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Sales and Production - The company sold 8,703 tons of coal in Q3 2025, a 3.9% increase from 8,379 tons in Q3 2024[130] - Coal production increased by 8.5% to 8,416 tons in Q3 2025 compared to 7,754 tons in Q3 2024[130] - Coal sales decreased to $1.47 billion for the 2025 Period compared to $1.61 billion for the 2024 Period, attributed to lower average coal sales prices and reduced tons sold[149] Revenue and Income - Total revenues decreased by 6.9% to $571.4 million in Q3 2025 from $613.6 million in Q3 2024, primarily due to lower coal sales prices[131] - Coal sales revenue fell to $511.6 million in Q3 2025, down 4.0% from $532.6 million in Q3 2024, attributed to a 7.5% decrease in average coal sales prices[133] - Net income attributable to the company rose by 10.2% to $95.1 million in Q3 2025, or $0.73 per unit, compared to $86.3 million, or $0.66 per unit, in Q3 2024[138] - Total revenues for the nine months ended September 30, 2025, decreased 10.7% to $1.66 billion compared to $1.86 billion for the same period in 2024, primarily due to lower coal sales and transportation revenues[149] - Net income attributable to ARLP for the 2025 Period was $228.5 million, or $1.76 per basic and diluted limited partner unit, down from $344.5 million, or $2.64 per unit, in the 2024 Period[154] Expenses and EBITDA - Segment Adjusted EBITDA increased by 7.8% to $207.2 million in Q3 2025 from $192.3 million in Q3 2024[139] - Segment Adjusted EBITDA for the 2025 Period decreased $84.8 million to $570.0 million from $654.8 million in the 2024 Period[155] - Labor and benefit expenses per ton produced decreased by 11.3% to $12.90 in Q3 2025 from $14.54 in Q3 2024[134] - Illinois Basin Coal Operations Segment Adjusted EBITDA decreased 8.1% to $105.4 million in the 2025 Quarter from $114.6 million in the 2024 Quarter, primarily due to lower average coal sales prices and higher operating expenses[143] - Appalachia Coal Operations Segment Adjusted EBITDA increased 44.2% to $54.1 million for the 2025 Quarter from $37.5 million in the 2024 Quarter, driven by reduced operating expenses despite lower coal sales volumes[144] Cash Flow and Capital Expenditures - Cash provided by operating activities was $507.3 million for the 2025 Period, down from $634.7 million in the 2024 Period, primarily due to decreased net income and unfavorable working capital changes[172] - Net cash used in investing activities decreased to $251.0 million for the 2025 Period from $337.4 million in the 2024 Period, mainly due to reduced capital expenditures and oil & gas reserves acquisitions[173] - Management projects total capital expenditures for 2025 to be in the range of $285.0 million to $320.0 million, with average estimated annual maintenance capital expenditures of approximately $7.28 per ton produced[175] Risk Factors - The company has significant exposure to commodity price risk due to long-term coal sales contracts, which are subject to price adjustments based on specified indices[179] - The company has not utilized commodity price-hedges or other derivatives related to sales price or supply cost risks but may consider doing so in the future[184] - Credit risk is primarily with domestic electric power generators and reputable global brokerage firms, with measures in place to evaluate and monitor customer creditworthiness[185] - The company does not have material exposure to currency exchange-rate risks as almost all transactions are denominated in U.S. dollars[186] - Borrowings under the Revolving Credit Facility and Securitization Facility are at variable rates, exposing the company to interest rate risk[187] - The company anticipates significant cash requirements over the long term, which may necessitate incurring debt or seeking additional equity capital[175] - The availability and cost of additional capital will depend on market conditions, the market price of common units, and the company's financial condition[175]

Group 1 - Alliance Resource Partners, L.P. (ARLP) is expected to report an EPS of $2.42 for fiscal 2025, slightly lower than 2024 due to coal pricing challenges and the expiration of higher-priced contracts [1] - Coal volumes and contracting momentum are strong, with management anticipating EPS to improve to $2.61 in fiscal 2026, driven by productivity improvements at Tunnel Ridge and Henderson County [2] - Operating expenses decreased by 11.7% in the Appalachia division and 6.4% in the Illinois Basin, with coal production growth of 8.5% and sales volume increase of 3.9%, indicating strong fundamentals [3] Group 2 - The stock is trading at a 42% discount on P/E and a 71% discount on EV/sales, suggesting potential for re-rating in the coming months [4] - The earnings outlook for ARLP is positive going into 2026, supported by strengthening domestic demand and management's focus on efficiency [4]

Core Insights - The focus is on analyzing undervalued and disliked companies or industries with strong fundamentals and good cash flows, particularly in sectors like Oil & Gas and consumer goods [1] - Energy Transfer is highlighted as a company that has been overlooked but shows potential for substantial returns [1] - The approach emphasizes long-term value investing while also exploring deal arbitrage opportunities in various sectors [1] Company Analysis - Energy Transfer is identified as a company that was previously avoided by investors but is now considered a valuable investment opportunity [1] - The analyst expresses a preference for companies with understandable business models, avoiding high-tech and certain consumer goods sectors [1] Investment Strategy - The investment strategy includes a focus on long-term value while being open to short-term arbitrage opportunities, as seen in examples like Microsoft/Activision Blizzard and Spirit Airlines/Jetblue [1] - There is a clear skepticism towards cryptocurrencies, indicating a preference for traditional investment avenues [1]

Core Insights - Alliance Resource Partners, L.P. (ARLP) reported a solid performance in Q3 2025, with increased coal volumes and improved unit costs, despite lower year-over-year realized pricing [1] Financial Performance - Total revenues for Q3 2025 decreased by 6.9% year-over-year to $571.4 million, driven by lower coal price realizations and reduced transportation revenues, despite an 8.5% increase in coal production and a 3.9% increase in coal sales volumes [1] - Net income for the quarter rose to $95.1 million compared to $86.9 million in Q3 2024, primarily due to lower operating costs and higher investment income [1] - Adjusted EBITDA for the quarter was $185.8 million, reflecting a 14.8% sequential increase [1] Operational Highlights - Coal tons sold increased to 8.7 million, supported by improved performance at Hamilton, River View, and Tunnel Ridge [8] - Oil & Gas royalty volumes increased by 4.1% year-over-year to 0.899 million BOE, with an average price of $35.68 per BOE [8] - The company declared a quarterly cash distribution of $0.60 per unit [8] Strategic Initiatives - The company deployed $22.1 million into a limited partnership that owns a coal-fired plant in PJM, aligning with its strategy to support baseload reliability, with expected attractive cash-on-cash returns beginning in 2026 [8] - ARLP tightened its FY25 guidance, projecting Q4 2025 results to be comparable to Q3 2025, supported by improving operational execution [1]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $571.4 million, down from $613.6 million in Q3 2024, primarily due to lower coal sales prices and transportation revenues, partially offset by higher coal sales volumes [4] - Average coal sales price per ton decreased by 7.5% year-over-year to $58.78, but increased by 1.5% sequentially [4] - Net income attributable to the company was $95.1 million, including a $3.7 million increase in the fair value of digital assets and $4.5 million in investment income [10] - Adjusted EBITDA for the quarter was $185.8 million, up 9% year-over-year and 14.8% sequentially [10] - Distributable cash flow for Q3 2025 was $106.4 million, up 17% sequentially, leading to a distribution coverage ratio of 1.37x [11] Business Line Data and Key Metrics Changes - Total coal production in Q3 2025 was 8.4 million tons, an 8.5% increase compared to Q3 2024, while total coal sales volumes increased by 3.9% to 8.7 million tons [5] - In the Illinois Basin, coal sales volumes increased by 10.8% year-over-year but decreased by 0.8% sequentially [6] - Coal sales volumes in Appalachia decreased by 13.3% year-over-year but increased by 21.8% sequentially due to improved mining conditions [7] - Segment-adjusted EBITDA expense per ton sold in Appalachia improved by 11.7% year-over-year [7] - Total revenues from royalties segments were $57.4 million, up 11.9% year-over-year, driven by higher coal royalties tons and revenue per ton sold [8] Market Data and Key Metrics Changes - Year-to-date utility coal consumption increased by 15% in MISO and 16% in PJM, reflecting strong demand fundamentals [16] - Analysts project 4%-6% annual growth in electricity demand in PJM and other markets over the next several years [17] - The recent PJM capacity auction cleared at maximum allowable prices, indicating a need for coal-fired power plants [17] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, investing prudently in core operations, and positioning for long-term growth while delivering attractive returns to unitholders [18] - The company has secured additional contract commitments for 2025, with a total of 32.8 million tons committed and priced [12] - The company is actively pursuing disciplined growth opportunities in its oil and gas royalties business [19] Management's Comments on Operating Environment and Future Outlook - Management noted that significant infrastructure investments in coal operations are beginning to pay off, with improved productivity expected from automation [14] - The company anticipates that coal demand will continue to grow due to favorable federal energy policies and rising electricity demand [16] - Management expressed confidence in the ability to increase production at Tunnel Ridge and in the Illinois Basin to meet anticipated demand [17] Other Important Information - The company held approximately 568 Bitcoin valued at $64.8 million at the end of Q3 2025 [10] - The company expects full-year 2025 segment-adjusted EBITDA expense per ton to be in a range of $60-$62 per ton in Appalachia and $34-$36 per ton in the Illinois Basin [13] Q&A Session Summary Question: Can you provide more details on the supply contracts being signed? - Most contracts are for two to three years, with a preference for fixed pricing, and some include tariff protection [24] Question: What index should be monitored for pricing? - The Illinois Basin index is relevant, but pricing may vary based on customer specifics [25] Question: What is the expectation for pricing in 2026? - Pricing is expected to decline around 5% year-over-year due to contracts rolling off, but improved conditions at Tunnel Ridge may help maintain margins [31] Question: How will the recent DOE investments impact the business? - Increased engagement from utilities and the DOE is expected to enhance demand for coal as utilities seek to extend the life of coal plants [34] Question: What is the outlook for equity method investment income? - Modestly positive numbers are anticipated for Q4, with some investments starting to yield distributions [40] Question: What is the expected CapEx for the full year? - CapEx is expected to be closer to the midpoint of guidance, with higher spending anticipated in Q4 [69] Question: Will there be a need for more staffing to increase production? - No additional staffing is anticipated; existing personnel will be utilized more effectively [55] Question: What is the confidence level for selling uncommitted met tons? - The company is confident in placing uncommitted met tons, although pricing will depend on market conditions [57] Question: How does the company view the coal vs. gas competition? - The competition is less significant now due to strong electricity demand growth, and all sources of generation are needed [64]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $571.4 million, down from $613.6 million in Q3 2024, primarily due to lower coal sales prices and transportation revenues, partially offset by higher coal sales volumes [4] - Average coal sales price per ton decreased by 7.5% year-over-year to $58.78, but increased by 1.5% sequentially [4] - Net income attributable to the company in Q3 2025 was $95.1 million, which included a $3.7 million increase in the fair value of digital assets and $4.5 million in investment income [10] - Adjusted EBITDA for the quarter was $185.8 million, up 9% year-over-year and 14.8% sequentially [10] - Distributable cash flow for Q3 2025 was $106.4 million, up 17% sequentially, leading to a distribution coverage ratio of 1.37 times [11] Business Line Data and Key Metrics Changes - Total coal production in Q3 2025 was 8.4 million tons, an increase of 8.5% compared to Q3 2024, while total coal sales volumes increased by 3.9% to 8.7 million tons [5] - In the Illinois Basin, coal sales volumes increased by 10.8% year-over-year but decreased by 0.8% sequentially [6] - Coal sales volumes in Appalachia decreased by 13.3% year-over-year but increased by 21.8% sequentially due to a successful transition at Tunnel Ridge [7] - Segment-adjusted EBITDA expense per ton sold in Appalachia improved by 11.7% year-over-year [7] - Total revenues from royalties segments were $57.4 million, up 11.9% year-over-year, driven by higher coal royalties tons and revenue per ton sold [8] Market Data and Key Metrics Changes - Year-to-date utility coal consumption increased by 15% in MISO and 16% in PJM, reflecting strong demand fundamentals [16] - Analysts project 4% to 6% annual growth in electricity demand in PJM and other markets over the next several years [17] - The recent PJM capacity auction cleared at maximum allowable prices, indicating a need for every available megawatt of dispatchable generation [17] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, investing prudently in core operations, and positioning for long-term growth while delivering attractive returns to unitholders [18] - The company has secured additional contract commitments for 2025 and has contracted 29.1 million sales tons for 2026, up 9% from the previous quarter [12] - The company is actively pursuing disciplined growth opportunities in its oil and gas royalties business [19] Management's Comments on Operating Environment and Future Outlook - Management noted that significant infrastructure investments in coal operations are beginning to pay off, with improved productivity expected from automation [14] - The company anticipates that rising electricity demand and favorable regulatory environments will support long-term coal demand [11][16] - Management expressed confidence in the ability to increase production at Tunnel Ridge and in the Illinois Basin to meet anticipated demand in 2026 [17] Other Important Information - Total liquidity at the end of Q3 2025 was $541.8 million, including $94.5 million in cash [10] - The company holds approximately 568 Bitcoin valued at $64.8 million at the end of Q3 2025 [10] Q&A Session Summary Question: Can you provide more details on the supply contracts being signed? - Most contracts are for two to three years, primarily fixed pricing, with some escalation in years two and three [24] Question: What index should be monitored for pricing? - The Illinois Basin index is relevant, but pricing may be higher than what the index shows [25][29] Question: What is the expectation for pricing in 2026? - Pricing is expected to decline around 5% year-over-year due to contracts rolling off, but improved conditions at Tunnel Ridge may help maintain margins [30][31] Question: How will the recent DOE investments impact the business? - Increased interest from utilities in dispatching coal resources is expected, potentially leading to higher demand [34][35] Question: What is the outlook for equity method investment income? - Modestly positive numbers are anticipated for Q4, with some investments starting to yield distributions [40] Question: What is the expected CapEx for the full year? - CapEx is expected to come in toward the midpoint of guidance, with higher spending anticipated in Q4 [68] Question: Will there be a need for more staffing to increase production? - No additional staffing is anticipated; existing personnel will be utilized more efficiently [54][55] Question: What is the confidence level for uncommitted MET tons? - The company is confident in placing uncommitted MET tons, although pricing will depend on market conditions [56] Question: How does the company view the competition between coal and gas? - The competition is less significant now due to increased electricity demand, with coal supply needed to meet growing demand [62][64]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $571.4 million, down from $613.6 million in Q3 2024, primarily due to lower coal sales prices and transportation revenues, partially offset by higher coal sales volumes [4][5] - Average coal sales price per ton decreased by 7.5% year-over-year to $58.78, but increased by 1.5% sequentially [5] - Net income attributable to the company was $95.1 million, including a $3.7 million favorable increase in the fair value of digital assets [10] - Adjusted EBITDA for the quarter was $185.8 million, up 9% year-over-year and 14.8% sequentially [10][11] Business Line Data and Key Metrics Changes - Total coal production in Q3 2025 was 8.4 million tons, an increase of 8.5% compared to Q3 2024, while total coal sales volumes increased by 3.9% to 8.7 million tons [5][6] - In the Illinois Basin, coal sales volumes increased by 10.8% year-over-year but decreased by 0.8% sequentially [6] - Coal sales volumes in Appalachia decreased by 13.3% year-over-year but increased by 21.8% sequentially due to improved mining conditions [6][7] - Total revenues from royalty segments were $57.4 million, up 11.9% year-over-year, driven by higher coal royalty tons sold [9] Market Data and Key Metrics Changes - Year-to-date utility coal consumption increased by 15% in MISO and 16% in PJM, reflecting strong demand fundamentals [17] - Analysts project 4% to 6% annual growth in electricity demand in PJM and other markets over the next several years [18] - The recent PJM capacity auction cleared at maximum allowable prices, indicating a need for every available megawatt of dispatchable generation [19] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, investing prudently in core operations, and positioning for long-term growth while delivering attractive returns to unitholders [20] - The company has secured additional contract commitments for 2026, with 29.1 million tons contracted, up 9% from the previous quarter [13] - The company plans to reduce sustaining capital needs in coal segments, enhancing free cash flow visibility for 2026 and beyond [20] Management's Comments on Operating Environment and Future Outlook - Management noted that favorable federal energy policies and rising electricity demand are supporting coal demand [17] - The company expects to increase production at Tunnel Ridge and in the Illinois Basin in 2026 to meet anticipated demand [18] - Management expressed confidence in the sustainability of lower costs in Appalachia due to improved mining conditions [86] Other Important Information - Total liquidity at the end of Q3 2025 was $541.8 million, including $94.5 million in cash [11] - The company declared a quarterly distribution of $0.60 per unit, unchanged from the previous quarter [20] Q&A Session Summary Question: Duration and structure of supply contracts - Most contracts are for two to three years, primarily fixed pricing with some tariff protection [26][27] Question: Pricing guidance for 2026 - Pricing is expected to decline around 5% year-over-year due to contracts rolling off, but improved conditions at Tunnel Ridge may help maintain margins [34][36] Question: Impact of Department of Energy investments - Increased interest from utilities in extending the life of coal plants could enhance demand for coal [38][40] Question: Equity method investment income - Modestly positive numbers are anticipated for Q4, with some investments starting to yield distributions [45][46] Question: Production increase logistics - No new staffing is required; existing personnel will be utilized more efficiently due to favorable conditions [63] Question: Confidence in uncommitted met coal sales - Anticipation of selling uncommitted met coal based on current pricing trends [67] Question: Coal vs. gas competition - Competition between coal and gas is less significant due to increasing electricity demand and data center growth [72][75] Question: Capital expenditures outlook - Full year CapEx is expected to be closer to the midpoint of guidance, with Q4 anticipated to be higher [81] Question: Future M&A outlook - Focus is more on minerals rather than expanding coal operations, with limited expectations for coal M&A [59][84]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $571.4 million, down from $613.6 million in Q3 2024, primarily due to lower coal sales prices and transportation revenues, partially offset by higher coal sales volumes [4] - Average coal sales price per ton decreased by 7.5% year-over-year to $58.78, but increased by 1.5% sequentially [4] - Net income attributable to Alliance Resource Partners, L.P. in Q3 2025 was $95.1 million, including a $3.7 million increase in the fair value of digital assets [10] - Adjusted EBITDA for the quarter was $185.8 million, up 9% from Q3 2024 and up 14.8% sequentially [10] - Total liquidity at quarter end was $541.8 million, including $94.5 million in cash [10] Business Line Data and Key Metrics Changes - Total coal production in Q3 2025 was 8.4 million tons, an 8.5% increase compared to Q3 2024, while total coal sales volumes increased by 3.9% to 8.7 million tons [5] - Coal sales volumes in the Illinois Basin increased by 10.8% year-over-year, but decreased by 0.8% sequentially [5] - Coal sales volumes in Appalachia decreased by 13.3% year-over-year but increased by 21.8% sequentially due to improved mining conditions [6] - Total revenues from royalties segments were $57.4 million, up 11.9% compared to Q3 2024, driven by higher coal royalties tons sold [8] Market Data and Key Metrics Changes - Year-to-date utility coal consumption increased by 15% in MISO and 16% in PJM, reflecting strong demand fundamentals [17] - Analysts project 4% to 6% annual growth in electricity demand in PJM and other markets over the next several years [18] - The recent PJM capacity auction cleared at maximum allowable prices, indicating a need for coal-fired power plants [18] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, investing prudently in core operations, and positioning for long-term growth [19] - The company has secured additional contract commitments for 2026, with 29.1 million sales tons contracted, up 9% from the previous quarter [12] - The company is actively pursuing disciplined growth opportunities in its oil and gas royalties business [20] Management's Comments on Operating Environment and Future Outlook - Management noted that U.S. coal demand is supported by favorable federal energy policies and rapid electricity demand growth [17] - The company expects to increase production at Tunnel Ridge and in the Illinois Basin in 2026 to meet anticipated demand [18] - Management expressed confidence in the sustainability of lower costs in Appalachia due to improved mining conditions [63] Other Important Information - The company generated free cash flow of $151.4 million after investing $63.8 million in coal operations [10] - Distributable cash flow for Q3 2025 was $106.4 million, leading to a distribution coverage ratio of 1.37 times [11] Q&A Session Summary Question: Duration and structure of supply contracts - Most contracts are for two to three years, primarily fixed pricing, with some escalation in years two and three [25] Question: Pricing guidance for 2026 - Overall pricing is likely to be down year-over-year due to contracts rolling off, but cost improvements at Tunnel Ridge may maintain margins [28] Question: Impact of Department of Energy investments - Increased engagement from utilities and the Department of Energy is expected to enhance demand for coal [32] Question: Equity method investment income outlook - Modestly positive numbers are anticipated for Q4, with some investments starting to yield distributions [37] Question: Confidence in uncommitted MET tons - Historically, MET tons are committed quarterly, and the company is confident in placing those tons [50] Question: Logistics of increasing production - No additional staffing is required to increase production; existing capital investments will be utilized [49] Question: CapEx expectations - Full-year CapEx is expected to come in toward the midpoint of guidance [60] Question: Future M&A outlook - Focus is more on minerals rather than expanding coal operations [46]