What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-07 compared with 2024-05-09 · 157 added, 50 removed, 153 unchanged (57% of the section changed)

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("NGP ET IV"), and Ascend Elements, Inc.

("Ascend") which are in the businesses of, respectively, electric vehicle charging stations, electric motor manufacturing, private equity investments in renewable energy, the electrification of our economy or the efficient use of energy, and the manufacturing and recycling of sustainable, engineered battery materials for electric vehicles.

("Ascend") which are in the businesses of:

electric vehicle charging stations;

electric motor manufacturing;

private equity investments in renewable energy, the electrification of our economy or the efficient use of energy;

and the manufacturing and recycling of sustainable, engineered battery materials for electric vehicles.

On February 19, 2024, we renewed our collaborative agreement with a third-party to acquire oil & gas mineral interests in the Midland and Delaware Basins (the "Acquisition Agreement") for an additional one-year term, committing up to $25.0 million.

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Financial Statements (Unaudited)—Note 3 – Acquisitions" of this Quarterly Report on Form 10-Q.

In June 2024, we completed a private placement of $400 million in aggregate principal amount of 8.625% senior unsecured notes due 2029.

A portion of the net proceeds from the offering was used to fund the redemption of our outstanding 7.5% senior notes due 2025 and the remaining proceeds were used for general corporate purposes.

In connection with consummation of the notes offering, we entered into an amendment to our Credit Agreement.

For more information, please read "Item 1.

Financial Statements (Unaudited)—Note 8 – Long-term Debt" of this Quarterly Report on Form 10-Q.

We have four reportable segments, Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties.

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Financial Statements (Unaudited)—Note 11 – Equity Investments" and —Note 8 – Long-Term Debt" of this Quarterly Report on Form 10-Q for more information on our investments in Francis, Infinitum, Ascend, and NGP ET IV as well as AROP Funding and Alliance Finance.

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Consolidated Information

Total Revenues

Total revenues for the three months ended March 31, 2024 ("2024 Quarter") decreased slightly to $651.7 million compared to $662.9 million for the three months ended March 31, 2023 ("2023 Quarter") primarily as a result of lower average coal sales prices, partially offset by higher oil & gas royalties and other revenues.

Total revenues for the three months ended June 30, 2024 ("2024 Quarter") decreased 7.6% to $593.4 million compared to $641.8 million for the three months ended June 30, 2023 ("2023 Quarter") primarily as a result of reduced coal sales volumes, partially offset by increased coal sales price realizations, which rose 3.8% to $65.30 per ton sold in the 2024 Quarter compared to $62.93 per ton sold in the 2023 Quarter.

Total operating expenses

Total operating expenses increased to $491.4 million in the 2024 Quarter, compared to $455.6 million in the 2023 Quarter, primarily due to the sale of higher cost purchased coal, increased coal sales volumes, higher per ton costs on certain expense items discussed in more detail below and a $15.3 million litigation expense accrual in the 2024 Quarter relating to the settlement (which is subject to court approval) of certain litigation as described in "Part II - Item 1.

Legal Proceedings" of this Quarterly Report on Form 10-Q.

Total operating expenses increased to $475.9 million in the 2024 Quarter, compared to $457.9 million in the 2023 Quarter, primarily due to the sale of higher cost purchased coal and higher per ton costs on certain expense items discussed in more detail below.

Net income attributable to ARLP

Net income for the 2024 Quarter was $158.1 million, or $1.21 per basic and diluted limited partner unit, compared to $191.2 million, or $1.45 per basic and diluted limited partner unit, for the 2023 Quarter as a result of lower revenues and increased total operating expenses, partially offset by an increase in the fair value of our digital assets.

Net income attributable to ARLP for the 2024 Quarter was $100.2 million, or $0.77 per basic and diluted limited partner unit, compared to $169.8 million, or $1.30 per basic and diluted limited partner unit, for the 2023 Quarter due to lower revenues and higher total operating expenses.

Coal sales decreased to $512.7 million for the 2024 Quarter compared to $560.3 million for the 2023 Quarter.

The decrease was attributable to lower average coal sales prices, which reduced coal sales by $30.9 million, partially offset by the benefit of higher tons sold, which contributed $14.0 million in additional coal sales.

Coal sales prices decreased by 5.2% primarily due to reduced domestic pricing at our Tunnel Ridge mine, which benefited from significantly elevated pricing during the 2023 Quarter.

Increased sales tonnage from our Hamilton and Warrior mines drove sales volumes higher by 2.4% in the 2024 Quarter to 8.7 million tons sold, compared to 8.5 million tons sold during the 2023 Quarter.

The decrease was attributable to lower tons sold, which reduced coal sales by $66.2 million, partially offset by the benefit of higher average coal sales prices, which contributed $18.6 million in additional coal sales.

Coal sales volumes decreased by 11.8% primarily due to transportation delays impacting sales from our Tunnel Ridge mine during the quarter and reduced tons sold from our Hamilton mine due to reduced domestic demand, partially offset by increased export sales volumes from our Gibson South operation.

Improved domestic price realizations contributed to an increase of 3.8% in average coal sales prices compared to the 2023 Quarter.

Coal - Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA Expense for our coal operations increased 5.5% to $354.3 million, as a result of increased sales volumes and higher per ton costs.

Segment Adjusted EBITDA Expense per ton sold for our coal operations increased 3.0% to $40.85 per ton sold in the 2024 Quarter compared to $39.66 per ton in the 2023 Quarter, primarily due to certain cost increases, which are discussed below by category:

Segment Adjusted EBITDA Expense for our coal operations increased 5.7% to $356.2 million, as a result of higher per ton costs, partially offset by lower coal sales volumes.

Segment Adjusted EBITDA Expense per ton sold for our coal operations increased 19.9% to $45.37 per ton sold in the 2024 Quarter compared to $37.85 per ton in the 2023 Quarter, primarily due to lower production and certain per ton cost increases, which are discussed below by category:

● Labor and benefit expenses per ton produced, excluding workers' compensation, increased 21.9% to $13.69 per ton in the 2024 Quarter from $11.23 per ton in the 2023 Quarter.

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● Material and supplies expenses per ton produced increased 24.8% to $16.02 per ton in the 2024 Quarter from $12.84 per ton in the 2023 Quarter.

The increase of $0.89 per ton produced primarily reflects increases of $0.35 per ton for outside expenses, $0.22 per ton for roof support and $0.11 per ton for environmental and reclamation expenses other than longwall subsidence .

The increase of $3.18 per ton produced primarily reflects increases of $0.69 per ton for roof support, $0.52 per ton in longwall subsidence expense, $0.42 per ton for ventilation related expenses, $0.40 per ton for power and fuel, $0.37 per ton for outside expenses, $0.28 per ton for environmental and reclamation expenses other than longwall subsidence, and $0.21 per ton for safety related materials and supplies .

● Maintenance expenses per ton produced increased 30.1% to $5.27 per ton in the 2024 Quarter from $4.05 per ton in the 2023 Quarter.

The increase of $0.78 per ton produced was primarily a result of higher maintenance costs at our River View and Hamilton mines.

● We had outside coal purchases of $9.1 million in the 2024 Quarter compared to no sales of outside coal purchases in the 2023 Quarter.

The increase of $1.22 per ton produced was primarily a result of higher maintenance costs at several mines.

● We had outside coal purchases of $10.6 million in the 2024 Quarter compared to $4.2 million in the 2023 Quarter.

Thus, costs per ton in the 2024 Quarter increased as our cost of outside coal purchases are generally higher on a per ton basis than our produced coal.

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Financial Statements (Unaudited) – Note 18 – Segment Information."

Segment Adjusted EBITDA

Our 2024 Quarter Segment Adjusted EBITDA decreased $67.4 million to $202.0 million from the 2023 Quarter Segment Adjusted EBITDA of $269.4 million.

For a definition of Segment Adjusted EBITDA and related reconciliation to its comparable GAAP financial measure, please see "Item 1.

Financial Statements (Unaudited) – Note 18 – Segment Information."

Segment Information

Three Months Ended

Increase (Decrease)

(in thousands)

Segment Adjusted EBITDA

Illinois Basin Coal Operations

Appalachia Coal Operations

Oil & Gas Royalties

Coal Royalties

Other, Corporate and Elimination (1)

Total Segment Adjusted EBITDA (2)

Coal - Tons sold

Illinois Basin Coal Operations

Appalachia Coal Operations

Total tons sold

Illinois Basin Coal Operations

Appalachia Coal Operations

Total coal sales

Other revenues

Illinois Basin Coal Operations

Appalachia Coal Operations

Oil & Gas Royalties

Coal Royalties

Other, Corporate and Elimination

Total other revenues

Segment Adjusted EBITDA Expense

Illinois Basin Coal Operations

Appalachia Coal Operations

Oil & Gas Royalties

Coal Royalties

Other, Corporate and Elimination (1)

Total Segment Adjusted EBITDA Expense (2)

Oil & Gas Royalties

Volume - BOE (3)

Oil & gas royalties

Coal Royalties

Volume - Tons sold (4)

Intercompany coal royalties

n/m Percentage change not meaningful.

(1) Other, Corporate and Elimination includes the elimination of intercompany coal royalty revenues and expenses between our Coal Royalties Segment and our Coal Operations Segments.

(2) For definitions of Segment Adjusted EBITDA and Segment Adjusted EBITDA Expense and related reconciliations to their respective comparable GAAP financial measures, please see "Item 1.

Financial Statements (Unaudited) – Note 18 – Segment Information."

(3) Barrels of oil equivalent ("BOE") is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).

(4) Represents tons sold by our Coal Operations Segments that were produced from coal reserves leased from our Coal Royalties Segment.

Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 1.3% to $118.0 million in the 2024 Quarter from $119.6 million in the 2023 Quarter.

The slight decrease was primarily attributable to lower coal sales volumes and higher operating expenses, partially offset by increased average coal sales price per ton realizations.

Sales volumes decreased by 4.6% compared to the 2023 Quarter due primarily to decreased tons sold from our Hamilton mine due to reduced domestic demand, partially offset by increased export sales volumes from our Gibson South operation.

Coal sales prices increased by 4.9% compared to the 2023 Quarter as a result of improved domestic price realizations.

Segment Adjusted EBITDA Expense increased slightly to $216.2 million in the 2024 Quarter from $214.7 million in the 2023 Quarter, primarily as a result of higher operating expenses per ton, partially offset by reduced sales volumes.

Segment Adjusted EBITDA Expense per ton for the 2024 Quarter increased by 5.5% compared to the 2023 Quarter due primarily to reduced production at our Hamilton mine and lower recoveries at our River View operation.

The lower recoveries at River View were attributable to the initial mining in the #11 seam that was necessary to slope into the # 9 seam at the new Henderson County mine, which was completed in early July.

Appalachia Coal Operations – Segment Adjusted EBITDA decreased 58.6% to $45.3 million for the 2024 Quarter from $109.6 million in the 2023 Quarter.

The decrease of $64.3 million was primarily attributable to lower coal sales, which decreased 20.9% to $180.7 million in the 2024 Quarter from $228.5 million in the 2023 Quarter, and higher operating expenses.

The decrease in coal sales reflects lower sales volumes partially offset by higher price realizations.

Coal sales volumes decreased by 27.3% compared to the 2023 Quarter primarily due to logistical challenges caused by flooding on the Ohio River and rail and port logistics complications caused by the Baltimore bridge collapse during the 2024 Quarter.

Average coal sales price per ton increased by 8.7% compared to the 2023 Quarter due primarily to increased domestic pricing from our Tunnel Ridge mine.

Segment Adjusted EBITDA Expense increased 14.6% to $136.8 million in the 2024 Quarter from $119.3 million in the 2023 Quarter due to increased per ton operating expenses.

Segment Adjusted EBITDA Expense per ton for the 2024 Quarter increased by 57.6% compared to the 2023 Quarter due to reduced production across the region as a result of longwall moves at our Tunnel Ridge and Mettiki mines and challenging mining conditions at all three operations, resulting in lowered recoveries, equipment availability and increased costs related to roof control and maintenance during the 2024 Quarter.

Oil & Gas Royalties – Segment Adjusted EBITDA increased 7.6% to $31.3 million in the 2024 Quarter compared to $29.1 million in the 2023 Quarter due to increased oil & gas volumes, which rose 6.8% to 817 MBOE sold in the 2024 Quarter compared to 765 MBOE in the 2023 Quarter as a result of increased drilling and completion activities on our interests, acquisitions of additional oil & gas mineral interests, and higher average sales price per BOE, which increased by 3.1%.

Coal Royalties – Segment Adjusted EBITDA decreased by 9.3% to $10.0 million in the 2024 Quarter compared to $11.0 million in the 2023 Quarter due to lower royalty tons sold resulting from lower sales volumes at our Hamilton and River View operations in the 2024 Quarter.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Consolidated Information

Total Revenues

Total revenues for the six months ended June 30, 2024 ("2024 Period") decreased 4.6% to $1.25 billion compared to $1.30 billion for the six months ended June 30, 2023 ("2023 Period") primarily due to lower coal sales, partially offset by higher oil & gas royalties and other revenues.

Total operating expenses

Total operating expenses increased to $967.3 million in the 2024 Period, compared to $913.5 million in the 2023 Period, primarily due to the sale of higher cost purchased coal, higher per ton costs on certain expense items discussed in more detail below and a $15.3 million litigation expense accrual in the 2024 Period relating to the settlement (which is subject to court approval) of certain litigation as described in "Part II - Item 1.

Legal Proceedings" of this Quarterly Report on Form 10-Q.

Net income attributable to ARLP

Net income attributable to ARLP for the 2024 Period was $258.2 million, or $1.98 per basic and diluted limited partner unit, compared to $361.0 million, or $2.75 per basic and diluted limited partner unit, for the 2023 Period as a result of lower revenues and increased total operating expenses.

Coal sales decreased to $1.07 billion for the 2024 Period compared to $1.14 billion for the 2023 Period.

The decrease was attributable to lower coal sales volumes, which reduced coal sales by $55.6 million, and lower average coal sales prices, which reduced coal sales by $9.0 million.

Coal sales volumes decreased by 4.9% primarily due to reduced tons sold from our River View and Tunnel Ridge mines due to reduced domestic demand and logistical challenges caused by flooding on the Ohio River, partially offset by increased export sales volumes from our Gibson South operation.

Coal sales prices decreased slightly in the 2024 Period primarily due to reduced domestic pricing at our Tunnel Ridge mine, which benefited from significantly elevated pricing during the 2023 Period.

Coal - Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA Expense for our coal operations increased 5.6% to $710.5 million, as a result of higher per ton costs.

Segment Adjusted EBITDA Expense per ton sold for our coal operations increased 11.0% to $42.99 per ton sold in the 2024 Period compared to $38.73 per ton in the 2023 Period, primarily due to certain cost increases, which are discussed below by category:

● Labor and benefit expenses per ton produced, excluding workers' compensation, increased 13.2% to $13.07 per ton in the 2024 Period from $11.55 per ton in the 2023 Period.

The increase of $1.52 per ton was primarily due to higher direct labor costs at several mines.

● Material and supplies expenses per ton produced increased 15.1% to $15.43 per ton in the 2024 Period from $13.41 per ton in the 2023 Period.

The increase of $2.02 per ton produced primarily reflects increases of $0.45 per ton for roof support, $0.36 per ton for outside expenses, $0.23 per ton for ventilation related expenses, $0.23 per ton in longwall subsidence expense, and $0.22 per ton for power and fuel .

● Maintenance expenses per ton produced increased 23.8% to $5.25 per ton in the 2024 Period from $4.24 per ton in the 2023 Period.

The increase of $1.01 per ton produced was primarily a result of higher maintenance costs at our River View and Hamilton mines.

● We had outside coal purchases of $19.7 million in the 2024 Period compared to $4.2 million in the 2023 Period.

Thus, costs per ton in the 2024 Period increased as our cost of outside coal purchases are generally higher on a per ton basis than our produced coal.

For a definition of Segment Adjusted EBITDA Expense and related reconciliation to its comparable GAAP financial measure, please see "Item 1.

Financial Statements (Unaudited) – Note 18 – Segment Information."

Change in fair value of digital assets

We recorded an $11.9 million increase in the fair value of our digital assets reflecting the increase in the price of bitcoin during the 2024 Quarter.

We recorded an $8.1 million increase in the fair value of our digital assets reflecting the increase in the price of bitcoin during the 2024 Period.

Effective January 1, 2024, we adopted new accounting guidance which clarifies the accounting and disclosure requirements for certain crypto assets.

The new guidance requires us to measure our digital assets at fair value and include the change in net income.

The new guidance requires us to measure our digital

assets at fair value and include the change in net income.

Please see "Item 1.

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Segment Adjusted EBITDA

Our 2024 Quarter Segment Adjusted EBITDA decreased $31.3 million to $260.6 million from the 2023 Quarter Segment Adjusted EBITDA of $291.9 million.

Our 2024 Period Segment Adjusted EBITDA decreased $98.7 million to $462.6 million from the 2023 Period Segment Adjusted EBITDA of $561.3 million.

For a definition of Segment Adjusted EBITDA and related reconciliation to its comparable GAAP financial measure, please see "Item 1.

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Segment Information

Three Months Ended

Six Months Ended

Increase (Decrease)

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(4) Represents tons sold by our Coal Operations Segments that were produced from coal reserves leased from our Coal Royalties Segment.

Illinois Basin Coal Operations – Segment Adjusted EBITDA increased 6.3% to $140.3 million in the 2024 Quarter from $132.0 million in the 2023 Quarter.

The increase of $8.3 million was primarily attributable to higher coal sales, which increased 10.0% to $370.6 million in the 2024 Quarter from $336.9 million in the 2023 Quarter, partially offset by increased operating expenses.

The increase in coal sales reflects higher coal sales price realizations of $57.58 per ton sold in the 2024 Quarter compared to $54.43 per ton sold in the 2023 Quarter due to improved domestic pricing, and a 4.0% increase in tons sold due primarily to higher sales volumes from our Hamilton and Warrior mines.

Segment Adjusted EBITDA Expense increased 12.6% to $233.1 million in the 2024 Quarter from $207.1 million in the 2023 Quarter primarily as a result of higher volumes and operating expenses per ton.

Segment Adjusted EBITDA Expense per ton increased by 8.3% compared to the 2023 Quarter resulting from reduced production and recoveries at our River View mine.

Appalachia Coal Operations – Segment Adjusted EBITDA decreased 36.3% to $74.2 million for the 2024 Quarter from $116.6 million in the 2023 Quarter.

The decrease of $42.4 million was primarily attributable to lower coal sales, which decreased 20.9% to $191.2 million in the 2024 Quarter from $241.9 million in the 2023 Quarter, partially offset by lower operating expenses.

Average coal sales prices decreased by 19.4% compared to the 2023 Quarter as a result of reduced domestic pricing from our Tunnel Ridge mine, which benefited from significantly elevated pricing during the 2023 Quarter.

Segment Adjusted EBITDA Expense decreased 6.6% to $117.5 million in the 2024 Quarter from $125.8 million in the 2023 Quarter due to decreased per ton operating expenses.

Segment Adjusted EBITDA Expense per ton decreased by 4.8% compared to the 2023 Quarter due primarily to increased production and recoveries at our Mettiki mine during the 2024 Quarter.

Oil & Gas Royalties – Segment Adjusted EBITDA increased to $31.4 million in the 2024 Quarter compared to $30.0 million in the 2023 Quarter.

Improved Segment Adjusted EBITDA in the 2024 Quarter was due to record oil & gas volumes, which rose to 898 MBOE sold in the 2024 Quarter, representing an increase of 18.3% compared to the 2023 Quarter as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests.

Coal Royalties – Segment Adjusted EBITDA increased to $12.4 million for the 2024 Quarter compared to $10.1 million for the 2023 Quarter.

Higher average royalty rates per ton and increased royalty tons sold contributed to improved results for the 2024 Quarter.

Illinois Basin Coal Operations – Segment Adjusted EBITDA increased 2.7% to $258.3 million in the 2024 Period from $251.6 million in the 2023 Period.

The increase of $6.7 million was primarily attributable to higher coal sales, which increased 5.1% to $702.6 million in the 2024 Period from $668.7 million in the 2023 Period, partially offset by increased operating expenses.

The increase in coal sales reflects higher coal sales price realizations of $57.48 per ton sold in the 2024 Period compared to $54.56 per ton sold in the 2023 Period due to improved domestic pricing, partially offset by a slight reduction in sales volumes.

Segment Adjusted EBITDA Expense increased 6.5% to $449.3 million in the 2024 Period from $421.7 million in the 2023 Period primarily as a result of higher operating expenses per ton.

Segment Adjusted EBITDA Expense per ton increased by 6.8% compared to the 2023 Period resulting from reduced production at our Hamilton mine and lower recoveries at our River View operation.

Appalachia Coal Operations – Segment Adjusted EBITDA decreased 47.1% to $119.6 million for the 2024 Period from $226.1 million in the 2023 Period.

The decrease of $106.5 million was primarily attributable to lower coal sales, which decreased 20.9% to $371.9 million in the 2024 Period from $470.4 million in the 2023 Period, and higher operating expenses.

The decrease in coal sales reflects lower sales volumes and prices.

Coal sales volumes decreased by 15.9% compared to the 2023 Period primarily due to reduced production across the region as a result of lower demand and logistical challenges caused by flooding on the Ohio River.

Average coal sales prices decreased by 5.9% compared to the 2023 Period as a result of reduced domestic pricing from our Tunnel Ridge mine, which benefited from significantly elevated pricing during the 2023 Period.

Segment Adjusted EBITDA Expense increased 3.7% to $254.3 million in the 2024 Period from $245.1 million in the 2023 Period due to increased operating expenses per ton.

Segment Adjusted EBITDA Expense per ton for the 2024 Period increased by 23.4% compared to the 2023 Period due to reduced production across the region as a result of challenging geology that lowered recoveries and increased costs related to labor, roof control, outside expenses, and maintenance during the 2024 Period.

Oil & Gas Royalties – Segment Adjusted EBITDA increased to $62.7 million in the 2024 Period compared to $59.1 million in the 2023 Period.

Improved Segment Adjusted EBITDA in the 2024 Period was due to record oil & gas volumes, which rose to 1,715 MBOE sold in the 2024 Period, representing an increase of 12.5% compared to the 2023 Period as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests.

Coal Royalties – Segment Adjusted EBITDA increased to $22.4 million for the 2024 Period compared to $21.1 million for the 2023 Period.

Higher average royalty rates per ton and increased royalty tons sold contributed to improved results for the 2024 Period.

Liquidity and Capital Resources

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February 2024 Equipment Financing

On February 28, 2024, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $54.6 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 "February 2024 Equipment Financing").

The February 2024 Equipment Financing contains customary terms and events of default and provides for forty-eight monthly payments with an implicit interest rate of 8.29%, maturing on February 28, 2028.

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

For additional information on February 2024 Equipment Financing, please see "Item 1.

On February 28, 2024, Alliance Coal entered into an equipment financing arrangement accounted for as debt, wherein Alliance Coal received $54.6 million in exchange for conveying its interest in certain equipment owned indirectly by Alliance Coal and entering into a master lease agreement for that equipment (the "February 2024 Equipment Financing").

For additional information on the February 2024 Equipment Financing, please see "Item 1.

Financial Statements (Unaudited) – Note 8 – Long-Term Debt."

8.625% Senior Notes due 2029

On June 12, 2024, the Intermediate Partnership and Alliance Finance (as co-issuer) issued an aggregate principal amount of $400 million of senior unsecured notes due 2029 in a private placement to qualified institutional buyers.

For additional information on the 8.625% Senior Notes due 2029, please see "Item 1.

Financial Statements (Unaudited) – Note 8 – Long-Term Debt."

7.5% Senior Notes due 2025

During the six months ended June 30, 2024, we redeemed the entire outstanding balance of $284.6 million of our 7.5% Senior Notes due 2025.

Unit Repurchase Program

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

No units were repurchased during the three months ended March 31, 2024.

The timing of any future unit repurchases and the ultimate number of units to be purchased will depend on several factors, including business and market conditions, our future financial performance, and other capital priorities.

No units were repurchased during the six months ended June 30, 2024.

The timing of any future unit repurchases and the ultimate number of units to be purchased will depend on several

factors, including business and market conditions, our future financial performance, and other capital priorities.

Please read "Part II - Item 2.

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We may over time, and subject to market conditions, in one or more offerings, offer and sell any of the securities described in the prospectus.

Cash provided by operating activities was $209.7 million for the 2024 Quarter compared to $221.7 million for the 2023 Quarter.

The decrease in cash provided by operating activities was primarily due to the decrease in net income adjusted for non-cash items and unfavorable working capital changes related to accounts payable, prepaid expenses and inventories.

These decreases were partially offset by favorable working capital changes related to trade receivables, accrued payroll and related benefits as well as miscellaneous other changes compared to the 2023 Quarter.

Net cash used in investing activities was $120.5 million for the 2024 Quarter compared to $147.1 million for the 2023 Quarter.

The decrease in cash used in investing activities was primarily due to acquisitions of oil & gas reserves including the JC Resources Acquisition in the 2023 Quarter.

These decreases were partially offset by increased capital expenditures during the 2024 Quarter and changes in accounts payable and accrued liabilities during the 2024 Quarter.

Net cash used in financing activities was $15.0 million for the 2024 Quarter compared to $99.3 million for the 2023 Quarter.

The decrease in cash used in financing activities was primarily attributable to increased borrowings under our revolving credit facility and the securitization facility, increased proceeds from equipment financing, reduced payments on long-term debt in the 2024 Quarter as compared to the 2023 Quarter, debt issuance costs paid in the 2023 Quarter and the purchase of units in the 2023 Quarter.

These decreases were partially offset by payments under our revolving credit facility and the securitization facility in the 2024 Quarter and long-term debt borrowings in the 2023 Quarter.

Cash provided by operating activities was $425.4 million for the 2024 Period compared to $500.7 million for the 2023 Period.

The decrease in cash provided by operating activities was primarily due to the decrease in net income adjusted for non-cash items and unfavorable working capital changes primarily related to inventories.

These decreases were partially offset by favorable working capital changes primarily related to trade receivables and miscellaneous other changes compared to the 2023 Period.

Net cash used in investing activities was $223.0 million for the 2024 Period compared to $274.3 million for the 2023 Period.

The decrease in cash used in investing activities was primarily due to acquisitions of oil & gas reserves including the JC Resources Acquisition in the 2023 Period and change in accounts payable and accrued liabilities.

These decreases were partially offset by increased capital expenditures during the 2024 Period.

Net cash used in financing activities was $58.6 million for the 2024 Period compared to $237.5 million for the 2023 Period.

The decrease in cash used in financing activities was primarily attributable to the issuance of our 8.625% Senior Notes due 2029, borrowings under our February 2024 Equipment Financing in the 2024 Period and the purchase of units under our repurchase program in the 2023 Period.

These decreases were partially offset by the redemption of our remaining 7.5% Senior Notes due 2025.

Cash Requirements

Management anticipates having sufficient cash flow to meet 2024 cash requirements, including capital expenditures, scheduled payments on long-term debt, lease obligations, asset retirement obligation costs and workers' compensation and pneumoconiosis costs, with our March 31, 2024 cash and cash equivalents of $134.0 million, cash flows from operations, or borrowings under our revolving credit facility and securitization facility, if necessary.

Management anticipates having sufficient cash flow to meet 2024 cash requirements, including capital expenditures, scheduled payments on long-term debt, lease obligations, asset retirement obligation costs and workers' compensation and pneumoconiosis costs, with our June 30, 2024 cash and cash equivalents of $203.7 million, cash flows from operations, or borrowings under our revolving credit facility and securitization facility, if necessary.

We currently project average estimated annual maintenance capital expenditures over the next five years of approximately $7.76 per ton produced.

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

On March 31, 2024, we had $5.0 million in letters of credit outstanding under this agreement.

On June 30, 2024, we had $5.0 million in letters of credit outstanding under this agreement.

Related-Party Transactions

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Craft Foundation, (2) the use of aircraft, and (3) the purchase of oil & gas mineral interests from JC Resources LP, an entity owned by Mr.

We also have related-party transactions with (a) WKY CoalPlay, LLC, a company owned by entities related to Mr.

We also have related-party transactions with

(a) WKY CoalPlay, LLC, a company owned by entities related to Mr.

Craft, regarding three mineral leases, and (b) with entities in which we hold equity investments.

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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-Q

Item 2. Management’s Discussion and Analysis