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]