Core Points - Alliance Resource Partners, L.P. (ARLP) will report its fourth quarter 2023 financial results on January 29, 2024, before market opens [1] - A conference call to discuss these results will take place at 10:00 a.m. Eastern on the same day [1] Company Overview - ARLP is the largest coal producer in the eastern United States, providing energy to major utilities and industrial users [2] - The company also generates income from mineral interests in coal and oil & gas producing regions in the U.S. [2] - ARLP is positioning itself as a reliable energy partner for the future by pursuing opportunities in energy and related infrastructure [2]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________to________________ Commission File No.: 0-26823 ALLIANCE RESOURCE PARTNERS, L.P. (Exact name of registrant as specified in its char ...

Alliance Resource Partners L.P. (NASDAQ:ARLP) Q3 2023 Earnings Conference Call October 27, 2023 10:00 AM ET Company Participants Joe Craft - Chairman, President & Chief Executive Officer Cary Marshall - Senior Vice President & Chief Financial Officer Conference Call Participants Nathan Martin - Benchmark Company Mark Reichman - Noble Capital Markets David Marsh - Singular Research Dave Storms - Stonegate Capital Market Operator Hello. And welcome to the Alliance Resource Partners Third Quarter 2023 Earnings ...

Financial Performance - Total revenues for Q2 2023 increased by 3.5% to $641.8 million compared to $619.9 million in Q2 2022, driven by higher coal sales prices [123]. - Net income attributable to ARLP for Q2 2023 was $169.8 million, or $1.30 per unit, compared to $163.5 million, or $1.23 per unit, in Q2 2022 [123]. - Total revenues for the six months ended June 30, 2023, increased 20.4% to $1.30 billion compared to $1.08 billion for the same period in 2022, largely due to a 23.8% increase in coal sales [144]. - Net income attributable to ARLP for the 2023 Period was $361.0 million, or $2.75 per unit, compared to $201.6 million, or $1.51 per unit, in the 2022 Period [145]. - Net income for the three months ended June 30, 2023, was $171.3 million, a 4.4% increase from $163.9 million in the same period of 2022 [162]. Revenue Sources - Coal sales increased by $28.5 million or 5.4% to $560.3 million in Q2 2023, with average coal sales prices rising by 5.7% to $62.93 per ton [124]. - Other revenues increased to $17.9 million in Q2 2023 from $13.4 million in Q2 2022, primarily due to increased sales of mining technology products [130]. - Other revenues increased to $37.3 million in the 2023 Period from $25.7 million in the 2022 Period, primarily due to increased sales of mining technology products [150]. Operating Expenses - Total operating expenses rose to $457.9 million in Q2 2023, compared to $442.6 million in Q2 2022, mainly due to higher costs associated with purchased coal [123]. - Total operating expenses rose to $913.5 million in the 2023 Period, up from $816.7 million in 2022, primarily due to higher per ton costs and increased sales volumes [144]. - Operating expenses (excluding depreciation, depletion, and amortization) for the three months ended June 30, 2023, were $334.4 million, compared to $316.9 million for the same period in 2022, reflecting a 5.5% increase [164]. Segment Performance - Segment Adjusted EBITDA for coal operations increased by 7.4% to $337.0 million in Q2 2023, with per ton costs rising by 7.8% to $37.85 [124]. - Illinois Basin Coal Operations Segment Adjusted EBITDA increased 22.8% to $119.6 million in Q2 2023 from $97.4 million in Q2 2022, driven by a 14.3% increase in coal sales to $331.8 million [137]. - Appalachia Coal Operations Segment Adjusted EBITDA decreased 11.9% to $109.6 million in Q2 2023 from $124.4 million in Q2 2022, primarily due to a 5.3% decline in coal sales to $228.5 million [138]. - Segment Adjusted EBITDA increased by $118.8 million to $561.3 million in the 2023 Period from $442.5 million in the 2022 Period, representing a 26.8% increase [150]. - Illinois Basin Coal Operations Segment Adjusted EBITDA rose to $251.6 million in the 2023 Period from $175.6 million in the 2022 Period, with coal sales increasing 22.9% to $668.7 million [155]. - Appalachia Coal Operations Segment Adjusted EBITDA increased 28.9% to $226.1 million in the 2023 Period from $175.5 million in the 2022 Period, with coal sales rising 25.1% to $470.4 million [156]. - Oil & Gas Royalties Segment Adjusted EBITDA decreased 22.8% to $29.1 million in Q2 2023, attributed to lower average sales price per BOE despite higher volumes sold [139]. - Oil & Gas Royalties Segment Adjusted EBITDA decreased to $59.1 million in the 2023 Period from $68.5 million in the 2022 Period, primarily due to a 33.6% decrease in average sales price per BOE [157]. - Coal Royalties Segment Adjusted EBITDA increased 20.2% to $11.0 million in Q2 2023, driven by higher average royalty rates per ton [139]. Capital Expenditures and Investments - Total capital expenditures for 2023 are estimated to be in the range of $390.0 million to $440.0 million, with average annual maintenance capital expenditures projected at approximately $7.05 per ton produced [175]. - The company closed on the JC Resources Acquisition for $72.3 million on February 22, 2023, funded with cash on hand [166]. - The company repurchased $60.8 million of its 7.5% senior notes due 2025 during the six months ended June 30, 2023, with an additional $50.0 million redeemed in July 2023 [171]. - Net cash used in investing activities was $277.6 million for the six months ended June 30, 2023, up from $163.3 million in the prior year, primarily due to increased capital expenditures and acquisitions [173]. Cash Flow - Cash provided by operating activities increased to $504.0 million for the six months ended June 30, 2023, compared to $239.4 million for the same period in 2022 [172]. Market Risks - The company has no material exposure to currency exchange-rate risks as almost all transactions are denominated in United States dollars [185]. - Coal is sold internationally in United States dollars, which may affect competitiveness against foreign competitors if their currencies decline [185]. - The company has interest rate exposure on borrowings under the Revolving Credit Facility and Securitization Facility, which are at variable rates [186]. - There was no outstanding balance under the Revolving Credit Facility or Securitization Facility as of June 30, 2023 [186]. - Historically, the company's earnings have not been materially affected by changes in interest rates [186]. - The company has not utilized interest rate derivative instruments related to its outstanding debt [186]. - There were no changes in the company's quantitative and qualitative disclosures about market risk since the last Annual Report [186].

Alliance Resource Partners L.P. (NASDAQ:ARLP) Q2 2023 Earnings Conference Call July 31, 2023 10:00 AM ET Company Participants Cary Marshall - Senior Vice President & Chief Financial Officer Joseph Craft - Chairman, President & Chief Executive Officer Conference Call Participants Nathan Martin - Benchmark Company Mark Reichman - Noble Capital Markets Dave Storms - Stonegate Capital Market David Marsh - Singular Research Arthur Calavritinos - ANC Capital Operator Greetings. Welcome to Alliance Resource Partne ...

Revenue Growth - Total revenues for the 2023 Quarter increased 43.0% to $662.9 million compared to $463.4 million for the 2022 Quarter, driven by a 49.0% increase in coal sales to $578.8 million[118] - Coal sales price per ton increased by 43.6% to $68.34 in the 2023 Quarter from $47.58 in the 2022 Quarter, contributing $175.8 million to revenue growth[118] - Total coal sales increased by 49.0% to $578.8 million in Q1 2023 from $388.4 million in Q1 2022, reflecting higher sales prices and volumes[129] Net Income and Earnings - Net income attributable to ARLP for the 2023 Quarter was $191.2 million, or $1.45 per unit, compared to $38.1 million, or $0.28 per unit, for the 2022 Quarter[119] Segment Performance - Segment Adjusted EBITDA for coal operations increased 28.3% to $335.9 million in the 2023 Quarter, with a per ton increase of 23.7% to $39.66[119] - Illinois Basin Coal Operations' Segment Adjusted EBITDA increased to $132.0 million in Q1 2023 from $78.2 million in Q1 2022, a rise of 68.8%[129] - Appalachia Coal Operations' Segment Adjusted EBITDA surged 128.1% to $116.6 million in Q1 2023 from $51.1 million in Q1 2022, driven by a 79.9% increase in coal sales to $241.9 million[130] - Total Segment Adjusted EBITDA for the company reached $291.9 million in Q1 2023, up 68.6% from $173.2 million in Q1 2022[135] Operating Expenses - Total operating expenses for the 2023 Quarter rose to $455.6 million, up from $374.2 million in the 2022 Quarter, primarily due to increased coal sales volumes and inflation[118] - Labor and benefit expenses per ton produced increased 26.5% to $11.88 in the 2023 Quarter, primarily due to higher incentive benefits and direct labor costs[119] - Material and supplies expenses per ton produced rose 12.6% to $13.99 in the 2023 Quarter, reflecting increases in various operational costs[120] - Maintenance expenses per ton produced increased 37.9% to $4.44 in the 2023 Quarter, driven by inflationary pressures[120] - Segment Adjusted EBITDA Expense increased by 29.8% to $339.3 million in Q1 2023 from $261.5 million in Q1 2022, primarily due to higher sales volumes and inflationary pressures[135] Other Revenues - Other revenues increased to $19.4 million in the 2023 Quarter from $12.3 million in the 2022 Quarter, mainly due to higher sales of mining technology products[121] - Other revenues totaled $19.4 million in Q1 2023, a 57.8% increase from $12.3 million in Q1 2022, driven by higher intercompany coal royalties and corporate activities[135] Cash Flow and Investments - Cash provided by operating activities increased to $223.3 million for the 2023 Quarter, up from $90.6 million in the 2022 Quarter, primarily due to higher net income and favorable working capital changes[145] - Net cash used in investing activities rose to $148.7 million for the 2023 Quarter, compared to $45.5 million in the 2022 Quarter, mainly due to increased capital expenditures and the JC Resources Acquisition[146] - Net cash used in financing activities was $99.3 million for the 2023 Quarter, up from $39.3 million in the 2022 Quarter, driven by higher cash distributions to unitholders and senior notes repurchases[147] Capital Expenditures and Financing - The company anticipates total capital expenditures for 2023 to be in the range of $400.0 million to $460.0 million, with average estimated annual maintenance capital expenditures projected at approximately $7.05 per ton produced[148] - The company closed the JC Resources Acquisition for $72.3 million on February 22, 2023, funded with cash on hand[140] - The company has a $425 million revolving credit facility and a $75 million term loan under a Credit Agreement that matures on March 9, 2027[141] - The company repurchased and retired 860,060 units at an average price of $21.17 for a total of $18.2 million during the three months ended March 31, 2023[144] - The company repurchased $26.6 million of its 7.5% senior notes due 2025 during the 2023 Quarter, with an outstanding principal amount of $373.4 million remaining[145] - The company extended the term of its $60.0 million accounts receivable securitization facility from January 2023 to January 2024[142]

Alliance Resource Partners LP (NASDAQ:ARLP) Q1 2023 Earnings Conference Call May 2, 2023 11:00 AM ET Company Participants Cary Marshall - SVP, CFO, VP, Corporate Finance & Treasurer Joseph Craft - Chairman, President & CEO Conference Call Participants Nathan Martin - The Benchmark Company Mark Reichman - NOBLE Capital Markets David Storms - Stonegate Capital Markets David Marsh - Singular Research Operator Greetings, and welcome to the Alliance Resource Partners L.P. First Quarter 2023 Earnings Conference C ...

Regulatory Environment - The company faces increasing difficulty in securing surety bonds, which are essential for compliance with federal and state laws, potentially impacting coal production and profitability [132]. - The EPA's regulations, including the MATS rule, may lead to additional capital investments for electric power generators, affecting demand for coal [140]. - The company is evaluating the potential impacts of the CSAPR Update and MATS on its business operations and financial condition [140]. - Future GHG regulations could negatively impact demand for coal and oil & gas, as the company navigates evolving federal and state policies [147]. - The Biden administration's commitment to climate change initiatives may further influence the regulatory landscape affecting fossil fuels [147]. - The company is subject to the EPA's New Source Performance Standards, which impose stricter emissions controls on fossil fuel power plants [146]. - The implementation of new air quality standards may require additional emissions control expenditures at coal-fired power plants, potentially reducing coal demand [141]. - The uncertainty surrounding the EPA's regulatory actions could lead to fluctuations in coal demand and impact the company's financial performance [148]. - The EPA's Clean Power Plan (CPP) was proposed in 2015 but faced legal challenges, leading to its repeal and replacement by the Affordable Clean Energy (ACE) rule in 2019, which was later struck down by the Circuit Court in 2021 [151]. - The Supreme Court's decision in June 2022 reversed the Circuit Court's ruling, indicating that the EPA acted outside its legal authority in promulgating the CPP [152]. - Environmental regulations have led to premature retirements of coal-fired generating units, potentially reducing coal demand, with no current legislation from Congress to restrict carbon dioxide emissions from existing power plants [152]. - Future initiatives to control greenhouse gas emissions may increase costs for fossil-fuel production, potentially leading customers to switch to alternative fuel sources [157]. - The Federal Clean Water Act (CWA) imposes permitting requirements that affect coal mining operations, with significant uncertainty regarding the permitting process in Appalachia due to EPA initiatives [158]. - The EPA has the authority to veto Section 404 permits if they determine an "unacceptable adverse effect," which could create uncertainty for coal mining operations [160]. - The EPA's regulations on coal combustion by-products (CCB) classify them as non-hazardous waste, but future regulations could increase operational costs for customers and reduce coal demand [167]. - The EPA's revised CCB rule mandates the closure of unlined impoundments by 2028, which may lead to the closure of coal-fired power plants unable to comply with new standards [170]. - The company is subject to various environmental regulations, including the Endangered Species Act, which could increase operating costs if species are designated as threatened or endangered [172]. - Legislative and regulatory compliance costs could impact the company's business and profitability [183]. - The company is subject to numerous federal, state, and local laws that could increase operational costs and limit coal production capabilities [283]. - Compliance with health and safety regulations has increased operational expenses and may continue to adversely affect financial performance [286]. - The company’s operations are impacted by climate change regulations, with potential future federal GHG regulations posing significant compliance costs [302]. - The U.S. has rejoined the Paris Agreement, aiming for a 50-52% reduction in economy-wide net GHG emissions by 2030, which could further reduce fossil fuel demand [303]. - New state and federal regulations regarding hydraulic fracturing could lead to increased costs and operational restrictions, adversely affecting revenues [292]. - Legislative changes regarding hydraulic fracturing and waste disposal could materially affect the company's business and financial condition [300]. Market Dynamics - The company sold 82.4% of its total tons to electric utilities in the United States, primarily to utility plants equipped with pollution control devices [135]. - Over thirty states have adopted renewable energy standards, with some aiming for 100% renewable energy in their electric generation portfolios by certain dates [153]. - The domestic electric power sector accounts for the majority of coal consumption, influenced by electricity demand, regulations, and competition from natural gas [249]. - Changes in consumption patterns by utilities regarding coal have affected the company's ability to sell coal, with potential future impacts anticipated [248]. - Future environmental regulations and mandates for renewable energy could further decrease coal demand, adversely affecting the company's operations and cash flow [250]. - The ongoing Russian-Ukrainian conflict has caused significant market disruptions, potentially leading to increased volatility in commodity prices [243]. - The company may be adversely affected by volatility in oil, gas, and coal prices, which depend on factors beyond its control [234]. - Changes in taxes, tariffs, and trade measures could adversely affect the company's results of operations and financial position [241]. - The marketability of oil & gas production is influenced by the availability and capacity of third-party transportation facilities, which are not controlled by the company or its operators [331]. Financial Performance - The company had long-term indebtedness of $427.0 million as of December 31, 2022, which may limit its ability to finance future operations and capital needs [220]. - The company’s cash distributions to unitholders are not guaranteed and depend on various financial factors [187]. - The company may issue an unlimited number of limited partner interests, which could dilute existing unitholders' ownership [188]. - The credit and risk profile of the company's general partner may adversely affect its credit ratings and profile, impacting business activities and cash distribution policies [191][192]. - An increase in interest rates could lead to a decline in the market price of the company's common units due to reduced demand for riskier investments [190]. - Cost reimbursements to the general partner could be substantial, adversely affecting the company's ability to pay distributions to unitholders [198]. - The general partner's discretion in determining cash reserves may limit the cash available for distributions to unitholders [203]. - Unitholders have limited voting rights, with the ability to remove the general partner requiring a vote of at least 66.7% of outstanding units [194]. - Unitholders may be required to sell their units at an undesirable time or price if less than 20% of outstanding common units are held by non-affiliates of the general partner [197]. - The company faces potential adverse effects on financial condition and cash flows due to various legal proceedings related to normal business activities [223]. - The stability of operations could be impacted if customers do not honor existing contracts or fail to enter into new long-term contracts for coal [224]. - The company has unused borrowing capacity under its revolving credit facility, which could increase leverage if utilized [220]. - The company may need to seek alternative financing for growth initiatives if expected financing is not available, potentially on less favorable terms [218]. - The present value of future net cash flows from proved reserves may differ significantly from current market values due to fluctuating oil & gas prices and costs [327]. - The company may experience delays in royalty payments if operators suspend payments due to title or other issues, adversely affecting financial results [321]. Operational Challenges - The company faces risks related to fluctuating coal and oil & gas prices, which could impact operational results [183]. - The company has a demonstrated history of safety performance, focusing on improving employee safety through regular training and monitoring [177]. - A shortage of skilled labor in the coal industry may hinder productivity and increase operational costs, affecting profitability [271]. - The company’s profitability is sensitive to fluctuations in raw material costs, including steel and fuel, which could lead to significant operational expense variations [267][270]. - The ability to obtain and renew necessary mining permits is critical; delays or denials could reduce production and profitability [260][262]. - Estimates of coal mineral reserves may prove inaccurate, impacting future profitability and operational success [275][278]. - Inflationary pressures could adversely affect operational results by increasing costs across various expense categories [273]. - The company faces significant challenges in coal mining due to geological characteristics, such as overburden depth and coal seam thickness, which increase mining costs [280]. - Regulatory constraints in certain operational areas may adversely affect mining operations and cost structures, potentially impacting overall financial results [280]. - Extensive environmental regulations impose significant emission control expenditures on coal-fired power plants, which could affect coal demand and pricing [282]. - Disruptions in supply chains and transportation could impair production and increase costs, negatively impacting profitability [272][264]. - Interruptions in operations due to unavailability of transportation facilities could significantly affect cash available for distribution [331]. Employee Welfare - As of December 31, 2022, the company employed 3,371 full-time employees, with 2,901 in active coal mining operations [174]. - The average concentration of respirable dust samples collected was 55% below the regulatory standard, demonstrating a commitment to workplace safety [177]. - The company provides medical, dental, and vision insurance with no out-of-pocket premiums for employees, along with on-site medical clinics [178]. - The company has a history of competitive compensation packages, including base salary, incentive compensation, and profit-sharing plans [175]. Climate Change and ESG Concerns - Increasing scrutiny on ESG matters may negatively impact the company's business, financial results, and unit price due to reputational risks and potential litigation [208][209]. - The company faces potential litigation related to climate change, which could result in significant costs and liabilities [252]. - The company’s operations could be negatively impacted by physical risks associated with climate change, such as extreme weather events [308]. - The Federal Reserve's pilot climate scenario analysis aims to enhance the ability of firms to manage climate-related financial risks, which could impact funding for fossil-fuel companies [306]. - Over 450 firms across 45 countries have committed over $130 trillion in capital to net zero goals, indicating a significant shift in financial support away from fossil fuels [306].

Alliance Resource Partners, L.P. (NASDAQ:ARLP) Q4 2022 Earnings Conference Call January 30, 2023 10:00 AM ET Company Participants Brian Cantrell - Senior Vice President and CFO Joe Craft - Chairman, President and CEO Cary Marshall - Incoming CFO Conference Call Participants Mark Reichman - NOBLE Capital Markets Nathan Martin - The Benchmark Company Dave Storms - Stonegate Capital Markets David Marsh - Singular Research Abraham Landa - Bank of America Tom Coleman - Kensico Capital Operator Greetings, and wel ...