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]

Financial Performance - For the 2025 Quarter, net income increased by 10.2% to $95.1 million, or $0.73 per unit, compared to $86.3 million, or $0.66 per unit for the 2024 Quarter[3] - Adjusted EBITDA increased by 9.0% to $185.8 million in the 2025 Quarter compared to $170.4 million in the 2024 Quarter[3] - Total revenues for the 2025 Period decreased by 10.7% to $1.66 billion compared to $1.86 billion for the 2024 Period[7] - Net income attributable to ARLP for Q3 2025 was $95,104, up from $86,281 in Q3 2024, reflecting a 9.5% increase[39] - Adjusted EBITDA for the three months ended September 30, 2025, was $185.8 million, compared to $170.4 million in the same period of 2024, reflecting an increase of 9.5%[56] - Free cash flow for the three months ended September 30, 2025, was $151.4 million, up from $103.2 million in the same period of 2024, marking an increase of 46.6%[51] - Distributable Cash Flow for the three months ended September 30, 2025, was $106.4 million, compared to $97.6 million in the same period of 2024, an increase of 8.9%[48] Revenue and Sales - Total revenues decreased by 6.9% to $571.4 million in the 2025 Quarter, primarily due to a 7.5% decline in coal sales price per ton and reduced transportation revenues[3] - Coal sales volumes rose by 3.9% to 8.7 million tons sold in the 2025 Quarter compared to 8.4 million tons sold in the 2024 Quarter[3] - The Illinois Basin coal operations saw tons sold increase by 10.8% year-over-year, while Appalachia experienced a 13.3% decrease in sales volumes compared to the 2024 Quarter[13] - Total revenues for Q3 2025 were $571,367, a decrease of 6.9% from $613,569 in Q3 2024, primarily due to lower coal sales[39] Cash Distribution and Investments - The company declared a quarterly cash distribution of $0.60 per unit, or $2.40 per unit annualized[4] - The Board approved a cash distribution of $0.60 per unit for the 2025 Quarter, equating to an annualized rate of $2.40 per unit, payable on November 14, 2025[21] - ARLP invested approximately $22.1 million of a $25.0 million commitment in a limited partnership that operates a coal-fired power plant during the 2025 Quarter, supporting growth in energy infrastructure[18] Operational Efficiency - Operating expenses decreased to $466,403 in Q3 2025 from $512,502 in Q3 2024, a reduction of 9.0%[39] - Operating expenses for the three months ended September 30, 2025, were $354.6 million, a decrease from $384.8 million in the same period of 2024, representing a decline of 7.8%[53] - Capital expenditures for the nine months ended September 30, 2025, were $218,521, down from $335,586 in 2024[42] - Capital expenditures for the three months ended September 30, 2025, were $64.7 million, down from $110.3 million in the same period of 2024, a decrease of 41.4%[51] Debt and Liquidity - Total debt and finance leases as of September 30, 2025, were $470.6 million, with total liquidity of $541.8 million, including $94.5 million in cash and cash equivalents[20] - Cash and cash equivalents at the end of Q3 2025 were $94,481, down from $136,962 at the end of Q4 2024[40] - ARLP holds 568 bitcoins valued at $64.8 million as of September 30, 2025, contributing to its liquidity position[20] Future Guidance - For the full year ending December 31, 2025, total sales tons are guided at 32.50 to 33.25 million short tons, with coal sales price per ton expected to be between $58.00 and $60.00[26] - The company anticipates 4-6% annual growth in electricity demand in PJM and other markets, driven by normalized utility inventories and demand from data centers[24] - The 2026 book includes 29.1 million tons committed and priced, representing a 9% increase from the previous quarter[24] - Oil & Gas Royalties segment is adjusting BOE volume guidance due to the timing of a multi-well pad in the Delaware Basin, expected to come online in early 2026[24] Segment Performance - Segment Adjusted EBITDA for the Appalachia coal operations increased by 44.2% to $54.1 million in the 2025 Quarter compared to $37.5 million in the 2024 Quarter[11] - Segment Adjusted EBITDA for the Coal Royalties segment increased to $17.1 million in the 2025 Quarter, up from $11.1 million in the 2024 Quarter, reflecting higher royalty tons sold and average royalty rates[16] - Segment Adjusted EBITDA for Coal Operations for the three months ended September 30, 2025, was $356.7 million, compared to $386.3 million in the same period of 2024, a decrease of 7.7%[53] Asset Management - Total assets as of September 30, 2025, were $2,908,341, slightly down from $2,915,730 at the end of 2024[41] - The company reported cash flows from operating activities of $507,260 for the nine months ended September 30, 2025, compared to $634,711 for the same period in 2024[42] - The company recorded a change in fair value of digital assets amounting to $3,739 in Q3 2025, compared to $332 in Q3 2024[39] - Impairment loss on investments was $25.0 million, related to a preferred equity investment in a battery materials company[50] - Estimated maintenance capital expenditures for 2025 are projected to be $7.28 per ton produced, down from $7.76 per ton in 2024[50]

Core Viewpoint - The Zacks Coal industry is experiencing significant challenges due to declining coal usage in U.S. thermal power plants, with projections indicating a marginal improvement in demand by 2025 followed by a drop in 2026 due to ongoing energy transitions and utility operators phasing out coal assets [1][3]. Industry Overview - The Zacks Coal industry includes companies involved in coal exploration and mining, with the U.S. holding an estimated 252 billion short tons of recoverable coal reserves, 58% of which is underground mineable [3]. - Five U.S. states contribute to approximately 70% of annual coal production and 60% of surface mine extraction [3]. - The industry faces long-term challenges as renewable energy adoption accelerates and coal-fired power plants are gradually retired [3]. Trends Impacting the Industry - Coal export volumes are expected to decline in 2025 and continue into 2026 due to a global supply surplus and falling prices, particularly affecting metallurgical coal exports [2][4]. - The U.S. coal production is projected to be 531 million short tons in 2025, an increase from 512 million short tons in 2024, but expected to drop to 494 million short tons in 2026 [5]. - Coal's share in U.S. electricity generation is anticipated to decrease from 17% in 2025 to 16% in 2026, driven by rising environmental concerns and the transition to cleaner energy sources [5]. Industry Performance and Valuation - The Zacks Coal industry ranks 230, placing it in the bottom 5% of 243 Zacks industries, indicating a lackluster performance outlook [6][8]. - The coal industry has outperformed the Zacks Oil and Gas sector and the S&P 500 composite over the past year, with a gain of 22.7% compared to a 4.2% decline in the Oil-Energy sector and a 13.9% gain in the S&P 500 [9]. - The industry currently trades at a trailing 12-month EV/EBITDA of 8.84X, significantly lower than the Zacks S&P 500 composite's 18.12X [12]. Notable Companies - **Alliance Resource Partners (ARLP)**: Based in Tulsa, OK, ARLP produces coal primarily for utilities and industrial users, with projected sales tonnage in 2025 between 32.75-34 million short tons. The current distribution yield is 9.58% [16][17]. - **SunCoke Energy (SXC)**: Located in Lisle, IL, SXC focuses on metallurgical coal essential for steel production. The company benefits from its acquisition of Phoenix Global, which is expected to enhance earnings and cash flow stability. The current dividend yield is 5.82% [21][22].