisition:

(in thousands)

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Mineral interests in unproved properties

On September 9, 2022 (the "Belvedere Acquisition Date"), we acquired approximately 394 oil & gas net royalty acres in the Delaware Basin from Belvedere for a cash purchase price of $ 11.4 million, which was funded with cash on hand.

This acquisition gives us additional exposure to a productive area of the Delaware Basin and is within close proximity to reserves that we currently own.

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

Because the mineral interests acquired in the Belvedere Acquisition include royalty interests in both developed properties and undeveloped properties with different risk profiles, we have determined that the acquisition should be accounted for as a business combination and the underlying assets should be recorded at fair value as of the Belvedere Acquisition Date on our consolidated balance sheet.

The following table summarizes the fair value allocation of assets acquired as of the Belvedere Acquisition Date:

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therefore, the fair value measurements represent Level 3 fair value measurements.

The amounts of revenue and earnings from the mineral interests acquired in the Belvedere Acquisition included in our consolidated statements of operations since the Belvedere Acquisition Date are as follows:

The amounts of revenue and earnings from the mineral interests acquired in the Belvedere Acquisition included in our consolidated statements of income from the Belvedere Acquisition Date through December 31, 2022 are as follows:

(in thousands)

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(in thousands)

On October 26, 2022 (the "Jase Acquisition Date"), we acquired approximately 3,928 oil & gas net royalty acres in the Midland and Delaware Basins from Jase for a cash purchase price of $ 81.2 million which was funded with cash on hand.

This acquisition further enhanced our ownership position in the Permian Basin.

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

Because the mineral interests acquired in the Jase Acquisition include royalty interests in both developed properties and undeveloped properties with different risk profiles, we have determined that the acquisition should be accounted for as a business combination and the underlying assets should be recorded at fair value as of the Jase Acquisition Date on our consolidated balance sheet.

The following table summarizes the fair value allocation of assets acquired as of the Jase Acquisition Date:

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therefore, the fair value measurements represent Level 3 fair value measurements.

The amounts of revenue and earnings from the mineral interests acquired in the Jase Acquisition included in our consolidated statements of operations since the Jase Acquisition Date are as follows:

The amounts of revenue and earnings from the mineral interests acquired in the Jase Acquisition included in our consolidated statements of income from the Jase Acquisition Date through December 31, 2022 are as follows:

(in thousands)

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(in thousands)

LONG-LIVED ASSET IMPAIRMENT S

During the year ended December 31, 2020, we recorded $ 23.5 million of non-cash asset impairment charges in our Illinois Basin Coal Operations segment due to sealing our idled Gibson North mine, resulting in its permanent closure, and a decrease in the fair value of certain mining equipment at our idled operations and greenfield coal mineral resources as a result of weakened coal market conditions including the impact of the COVID-19 pandemic.

During the same period, we also recorded an asset impairment charge of $ 1.5 million in our Coal Royalties segment due to a decrease in the fair value of greenfield coal mineral resources held by Alliance Resource Properties near our coal mining operations in the Illinois Basin.

See Note 25 – Segment Information for more information about our segments.

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

The fair value analysis used assumptions regarding the marketability of certain mining and coal mineral reserve and resource assets near our Illinois Basin coal mining operations.

See Note 2 – Summary of Significant Accounting Policies – Long-Lived Asset Impairment for more information on our accounting policy for asset impairments.

GOODWILL IMPAIRMENT

During the first quarter of 2020, we considered whether an interim test of our consolidated goodwill of $ 136.4 million was necessary.

Our consolidated goodwill included $ 132.0 million recorded in our Illinois Basin Coal Operations segment in conjunction with our acquisition of the Hamilton mine on July 31, 2015.

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

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

We estimated the fair value of Hamilton using an income approach utilizing a discounted cash flow model.

The assumptions used in the discounted cash flow model included estimated production, forward coal prices, operating expenses, capital expenditures and a weighted average cost of capital.

Our forecasts of future cash flows considered market conditions at the time of the assessment and our estimate of the mine's performance in future years based on the information available to us.

Key assumptions used in our valuation were not observable in active markets;

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.

The JC Resources Acquisition increased revenues included in our consolidated statements of income by $ 10.6 million for the year ended December 31, 2023.

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 December 31, 2023, we have purchased $ 6.5 million and $ 6.7 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.

On February 19, 2024, we renewed this agreement for an additional one-year term, committing up to $ 25.0 million.

Skyland Acquisition

On December 7, 2023 (the "Skyland Acquisition Date"), we acquired approximately 2,372 oil & gas net royalty acres in the Anadarko, Williston and Delaware Basins from Skyland and Haymaker for a cash purchase price of $ 14.5 million which was funded with cash on hand.

This acquisition further enhanced our ownership position in these basins.

Because the mineral interests acquired in the Skyland Acquisition include royalty interests in both developed properties and undeveloped properties with different risk profiles, we have determined that the acquisition should be accounted for as a business combination and the underlying assets should be recorded at fair value as of the Skyland Acquisition Date on our consolidated balance sheet.

The following table summarizes the fair value allocation of assets acquired as of the Skyland Acquisition Date:

(in thousands)

Mineral interests in proved properties

Mineral interests in unproved properties

Net assets acquired

The fair value of the mineral interests was determined using an income approach consisting of a discounted cash flow model.

The assumptions used in the discounted cash flow model included estimated production, projected cash flows, forward oil & gas prices and risk adjusted discount rates.

Certain assumptions used are not observable in active markets;

therefore, the fair value measurements represent Level 3 fair value measurements.

The fair value of Hamilton was determined to be below its carrying amount (including goodwill) by more than the recorded balance of goodwill associated with the mine.

Accordingly, we recognized an impairment charge of $ 132.0 million consisting of the total carrying amount of goodwill associated with Hamilton.

The amounts of revenue and earnings from the mineral interests acquired in the Skyland Acquisition included in our consolidated statements of income from the Skyland Acquisition Date through December 31, 2023 are immaterial.

The following represents our supplemental pro forma consolidated revenues and net income for the years ended December 31, 2023 and 2022 as if the mineral interests acquired in the Skyland Acquisition had been included in our consolidated results since January 1, 2022.

These amounts have been calculated after applying our accounting policies.

(in thousands)

Miscellaneous Acquisitions

In addition to the acquisitions discussed above, we purchased $ 6.8 million and $ 4.3 million of oil & gas mineral interests in proved and unproved properties, respectively, during the year ended December 31, 2023 and $ 1.3 million and $ 0.4 million in proved and unproved properties, respectively, during the year ended December 31, 2022.

Inventories consist of the following :

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Total inventories, net

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for inventories.

The table above includes lower of cost or net realizable value adjustments of $ 33.3 million.

These adjustments are a result of lower coal sale prices and higher cost per ton primarily due to the impact of Mettiki's longwall being idle most of the second half of 2023 due to delayed development of a new longwall district, Hamilton experiencing disruptions in production due to a longwall move, and continuing development of the Henderson County mine at our River View complex.

PROPERTY, PLANT AND EQUIPMENT

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Total property, plant and equipment, net

All of our property, plant and equipment have depreciable lives of 1 to 20 years .

Depreciation, depletion and amortization expense related to property, plant and equipment was $ 276.4 million, $ 273.8 million and $ 260.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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We believe that the carrying value of these coal mineral reserves will be recovered.

At December 31, 2022 and 2021, our oil & gas mineral interests noted in the table above includes the carrying value of our unproved oil & gas mineral interests totaling $ 383.6 million and $ 355.1 million, respectively.

As discussed in Note 2 – Summary of Significant Accounting Policies, we generally do not record depletion expense for our unproved oil & gas mineral interests;

At December 31, 2023 and 2022, our oil & gas mineral interests noted in the table above include the carrying value of our unproved oil & gas mineral interests totaling $ 411.6 million and $ 422.7 million, respectively.

We generally do not record depletion expense for our unproved oil & gas mineral interests;

however, we do review for impairment as needed throughout the year.

During 2022, we incurred $ 11.3 million in mine development costs, primarily related to Hamilton and River View Coal, LLC ("River View") mine.

During 2021, we did not incur material mine development costs.

During 2023, we incurred $ 44.4 million in mine development costs, primarily related to Tunnel Ridge and the Henderson County mine at River View Coal, LLC ("River View").

During 2022, we incurred $ 11.3 million in mine development costs, primarily related to Hamilton and River View mine.

All past capitalized mine development costs are associated with other mines that shifted to the production phase in past years and we are amortizing these costs accordingly.

We believe that the carrying value of the past development costs will be recovered.

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for property, plant and equipment.

LONG-TERM DEBT

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(in thousands)

Replaced credit facility

Revolving credit facility

Securitization facility

May 2019 equipment financing

November 2019 equipment financing

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Credit Facility

On January 13, 2023, Alliance Coal 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").

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 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.

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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 Credit Facility replaces the $ 459.5 million revolving credit facility ("Replaced Credit Facility"), which included a sublimit of $ 125 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.

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 Revolving Credit Facility replaces the $ 459.5 million revolving credit facility extended to the Intermediate Partnership under its Fifth Amended and Restated Credit Agreement, dated as of March 9, 2020.

We incurred debt issuance costs during the year ended December 31, 2023 of $ 12.4 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 December 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 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.

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.

Borrowings under the Replaced Credit Facility bore interest, at our option, at either (i) the base rate at the greater of three benchmarks or (ii) a Eurodollar Rate, plus margins.

The Eurodollar Rate, with applicable margin, under the Replaced Credit Facility was 6.74 % as of December 31, 2022.

At December 31, 2022, we had $ 41.1 million of letters of credit outstanding with $ 418.4 million available for borrowing under the Replaced Credit Facility.

We incurred an annual commitment fee of 0.35 % on the undrawn portion of the Replaced Credit Facility.

For borrowings under the Term Loan, we elected the three-month term rate, with applicable margin, which was 8.50 % as of December 31, 2023.

At December 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 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, the restrictions apply to the payment of cash distributions if such payment would result in a certain 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) 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 Replaced Credit Facility was subject to similar restrictions on the Intermediate Partnership.

The Replaced Credit Facility required the Intermediate Partnership to maintain (a) a debt to cash flow ratio of not more than 2.5 to 1.0, (b) a cash flow to interest expense ratio of not less than 3.0 to 1.0 and (c) a first lien debt to cash flow ratio of not more than 1.5 to 1.0, in each case,

during the four most recently ended fiscal quarters.

The debt to cash flow ratio, cash flow to interest expense ratio and first lien debt to cash flow ratio were 0.52 to 1.0, 21.76 to 1.0 and 0.03 to 1.0, respectively, for the trailing twelve months ended December 31, 2022.

We remained in compliance with the covenants of the Replaced Credit Facility as of December 31, 2022 and anticipate remaining in compliance with the covenants of the new Credit Agreement.

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

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 0.08 to 1.0, 0.46 to 1.0 and 63.86 to 1.0, respectively, for the trailing twelve months ended December 31, 2023.

We were in compliance with the covenants of the Credit Agreement as of December 31, 2023 and anticipate remaining in compliance with the covenants.

Net restricted assets, as defined by the Securities and Exchange Commission, refers to the amount of our consolidated subsidiaries' net assets for which the ability to transfer funds to ARLP in the form of cash dividends, loans, advances, or transfers is restricted.

As a result of the restrictions contained in the Replaced Credit Facility and its associated compliance ratios, the amount of our net restricted assets at December 31, 2022 was $ 537.3 million.

Senior Notes.

On April 24, 2017, the Intermediate Partnership and Alliance Resource Finance Corporation ("Alliance Finance") (as co-issuer), a wholly owned subsidiary of the Intermediate Partnership, 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 %.

As a result of the restrictions contained in the Credit Facility and its associated compliance ratios, the amount of our net restricted assets at December 31, 2023 was $ 797.2 million.

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 and accrue interest at an annual rate of 7.5 %.

Interest is payable semi-annually in arrears on each May 1 and November 1.

The indenture governing the Senior Notes contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of distributions or similar restricted payments, undertaking transactions with affiliates and limitations on asset sales.

The issuers of the Senior Notes may redeem all or a part of the notes at any time at redemption prices set forth in the indenture governing the Senior Notes.

During the year ended December 31, 2023, we repurchased or redeemed $ 115.4 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.

Certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership were party to a $ 60.0 million accounts receivable securitization facility ("Securitization Facility").

After the sale, Alliance Coal, as servicer of the assets, collects the receivables on behalf of AROP Funding.

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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.

In January 2024, we extended the term of the Securitization Facility to January 2025 and increased the borrowing availability under the facility to $ 90.0 million.

The Securitization Facility was previously scheduled to mature in January 2024.

At December 31, 2023, we did no t have any outstanding borrowings under the Securitization Facility.

May 2019 Equipment Financing.

On May 17, 2019, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $ 10.0 million in exchange for conveying its interest in certain equipment owned indirectly by the Intermediate Partnership and entering into a master lease agreement for that equipment (the "May 2019 Equipment Financing").

The May 2019 Equipment Financing contained customary terms and events of default and provided for thirty-six month ly payments with an implicit interest rate of 6.25 %.

The May 2019 Equipment Financing matured on May 1, 2022 and the equipment reverted back to the Intermediate Partnership.

November 2019 Equipment Financing

On November 6, 2019, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $ 53.1 million in exchange for conveying its interest in certain equipment owned indirectly by the Intermediate Partnership and entering into a master lease agreement for that equipment (the "November 2019 Equipment Financing").

The November 2019 Equipment Financing contains customary terms and events of default and an implicit interest rate of 4.75 %, 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 back to the Intermediate Partnership.

The November 2019 Equipment Financing contained customary terms and events of default and an implicit interest rate of 4.75 % and matured on November 6, 2023.

Upon maturity, the equipment reverted 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 month ly payments with an implicit interest rate of 6.1 %, maturing on June 5, 2024.

Upon maturity, the equipment will revert back to the Intermediate Partnership.

Upon maturity, the equipment will revert to the Intermediate Partnership.

We also have an agreement with a bank to provide additional letters of credit in an amount of $ 5.0 million to maintain surety bonds to secure certain asset retirement obligations and our obligations for workers' compensation benefits.

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Income tax expense

Alliance Minerals' Tax Election resulted in the recognition of an initial deferred tax liability of $ 37.3 million and a corresponding increase to income tax expense for the year ended December 31, 2022.

This increase in income tax expense reduced net income by $ 37.3 million, or approximately $ 0.29 per basic and diluted limited partner unit, for the year ended December 31, 2022.

Recognition of the initial deferred tax liability and expense is primarily the result of the $ 177.0 million non-cash acquisition gain recognized in 2019 related to the acquisition of the remaining interests in AllDale Minerals LP ("AllDale I") and AllDale Minerals II, LP ("AllDale II", and collectively with AllDale I, "AllDale I & II") (the "Acquisition Gain").

The Acquisition Gain was recognized to step up to fair value the financial reporting basis of the interests we already owned at the time of acquisition.

Alliance Minerals' Tax Election resulted in the recognition of an initial deferred tax liability of $ 37.3 million with a corresponding increase to income tax expense and reduction of net income for the year ended December 31, 2022.

This reduction of net income equates to approximately $ 0.29 per basic and diluted limited partner unit.

The Acquisition Gain was

recognized to step up to fair value the financial reporting basis of the interests we already owned at the time of acquisition.

The tax basis of the underlying properties of AllDale I & II did not include the Acquisition Gain.

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Tax effect of noncontrolling interest income not subject to income taxes

Return to accrual adjustments

Income tax expense

The effective income tax rates for our income tax expense for the year ended December 31, 2023 and 2021 are 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 year ended December 31, 2022 is less than the federal statutory rate, primarily due to the portion of income not subject to income taxes, partially offset by the effect of the Tax Election previously discussed.

The effective income tax rates for our income tax expense for the years ended December 31, 2021 and 2020 are less than the federal statutory rate, primarily due to the portion of income not subject to income taxes.

Significant components of deferred tax liabilities and deferred tax assets are as follows:

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Federal loss carryovers and credits

State loss carryovers and credits

Capitalized research and development

Total deferred tax assets

Less valuation allowance

Net deferred tax assets

Overall net deferred tax liabilities

The change in deferred tax liabilities for property, plant and equipment is primarily as a result of the Alliance Minerals' Tax Election and associated impact of the Acquisition Gain discussed above.

Federal loss carryovers and credits are primarily due to net operating losses and research and development credits associated with the operations of other subsidiaries that are taxable for federal income tax purposes.

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.

Deferred tax liabilities for property, plant and equipment are primarily the result of the Alliance Minerals' Tax Election and associated impact of the Acquisition Gain discussed above.

Federal and state loss carryovers and credits are primarily due to net operating losses and research and development credits associated with the operations of other subsidiaries that are taxable for federal income tax purposes.

Research and development expenses are required to be capitalized and amortized for U.S.

tax purposes, resulting in a deferred tax asset.

These expenses are primarily associated with the operations of other subsidiaries that are taxable for federal income tax purposes.

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.

The components of lease expense were as follows:

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Long-term debt

See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding fair value hierarchy levels.

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 8 – Long-Term Debt).

The fair value of debt, which is based on these interest rates, is classified as a Level 2 measurement under the fair value hierarchy.

See Note 6 – Long-Term Debt for additional information on our long-term debt.

PARTNERS' CAPITAL

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Unit Repurchase Program

In May 2018, the board of directors of our general partner ("Board of Directors") approved the establishment of a unit repurchase program authorizing us to repurchase and retire up to $ 100 million of ARLP common units.

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 were authorized to repurchase up to a total of $ 100.0 million of ARLP common units.

The program has no time limit and we may repurchase units from time to time in the open market or in other privately negotiated transactions.

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

No unit repurchases were made during the year ended December 31, 2022.

During the year ended December 31, 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, leaving $ 80.6 million remaining under the current authorization.

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.

In January 2023, the Board of Directors 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.

As of February 24, 2023, we have repurchased and retired 856,629 units at an average unit price of $ 21.15 for an aggregate purchase price of $ 18.1 million since we increased the amount authorized under the unit repurchase program.

The noncontrolling interest in our consolidated balance sheets represents Bluegrass Minerals Management, LLC's ("Bluegrass Minerals") ownership interest in Cavalier Minerals JV, LLC ("Cavalier Minerals").

Our accumulated other comprehensive loss consists of unrecognized actuarial gains and losses as well as unrecognized prior service costs related to our pension and pneumoconiosis benefits.

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VARIABLE INTEREST ENTITIES

Cavalier Minerals

On November 10, 2014, our subsidiary, Alliance Minerals, and Bluegrass Minerals entered into a limited liability company agreement (the "Cavalier Agreement") to create 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 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.

Bluegrass Minerals' profits interest distributions began in late 2022.

We hold the managing member interest in Cavalier Minerals.

Total contributions to and cumulative distributions from Cavalier Minerals are as follows:

AllDale I & II and Cavalier Minerals

We own the general partner interests and, including the limited partner interests we hold through our ownership in Cavalier Minerals, approximately 97 % of the limited partner interests in AllDale I & II.

As the general partner of AllDale I & II, we are entitled to receive 20.0 % of all distributions from AllDale I & II with the remaining 80.0 % allocated to limited partners based upon ownership percentages.

Cavalier Minerals owns approximately 72 % of the limited partner interests in AllDale I & II.

We own the managing member interest and a 96 % member interest in Cavalier Minerals.

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.

All members have recovered their investment and Bluegrass Minerals began receiving its profits interest distributions in late 2022.

We have concluded that AllDale I, AllDale II and Cavalier Minerals are VIEs which we consolidate as the primary beneficiary because we have the power to direct the activities that most significantly impact the economic performance of AllDale I, AllDale II and Cavalier Minerals in addition to having substantial equity ownership.

Our share of Cavalier Minerals' investment in AllDale I & II is eliminated in consolidation and Bluegrass Minerals' investment in Cavalier Minerals is accounted for as noncontrolling ownership interest in our consolidated balance sheets.

Additionally, earnings attributable to Bluegrass Minerals are recognized as noncontrolling interest in our consolidated statements of income.

The following table presents the carrying amounts and classification of AllDale I & II's assets and liabilities included in our consolidated balance sheets:

Assets (liabilities):

(in thousands)

Contributions

Distributions

We have concluded that Cavalier Minerals is a 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 consolidated balance sheets.

In addition, earnings attributable to Bluegrass Minerals are recognized as noncontrolling interest in our consolidated statements of operations.

In February 2017, Alliance Minerals committed to directly invest $ 30.0 million in AllDale III, which was created for similar investment purposes as AllDale I & II.

Alliance Minerals completed funding of this commitment in 2018.

Alliance Minerals' limited partner interest in AllDale III is 13.9 %.

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

provision for the general partner.

Since AllDale III is structured as a limited partnership with the limited partners 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.

Cash and cash equivalents

Trade receivables

Total property, plant and equipment, net

Accounts payable

Due to affiliates

Accrued taxes other than income taxes

AllDale III owns oil & gas mineral interests in areas around the oil & gas mineral interests we own.

Alliance Minerals owns a 13.9 % limited partner interest in AllDale III.

Alliance Minerals' investment in AllDale III is subject to a 25 % profits interest for the general partner that is 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.

We have concluded that AllDale III is a VIE that we do not consolidate because we are not the primary beneficiary and 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 are not the primary beneficiary of AllDale III because we do not have the power to direct the activities that most significantly impact AllDale III's economic performance.

See Note 12 – Equity Investments for more information about the accounting for our investment in AllDale III.

On April 5, 2022, we invested $ 20 million in Francis, in the form of a convertible note.

Our convertible note matured on April 1, 2023 and was converted into a preferred equity interest 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.

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

As of December 31, 2023, we held approximately 17.0 % of Francis' equity.

We have concluded that Francis is a VIE that we do not consolidate because we are not the primary beneficiary and Francis' 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 because we do not have the power to direct the activities that most significantly impact Francis's economic performance.

See Note 12 – Equity Investments for more information about the accounting for our investment in Francis.

On June 2, 2022, we committed to purchase $ 25.0 million of limited partner interests in 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 December 31, 2023, we have funded $ 6.6 million of this commitment.

We have concluded that NGP ET IV is a VIE that we do not consolidate because we are not the primary beneficiary and NGP ET IV 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 because we do not have the power to direct the activities that most significantly impact NGP ET IV's economic performance.

See Note 12 – Equity Investments for more information about the accounting for our investment in NGP ET IV.

EQUITY INVESTMENTS

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 14 – Investments for more information.

On April 5, 2022, we invested $ 20 million in Francis, in the form of a convertible note with a maturity date of April 1, 2023.

Our convertible note represents an ownership interest in Francis upon conversion.

We have determined the note more closely represents equity as opposed to debt.

Therefore, we will account for the convertible note as an equity contribution even though we will not participate in Francis' earnings or losses and will not be eligible to receive distributions until the note converts.

We have concluded that Francis is a VIE as the management structure is similar to a limited partnership with the non-managing members (i) not having the ability to remove the managing member and (ii) not participating significantly in the operational decisions.

We are not the primary beneficiary of Francis as we do not have the power to direct the activities that most significantly impact Francis's economic performance.

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

We record equity income or loss based on Francis' distribution structure.

See Note 14 – Investments for more information.

On June 2, 2022, we committed to purchase $ 25.0 million of limited partner interests in NGP ETP IV, a private equity fund sponsored by NGP and focused on investments that are part of the global transition toward a lower carbon economy.

We funded $ 4.1 million during the year ended December 31, 2022.

Our final ownership percentage in NGP ETP IV is not yet known.

We have concluded that NGP ETP IV is a VIE as it is structured as a limited partnership with limited partners (i) not having the ability to remove the general partner and (ii) not participating significantly in the operational decisions.

We are not the primary beneficiary of NGP ETP IV as we do not have the power to direct the activities that most significantly impact NGP ETP IV's economic performance.

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

See Note 14 – Investments for more information.

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for variable interest entities.

As discussed in Note 13 – 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:

Year Ended December 31,

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Ending balance

As discussed in Note 13 – Variable Interest Entities, we account for our ownership interest in the income or loss of Francis as an equity method investment.

The changes in our equity method investment in Francis for the year ended December 31, 2022 were as follows:

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

Prior to the conversion of our convertible note, we did not participate in Francis' earnings or losses;

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

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 were as follows:

Year Ended December 31,

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Contributions

Equity method investment loss

Ending balance

As discussed in Note 13 – 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 the year ended December 31, 2022 were as follows:

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:

Year Ended December 31,

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Contributions

Equity method investment loss

Ending balance

On April 29, 2022, we purchased $ 32.6 million of Series D Preferred Stock in Infinitum, a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators.

On November 2, 2022, we purchased an additional $ 9.4 million of Series D Preferred Stock in Infinitum at the same price per share as those shares of Series D Preferred Stock that we acquired on April 29, 2022.

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.

During 2022, we purchased $ 42.0 million of Series D Preferred Stock in Infinitum, a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators.

On September 8, 2023, we purchased $ 24.6 million of Series E 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.

The changes in our investment in Infinitum for the year ended December 31, 2022 were as follows:

Year Ended December 31,

(in thousands)

Beginning balance

Contributions

Ending balance

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for investments.

On August 22, 2023, we purchased $ 25.0 million of Ascend Preferred Stock in 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.

REVENUE FROM CONTRACTS WITH CUSTOMERS

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EARNINGS PER LIMITED PARTNER UNIT

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

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

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

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.

Our participating securities are outstanding restricted unit awards under our LTIP and phantom units in notional accounts under our SERP and the Directors' Deferred Compensation Plan.

The following is a reconciliation of net income (loss) attributable to ARLP used for calculating basic and diluted earnings per unit and the weighted-average units used in computing EPU.

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.

Year Ended December 31,

(in thousands, except per unit data)

Net income (loss) attributable to ARLP

Net income attributable to ARLP

General partner's interest in net income attributable to ARLP

Limited partners' interest in net income attributable to ARLP

Distributions to participating securities

Undistributed earnings attributable to participating securities

Net income (loss) attributable to ARLP available to limited partners

Net income attributable to ARLP available to limited partners

Weighted-average limited partner units outstanding – basic and diluted

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EMPLOYEE BENEFIT PLANS

Defined Contribution Plans —All regular full-time employees are eligible to participate in a defined contribution profit sharing and savings plan ("PSSP") that we sponsor.

Defined Contribution Plans

All regular full-time employees are eligible to participate in a defined contribution profit sharing and savings plan ("PSSP") that we sponsor.

PSSP participants may elect to make voluntary contributions to this plan up to a specified amount of their compensation.

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Our contribution expense for the PSSP was approximately $ 21.8 million, $ 19.4 million and $ 17.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Defined Benefit Plan —Eligible employees and former employees of certain of our mining operations participate in a defined benefit plan (the "Pension Plan") that we sponsor.

Defined Benefit Plan

Eligible employees and former employees of certain of our mining operations participate in a defined benefit plan (the "Pension Plan") that we sponsor.

The Pension Plan is closed to new applicants.

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Interest cost

Actuarial gain

Actuarial loss (gain)

Benefits paid

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Fair value of plan assets at beginning of year

Employer contribution

Actual return on plan assets

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Expected return on plan assets

The actuarial gain components of the change in benefit obligations in 2022 and 2021 were primarily attributable to an increase in the discount rate compared to the prior year end.

The expected long-term rate of return used to determine our pension liability is based on a 1.5 % active management premium in addition to an asset allocation assumption of:

The actuarial loss component of the change in benefit obligations in 2023 was primarily attributable to a decrease in the discount rate compared to the prior year end.

The actuarial gain component of the change in benefit obligations in 2022 was primarily attributable to an increase in the discount rate compared to the prior year end.

The expected long-term rate of return used to determine our pension liability is based on an asset allocation assumption of:

Asset allocation

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(in thousands)

Components of net periodic benefit cost:

Components of net periodic benefit cost (credit):

Interest cost

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Amortization of net loss

Net periodic benefit cost (1)

(1) Nonservice components of net periodic benefit cost are included in the Other income (expense) line item within our consolidated statements of operations.

Net periodic benefit cost (credit) (1)

(1) Nonservice components of net periodic benefit cost (credit) are included in the Other income (expense) line item within our consolidated statements of income.

Year Ended December 31,

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Total recognized in accumulated other comprehensive loss

Net periodic benefit cost (credit)

Net periodic benefit cost

Total recognized in net periodic benefit cost and accumulated other comprehensive loss

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(in thousands)

As a result of certain pension plan contribution relief provided by the American Rescue Plan Act enacted in March 2021, we do no t expect to make contributions to the Pension Plan during 2023.

We do no t expect to make material contributions to the Pension Plan during 2024.

The Compensation Committee has appointed an investment manager with full investment authority with respect to Pension Plan investments subject to investment guidelines and compliance with Employee Retirement Income Security Act of 1974 or other applicable laws.

The investment manager employs a series of asset allocation strategy phases to glide the portfolio risk commensurate with both plan characteristics and market conditions.

The objective of the allocation policy is to reach and maintain fully funded status.

The total portfolio allocation will be adjusted as the funded ratio of the Pension Plan changes and market conditions warrant.

Total account performance is reviewed at least annually, using a dynamic benchmark approach to track investment performance.

The investment manager employs an asset allocation strategy through investment in certain investment types such as equity securities and fixed income securities.

The asset allocation process provides that the total portfolio allocation will be adjusted as the funded ratio of the plan changes and market conditions warrant, consistent with managing risks in accordance with plan objectives and time horizon.

As the funded ratio improves, more assets may be allocated to the core fixed income portfolio to reduce volatility.

The objective of the allocation policy is to achieve an average annual return greater than the actuarial discount rate over the specified time horizon.

General asset allocation guidelines at December 31, 2023 are as follows:

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Fixed income securities

Convertible securities

Equity securities include domestic equity securities, developed international equity securities, emerging markets equity securities and real estate investment trust.

Fixed income securities include domestic and international investment grade fixed income securities, high yield securities and emerging markets fixed income securities.

Futures may also be utilized within the equity securities and fixed income securities asset allocation.

Alternatives may include individual securities, exchange traded notes, exchange traded commodities and underlying funds providing exposure to market neutral strategies, long/short strategies, direct real estate and commodities.

Equity securities include domestic and international common stocks, convertible notes and bonds, convertible preferred stocks, American Depository Receipts of non-U.S.

companies and Real Estate Investment Trusts.

Fixed income securities include debt securities issued by the federal government as well as state and local governments, banker's acceptances, repurchase agreements, asset-backed securities, collateralized mortgage-backed securities, corporate debt securities, inflation-index bonds and structured notes.

The following information discloses the fair values of our Pension Plan assets by asset category:

(in thousands)

Cash and cash equivalents (a)

Commingled investment funds measured at net asset value (b):

Equities - Global

Cash and cash equivalents

Equity investments - Individual securities (a):

Consumer discretionary

Consumer durables

Industrials & materials

Information technology & communication

Fixed income investments - Individual securities (b):

Preferred stocks non-convertible

Equity investments - Mutual funds (c):

Mid-cap stock funds

Small-cap stock funds

International stock funds

Equity investments - Exchange traded funds (d):

Large-cap blend - S&P 500 index

International - Developed markets

International - Emerging markets

Accrued income (e)

Commingled investment funds measured at net asset value (f):

Equities - United States

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Fixed income - Futures

(a) Cash and cash equivalents represents a Level 1 fair value measurement.

See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding the definitions of fair value hierarchy levels.

(b) Investments measured at fair value using the net asset value per share (or its equivalent) have not been classified within the fair value hierarchy.

(a) Equity investments - Individual securities include investments in publicly traded common stock and American Depository Receipts.

Publicly traded common stocks are traded on a national securities exchange and investments in common stocks are valued using quoted market prices multiplied by the number of shares owned.

American Depository Receipts are negotiable securities issued by a bank representing shares in a foreign company and traded on a national securities exchange.

(b) Fixed income investments - Individual securities include investments in preferred stock that are traded on a national securities exchange and valued using quoted market prices multiplied by the number of shares owned.

For purposes of calculating the value, portfolio securities and other assets for which market quotes are readily available are valued at market value.

Investments initially valued in currencies other than the U.S.

dollars are converted to the U.S.

dollar using exchange rates obtained from pricing services.

(d) Equity investments – Exchange traded funds are funds that own financial assets and trade on exchanges, generally tracking a specific index.

Investments in exchange traded funds are valued using a market approach based on the quoted market prices.

(e) Accrued income represents dividends or interest declared, but not received, on equity securities owned at December 31, 2023.

(f) Investments measured at fair value using the net asset value per share (or its equivalent) have not been classified within the fair value hierarchy.

The fair values of all commingled investment funds are determined based on the net asset values per unit of each of the funds.

The net asset values per unit represent the aggregate value of the fund's assets at fair value less liabilities, divided by the number of units outstanding .

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for pension benefits.

COMMON UNIT-BASED COMPENSATION PLANS

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Non-vested grants at January 1, 2021

Grants canceled (3)

Non-vested grants at December 31, 2021

Non-vested grants at December 31, 2022

( 1,291,330 )

Non-vested grants at December 31, 2023

(1) In December 2020, we modified the vesting requirements for certain restricted units that we granted in February 2020 which were determined to be improbable of vesting under the original vesting requirements (the "2020 Grants").

The new vesting requirements make it probable the modified restricted units will vest.

Also in December 2020, an additional 578,114 restricted units under these modified vesting requirements were granted.

The grant date fair value reflects the modification date fair value for those awards that were modified.

(2) In February 2020, we issued 279,622 unrestricted common units to LTIP participants as a result of satisfying the vesting requirements for 424,486 restricted units that were granted in 2017.

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

In December 2020, we accelerated the vesting requirements for 495,038 restricted units that were granted in 2018 (the "2018 Grants") and settled these restricted units in cash.

(3) In December 2020, 675,302 restricted units that were granted in 2019 (the "2019 Grants") were canceled since it was determined that the vesting requirements for these restricted units were not probable of being satisfied.

(4) The restricted units granted during 2021 and 2022 have certain minimum-value guarantees per unit, regardless of whether or not the awards vest .

(1) Restricted units granted have certain minimum-value guarantees per unit, regardless of whether or not the awards vest .

(2) During the year ended December 31, 2023, we issued 860,060 unrestricted common units to the LTIP participants.

The remaining vested units were settled in cash to satisfy our tax withholding obligations.

For the years ended December 31, 2023, 2022 and 2021, our LTIP expense for grants of restricted units was $ 10.4 million, $ 9.4 million and $ 5.4 million, respectively.

LTIP expense for grants of restricted units for the year ended December 31, 2020 includes the impact of the reversal of the 2019 Grants, the modification of the 2020 Grants and incremental compensation cost associated with the cash settlement of the 2018 Grants.

The cash settlement of the 2018 Grants was the first time we have settled restricted units in cash and we currently do not expect to do so again in the future.

The cash settlement of the 2018 Grants resulted in $ 5.4 million in incremental compensation cost.

The 2019 Grants were determined to be not probable of vesting therefore $ 4.8 million of cumulative previously recognized expense was reversed in 2020, offset in part by related DERs for the 2019 Grants previously recorded to equity and then expensed in 2020.

The 2020 Grants were determined to be improbable of vesting therefore the Compensation Committee modified the awards to change the vesting requirement, which made the grants probable of vesting, and granted additional restricted units under these modified vesting requirements as previously discussed.

As a result, the grant date fair value of the modified awards was changed to reflect the modification date fair value of the awards resulting in a net reduction in LTIP expense of $ 1.0 million for the year ended December 31, 2020.

The total obligation associated with LTIP grants of restricted units as of December 31, 2023 and 2022 was $ 19.5 million and $ 16.0 million, respectively, and is included in the partners' capital Limited partners-common unitholders line item in our consolidated balance sheets.

As of December 31, 2022, there was $ 11.4 million in total unrecognized

compensation expense related to the non-vested LTIP restricted unit grants that are expected to vest.

As of December 31, 2023, there was $ 10.0 million in total unrecognized compensation expense related to the non-vested LTIP restricted unit grants that are expected to vest.

That expense is expected to be recognized over a weighted-average period of 1.4 years.

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Phantom units outstanding as of December 31, 2023

(1) During the year ended December 31, 2021, we purchased 102,962 ARLP common units on the open market to settle the account of a participant under the SERP.

(1) During the years ended December 31, 2023 and 2021, we purchased 27,576 ARLP common units and 102,962 ARLP common units on the open market to settle the accounts of participants under the SERP.

Units purchased were net of units settled in cash to satisfy tax-withholding obligations.

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As of December 31, 2023 and 2022, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $ 16.6 million and $ 15.1 million, respectively, and is included in the partners' capital Limited partners-common unitholders line item in our consolidated balance sheets.

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for unit-based compensation.

SUPPLEMENTAL CASH FLOW INFORMATION

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Right-of-use assets acquired by operating lease

Market value of common units issued under deferred compensation plans before tax withholding requirements

Market value of common units distributed under deferred compensation plans before tax withholding requirements

ASSET RETIREMENT OBLIGATIONS

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Ending balance

For the year ended December 31, 2023, the allocation of liability associated with mine development and change in assumptions decreased by $ 1.5 million.

The decrease was largely attributable to lower cost assumptions.

For the year ended December 31, 2022, the allocation of liability associated with mine development and change in assumptions increased by $ 17.4 million.

The increase was largely attributable to higher cost assumptions as well as the expansion of refuse disposal facilities at certain mines.

For the year ended December 31, 2021, the allocation of liability associated with mine development and change in assumptions was immaterial.

The impact of discounting our estimated cash flows resulted in reducing the accrual for asset retirement obligations by $ 116.2 million and $ 110.4 million at December 31, 2023 and 2022, respectively.

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As of December 31, 2023 and 2022, we had approximately $ 173.5 million and $ 174.3 million, respectively, in surety bonds outstanding to secure the performance of our reclamation obligations.

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for asset retirement obligations.

ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS

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Interest accretion

Valuation loss

Valuation loss (gain)

Ending balance

The discount rate used to calculate the estimated present value of future obligations for workers' compensation was 4.66 % and 4.87 % at December 31, 2023 and 2022, respectively.

The valuation gain in 2023 was primarily attributable to a favorable change in claims development partially offset by a decrease in the discount rate used to calculate the estimated present value of the future obligations.

The valuation loss in 2022 was primarily attributable to an increase in the discount rate used to calculate the estimated present value of the future obligations being partially offset by unfavorable changes in claims development.

The 2021valuation loss was primarily attributable to unfavorable changes in claims development partially offset by an increase in the discount rate used to calculate the estimated present value of future obligations.

As of December 31, 2023 and 2022, we had $ 99.4 million and $ 99.8 million, respectively, in surety bonds and letters of credit outstanding to secure workers' compensation obligations.

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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 December 31, 2022 and 2021 are $ 4.1 million and $ 5.7 million, respectively.

Our receivables for traumatic injury claims under this policy as of December 31, 2023 and 2022 were $ 4.1 million.

Our receivables are included in Other long-term assets on our consolidated balance sheets.

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Reversal of amortization item:

Net actuarial loss (gain)

Net actuarial loss

Total recognized in accumulated other comprehensive loss

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Net actuarial loss

The actuarial loss component of the change in benefit obligations in 2023 was primarily attributable to a) unfavorable changes in the discount rate, b) unfavorable demographics in the at-risk population, c) unfavorable black lung claims experience, d) unfavorable assumption changes regarding future average medical benefits, and e) unfavorable assumption changes related to Federal and State benefit levels.

The actuarial gain component of the change in benefit obligations in 2022 was primarily attributable to favorable assumption changes in the discount rate and demographics in the at-risk population.

These components were offset in part by a) unfavorable black lung claims experience, b) unfavorable assumption changes regarding future average medical benefits and legal expense levels, and c) unfavorable assumption changes related to Federal and State benefit levels.

The actuarial loss component of the change in benefit obligations in 2021 was primarily attributable to unfavorable assumption changes regarding future medical and legal expense levels.

These components were offset in part by a) an increase in the discount rate used to calculate the estimated present value of the future obligations and b) favorable black lung claims experience and other demographic changes in the at-risk population.

Summarized below is information about the amounts recognized in the accompanying consolidated balance sheets for pneumoconiosis and workers' compensation benefits:

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________________________________________

(1) Interest cost and net amortization is included in the Other income (expense) line item within our consolidated statements of income ( see Note 2 – Summary of Significant Accounting Policies).

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for workers' compensation and pneumoconiosis benefits.

(1) Interest cost and net amortization is included in the Other income line item within our consolidated statements of income .

RELATED-PARTY TRANSACTIONS

We have continuing related-party transactions with MGP and its affiliates.

The Board of Directors and its conflicts committee ("Conflicts Committee") review our related-party transactions that involve a potential conflict of interest between our general partner or its affiliates and ARLP or its subsidiaries or any other partner of ARLP to determine that such transactions are fair and reasonable to ARLP.

As a result of these reviews, the Board of Directors and the Conflicts Committee approved each of the transactions described below that had such potential conflict of interest as fair and reasonable to ARLP.

Line of Credit

On February 19, 2021, we entered into a line of credit arrangement (the "Line of Credit") with a related party for $ 5.0 million.

This Line of Credit was amended on November 4, 2021 to increase the total available under the Line of Credit to $ 5.5 million.

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Craft Foundations

December 2014

February 2015

(in thousands)

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As of December 31, 2023

Craft Foundations — In January 2005, we acquired Tunnel Ridge from ARH.

Craft Foundations

In January 2005, we acquired Tunnel Ridge from ARH.

In connection with this acquisition, we assumed a coal lease with Alliance Resource GP, LLC, an entity indirectly wholly owned by Mr.

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Craft III Foundation and the Kathleen S.

Craft Foundation, which each hold an undivided one - half interest (the "Craft Foundations").

Under the terms of the lease, Tunnel Ridge is required to pay an annual minimum royalty of $ 3.0 million.

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Tunnel Ridge has a surface land lease with an annual payment of $ 0.2 million, payable in January of each year with the Craft Foundations.

WKY CoalPlay — In February 2015, WKY CoalPlay, LLC ("WKY CoalPlay") entered into a coal lease agreement with Alliance Resource Properties regarding coal mineral resources located in Henderson and Union Counties, Kentucky.

In February 2015, WKY CoalPlay, LLC ("WKY CoalPlay") entered into a coal lease agreement with Alliance Resource Properties regarding coal mineral resources located in Henderson and Union Counties, Kentucky.

The lease has an initial term of 20 years and provides for earned royalty payments to WKY CoalPlay of 4.0 % of the coal sales price and annual minimum royalty payments of $ 2.1 million.

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This lease expired in December 2021.

Cavalier Minerals – As discussed in Note 13 – Variable Interest Entities, through our subsidiaries, we hold a non-economic managing member interest and a 96 % non-managing member interest in Cavalier Minerals and, Bluegrass Minerals, a third party, holds a 4 % non-managing member interest and a 25 % profits interest.

See Note 14 – Investments for information on payments made and distributions received by Cavalier Minerals.

COMMITMENTS AND CONTINGENCIES

Commitments — We lease buildings and equipment under operating lease agreements that provide for the payment of both minimum and contingent rentals.

We lease buildings and equipment under operating lease agreements that provide for the payment of both minimum and contingent rentals.

We also have noncancelable coal mineral reserve and resource leases as discussed in Note 20 – Related-Party Transactions.

Contractual Commitments — In connection with planned capital projects, we have contractual commitments of approximately $ 147.7 million at December 31, 2022.

As of December 31, 2022, we had no commitments to purchase coal from external production sources in 2022 and thereafter.

General Litigation — We are party to litigation that has been initiated against certain of our subsidiaries in which the plaintiffs allege violations of the Fair Labor Standards Act and 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.

We cannot reasonably estimate a range of potential exposure at this time.

We believe the plaintiffs' claims are without merit and our ultimate exposure, if any, will not be material to our results of operations or financial position and we are defending the litigation vigorously.

However, if our current belief that the claims are without merit is not upheld, it is reasonably possible that the ultimate resolution of these matters could result in a potential loss that may be material to our results of operations.

Contractual Commitments

In connection with planned capital projects, we have contractual commitments of approximately $ 201.9 million at December 31, 2023.

As of December 31, 2023, we had $ 22.3 million in commitments to purchase coal from external production sources in 2024 and thereafter.

General Litigation

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 believe our ultimate exposure, if any, will not be material to our results of operations or financial position;

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.

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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.

Other —Effective December 1, 2022, we renewed our property and casualty insurance program through October 1, 2023.

Our property insurance was procured from our wholly owned captive insurance company, Wildcat Insurance, LLC ("Wildcat Insurance").

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

Effective October 1, 2023, we renewed our property and casualty insurance program through September 30, 2024.

Our property insurance was procured from our wholly owned captive insurance company, Wildcat Insurance, LLC ("Wildcat Insurance").

Wildcat Insurance charged certain of our subsidiaries for the premiums on this program and in return purchased reinsurance for the program in the standard market.

The maximum limit in the commercial property program is $ 100.0 million per occurrence, excluding a $ 1.5 million deductible for property damage, a 75 or 90 day waiting period for underground business interruption depending on the mining complex and an additional $ 25.0 million overall aggregate deductible.

We retained a 7.25 % participating interest in our current commercial property insurance program.

We can make no assurances that we will not experience significant insurance claims in the future that could have a material adverse effect on our business, financial condition, results of operations and ability to purchase property insurance in the future.

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(in thousands)

Illinois Basin/Appalachia

Illinois Basin

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Illinois Basin/Appalachia

Trade accounts receivable from major customers totaled approximately $ 54.3 million and $ 63.6 million at December 31, 2023 and 2022, respectively.

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Financial conditions of our customers could result in a material change to our credit loss expense in future periods.

The coal supply agreements with Customers A, B and C expire in 2026, 2029 and 2024 respectively.

The coal supply agreements with Customers A and B expire in 2025 and 2029, respectively.

SEGMENT INFORMATION

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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.

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.

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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 Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC's ("Gibson ") 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 14 – Investments) and Cavalier Minerals.

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.

Infinitum and NGP ETP IV (see Note 14 – Investments), Wildcat Insurance, which assists the ARLP Partnership with its insurance requirements, AROP Funding and Alliance Finance (both discussed in Note 8 – Long-Term Debt) and other miscellaneous activities.

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 Alliance Minerals' through its consolidated subsidiaries as well as equity interests held in AllDale III (Note 12 – Equity Investments).

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

Approximately 60 % of the coal sold by our coal operations' mines was 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, NGP ET IV and Ascend (see Note 12 – 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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Segment Adjusted EBITDA Expense

(3) Segment Adjusted EBITDA is defined as net income (loss) attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization, general and administrative expense, asset and goodwill impairments and acquisition gain.

(3) Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expense.

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.

Net income (loss) , the most comparable GAAP financial measure, is reconciled to consolidated Segment Adjusted EBITDA:

Net income , the most comparable GAAP financial measure, is reconciled to consolidated Segment Adjusted EBITDA:

Year Ended December 31,

(in thousands)

Net income (loss)

Noncontrolling interest

Net income (loss) attributable to ARLP

Net income attributable to ARLP

General and administrative

Depreciation, depletion and amortization

Asset impairments

Goodwill impairment

Interest expense, net

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Consolidated Segment Adjusted EBITDA

(4) Capital Expenditures shown exclude the Belvedere Acquisition on September 9, 2022, Jase Acquisition on October 26, 2022 and the Boulders Acquisition on October 13, 2021.

(Note 3 – Acquisitions).

SUBSEQUENT EVENT S

Acquisition Agreement

Under the agreement, the third party will assist us in the identification, evaluation, and acquisition of target oil & gas mineral interests.

In exchange for these services, the third party will receive a participation share, partially funded by the third party, and will be paid a periodic management fee.

On February 22, 2023, we acquired approximately 2,682 oil & gas net royalty acres in the Delaware Basin from JC Resources LP ("JC Resources"), a related-party entity owned by Mr.

Craft, for $ 72.3 million, which was funded with cash on hand.

(4) Capital expenditures shown exclude $ 110.9 million, $ 92.6 million and $ 31.0 million paid for oil & gas acquisitions in 2023, 2022 and 2021, respectively.

See Note 3 – Acquisitions for more information.

SUPPLEMENTAL OIL & GAS RESERVE INFORMATION (UNAUDITED)

These supplemental oil & gas reserve information disclosures are required for periods in which a company has significant oil & gas producing activities.

A company is considered to have significant oil & gas producing activities if any of its revenues, results of operations or assets from oil & gas producing activities exceed 10% of consolidated revenues, results of operations or assets for the year being measured.

All periods presented in these supplemental oil & gas reserve information disclosures have been recast to reflect the JC Resources Acquisition as if we, rather than JC Resources, acquired the mineral interests in 2019.

For more information with respect to the JC Resources Acquisition please see Note – 1 Organization and Presentation and Note – 3 Acquisition in our consolidated financial statements.

Geographical Area of Operation

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Acquisition costs of properties

Property acquisition costs for 2023 primarily include the Skyland Acquisition and other ground game acquisitions.

Property acquisition costs for 2022 primarily include the Belvedere and Jase Acquisitions.

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Oil & gas properties, net

(1) The change in total capitalized cost in 2022 primarily reflects the acquisition of proved and unproved properties in the Belvedere and Jase Acquisitions.

The change in total capitalized cost in 2021 reflects the acquisition of proved and unproved properties in the Boulders Acquisition.

See Note 3 – Acquisitions of our consolidated financial statements for more information regarding these acquisitions.

Results of Operations from Oil & Gas Activities

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Oil & Gas Reserves

Proved oil & gas reserve estimates as of December 31, 2022 were prepared by our internal engineering team and 95% of those reserves were audited by Netherland, Sewell & Associates, Inc., independent petroleum engineers.

Proved reserves are estimated under existing economic and operating conditions based on the 12-month unweighted average of the first-of-the-month prices.

Due to the inherent uncertainties and the limited nature of reservoir data, such estimates are subject to change as additional information becomes available.

The reserves actually recovered and the timing of production of these reserves may be substantially different from the original estimate.

Revisions result primarily from new information obtained from development drilling and production history and from changes in economic factors.

The net proved developed and undeveloped oil & gas reserves quantities of the mineral interests attributable to us are summarized below:

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As of January 1, 2021

Purchases of minerals in place

Revisions of previous estimates

Extensions and discoveries

Sales of minerals in place

As of December 31, 2021 (1)

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As of January 1, 2021

Sales of minerals in place

Revisions of previous estimates

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Notable changes in proved reserves during the year ended December 31, 2021, included:

● Net change due to extensions and discoveries:

The increases are a result of additional development by the operators of the properties under which we own mineral interests.

● Net change due to extensions and discoveries - The increases are a result of additional development by the operators of the properties under which we own mineral interests.

In 2021, a net addition of 1,358 MBOE occurred primarily from the completion of 906 new wells on our acreage and from the addition of 498 new proved undeveloped locations due to permitting and drilling activity.

Increases in oil & gas are also due to changes in the underlying commodity prices during the year and revisions of previous quantity estimates.

● Revisions - Increases in oil & gas are also due to changes in the underlying commodity prices during the year and revisions of previous quantity estimates.

Notable changes in proved reserves during the year ended December 31, 2022, included:

● Net change due to extensions and discoveries:

The increases are a result of additional development by the operators of the properties under which we own mineral interests.

● Net change due to extensions and discoveries - The increases are a result of additional development by the operators of the properties under which we own mineral interests.

In 2022, a net addition of 4,598 MBOE occurred primarily from the completion of 1,212 new wells on our acreage and from the addition of 878 new proved undeveloped locations due to permitting and drilling activity.

Increases in oil & gas are also due to changes in the underlying commodity prices during the year and revisions of previous quantity estimates.

● Revisions - Increases in oil & gas are also due to changes in the underlying commodity prices during the year and revisions of previous quantity estimates.

Notable changes in proved reserves during the year ended December 31, 2023, included:

● Net change due to extensions and discoveries:

The increases are a result of additional development by the operators of the properties under which we own mineral interests.

● Net change due to extensions and discoveries - The increases are a result of additional development by the operators of the properties under which we own mineral interests.

In 2023, a net addition of 2,897 MBOE occurred primarily from the completion of 2,117 new wells on our acreage and from the addition of 548 new proved undeveloped locations due to permitting and drilling activity.

Increases in oil & gas are also due to changes in the underlying commodity prices during the year and revisions of previous quantity estimates.

● Revisions - Increases in oil & gas are also due to changes in the underlying commodity prices during the year and revisions of previous quantity estimates.

Standardized Measure of Discounted Future Net Cash Flows

In accordance with United States Securities and Exchange Commission ("SEC") and FASB requirements, future cash inflows represent expected revenues from production of period-end quantities of proved reserves based on the 12-month unweighted average of first-of-the-month commodity prices for the year ended December 31, 2022.

Future cash inflows represent expected revenues from production of period-end quantities of proved reserves based on the 12-month unweighted average of first-of-the-month commodity prices for the years ended December 31, 2023, 2022 and 2021.

All prices are adjusted for quality, transportation fees, energy content and regional basis differentials.

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Total standardized measure (2)

(1) On March 15, 2022, Alliance Minerals changed its Federal income tax status from a pass-through entity to a taxable entity via a "check the box"

election, which became effective January 1, 2022.

See Note 9 – Income Tax for more information.

(1) On March 15, 2022, Alliance Minerals changed its Federal income tax status from a pass-through entity to a taxable entity via a "check the box" election, which became effective January 1, 2022.

See Note 7 – Income Tax in our consolidated financial statements for more information.

(2) Includes standardized discounted future net cash flows of approximately $31.6 million, $45.3 million and $17.9 million attributable to noncontrolling interests in the ARLP Partnership's consolidated subsidiaries as of December 31, 2023, 2022 and 2021, respectively.

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Standardized measure, end of year

(1) On March 15, 2022, Alliance Minerals changed its federal income tax status from a pass-through entity to a taxable entity via a "check the box"

election, which became effective January 1, 2022.

See Note 9 – Income Tax for more information.

Net change in prices and production costs occur from one reporting period to another when the SEC reporting price for that period changes.

For 2022, this was a major component of the overall reserves value change from 2021 due to the surge in global energy demand during the recovery from the economic downturn related to the COVID-19 pandemic during 2020.

For 2020, net changes in prices and production costs were major components of the overall reserves value change from 2019 due mainly to the COVID-19 pandemic and the subsequent decline in oil and gas demand.

(1) On March 15, 2022, Alliance Minerals changed its federal income tax status from a pass-through entity to a taxable entity via a "check the box" election, which became effective January 1, 2022.

See Note 7 – Income Tax in our consolidated financial statements for more information.

SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

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PARTNERS' CAPITAL:

Limited Partners - Common Unitholders 127,195,219 units outstanding

Limited Partners - Common Unitholders 127,125,437 and 127,195,219 units outstanding, respectively

General Partner's interest

Total Partners' Capital

TOTAL LIABILITIES AND PARTNERS' CAPITAL

* Recast as discussed in "Item 8.

Financial Statements and Supplementary Data—Note 1 – Organization and Presentation" of this Annual Report on Form 10-K.

See accompanying notes.

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Year Ended December 31,

General and administrative

Total operating expenses

LOSS FROM OPERATIONS

Interest income

Equity in earnings of consolidated subsidiaries

NET INCOME (LOSS) ATTRIBUTABLE TO ARLP

NET INCOME ATTRIBUTABLE TO ARLP

GENERAL PARTNER

LIMITED PARTNERS

EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED

WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED

* Recast as discussed in "Item 8.

Financial Statements and Supplementary Data—Note 1 – Organization and Presentation" of this Annual Report on Form 10-K.

See accompanying notes.

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CASH AND CASH EQUIVALENTS AT END OF PERIOD

* Recast as discussed in "Item 8.

Financial Statements and Supplementary Data—Note 1 – Organization and Presentation" of this Annual Report on Form 10-K.

See accompanying notes.

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In these parent-company-only financial statements, our investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries and reduced by distributions received from subsidiaries since the date of acquisition.

These parent-company-only financial statements should be read in conjunction with our consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data"

of this Annual Report on Form 10-K.

As the parent of the Intermediate Partnership, ARLP was a guarantor of the Replaced Credit Facility and is a guarantor of the Senior Notes discussed in "Item 8.

Financial Statements and Supplementary Data—Note 8 – Long-Term Debt"

of this Annual Report on Form 10-K.

These parent-company-only financial statements have been recast as a result of the JC Resources Acquisition as discussed in "Item 8.

Financial Statements and Supplementary Data—Note 1 – Organization and Presentation" of this Annual Report on Form 10-K.

These parent-company-only financial statements should be read in conjunction with our consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.

As the parent of Alliance Coal and the Intermediate Partnership, ARLP is a guarantor of the Credit Facility and the Senior Notes discussed in "Item 8.

Financial Statements and Supplementary Data—Note 6 – Long-Term Debt" of this Annual Report on Form 10-K.

In addition to these guarantees, ARLP has provided guarantees on surety indemnity agreements and financially guaranteed certain coal supply agreements.

The duration of these guarantees varies.

The maximum undiscounted potential future payment obligation for our guarantees of certain coal supply agreements as of December 31, 2022 is approximately $ 425.6 million as a result of elevated market prices.

The maximum undiscounted potential future payment obligation for our guarantees of certain coal supply agreements as of December 31, 2023 is approximately $ 75.1 million.

These guarantees provide for compensation to customers based on additional cost to the customer to replace any contracted tons that our subsidiaries fail to deliver.

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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-K

Item 8. Financial Statements and Supplementary Data