What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-07 · 69 added, 61 removed, 249 unchanged (34% of the section changed)

11 unchanged sentences

● References to "Alliance Resource Properties" mean Alliance Resource Properties, LLC, an indirect wholly owned subsidiary of ARLP.

We are a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located in strategic producing regions across the United States.

We are a diversified natural resources company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located in strategic producing regions across the United States.

Our strategy is to provide our customers with reliable, baseload fuel for electricity generation to meet their load expectations.

26 unchanged sentences

Our Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties.

● Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC's mining complex, (b) the Warrior Coal, LLC ("Warrior") mining complex, (c) the River View Coal, LLC ("River View") mining complex and (d) the Hamilton County Coal, LLC ("Hamilton") mining complex.

● Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC ("Gibson") mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View Coal, LLC ("River View") mining complex and (d) the Hamilton County Coal, LLC ("Hamilton") mining complex.

The segment also includes our Mt.

Vernon coal-loading terminal on the Ohio River in Indiana, Mid-America Carbonates, LLC and other support services, and our non-operating mining complexes.

● Appalachia Coal Operations reportable segment includes (a) the Mettiki mining complex, (b) the Tunnel Ridge, LLC ("Tunnel Ridge") mining complex and (c) the MC Mining, LLC mining complex.

● Appalachia Coal Operations reportable segment includes (a) the Mettiki Coal, LLC ("Mettiki") mining complex, (b) the Tunnel Ridge, LLC ("Tunnel Ridge") mining complex and (c) the MC Mining, LLC ("MC Mining") mining complex.

● Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals as well as our equity method investment in AllDale III.

2 unchanged sentences

● Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties.

Approximately 63% of the coal sold by our Coal Operations' mines is leased from our Coal Royalties entities.

Approximately 63% of the coal sold by our mines is leased from our Coal Royalty entities.

● Other, Corporate and Elimination includes marketing and administrative activities, Matrix Design Group, LLC, its subsidiaries and Alliance Design Group, LLC, our investments in Francis, Infinitum, NGP ET IV , and Ascend, Wildcat Insurance, LLC, which assists the ARLP Partnership with its insurance requirements, AROP Funding, LLC ("AROP Funding") and Alliance Resource Finance Corporation ("Alliance Finance"), and other miscellaneous activities.

2 unchanged sentences

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

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

Consolidated Information

Total 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 revenues for the three months ended September 30, 2024 ("2024 Quarter") decreased 3.6% to $613.6 million compared to $636.5 million for the three months ended September 30, 2023 ("2023 Quarter") primarily as a result of reduced coal sales prices and lower transportation revenues.

Total operating expenses

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.

Total operating expenses increased to $512.5 million in the 2024 Quarter, compared to $471.1 million in the 2023 Quarter, primarily due to higher per ton costs on certain expense items discussed below.

Net income attributable to ARLP

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.

Net income attributable to ARLP for the 2024 Quarter was $86.3 million, or $0.66 per basic and diluted limited partner unit, compared to $153.7 million, or $1.18 per basic and diluted limited partner unit, for the 2023 Quarter as a result of lower revenues and increased total operating expenses.

Coal sales decreased to $532.6 million for the 2024 Quarter compared to $549.1 million for 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.

The decrease was attributable to lower average coal sales prices, which reduced coal sales by $11.5 million, and lower tons sold, which reduced coal sales by $5.0 million.

Coal sales prices decreased by 2.1% primarily as a result of reduced export price realizations from our Appalachian segment.

Coal sales volumes decreased slightly as reduced sales at our Hamilton and MC Mining operations were primarily offset by increased sales volumes from our Gibson South and Mettiki mines.

Coal - Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA Expense for our coal operations increased 10.9% to $386.3 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:

Segment Adjusted EBITDA Expense per ton sold for our coal operations increased 11.9% to $46.11 per ton sold in the 2024 Quarter compared to $41.19 per ton in the 2023 Quarter, primarily due to reduced production, higher beginning inventory cost per ton at several mines, increased longwall move days at our Hamilton and Tunnel Ridge operations and challenging mining conditions at our Appalachian mines that lowered recoveries and increased per ton expenses as well as certain other per ton cost increases, which are discussed below by category:

● Labor and benefit expenses per ton produced, excluding workers' compensation, increased 17.5% to $14.54 per ton in the 2024 Quarter from $12.37 per ton in the 2023 Quarter.

1 unchanged sentence

● Material and supplies expenses per ton produced increased 14.4% to $15.94 per ton in the 2024 Quarter from $13.93 per ton in the 2023 Quarter.

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 .

The increase of $2.01 per ton produced primarily reflects increases of $0.86 per ton for environmental and longwall subsidence expense, $0.49 per ton for outside expenses, $0.47 per ton for roof support, and $0.39 per ton for power and fuel , partially offset by a decrease of $0.29 per ton for contract labor used in the mining process .

● Maintenance expenses per ton produced increased 16.3% to $5.65 per ton in the 2024 Quarter from $4.86 per ton in the 2023 Quarter.

The increase of $0.79 per ton produced was primarily a result of higher maintenance costs at several mines.

Segment Adjusted EBITDA Expense increases per ton were partially offset by the following decreases:

● Production taxes and royalty expenses per ton incurred as a percentage of coal sales prices and volumes decreased $0.28 per produced ton sold in the 2024 Quarter compared to 2023 Quarter primarily as a result of lower price realizations and a favorable mix of tons sold mined in states without severance taxes.

● We had outside coal purchases of $8.2 million in the 2024 Quarter compared to $11.5 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.

This benefited costs per ton in the 2024 Quarter since the 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."

Depreciation, depletion and amortization

Depreciation, depletion and amortization expense increased to $73.0 million for the 2024 Quarter compared to $65.4 million for the 2023 Quarter primarily due to increased sales of higher depreciation cost tons at our Tunnel Ridge mine as a result of lower production volumes at the mine in the 2024 Quarter.

Transportation revenues and expenses

Transportation revenues and expenses were $24.6 million and $35.0 million for 2024 and 2023 Quarters, respectively.

The decrease of $10.4 million was primarily attributable to decreased average third-party transportation rates in the 2024 Quarter and decreased coal shipments for which we arrange third-party transportation.

Transportation revenues are recognized when title to the coal passes to the customer and recognized in an amount equal to the corresponding transportation expenses.

Segment Adjusted EBITDA

4 unchanged sentences

Three Months Ended

September 30,

Increase (Decrease)

18 unchanged sentences

Oil & Gas Royalties

Coal Royalties

Other, Corporate and Elimination

13 unchanged sentences

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.

4 unchanged sentences

Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 13.4% to $114.6 million in the 2024 Quarter from $132.4 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.

The decrease of $17.8 million was primarily attributable to lower coal sales volumes and higher operating expenses.

Sales volumes decreased by 1.4% compared to the 2023 Quarter due primarily to reduced domestic demand, partially offset by increased export sales volumes from our Gibson South operation.

Segment Adjusted EBITDA Expense increased 5.8% to $225.5 million in the 2024 Quarter from $213.2 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 7.2% compared to the 2023 Quarter due primarily to reduced production and higher beginning inventory cost per ton at our Hamilton and River View mines.

Increased expenses and lower production at our Hamilton mine during the 2024 Quarter was partially attributable to increased longwall move days compared to the 2023 Quarter.

Appalachia Coal Operations – Segment Adjusted EBITDA decreased 49.9% to $37.5 million for the 2024 Quarter from $74.8 million in the 2023 Quarter.

The decrease of $37.3 million was primarily attributable to lower coal sales, which decreased 5.6% to $194.8 million in the 2024 Quarter from $206.4 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.

The decrease in coal sales reflects lower price realizations.

Average coal sales price per ton decreased by 5.8% compared to the 2023 Quarter as a result of reduced export price realizations from our Mettiki and MC Mining operations.

Segment Adjusted EBITDA Expense increased 19.5% to $157.8 million in the 2024 Quarter from $132.0 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

Segment Adjusted EBITDA Expense per ton for the 2024 Quarter increased by 19.3% compared to the 2023 Quarter due to a longwall move at our Tunnel Ridge operation, increased subsidence related expenses and challenging mining conditions at all three operations that lowered recoveries, and increased costs related to roof control and maintenance.

Oil & Gas Royalties – Segment Adjusted EBITDA decreased 8.5% to $28.7 million in the 2024 Quarter compared to $31.4 million in the 2023 Quarter due to reduced average sales prices, which decreased by 9.8%, partially offset by increased oil & gas volumes, which rose 11.9% to 864 MBOE sold in the 2024 Quarter compared to 772 MBOE in 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 by 11.6% to $11.1 million in the 2024 Quarter compared to $9.9 million in the 2023 Quarter due to increased royalty tons sold and reduced expenses, partially offset by reduced prices.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 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 revenues for the nine months ended September 30, 2024 ("2024 Period") decreased 4.3% to $1.86 billion compared to $1.94 billion for the nine months ended September 30, 2023 ("2023 Period") primarily due to lower coal sales and transportation revenues, 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.

Total operating expenses increased to $1.48 billion in the 2024 Period, compared to $1.38 billion in the 2023 Period, primarily due to the sale of higher cost purchased coal, higher per ton costs on certain expense items discussed 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.

Net income attributable to ARLP for the 2024 Period was $344.5 million, or $2.64 per basic and diluted limited partner unit, compared to $514.7 million, or $3.93 per basic and diluted limited partner unit, for the 2023 Period as a result of lower revenues and increased total operating expenses, partially offset by an increase in the fair value of our digital assets.

Coal sales decreased to $1.61 billion for the 2024 Period compared to $1.69 billion for the 2023 Period.

The decrease was attributable to lower coal sales volumes, which reduced coal sales by $60.5 million, and lower average coal sales prices, which reduced coal sales by $20.6 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 sales volumes decreased by 3.6% primarily due to reduced tons sold from our River View and Tunnel Ridge mines due to reduced domestic demand, 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, and lower export price realizations from our Mettiki and MC Mining operations.

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 for our coal operations increased 7.4% to $1.10 billion, 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 11.4% to $44.04 per ton sold in the 2024 Period compared to $39.54 per ton in the 2023 Period, primarily due to certain cost increases, which are discussed below by category:

2 unchanged sentences

● Material and supplies expenses per ton produced increased 14.9% to $15.59 per ton in the 2024 Period from $13.57 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 .

The increase of $2.02 per ton produced primarily reflects increases of $0.56 per ton for environmental and longwall subsidence expense, $0.45 per ton for roof support, $0.40 per ton for outside expenses, and $0.27 per ton for power and fuel .

● Maintenance expenses per ton produced increased 21.2% to $5.37 per ton in the 2024 Period from $4.43 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.

The increase of $0.94 per ton produced was primarily a result of higher maintenance costs at several mines.

● We had outside coal purchases of $27.9 million in the 2024 Period compared to $15.7 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.

The increase of outside coal purchases negatively impacted costs per ton in the 2024 Period 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.

3 unchanged sentences

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.

Financial Statements (Unaudited) – Note 6 – Digital Assets" for more information on our digital assets.

Transportation revenues and expenses

Transportation revenues and expenses were $82.1 million and $95.7 million for 2024 and 2023 Periods, respectively.

The decrease of $13.6 million was primarily attributable to decreased coal shipments for which we arrange third-party transportation, partially offset by increased average third-party transportation rates in the 2024 Period.

Transportation revenues are recognized when title to the coal passes to the customer and recognized in an amount equal to the corresponding transportation expenses.

Segment Adjusted EBITDA

3 unchanged sentences

Segment Information

Six Months Ended

Nine Months Ended

September 30,

Increase (Decrease)

40 unchanged sentences

(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 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.

Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 2.9% to $373.0 million in the 2024 Period from $384.0 million in the 2023 Period.

The decrease of $11.0 million was primarily attributable to increased operating expenses, partially offset by higher coal sales, which increased 2.9% to $1.04 billion in the 2024 Period from $1.01 billion in the 2023 Period.

The increase in coal sales reflects higher coal sales price realizations of $57.19 per ton sold in the 2024 Period compared to $55.26 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 6.3% to $674.8 million in the 2024 Period from $634.9 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.

Segment Adjusted EBITDA Expense per ton increased by 6.9% compared to the 2023 Period resulting from reduced production and lower recoveries at our River View and Hamilton operations.

Appalachia Coal Operations – Segment Adjusted EBITDA decreased 47.8% to $157.1 million for the 2024 Period from $301.1 million in the 2023 Period.

1 unchanged sentence

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.

Coal sales volumes decreased by 10.8% compared to the 2023 Period primarily due to reduced production at our Tunnel Ridge operation as a result of lower demand.

Average coal sales prices decreased by 6.1% 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, and lower export price realizations from our Mettiki and MC Mining operations.

Segment Adjusted EBITDA Expense increased 9.3% to $412.1 million in the 2024 Period from $377.1 million in the 2023 Period due to increased operating expenses per ton, partially offset by lower sales volumes.

Segment Adjusted EBITDA Expense per ton for the 2024 Period increased by 22.5% compared to the 2023 Period due to reduced production as a result of challenging mining conditions 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 $91.4 million in the 2024 Period compared to $90.5 million in the 2023 Period.

23 unchanged sentences

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.

In June 2024, we redeemed the entire outstanding balance of $284.6 million of our 7.5% Senior Notes due 2025.

Unit Repurchase Program

3 unchanged sentences

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

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.

No units were repurchased during the nine months ended September 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.

4 unchanged sentences

Cash provided by operating activities was $634.7 million for the 2024 Period compared to $730.3 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.

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

Net cash used in investing activities was $337.4 million for the 2024 Period compared to $439.4 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.

The decrease in cash used in investing activities was primarily due to acquisitions of oil & gas reserves including the JC Resources Acquisition and purchase of investments 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 $161.7 million for the 2024 Period compared to $389.7 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.

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 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 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.

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 September 30, 2024 cash and cash equivalents of $195.4 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.

5 unchanged sentences

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

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

Related-Party Transactions

4 unchanged sentences

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.

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

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.

For more information regarding our investments, please read "Item 1.

6 unchanged sentences

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