What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-11-07 · 282 added, 429 removed, 348 unchanged (67% of the section changed)

4 unchanged sentences

(In thousands, except unit data)

September 30,

CURRENT ASSETS:

Cash and cash equivalents

Trade receivables

Trade receivables (net of allowance of $ 2,212 and $ 2,087 , respectively)

Other receivables

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PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment, at cost

Property, plant and equipment

Less accumulated depreciation, depletion and amortization

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Pneumoconiosis benefits

Accrued pension benefit

Workers' compensation

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Three Months Ended

Nine Months Ended

September 30,

SALES AND OPERATING REVENUES:

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INCOME FROM OPERATIONS

Interest expense (net of interest capitalized for the three and nine months ended September 30, 2024 and 2023 of $ 3,521 , $ 1,809 , $ 8,605 and $ 4,432 , respectively)

Interest expense (net of interest capitalized of $ 4,488 and $ 2,298 , respectively)

Interest income

Equity method investment loss

Net loss on equity method investments

Change in fair value of digital assets

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NET INCOME ATTRIBUTABLE TO ARLP

GENERAL PARTNER

LIMITED PARTNERS

EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED

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Three Months Ended

Nine Months Ended

September 30,

OTHER COMPREHENSIVE INCOME:

6 unchanged sentences

Total pneumoconiosis benefits adjustments

Foreign currency translation adjustment

OTHER COMPREHENSIVE INCOME

8 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

5 unchanged sentences

Contributions to equity method investments

Purchase of equity securities

JC Resources acquisition

Oil & gas reserve asset acquisitions

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Payments under revolving credit facilities

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

Payments for tax withholdings related to settlements under deferred compensation plan

Distributions paid to Partners

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

NET CHANGE IN CASH AND CASH EQUIVALENTS

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Cash paid for interest

Cash paid for income taxes

SUPPLEMENTAL NON-CASH ACTIVITY:

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● 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.

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Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of September 30, 2024 and December 31, 2023, the results of our operations and comprehensive income for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023.

The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of March 31, 2025 and December 31, 2024 and the results of our operations, comprehensive income and cash flows for the three months ended March 31, 2025 and 2024.

All intercompany transactions and accounts have been eliminated.

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

These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all the information normally included with financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States.

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Actual results could differ from those estimates.

Digital Assets

We began our crypto-mining activities during the second half of 2020 as we started mining bitcoin as a pilot project to monetize already paid for, yet underutilized, electricity load.

We continue to periodically be awarded digital assets through our crypto-mining activities.

The awards are accounted for as revenue and valued at the exchange quoted price at the time they are awarded.

Beginning January 1, 2024, with our adoption of the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60) ("ASU 2023-08"), the digital assets we hold are subsequently remeasured to fair value based on the exchange quoted price as of the balance sheet date and included on our condensed consolidated balance sheets within the Digital assets line item.

The activity from remeasurement of digital assets to fair value is reflected in our condensed consolidated statements of income within the Change in fair value of digital assets line item.

Digital assets sold for cash nearly immediately after they are awarded to us for mining activities are presented as cash flows from operating activities, while other sales are reflected as cash flows from investing activities in our condensed consolidated statements of cash flows.

Our realized gains or losses are determined as the difference between the proceeds received when the digital assets are sold and our cost basis in the digital assets.

Our cost basis is the value of the digital assets when they are awarded less any impairment recognized prior to our adoption of ASU 2023-08.

We use a first-in, first-out methodology to assign costs to our digital assets in the calculation of our realized gains or losses.

See Note 6 – Digital Assets for additional information.

NEW ACCOUNTING STANDARDS

New Accounting Standards Issued and Adopted

In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60) ("ASU 2023-08"), which requires an entity to measure certain digital assets at fair value with changes in the fair value recognized in net income.

In addition, the guidance requires additional disclosures related to digital assets once adopted.

We adopted ASU 2023-08, effective January 1, 2024, which resulted in a cumulative-effect adjustment to increase the opening balance of Partners' Capital by $ 6.2 million.

See Note 6 – Digital Assets for more information on our digital assets.

New Accounting Standards Issued and Not Yet Adopted

In November 2023, the FASB issued 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 do not expect ASU 2023-07 to have a material effect on our consolidated financial statements but will result in changes in our segment reporting disclosures upon adoption.

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

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

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

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

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

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.

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

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.

During the nine months ended September 30, 2024, we purchased $ 5.1 million and $ 7.8 million of oil & gas mineral interests in proved and unproved properties, respectively, pursuant to this agreement.

Management fees paid under this agreement have been immaterial.

Miscellaneous Acquisitions

In addition to the acquisitions under the collaborative agreement discussed above, we purchased $ 0.7 million and $ 1.6 million of oil & gas mineral interests in proved and unproved properties, respectively, during the nine months ended September 30, 2024.

CONTINGENCIES

Certain of our subsidiaries are party to litigation in which the plaintiffs allege violations of the Fair Labor Standards Act and state law due to alleged failure to compensate for time "donning" and "doffing" equipment and to account for certain bonuses in the calculation of overtime rates and pay.

In April 2024, we entered into a settlement agreement with the plaintiffs pursuant to which we agreed to settle such litigation for $ 15.3 million.

As a result of reaching this settlement, which is subject to court approval, we have accrued $ 15.3 million as of September 30, 2024.

Our $ 15.3 million accrual is included in the Other current liabilities line item on our condensed consolidated balance sheet.

We also have various other lawsuits, claims and regulatory proceedings incidental to our business that are pending against the ARLP Partnership.

We record an accrual for a potential loss related to these matters when, in management's opinion, such loss is probable and reasonably estimable.

Based on known facts and circumstances, we believe the ultimate outcome of these outstanding lawsuits, claims and regulatory proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity.

However, if the results of these matters are different from management's current expectations and in amounts greater than our accruals (if any), such matters could have a material adverse effect on our business and operations.

Inventories consist of the following:

September 30,

(in thousands)

Finished goods (net of reserve for obsolescence of $ 723 and $ 728 , respectively)

Work in process

Raw materials

Supplies (net of reserve for obsolescence of $ 8,036 and $ 7,439 , respectively)

Total inventories, net

The above balances reflect lower of cost or net realizable value adjustments of $ 5.9 million to our coal inventories.

These adjustments are primarily a result of lower coal sale prices and higher cost per ton at the Mettiki Mining, LLC ("Mettiki") and MC Mining, LLC ("MC Mining") mining complexes.

Certain of our subsidiaries, primarily consisting of Matrix Design Group, LLC, its subsidiaries, and Alliance Design Group, LLC (collectively referred to as "Matrix Group"), manufacture a variety of products for our mining operations and third parties.

These products are primarily consumed internally by our mining operations with associated inventory historically presented as supplies inventory.

Recently Matrix Group has been increasing its production of products with the intention to increase third-party sales.

We have therefore presented our manufactured goods inventories in the table above separately from our historical presentation of supplies inventory.

DIGITAL ASSETS

The following table sets forth our digital assets as shown on the condensed consolidated balance sheet:

September 30, 2024

Digital assets:

(in thousands, except unit data)

The following table represents a reconciliation of the fair values of our digital assets:

Three Months Ended

Nine Months Ended

September 30,

Digital assets:

We are currently evaluating the impact of adopting ASU 2023-09.

We do not expect ASU 2023-09 to have a material effect on our consolidated financial statements but will result in the enhanced disclosures described above.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40 ) (“ASU 2024-03”).

ASU 2024-03 requires the disclosure of additional information about specific expense categories in the notes to the financial statements to provide enhanced transparency into the nature and function of expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact ASU 2024-03 will have on our consolidated financial statements and related disclosures.

VARIABLE INTEREST ENTITIES

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 JV, LLC (“Cavalier Minerals”), approximately 97 % of the limited partner interests in AllDale Minerals LP (“AllDale I”) and AllDale Minerals II, LP (“AllDale II”, and collectively with AllDale I, “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 Management, LLC (“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 variable interest entities (“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 on our condensed consolidated balance sheets.

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

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

Assets (liabilities):

(in thousands)

Beginning balance

Fair value gains

Ending balance

As discussed in Note 2 – New Accounting Standards, our beginning balance is inclusive of a cumulative-effect adjustment of $ 6.2 million as of January 1, 2024.

Additions are the result of awarded digital assets received from our crypto-mining activities, while dispositions are the result of sales and payments for services.

During the three and nine months ended September 30, 2024, we had digital asset dispositions of $ 1.4 million and $ 3.1 million, respectively, inclusive of realized gains of $ 1.0 million and $ 2.1 million, respectively.

Cash and cash equivalents

Trade receivables

Total property, plant and equipment, net

Accounts payable

Due to affiliates

Accrued taxes other than income taxes

AllDale Minerals III, LP (“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.

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 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.

At March 31, 2025, the carrying value of our investment in AllDale III was $ 21.9 million.

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

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

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

As of March 31, 2025, we have funded $ 10.4 million of this commitment.

We have concluded that NGP ET IV is a VIE that we do not consolidate.

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 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.

At March 31, 2025, the carrying value of our investment in NGP ET IV was $ 9.3 million.

Gavin Generation

In February 2025, we committed to invest up to $ 25.0 million of limited partner interests in Gavin Generation Holdings A, LP (“Gavin Generation”), which is sponsored by a private equity firm.

Gavin Generation intends to own, indirectly, an interest in a joint venture holding company formed with a third party that plans to indirectly acquire, own and operate a coal-fired power plant.

This commitment represents an interest of approximately 5.0 % in Gavin Generation (based on total commitments).

Our investment in Gavin Generation is subject to a customary profit interest in favor of the general partner after the return of capital to the limited partners and the investment generating a specified internal rate of return in favor of the limited partners.

As of March 31, 2025, we have no t funded any portion of our capital commitment.

We have concluded that Gavin Generation is a variable interest entity that we do not consolidate.

Gavin Generation 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 operational decisions.

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

FAIR VALUE MEASUREMENTS

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

Carrying Value

(in thousands)

September 30, 2024

March 31, 2025

Recorded on a recurring basis:

Digital assets

Contingent consideration

Additional disclosures:

1 unchanged sentence

December 31, 2024

Recorded on a recurring basis:

Digital assets

Contingent consideration

Additional disclosures:

Long-term debt

(1) As discussed in Note 2 – New Accounting Standards, we adopted ASU 2023-08 effective January 1, 2024.

Prior to our adoption, our digital assets were not recorded at fair value on a recurring basis.

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.

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See Note 6 – Digital Assets for more information on our digital assets.

The fair value measurement of our contingent consideration liability is determined using an option approach methodology simulation based on significant inputs not observable in active markets representing a Level 3 fair value measurement under the fair value hierarchy.

Our contingent consideration liability is associated with our acquisition of

our Hamilton mine in 2015 wherein we agreed to pay the seller additional consideration for the acquisition if the average quarterly sales price exceeds a defined threshold price in any future quarters subject to a maximum of $ 110.0 million reduced for any payments made under an overriding royalty agreement with the sellers relating to mineral interests controlled by our Hamilton mine.

We have paid $ 11.4 million under this contingent consideration agreement and nothing under the overriding royalty agreement as of March 31, 2025.

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 for additional information on our long-term debt.

Quantitative Information about Level 3 Fair Value Measurements

Our option approach methodology simulation generates an expected payment for each quarter in Hamilton’s mine life by using proprietary internal estimates of our uncommitted coal sales prices and generating a simulated uncommitted coal sales price by applying unobservable inputs through a million simulations.

This simulated coal sales price is then used in a calculation of the expected future payments using our proprietary committed coal sales prices and production for each quarter.

We then calculate the present value of the estimated future payments.

The following table presents quantitative information about certain significant unobservable inputs used in the fair value measurement for our contingent consideration liability.

The use of significant unobservable inputs results in uncertainty as of the reporting date, as changes in these unobservable inputs could significantly raise or lower the estimated fair value.

Valuation Technique(s)

Unobservable Input

(Average) (a)

March 31, 2025

Contingent Consideration

Option approach methodology simulation

6.51 % - 8.56 %

Coal price volatility

Market price of risk adjustment (annual)

December 31, 2024

Contingent Consideration

Option approach methodology simulation

6.51 % - 8.56 %

Coal price volatility

Market price of risk adjustment (annual)

(a) Averages represent the arithmetic average of the inputs and is not weighted by a relative fair value or notional amount

The following table represents changes in our contingent consideration liability:

Three Months Ended

(in thousands)

Beginning balance

Ending balance

Inventories consist of the following:

(in thousands)

Finished goods (net of reserve for obsolescence of $ 2,617 and $ 2,481 , respectively)

Work in process

Raw materials

Supplies (net of reserve for obsolescence of $ 6,562 and $ 6,409 , respectively)

Total inventories, net

The above balances reflect lower of cost or net realizable value adjustments to our coal inventories of $ 5.7 million and $ 24.6 million as of March 31, 2025 and December 31, 2024, respectively.

The adjustment as of March 31, 2025 is primarily a result of lower coal sale prices and higher cost per ton primarily due to a long wall move and operational difficulties at the Mettiki Coal, LLC and Mettiki Coal (WV), LLC (collectively “Mettiki”) mining complexes.

The adjustment as of December 31, 2024 is the result of lower coal sale prices and higher cost per ton primarily due to a longwall move at the Hamilton County Coal, LLC (“Hamilton”) mining complex, lower production at Mettiki and MC Mining, LLC (“MC Mining”) mining complexes, and ongoing development activities at the Henderson County mine at our River View Coal, LLC (“River View”) mining complex.

DIGITAL ASSETS

The following table sets forth our digital assets as shown on the condensed consolidated balance sheet:

March 31, 2025

December 31, 2024

Digital assets:

(in thousands, except unit data)

EQUITY INVESTMENT S

Equity Method Investments

The changes in our equity method investments were as follows:

Three Months Ended

(in thousands)

Beginning balance

Contributions

Net loss on equity method investments

Distributions received

Ending balance

Net loss on equity method investments represents our share of the income or loss of the equity method investments.

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

(“Infinitum”), a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators.

On September 8, 2023, we purchased $ 24.6 million of Series E Preferred Stock (“Series E Preferred Stock” and, together with the “Series D Preferred Stock,” the “Infinitum Preferred Stock”) in Infinitum.

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

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

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

Absent an observable price change, it is not practicable to estimate the fair value of our investment in Infinitum because of the lack of a quoted market price for our ownership interests.

Therefore, we use a measurement alternative other than fair value to account for our investment.

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.

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.

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

Additional capital contributions or conversion of our investment into common stock of Ascend could impact the preference of our investment relative to other investments in Ascend or dilute our holdings.

If Ascend is unable to raise sufficient funds or if our investment loses preference or becomes diluted due to new capital contributions, it could have an adverse effect on our investment.

LONG-TERM DEBT

2 unchanged sentences

Debt Issuance Costs

September 30,

(in thousands)

1 unchanged sentence

8.625 % Senior notes due 2029

7.5 % Senior notes due 2025

Securitization facility

June 2020 equipment financing

February 2024 equipment financing

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Interest is payable quarterly, with principal on the Term Loan due in quarterly installments equal to 6.25 % of the outstanding balance of the Term Loan on the Credit Agreement amendment date beginning with the quarter ended June 30, 2024.

The Revolving Credit Facility is underwritten by a syndicate of several 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 September 30, 2024 we have no reason to believe that the banks within our syndicate are facing financial difficulties, defaults or limited liquidity situations that would cause them to be unable to fund their obligations under the Credit Agreement.

However, should any of the banks in our syndicate experience conditions in the future that limit their ability to fund their obligations, the amount available under the Revolving Credit Facility could be reduced.

The Credit Agreement is guaranteed by ARLP and certain of its subsidiaries, including the Intermediate Partnership and most of the direct and indirect subsidiaries of Alliance Coal (the “Subsidiary Guarantors”).

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

For borrowings under the Term Loan, we elected the one-month term rate, with applicable margin, which was 8.2 % as of September 30, 2024.

At September 30, 2024, we had $ 41.0

million of letters of credit outstanding with $ 384.0 million available for borrowing under the Revolving Credit Facility.

For borrowings under the Term Loan, we elected the one-month term rate, with applicable margin, which was 7.68 % as of March 31, 2025.

At March 31, 2025, we had $ 41.0 million of letters of credit outstanding with $ 384.0 million available for borrowing under the Revolving Credit Facility.

We incur an annual commitment fee of 0.50 % on the undrawn portion of the Revolving Credit Facility.

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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 0.17 to 1.0 , 0.84 to 1.0 and 43.19 to 1.0 , respectively, for the trailing twelve months ended September 30, 2024.

We were in compliance with the covenants of the Credit Agreement as of September 30, 2024 and anticipate remaining in compliance with the covenants.

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 0.17 to 1.0, 0.98

to 1.0 and 34.52 to 1.0, respectively, for the trailing twelve months ended March 31, 2025.

We were in compliance with the covenants of the Credit Agreement as of March 31, 2025 and anticipate remaining in compliance with the covenants.

8.625% Senior Notes due 2029

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In addition, if prior to June 15, 2026, a Specified Minerals Disposition (as defined in the indenture governing the 2029 Senior Notes and which involves oil and gas mineral interests) occurs, the issuers will be required to make an offer to purchase up to 40 % of the aggregate principal amount of 2029 Senior Notes then outstanding at an offer price in cash in an amount equal to 108.625 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase.

7.5% Senior Notes due 2025

On April 24, 2017, the Intermediate Partnership and Alliance Finance (as co-issuer) issued an aggregate principal amount of $ 400.0 million of senior unsecured notes due 2025 in a private placement to qualified institutional buyers.

The 7.5% Senior Notes due 2025 had a term of eight years , maturing on May 1, 2025 and accrued interest at an annual rate of 7.5 % .

In June 2024, we used a portion of the net proceeds from the offering of the 2029 Senior Notes to redeem the outstanding balance of the 7.5% Senior Notes due 2025.

Accounts Receivable Securitization

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

On September 30, 2024, we had $ 11.7 million of letters of credit outstanding with $ 78.3 million available for borrowing under the Securitization Facility.

On March 31, 2025, we had $ 14.8 million of letters of credit outstanding with $ 49.0 million available for borrowing under the Securitization Facility.

The agreement governing the Securitization Facility contains customary terms and conditions, including limitations with regards to certain customer credit ratings.

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 contained customary terms and events of default and provided for forty-eight monthly payments with an implicit interest rate of 6.1 % .

The June 2020 Equipment Financing matured on June 5, 2024 and the equipment reverted back to the Intermediate Partnership.

February 2024 Equipment Financing

2 unchanged sentences

Upon maturity, the equipment will revert to Alliance Coal.

Components of income tax expense are as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Income tax expense

The effective income tax rates for our income tax expense for the three and nine months ended September 30, 2024 and 2023 are less than the federal statutory rate, primarily due to the portion of income not subject to income taxes.

Our 2020 through 2023 tax years remain open to examination by tax authorities, and certain lower-tier partnership income tax returns for the tax years ended December 31, 2020 and 2021 are being audited by the Internal Revenue Service.

VARIABLE INTEREST ENTITIES

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 JV, LLC ("Cavalier Minerals"), approximately 97 % of the limited partner interests in AllDale Minerals LP ("AllDale I") and AllDale Minerals II, LP ("AllDale II", and collectively with AllDale I, "AllDale I & II").

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 Management, LLC ("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 variable interest entities ("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 on our condensed consolidated balance sheets.

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

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

September 30,

Assets (liabilities):

(in thousands)

Cash and cash equivalents

Trade receivables

Total property, plant and equipment, net

Accounts payable

Accrued taxes other than income taxes

AllDale Minerals III, LP ("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.

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 11 – Equity Investments for more information about the accounting for our investment in AllDale III.

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

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 September 30, 2024, we held approximately 16.7 % of Francis' equity.

We have concluded that Francis is a VIE that we do not consolidate.

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 11 – 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 Energy Transition, L.P.

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

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

As of September 30, 2024, we have funded $ 8.0 million of this commitment.

We have concluded that NGP ET IV is a VIE that we do not consolidate.

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

EQUITY INVESTMENT S

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 were as follows:

WORKERS’ COMPENSATION AND PNEUMOCONIOSIS

The changes in the workers’ compensation liability, including current and long-term liability balances, for each of the periods presented were as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Beginning balance

Equity method investment income

Distributions received

Changes in accruals

Interest accretion

Ending balance

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.

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

We limit our exposure to traumatic injury claims by purchasing a high deductible insurance policy that starts paying benefits after deductibles for a claim have been met.

The deductible level may vary by claim year.

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

Our receivables for traumatic injury claims under this policy as of March 31, 2025 are $ 3.7 million and are included in Other long-term assets on our condensed consolidated balance sheet.

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

Components of the net periodic benefit cost for each of the periods presented are as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Beginning balance

Equity method investment loss

Change in our share of Francis' net assets

Ending balance

We have not impaired our initial investment and currently believe that the carrying value of our investment is recoverable.

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:

Interest cost (1)

Net amortization (1)

Net periodic benefit cost

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

COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS

Eligible employees at certain of our mining operations participate in a defined benefit plan (the “Pension Plan”) that we sponsor.

The Pension Plan is currently closed to new applicants and participants in the Pension Plan are no longer receiving benefit accruals for service.

The benefit formula for the Pension Plan is a fixed dollar unit based on years of service.

Components of the net periodic benefit credit for each of the periods presented are as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Beginning balance

Contributions

Equity method investment income (loss)

Ending balance

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

("Infinitum"), a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators.

On September 8, 2023, we purchased $ 24.6 million of Series E Preferred Stock ("Series E Preferred Stock" and, together with the "Series D Preferred Stock," the "Infinitum Preferred Stock") in Infinitum.

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

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

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

Absent an observable price change, it is not practicable to estimate the fair value of our investment in Infinitum because of the lack of a quoted market price for our ownership interests.

Therefore, we use a measurement alternative other than fair value to account for our investment.

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.

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.

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss

Net periodic benefit credit (1)

(1) Net periodic benefit credit for the Pension Plan is included in the Other income (expense) line item within our condensed consolidated statements of income.

We do not expect to make material contributions to the Pension Plan during 2025.

CONTINGENCIES

Certain of our subsidiaries are party to litigation in which the plaintiffs allege violations of the Fair Labor Standards Act and state law due to alleged failure to compensate for time “donning” and “doffing” equipment and to account for certain bonuses in the calculation of overtime rates and pay.

The plaintiffs in these cases sought class and collective action certification, which we opposed.

In April 2024, we entered into a settlement agreement with the plaintiffs pursuant to which we agreed to settle such litigation for $ 15.3 million.

As a result of reaching this settlement, which is subject to and awaiting court approval, we have accrued $ 15.3 million as of March 31, 2025.

Our $ 15.3 million accrual is included in the Other current liabilities line item on our condensed consolidated balance sheet.

We believe our ultimate exposure, if any should litigation resume, 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 if litigation were to resume, 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.

We record an accrual for a potential loss related to these matters when, in management’s opinion, such loss is probable and reasonably estimable.

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.

PARTNERS’ CAPITAL

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February 14, 2025

August 14, 2024

November 14, 2024 (1)

(1) On October 28, 2024, we declared this quarterly distribution payable on November 14, 2024 to all unitholders of record as of November 7, 2024.

May 15, 2025 (1)

(1) On April 28, 2025, we declared this quarterly distribution payable on May 15, 2025 to all unitholders of record as of May 8, 2025.

Unit Repurchase Program

In January 2023, the board of directors of MGP authorized a $ 93.5 million increase to the unit repurchase program authorizing us to be able to repurchase up to a total of $ 100.0 million of ARLP common units from that date.

No units were repurchased during the nine months ended September 30, 2024.

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

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 remaining of the original $ 100.0 million authorized 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 from that date.

No units were repurchased during the three months ended March 31, 2025 and 2024, respectively.

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

Change in Partners’ Capital

The following tables present the quarterly change in Partners' Capital for the three and nine months ended September 30, 2024 and 2023:

The following tables present the quarterly change in Partners' Capital for the three months ended March 31, 2025 and 2024:

Limited Partner

5 unchanged sentences

Balance at January 1, 2025

Cumulative-effect adjustment (see Note 2)

Comprehensive income:

Actuarially determined long-term liability adjustments

Other comprehensive income

Total comprehensive income

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Balance at March 31, 2025

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive income

Common unit-based compensation

Distributions on deferred common unit-based compensation

Distributions from consolidated company to noncontrolling interest

Distributions to Partners

Balance at June 30, 2024

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive income

Settlement of deferred compensation plans

Common unit-based compensation

Distributions on deferred common unit-based compensation

Distributions from consolidated company to noncontrolling interest

Distributions to Partners

Balance at September 30, 2024

Limited Partner

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Balance at January 1, 2024

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive income

Settlement of deferred compensation plans

Purchase of units under unit repurchase program

Common unit-based compensation

Distributions on deferred common unit-based compensation

Distributions from consolidated company to affiliate noncontrolling interest

JC Resources acquisition

Cash retained by JC Resources in acquisition

Distributions to Partners

Balance at March 31, 2023

Cumulative-effect adjustment

Comprehensive income:

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Settlement of deferred compensation plans

Purchase of units under unit repurchase program

Common unit-based compensation

2 unchanged sentences

Distributions to Partners

Balance at June 30, 2023

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive income

Common unit-based compensation

Distributions on deferred common unit-based compensation

Distributions from consolidated company to noncontrolling interest

Distributions to Partners

Balance at September 30, 2023

Balance at March 31, 2024

COMMON UNIT-BASED COMPENSATION PLAN

Long-Term Incentive Plan

A summary of non-vested Long-Term Incentive Plan (“LTIP”) grants of restricted units is as follows:

Number of units

Weighted average grant date fair value per unit

Intrinsic value

(in thousands)

Non-vested grants at January 1, 2025

Non-vested grants at March 31, 2025

(1) The restricted units granted during 2025 have certain minimum-value guarantees per unit, regardless of whether the awards vest.

(2) During the three months ended March 31, 2025, we issued 366,043 unrestricted common units to the LTIP participants.

The remaining vested units were withheld to satisfy tax withholdings.

LTIP expense for grants of restricted units was $ 2.0 million for each of the three months ended March 31, 2025 and 2024.

The total obligation associated with LTIP grants of restricted units as of March 31, 2025 was $ 10.3 million and is included in the partners’ capital Limited partners-common unitholders line item on our condensed consolidated balance sheets.

As of March 31, 2025, there was $ 16.2 million in total unrecognized compensation expense related to the non-vested LTIP restricted unit grants that are expected to vest.

That expense is expected to be recognized over a weighted-average period of 1.7 years.

REVENUE FROM CONTRACTS WITH CUSTOMERS

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(in thousands)

Three Months Ended September 30, 2024

Oil & gas royalties

Coal royalties

Transportation revenues

Other revenues

Total revenues

Three Months Ended September 30, 2023

Oil & gas royalties

Coal royalties

Transportation revenues

Other revenues

Total revenues

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Oil & gas royalties

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Total revenues

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Oil & gas royalties

3 unchanged sentences

Total revenues

The following table illustrates the amount of our transaction price for all current coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2024 and disaggregated by segment and contract duration.

The following table illustrates the beginning and ending balances of our trade receivables:

Three Months Ended

(in thousands)

Beginning balance

Ending balance

The following table illustrates the amount of our transaction price for all current coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2025 and disaggregated by segment and contract duration.

(in thousands)

Illinois Basin Coal Operations coal revenues

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(1) Coal revenues generally consists of consolidated revenues excluding our Oil & Gas Royalties segment as well as intercompany revenues from our Coal Royalties segment .

Components of income tax expense are as follows:

Three Months Ended

(in thousands)

Income tax expense

The effective income tax rates for our income tax expense for the three months ended March 31, 2025 and 2024 are less than the federal statutory rate, primarily due to the portion of income not subject to income taxes.

Our 2020 through 2024 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.

EARNINGS PER LIMITED PARTNER UNIT

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

Subsequent to the acquisition of oil & gas net royalty acres from JC Resources LP on February 22, 2023 (the "JC Resources Acquisition"), 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 were 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 Long-Term Incentive Plan ("LTIP") and phantom units in notional accounts under our Supplemental Executive Retirement Plan ("SERP") and the MGP Amended and Restated Deferred Compensation Plan for Directors ("Directors' Deferred Compensation Plan").

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.

During 2025, our participating securities represent outstanding restricted unit awards under our LTIP.

During 2024, our participating securities also included phantom units in notional accounts under our Supplemental

Executive Retirement Plan (“SERP”) and the MGP Amended and Restated Deferred Compensation Plan for Directors (“Directors’ Deferred Compensation Plan”).

The SERP and Directors’ Deferred Compensation Plan were terminated in December 2024 and no longer receive an allocation of income.

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:

Three Months Ended

Nine Months Ended

September 30,

(in thousands, except per unit data)

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

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Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive.

The combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 1,863 and 1,915 for the three and nine months ended September 30, 2024, respectively, and 2,759 and 2,878 for the three and nine months ended September 30, 2023, respectively, were considered anti-dilutive under the treasury stock method .

WORKERS' COMPENSATION AND PNEUMOCONIOSIS

The changes in the workers' compensation liability, including current and long-term liability balances, for each of the periods presented were as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Beginning balance

Changes in accruals

Interest accretion

Valuation loss (gain) (1)

Ending balance

(1) Our estimate of the liability for the present value of current workers′ compensation benefits is based on our actuarial calculations.

Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claims development patterns, mortality, medical costs and interest rates.

The valuation gain in 2024 is due to an increase in the discount rate from 4.66 % on December 31, 2023 to 5.18 % on June 30, 2024.

The valuation loss in 2023 is due to adverse claims development.

We limit our exposure to traumatic injury claims by purchasing a high deductible insurance policy that starts paying benefits after deductibles for a claim have been met.

The deductible level may vary by claim year.

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

Our receivables for traumatic injury claims under this policy as of September 30, 2024 are $ 4.1 million and are included in Other long-term assets on our condensed consolidated balance sheet.

Components of the net periodic benefit cost for each of the periods presented are as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Interest cost (1)

Net amortization (1)

Net periodic benefit cost

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

COMMON UNIT-BASED COMPENSATION PLANS

Long-Term Incentive Plan

A summary of non-vested LTIP grants of restricted units is as follows:

Number of units

Weighted average grant date fair value per unit

Intrinsic value

(in thousands)

Non-vested grants at January 1, 2024

( 1,582,422 )

Non-vested grants at September 30, 2024

(1) The restricted units granted during 2024 have certain minimum-value guarantees per unit, regardless of whether the awards vest.

(2) During the nine months ended September 30, 2024, we issued 936,544 unrestricted common units to the LTIP participants.

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

LTIP expense for grants of restricted units was $ 2.4 million and $ 2.7 million for the three months ended September 30, 2024 and 2023, respectively, and $ 6.8 million and $ 7.7 million for the nine months ended September 30, 2024 and 2023, respectively.

The total obligation associated with LTIP grants of restricted units as of September 30, 2024 was $ 15.9 million and is included in the partners' capital Limited partners-common unitholders line item on our condensed consolidated balance sheets.

As of September 30, 2024, there was $ 11.7 million in total unrecognized compensation expense related to the non-vested LTIP restricted unit grants that are expected to vest.

That expense is expected to be recognized over a weighted-average period of 1.1 years.

Supplemental Executive Retirement Plan and Directors' Deferred Compensation Plan

A summary of SERP and Directors' Deferred Compensation Plan activity is as follows:

Number of units

Weighted average fair value per unit

Intrinsic value

(in thousands)

Phantom units outstanding as of January 1, 2024

Phantom units outstanding as of September 30, 2024

(1) During the nine months ended September 30, 2024, we purchased 54,152 ARLP common units on the open market to settle the account of a participant under the SERP.

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

Total SERP and Directors' Deferred Compensation Plan expense was $ 0.7 million and $ 0.6 million for the three months ended September 30, 2024 and 2023, respectively, and $ 2.0 million and $ 1.8 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $ 16.5 million and is included in the partners' capital Limited partners-common unitholders line item on our condensed consolidated balance sheets.

COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS

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

The Pension Plan is currently closed to new applicants and participants in the Pension Plan are no longer receiving benefit accruals for service.

The benefit formula for the Pension Plan is a fixed dollar unit based on years of service.

Components of the net periodic benefit credit for each of the periods presented are as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss

Net periodic benefit credit (1)

(1) Net periodic benefit credit for the Pension Plan is included in the Other income (expense) line item within our condensed consolidated statements of income.

We do not expect to make material contributions to the Pension Plan during 2024.

For the three months ended March 31, 2025, LTIP units of 817 were considered anti-dilutive under the treasury stock method.

For the three months ended March 31, 2024, the combined total of LTIP, SERP and Directors’ Deferred Compensation Plan units of 2,175 were considered anti-dilutive under the treasury stock method .

SEGMENT INFORMATION

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

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

We aggregate multiple operating segments into four reportable segments, Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties.

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The two coal operations reportable segments include seven mining complexes operating in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia and a coal loading terminal in Indiana on the Ohio River.

Our Oil & Gas Royalties reportable segment includes our oil & gas mineral interests which are located primarily in the Permian (Delaware and

Midland), Anadarko (SCOOP/STACK) and Williston (Bakken) basins.

Our Oil & Gas Royalties reportable segment includes our oil & gas mineral interests which are located primarily in the Permian (Delaware and Midland), Anadarko (SCOOP/STACK) and Williston (Bakken) basins.

The operations within our Oil & Gas Royalties reportable segment primarily include receiving royalties and lease bonuses for our oil & gas mineral interests.

Our Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties, which are either (a) leased to our mining complexes or (b) near our coal mining operations but not yet leased.

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

The Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC’s mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View mining complex, which includes the River View and Henderson County mines and (d) the Hamilton mining complex.

The segment also includes our Mt.

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The Appalachia Coal Operations reportable segment includes (a) the Mettiki mining complex, (b) the Tunnel Ridge, LLC mining complex and (c) the MC 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 11 – Equity Investments).

The Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties that are (a) leased to certain of our mining complexes in both the Illinois Basin Coal Operations and Appalachia Coal Operations reportable segments or (b) located near our operations and external mining operations.

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

Other, Corporate and Elimination includes marketing and administrative activities, the Matrix Group, our investments in Francis, Infinitum, NGP ET IV, and Ascend (see Note 11 – Equity Investments), Wildcat Insurance, LLC which assists the ARLP Partnership with its insurance requirements, AROP Funding and Alliance Finance (both discussed in Note 8 – Long-Term Debt) and our crypto-mining activities.

Other, Corporate and Elimination includes marketing and administrative activities, certain of our subsidiaries, primarily consisting of Matrix Design Group, LLC, its subsidiaries, and Alliance Design Group, LLC (collectively referred to as "Matrix Group"), Bitiki KY, LLC, which holds our crypto-mining activities (see Note 6 – Digital Assets), our non oil & gas equity investments (see Note 3 – Variable Interest Entities and Note 7 – Equity Investments), Wildcat Insurance, LLC which assists the ARLP Partnership with its insurance requirements, AROP Funding and Alliance Finance (both discussed in Note 8 – Long-Term Debt).

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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Coal Operations

Corporate and

(in thousands)

Three Months Ended September 30, 2024

Revenues - Outside (1)

Revenues - Intercompany

Total revenues (1)

Segment Adjusted EBITDA Expense (2)

Segment Adjusted EBITDA (3)

Capital expenditures (4)

Three Months Ended September 30, 2023

Revenues - Outside (1)

Revenues - Intercompany

Total revenues (1)

Segment Adjusted EBITDA Expense (2)

Segment Adjusted EBITDA (3)

Capital expenditures (4)

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Revenues - Outside

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Segment Adjusted EBITDA Expense (2)

Transportation expenses

Other segment items (3)

Segment Adjusted EBITDA (4)

Total assets (5)

Capital expenditures (6)

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Revenues - Outside

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Segment Adjusted EBITDA Expense (2)

Transportation expenses

Other segment items (3)

Segment Adjusted EBITDA (4)

Total assets (5)

Capital expenditures (6)

(1) Revenues included in the Other, Corporate and Elimination column are attributable to intercompany eliminations, which are primarily intercompany coal royalty eliminations, outside revenues at the Matrix Group and awarded digital assets received for our crypto-mining activities.

(2) Segment Adjusted EBITDA Expense (a non-GAAP financial measure) includes operating expenses, coal purchases, if applicable, and other income or expense as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations.

Transportation expenses are excluded as these expenses are passed through to our customers and, consequently, we do not realize any gain or loss on transportation revenues.

Segment Adjusted EBITDA Expense is used as a supplemental financial measure by our management to assess the operating performance of our segments.

Segment Adjusted EBITDA Expense is a key component of Segment Adjusted EBITDA in addition to coal sales, royalty revenues and other revenues.

The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses.

The following is a reconciliation of Operating expenses (excluding depreciation, depletion and amortization), the most comparable GAAP financial measure, to consolidated Segment Adjusted EBITDA Expense:

(1) The following is a reconciliation of our total segment revenues to total consolidated revenues:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Operating expenses (excluding depreciation, depletion and amortization)

Litigation expense accrual

Outside coal purchases

Other expense (income)

Segment Adjusted EBITDA Expense

(3) Segment Adjusted EBITDA (a non-GAAP financial measure) is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses adjusted for certain items that we characterize as unrepresentative of our ongoing operations.

Segment Adjusted EBITDA is a key component of consolidated EBITDA, which is used as a supplemental financial measure by management and by external users of our financial statements such as investors, commercial banks, research analysts and others.

We believe that the presentation of EBITDA provides useful information to investors regarding our performance and results of operations because EBITDA, when used in conjunction with related GAAP financial measures, (i) provides additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provides investors with the financial analytical framework upon which we base financial, operational, compensation and planning decisions and (iii) presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations.

Segment Adjusted EBITDA is also used as a supplemental financial measure by our management for reasons similar to those stated in the previous explanation of EBITDA.

In addition, the exclusion of corporate general and administrative expenses from consolidated Segment Adjusted EBITDA allows management 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.

The following is a reconciliation of Net income , the most comparable GAAP financial measure, to Consolidated Segment Adjusted EBITDA:

Total segment revenues

Other, Corporate and Elimination revenues - Outside

Other, Corporate and Elimination revenues - Intercompany

Total consolidated revenues

Revenues included in Other, Corporate and Elimination are attributable to intercompany eliminations, which are primarily intercompany coal royalties eliminations, outside revenues at the Matrix Group and other outside miscellaneous sales and revenue activities.

(2) Segment Adjusted EBITDA Expense includes operating expenses, coal purchases, if applicable, and other income or expense as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations.

Segment Adjusted EBITDA Expense is used as a financial measure by our management to assess the operating performance of our segments.

Segment Adjusted EBITDA Expense is a key component of Segment Adjusted EBITDA in addition to coal sales, royalty revenues and other revenues.

(3) Other segment items for each reportable segment includes:

Oil & Gas Royalties – equity method investment income from AllDale III and income allocated to noncontrolling interest

(4) Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses adjusted for certain items that we characterize as unrepresentative of our ongoing operations.

Segment Adjusted EBITDA is used as a financial measure by Mr.

Craft, who is also our chief operating decision maker (“CODM”), other management and by external users of our financial statements such as investors, commercial banks, research analysts and others.

Our CODM uses Segment Adjusted EBITDA in assessing segment performance and deciding how to allocate resources.

Segment Adjusted EBITDA provides useful information to our CODM and investors regarding our performance and results of operations because Segment Adjusted EBITDA (i) provides additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provides investors with the financial analytical framework upon which we base financial, operational, compensation and planning decisions, (iii) presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations and (iv) allows our CODM and management 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.

The following is a reconciliation of total Segment Adjusted EBITDA for our segments to consolidated income before income taxes:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Noncontrolling interest

Net income attributable to ARLP

Segment Adjusted EBITDA – total segments

Other, Corporate and Elimination profit (loss)

General and administrative

3 unchanged sentences

Litigation expense accrual

Income tax expense

Consolidated Segment Adjusted EBITDA

(4) Capital expenditures exclude $ 72.3 million paid for the JC Resources Acquisition for the nine months ended September 30, 2023, $ 10.5 million and $ 10.0 million paid towards oil & gas reserve acquisitions for the three months ended September 30, 2024 and 2023, respectively, and $ 15.2 million and $ 13.9 million paid towards oil & gas reserve acquisitions for the nine months ended September 30, 2024 and 2023, respectively (See Note 3 – Acquisitions) .

Noncontrolling interest

Income before income taxes

Other, Corporate and Elimination profit (loss) represents profit (loss) from operating segments below the quantitative thresholds when determining our reportable segments as well as the elimination of intersegment profit (loss) between our reportable segments.

The operating segments included are those described as part of our Other, Corporate and Eliminations category.

(5) The following is a reconciliation of our total segment assets to total consolidated assets:

Three Months Ended

(in thousands)

Total segment assets

Other, Corporate and Elimination total assets

Total consolidated assets

(6) Capital expenditures exclude $ 1.8 million paid towards oil & gas reserve acquisitions for the three months ended March 31, 2024.

Three Months Ended

(in thousands)

Total segment capital expenditures

Other, Corporate and Elimination capital expenditures

Total consolidated capital expenditures

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

What changed 10-Q

Item 1. Financial Statements