Alliance Resource Partners(US:ARLP)2024-11-07 21:13Financial Performance - Total revenues for Q3 2024 decreased by 3.6% to $613.6 million compared to $636.5 million in Q3 2023, primarily due to reduced coal sales prices and lower transportation revenues [140]. - Net income attributable to the company for Q3 2024 was $86.3 million, or $0.66 per unit, down from $153.7 million, or $1.18 per unit, in Q3 2023, reflecting lower revenues and increased operating expenses [143]. - Total revenues for the nine months ended September 30, 2024, decreased 4.3% to $1.86 billion compared to $1.94 billion for the same period in 2023, mainly due to lower coal sales and transportation revenues [159]. - Net income attributable to the company for the 2024 Period was $344.5 million, or $2.64 per unit, down from $514.7 million, or $3.93 per unit, in the 2023 Period [161]. Coal Operations - Coal sales decreased to $532.6 million in Q3 2024 from $549.1 million in Q3 2023, driven by a 2.1% decline in average coal sales prices and lower tons sold [144]. - Segment Adjusted EBITDA for coal operations increased by 10.9% to $386.3 million, with per ton costs rising 11.9% to $46.11 per ton sold in Q3 2024 [145]. - Segment Adjusted EBITDA decreased by $55.4 million to $192.3 million in Q3 2024 from $247.7 million in Q3 2023 [152]. - Segment Adjusted EBITDA for Illinois Basin Coal Operations decreased 13.4% to $114.6 million in Q3 2024 from $132.4 million in Q3 2023, primarily due to lower coal sales volumes and higher operating expenses [156]. - Appalachia Coal Operations saw a 49.9% decrease in Segment Adjusted EBITDA to $37.5 million in Q3 2024 from $74.8 million in Q3 2023, attributed to lower coal sales and higher operating expenses [157]. - Coal sales decreased to $1.61 billion for the 2024 Period compared to $1.69 billion for the 2023 Period, with a 3.6% decrease in sales volumes primarily due to reduced domestic demand [163]. - Segment Adjusted EBITDA Expense for coal operations increased 7.4% to $1.10 billion, with per ton costs rising 11.4% to $44.04 per ton sold in the 2024 Period [164]. - Illinois Basin Coal Operations reported a 2.9% increase in coal sales to $1.04 billion, while Segment Adjusted EBITDA decreased by 2.9% to $373.0 million [177]. - Appalachia Coal Operations experienced a 47.8% decline in Segment Adjusted EBITDA to $157.1 million, with coal sales decreasing by 16.3% to $566.8 million [178]. - Coal Royalties Segment Adjusted EBITDA rose to $33.5 million, reflecting higher average royalty rates and increased tons sold [180]. Transportation Revenues - Transportation revenues decreased to $24.6 million in Q3 2024 from $35.0 million in Q3 2023, attributed to lower average third-party transportation rates and decreased coal shipments [151]. - Transportation revenues decreased by $13.6 million to $82.1 million in the 2024 Period, primarily due to decreased coal shipments [169]. Operating Expenses - Total operating expenses increased to $1.48 billion in the 2024 Period from $1.38 billion in the 2023 Period, primarily due to higher cost purchased coal and a $15.3 million litigation expense accrual [160]. - Segment Adjusted EBITDA Expense increased by 8.5% to $1.12 billion, primarily due to higher operating expenses across segments [1]. Cash Flow and Investments - Cash provided by operating activities decreased to $634.7 million in the 2024 Period from $730.3 million in the 2023 Period [190]. - Net cash used in investing activities decreased to $337.4 million for the 2024 Period from $439.4 million in the 2023 Period, primarily due to reduced acquisitions of oil & gas reserves [191]. - Net cash used in financing activities decreased to $161.7 million for the 2024 Period from $389.7 million in the 2023 Period, mainly due to the issuance of Senior Notes and borrowings under Equipment Financing [192]. - The company anticipates total capital expenditures for 2024 to be in the range of $420.0 million to $460.0 million, with average estimated annual maintenance capital expenditures projected at approximately $7.76 per ton produced [193]. - As of September 30, 2024, the company had $195.4 million in cash and cash equivalents, which is expected to be sufficient to meet 2024 cash requirements [193]. Oil & Gas Operations - The company owns oil & gas mineral interests in approximately 69,000 net royalty acres in premier producing regions, supporting its strategy to grow its oil & gas mineral interest business [129]. - The company has committed up to $25.0 million to acquire additional oil & gas mineral interests in the Midland and Delaware Basins for an additional one-year term [131]. - Oil & Gas Royalties Segment Adjusted EBITDA decreased 8.5% to $28.7 million in Q3 2024 compared to $31.4 million in Q3 2023, driven by reduced average sales prices despite an 11.9% increase in volumes sold [158]. - Oil & Gas Royalties Segment Adjusted EBITDA increased to $91.4 million, driven by a 12.3% rise in oil & gas volumes to 2,579 MBOE [179]. Risk Factors - The company is exposed to commodity price risks, particularly in coal, oil, and natural gas, which could significantly impact revenues if prices decline [200]. - Credit risk is primarily associated with domestic electric power generators and reputable global brokerage firms, with measures in place to evaluate and monitor customer creditworthiness [202]. - The company does not have material exposure to currency exchange-rate risks as most transactions are in U.S. dollars, but foreign competitors may gain advantages from currency fluctuations [203]. - Borrowings under the Revolving Credit Facility and Securitization Facility are at variable rates, exposing the company to interest rate risks [204]. - There were no significant changes in the company's quantitative and qualitative disclosures about market risk compared to the previous annual report [205].