Summary of Alliance Resource Partners Conference Call (October 08, 2025) Company Overview - **Company**: Alliance Resource Partners (NasdaqGS:ARLP) - **Market Capitalization**: Approximately $3.5 billion - **Structure**: Master Limited Partnership (MLP) which is tax-advantaged and yield-oriented, primarily focused on energy infrastructure and natural resource activities [2][3][5] Business Segments 1. **Coal Operations**: - Generates 80% to 85% of cash flow - Second largest coal producer in the Eastern United States - Operates seven underground mining complexes across several states - 92% of sales in 2024 directed to domestic electric power generation markets [5][6][10] 2. **Oil and Gas Mineral Interests**: - Represents 15% to 20% of cash flows - Generated approximately $115 million in segment-adjusted EBITDA in 2024, up from $40 million in 2020 - Focused on passive investments in royalty interests, primarily in the Permian Basin [6][19][20] 3. **Other Growth Investments**: - Includes investments in energy technology (Matrix) and digital asset technology (BitTiki for Bitcoin mining) - Recent investment in Gavin Coal-Fired Power Plant, representing a 5.5% equity stake [7][22][24] Industry Outlook - **Coal Industry**: - Positive outlook supported by current administration policies emphasizing coal's role in grid reliability - Anticipated increase in U.S. electricity demand driven by data centers, onshoring, and AI [8][10][13] - Shift towards domestic markets with 92% of sales expected to be domestic in 2025, compared to an average of 86% from 2021 to 2024 [10][11] - **Government Support**: - Recent actions from the administration include extending compliance timelines for environmental regulations and funding for modernizing coal plants [15][16][17] Capital Allocation Priorities 1. **Strengthening Balance Sheet**: - Low leverage with gross debt to trailing 12 months adjusted EBITDA at 0.8 times [26][27] 2. **Investments in Coal Operations**: - Planned capital investment of $285 million to $320 million in mining operations for 2025 [27][28] 3. **Oil and Gas Royalties**: - Approximately $100 million allocated for reinvestment in oil and gas minerals [28] 4. **Distributions to Unitholders**: - Focus on providing attractive yields through cash distributions rather than stock buybacks [29][30] Additional Insights - **Growth Potential**: - The oil and gas minerals segment is expected to potentially double in size over the next eight years [21] - Investments in technology and diversification into non-fossil fuel sectors are seen as growth opportunities [23][24] - **Market Dynamics**: - Domestic pricing for coal is currently more attractive than export pricing, leading to a strategic focus on domestic markets [11][12] This summary encapsulates the key points discussed during the conference call, highlighting the company's structure, business segments, industry outlook, capital allocation strategies, and additional insights into growth potential and market dynamics.

Core Insights - BorgWarner has secured a significant contract with a major Chinese OEM for electric motors, highlighting its strong position in China's rapidly growing NEV market [1][2] - The awarded motor features a platform-based design suitable for various NEV applications and utilizes an innovative ultra-short hairpin welding process to enhance space efficiency [1][6] - BorgWarner is expanding its motor operations in China, including a new manufacturing base in Wuhu, which will increase motor capacity and support scalable delivery [2][6] Company Developments - The partnership with the Chinese OEM has lasted nearly a decade, indicating a strong and ongoing relationship [2] - BorgWarner's commitment to delivering efficient motor solutions aligns with the electrification trends in the automotive industry [2][3] - The new Wuhu facility will feature intelligent manufacturing lines capable of producing multiple motor platforms, enhancing operational efficiency [2][6] Industry Context - The NEV market in China is experiencing rapid growth, creating opportunities for companies like BorgWarner to leverage their technological advantages [2] - The demand for electric motors is increasing as the automotive industry shifts towards electrification, positioning BorgWarner favorably in this evolving landscape [2][3]

Financial Performance & Guidance - NN's Q1 2025 net sales were $105.7 million, flat year-over-year on a pro forma basis, but down $15.5 million as reported[14, 40] - Adjusted EBITDA for Q1 2025 was $10.6 million, with an adjusted EBITDA margin of 10.0%, reconfirming FY 2025 guidance of $53-$63 million[14] - The company is lowering its 2025 net sales guidance to $430-$460 million due to GDP uncertainties, but reiterating adjusted EBITDA guidance of $53-$63 million and new business awards guidance of $60-$70 million[12] - NN initiates 2025 guidance for free cash flow at $14 to $16 million[12] Business Transformation & New Business - NN is launching 120 new programs in 2025, expected to add approximately $55 million in peak annual sales[11] - The company's new business program has secured $160 million of new business from January 2023 to May YTD 2025[16, 18, 21] - NN Europe achieved $6.7 million in new wins in Q1 2025, with an estimated total program value of over $50 million[25] - The company's working capital has been reduced by 20%, or $21.6 million, over the last two years, from $106.4 million in Q1 2023 to $84.8 million in Q1 2025[37, 38] Cost Reduction & Operational Efficiency - NN has reduced its global staff by 16%, or 525 people, over two years, with further reductions planned for 2025[29, 33] - The company is implementing a $6.5 million payroll reduction plan in 2025[33] - NN is advancing its organic transition into non-auto areas by leveraging $340 million of installed assets and investing $10-$14 million additional cash capex per year[12]

Financial Highlights - Net sales for Q1 2025 were $878 million, a decrease of 4% from $915 million in Q1 2024, with a 2% decline on a constant currency basis [4][38] - Gross profit increased to $179 million, with a gross profit margin of 20.4%, compared to 18.8% in Q1 2024 [7][36] - Net income for Q1 2025 was $62 million, down from $66 million in Q1 2024, resulting in a net income margin of 7.1% [13][36] - Adjusted EBIT rose to $131 million, with an adjusted EBIT margin of 14.9%, compared to 13.2% in the prior year [15][36] - Adjusted EBITDA was $159 million, with an adjusted EBITDA margin of 18.1%, up from 16.5% in Q1 2024 [15][36] - Net cash provided by operating activities totaled $56 million, down from $84 million in Q1 2024 [14][36] - Adjusted free cash flow decreased to $36 million from $68 million in the previous year [16][36] Business Highlights - The company declared a cash dividend of $0.06 per share, payable on June 16, 2025 [2] - The company repurchased $30 million of common stock during the quarter, with a remaining repurchase capacity of $220 million [18] - The company secured new business in turbocharging, particularly in plug-in hybrid and range-extended electric platforms [3][4] - A significant milestone was achieved with the first major series production award for high-speed electric traction motors, expected to start production in 2027 [3][4] Liquidity and Capital Resources - As of March 31, 2025, the company had $760 million in available liquidity, including $130 million in cash and cash equivalents [17] - Total principal amount of debt outstanding was $1,494 million, slightly up from $1,493 million at the end of 2024 [18] Full Year 2025 Outlook - The company expects net sales for 2025 to be between $3.3 billion and $3.5 billion, with a constant currency growth forecast of -3% to +2% [21][44] - Projected net income for 2025 is between $209 million and $254 million [21][45] - Adjusted EBITDA is expected to range from $545 million to $605 million for the full year [21][45]