Alliance Resource Partners Q3 earnings rise 46.8%
The AllDale transaction involved approximately 48,500 net royalty acres in the Permian, Anadarko, Bakken and Haynesville regions.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Alliance Resource Partners, L.P. (ARLP) reported third-quarter 2026 revenue of $603.015 million, versus $571.367 million a year earlier, and net income attributable to ARLP of $139.596 million, versus $95.104 million. Earnings per limited partner unit were $1.08, compared with $0.73. Oil and gas royalties were $59.761 million, up from $32.055 million. Operating cash flow for the first nine months was $511.506 million, compared with $507.260 million.
Alliance Minerals acquired certain general and limited partner interests in AllDale III & IV on July 1 for $206.2 million, subject to customary post-closing adjustments; the transaction involved approximately 48,500 net royalty acres. ARLP recorded a $37.8 million impairment at Mettiki after deciding to cease longwall production; the mine has since transitioned to a continuous mining unit operation. On November 2, ARLP acquired certain assets and liabilities of Auxier Welding, Inc. for $23.2 million, including $6.0 million deferred in two $3.0 million installments due on or before December 1, 2027 and 2028. Principal debt was $679.686 million as of September 30, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue increased 5.5% to $603.015 million.
- Moderate pointNet income attributable to ARLP rose 46.8% to $139.596 million.
- Minor pointThe AllDale acquisition involved approximately 48,500 net royalty acres.
Negative
- Moderate pointMettiki impairment charge: $37.8 million following the longwall production decision. 1.2% of market cap
Filing Explained
Related parties retain 53.08% of AllDale III and 21.43% of IV, while ARLP consolidates both partnerships after gaining control.
Following the completed July 1 acquisition, ARLP consolidates AllDale III & IV because it holds their general-partner interests and directs the activities that most affect their economic performance. ARLP holds
ARLP holds all of the non-economic general-partner interest; the related parties’ limited-partner interests are reported as noncontrolling interests. At the acquisition date, those interests were valued at
To help fund the acquisition, Alliance Minerals borrowed
Key Figures
Key Terms
variable interest entities financial
primary beneficiary financial
Level 3 fair value measurement financial
accounts receivable securitization facility financial
measurement alternative financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were ARLP's third-quarter 2026 revenue and earnings per unit?
What interests did ARLP acquire in AllDale III and IV?
What did ARLP acquire from Auxier Welding?
What was ARLP's November 2026 cash distribution?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from ________________to________________
Commission File No.:
.
(Exact name of registrant as specified in its charter)
| ||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
(Address of principal executive offices and zip code)
(
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated Filer ☐ | Non-Accelerated Filer ☐ | Smaller Reporting Company | |
Emerging Growth Company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
As of November 6, 2026,
Table of Contents
TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION
Page | ||
ITEM 1. | Financial Statements (Unaudited) | |
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES | ||
Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 | 1 | |
Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2026 and 2025 | 2 | |
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2026 and 2025 | 3 | |
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025 | 4 | |
Notes to Condensed Consolidated Financial Statements | 5 | |
1. Organization and Presentation | 5 | |
2. New Accounting Standards | 6 | |
3. Variable Interest Entities | 6 | |
4. Acquisitions | 9 | |
5. Fair Value Measurements | 12 | |
6. Inventories | 14 | |
7. Digital Assets | 14 | |
8. Derivative Financial Instruments | 14 | |
9. Long-Lived Asset Impairment | 16 | |
10. Investments | 17 | |
11. Long-Term Debt | 18 | |
12. Workers’ Compensation and Pneumoconiosis | 21 | |
13. Components of Pension Plan Net Periodic Benefit Cost | 22 | |
14. Contingencies | 22 | |
15. Partners’ Capital | 23 | |
16. Noncontrolling Interests | 25 | |
17. Common Unit-Based Compensation Plan | 26 | |
18. Revenue from Contracts with Customers | 27 | |
19. Related-Party Transactions | 28 | |
20. Income Taxes | 29 | |
21. Earnings per Limited Partner Unit | 29 | |
22. Segment Information | 30 | |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 34 |
ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 48 |
ITEM 4. | Controls and Procedures | 49 |
Forward-Looking Statements | 50 | |
PART II | ||
OTHER INFORMATION | ||
ITEM 1. | Legal Proceedings | 52 |
ITEM 1A. | Risk Factors | 52 |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 52 |
ITEM 3. | Defaults Upon Senior Securities | 52 |
ITEM 4. | Mine Safety Disclosures | 52 |
ITEM 5. | Other Information | 52 |
ITEM 6. | Exhibits | 53 |
i
Table of Contents
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)
(Unaudited)
September 30, | December 31, | ||||||
2026 | | 2025 | |||||
ASSETS | |
| |||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Trade receivables (net of allowance of $ |
| |
| | |||
Other receivables |
| |
| | |||
Inventories, net |
| |
| | |||
Advance royalties |
| |
| | |||
Digital assets |
| |
| | |||
Prepaid expenses and other assets | |
| | |
| | |
Total current assets |
| |
| | |||
PROPERTY, PLANT AND EQUIPMENT: | |||||||
Property, plant and equipment |
| |
| | |||
Less accumulated depreciation, depletion and amortization |
| ( |
| ( | |||
Total property, plant and equipment, net |
| |
| | |||
OTHER ASSETS: | |||||||
Advance royalties |
| |
| | |||
Equity method investments |
| |
| | |||
Equity securities | |
| | ||||
Operating lease right-of-use assets | | | |||||
Other long-term assets |
| |
| | |||
Total other assets |
| |
| | |||
TOTAL ASSETS | $ | | $ | | |||
LIABILITIES AND PARTNERS' CAPITAL | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | | $ | | |||
Accrued taxes other than income taxes |
| |
| | |||
Accrued payroll and related expenses |
| |
| | |||
Accrued interest |
| |
| | |||
Workers' compensation and pneumoconiosis benefits |
| |
| | |||
Other current liabilities |
| |
| | |||
Current maturities, long-term debt, net |
| |
| | |||
Total current liabilities |
| |
| | |||
LONG-TERM LIABILITIES: | |||||||
Long-term debt, excluding current maturities, net |
| |
| | |||
Pneumoconiosis benefits |
| |
| | |||
Workers' compensation |
| |
| | |||
Asset retirement obligations |
| |
| | |||
Long-term operating lease obligations |
| |
| | |||
Deferred income tax liabilities |
| |
| | |||
Other liabilities |
| |
| | |||
Total long-term liabilities |
| |
| | |||
Total liabilities |
| |
| | |||
COMMITMENTS AND CONTINGENCIES - (NOTE 14) | |||||||
PARTNERS' CAPITAL: | |||||||
ARLP Partners' Capital: | |||||||
Limited Partners - Common Unitholders |
| |
| | |||
Accumulated other comprehensive loss |
| ( |
| ( | |||
Total ARLP Partners' Capital |
| |
| | |||
Noncontrolling interest | | | |||||
Total Partners' Capital | | | |||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ | | $ | | |||
See notes to condensed consolidated financial statements.
1
Table of Contents
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except unit and per unit data)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | | |||||
SALES AND OPERATING REVENUES: | |||||||||||||
Coal sales | $ | | $ | | $ | | $ | | |||||
Oil & gas royalties | | | | | |||||||||
Transportation revenues |
| |
| |
| |
| | |||||
Other revenues |
| |
| |
| |
| | |||||
Total revenues |
| |
| |
| |
| | |||||
EXPENSES: | |||||||||||||
Operating expenses (excluding depreciation, depletion and amortization) |
| |
| |
| |
| | |||||
Transportation expenses |
| |
| |
| |
| | |||||
Outside coal purchases |
| |
| |
| |
| | |||||
General and administrative |
| |
| |
| |
| | |||||
Depreciation, depletion and amortization |
| |
| |
| |
| | |||||
Settlement gain | ( | |
| ( |
| | |||||||
Asset impairments |
| |
| |
| |
| | |||||
Total operating expenses |
| |
| |
| |
| | |||||
INCOME FROM OPERATIONS |
| |
| |
| |
| | |||||
Interest expense (net of interest capitalized for the three and nine months ended September 30, 2026 and 2025 of $ |
| ( |
| ( |
| ( |
| ( | |||||
Interest income |
| |
| |
| |
| | |||||
Net income on equity method investments |
| |
| |
| |
| | |||||
Change in fair value of digital assets | |
| |
| ( |
| | ||||||
Loss on derivative instruments, net | ( |
| |
| ( |
| | ||||||
Acquisition gain | |
| |
| |
| | ||||||
Impairment loss on investments - (Note 10) | |
| |
| |
| ( | ||||||
Other income (expense) |
| ( |
| ( |
| |
| | |||||
INCOME BEFORE INCOME TAXES |
| |
| |
| |
| | |||||
INCOME TAX EXPENSE |
| |
| |
| |
| | |||||
NET INCOME | | | | | |||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | ( |
| ( |
| ( |
| ( | ||||||
NET INCOME ATTRIBUTABLE TO ARLP | $ | | $ | | $ | | $ | | |||||
EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED | $ | | $ | | $ | | $ | | |||||
WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED |
| |
| |
| |
| | |||||
See notes to condensed consolidated financial statements.
2
Table of Contents
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | |||||||||||
2026 | | 2025 | | 2026 | | 2025 | | ||||||
NET INCOME | $ | | $ | | $ | | $ | | |||||
OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||||
Defined benefit pension plan | |||||||||||||
Amortization of prior service cost (1) | | | | | |||||||||
Total defined benefit pension plan adjustments |
| |
| |
| |
| | |||||
Pneumoconiosis benefits | |||||||||||||
Amortization of net actuarial loss (1) |
| |
| |
| |
| | |||||
Other adjustments (2) | |
| | ( | | ||||||||
Total pneumoconiosis benefits adjustments |
| |
| |
| ( |
| | |||||
Foreign currency translation adjustment | |
| | |
| | |||||||
Change in unrealized gains on debt securities (3) | |
| ( | |
| | |||||||
OTHER COMPREHENSIVE INCOME (LOSS) |
| |
| ( |
| ( |
| | |||||
COMPREHENSIVE INCOME | | | | | |||||||||
Less: Comprehensive income attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP | $ | | $ | | $ | | $ | | |||||
| (1) |
| (2) |
| (3) |
See notes to condensed consolidated financial statements.
3
Table of Contents
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended | |||||||
September 30, | |||||||
| 2026 | | 2025 | | |||
CASH FLOWS FROM OPERATING ACTIVITIES | $ | | $ | | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Property, plant and equipment: | |||||||
Capital expenditures |
| ( |
| ( | |||
Change in accounts payable and accrued liabilities |
| |
| ( | |||
Proceeds from sale of property, plant and equipment |
| |
| | |||
Contributions to equity method investments |
| ( |
| ( | |||
Purchase of debt securities | |
| ( | ||||
Business combinations, net of cash acquired |
| ( |
| | |||
Oil & gas reserve asset acquisitions | ( | ( | |||||
Other |
| |
| | |||
Net cash used in investing activities |
| ( |
| ( | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under securitization facility | |
| | ||||
Payments under securitization facility | ( |
| ( | ||||
Payments on equipment financings | ( |
| ( | ||||
Borrowings under revolving credit facilities |
| |
| | |||
Payments under revolving credit facilities |
| ( |
| | |||
Borrowing under long-term debt | |
| | ||||
Payments on long-term debt |
| ( |
| ( | |||
Payment of debt issuance costs |
| ( |
| | |||
Payments for tax withholdings related to settlements under deferred compensation plan |
| ( |
| ( | |||
Distributions paid to Partners | ( |
| ( | ||||
Other |
| ( |
| ( | |||
Net cash used in financing activities |
| ( |
| ( | |||
Effect of exchange rate changes on cash and cash equivalents | |
| | ||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
| |
| ( | |||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
| |
| | |||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | | $ | | |||
SUPPLEMENTAL NON-CASH ACTIVITY: | |||||||
Accounts payable for purchase of property, plant and equipment | $ | | $ | | |||
Change in property, plant and equipment for reclamation assets | | | |||||
Right-of-use assets acquired by operating lease | $ | | $ | | |||
Market value of common units issued under deferred compensation plan before tax withholding requirements | $ | | $ | | |||
See notes to condensed consolidated financial statements.
4
Table of Contents
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.ORGANIZATION AND PRESENTATION
Significant Relationships Referenced in Notes to Condensed Consolidated Financial Statements
| ● | References to “we,” “us,” “our” or “ARLP Partnership” mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries. |
| ● | References to “ARLP” mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis. |
| ● | References to “MGP” mean Alliance Resource Management GP, LLC, ARLP’s general partner. |
| ● | References to “Mr. Craft” mean Joseph W. Craft III, the Chairman, President and Chief Executive Officer of MGP. |
| ● | References to “Intermediate Partnership” mean Alliance Resource Operating Partners, L.P., the intermediate partnership of Alliance Resource Partners, L.P. |
| ● | References to “Alliance Coal” mean Alliance Coal, LLC, an indirect wholly owned subsidiary of ARLP. |
| ● | References to “Alliance Minerals” mean Alliance Minerals, LLC, an indirect wholly owned subsidiary of ARLP. |
| ● | References to “Alliance Resource Properties” mean Alliance Resource Properties, LLC, an indirect wholly owned subsidiary of ARLP. |
Organization
ARLP is a Delaware limited partnership listed on the NASDAQ Global Select Market under the ticker symbol “ARLP.” ARLP was formed in May 1999 and completed its initial public offering on August 19, 1999 when it acquired substantially all of the coal production and marketing assets of Alliance Resource Holdings, Inc., a Delaware corporation, and its subsidiaries. We are managed by our general partner, MGP, a Delaware limited liability company which holds a non-economic general partner interest in ARLP.
AllDale III & IV Acquisition
On July 1, 2026, Alliance Minerals acquired certain general partner and limited partner interests in AllDale Minerals III, LP (“AllDale III”) & AllDale Minerals IV, LP ("AllDale IV", and collectively with AllDale III, "AllDale III & IV") for $
Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of September 30, 2026 and December 31, 2025, the results of our operations and comprehensive income for the three and nine months ended September 30, 2026 and 2025 and cash flows for the nine months ended September 30, 2026 and 2025. All intercompany transactions and accounts have been eliminated. Certain immaterial amounts in the prior period have been reclassified to conform to the current period presentation.
These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all the information normally included with financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.
5
Table of Contents
These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2026.
Use of Estimates
The preparation of the ARLP Partnership’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates.
Derivative Financial Instruments
Our investments in oil & gas mineral interests expose us to changes in the market price for oil, natural gas and natural gas liquids. To manage risks related to fluctuations in prices attributable to projected oil and natural gas production on our mineral interests, we hold derivative contracts on a portion of production at AllDale III & IV. Such instruments are variable-to-fixed price swaps. A fixed-price swap contract between us and a counterparty specifies a fixed commodity price and a future settlement date. We are not actively entering into new derivative instruments and do not hold derivative instruments for speculative or trading purposes.
Derivative instruments that have not settled in cash are reflected at fair value as either derivative assets or liabilities in the ARLP Partnership’s accompanying consolidated balance sheets. We do not specifically designate derivative instruments as fair value or cash flow hedges, even though they reduce our exposure to changes in oil and natural gas prices; therefore, gains and losses arising from changes in the fair value of derivatives are recognized on a net basis in the condensed consolidated statements of income within Loss on derivative instruments, net. Cash flows arising from the settlement of derivative instruments are classified as operating activities in the ARLP Partnership’s condensed consolidated statements of cash flows.
2.NEW ACCOUNTING STANDARDS
New Accounting Standards Issued and Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires the disclosure of additional information about specific expense categories in the notes to the financial statements to provide enhanced transparency into the nature and function of expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a prospective basis, with early adoption permitted. We continue evaluation of the impact of ASU 2024-03 on our results of operations, cash flows, financial condition and related disclosures including ongoing research as well as assessing our ability to accurately generate the information required for disclosure.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 improves the accounting for software development costs by removing references to software development stages so that the accounting is neutral to different software development methods. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years, with early adoption permitted. ASU 2025-06 can be applied on a prospective basis, a modified basis for in-process projects or a retrospective basis. We are evaluating the impact of ASU 2025-06 on our results of operations, cash flows, financial condition and related disclosures.
3.VARIABLE INTEREST ENTITIES
AllDale I & II and Cavalier Minerals
We own the general partner interests and, including the limited partner interests we hold through our ownership in Cavalier Minerals JV, LLC (“Cavalier Minerals”), approximately
6
Table of Contents
Minerals LP (“AllDale I”) and AllDale Minerals II, LP (“AllDale II”, and collectively with AllDale I, “AllDale I & II”). As the general partner of AllDale I & II, we are entitled to receive
Cavalier Minerals owns approximately
We have concluded that AllDale I, AllDale II and Cavalier Minerals are variable interest entities (“VIEs”) which we consolidate as the primary beneficiary because we have the power to direct the activities that most significantly impact the economic performance of AllDale I, AllDale II and Cavalier Minerals in addition to having substantial equity ownership.
Our share of Cavalier Minerals’ investment in AllDale I & II is eliminated in consolidation and Bluegrass Minerals’ investment in Cavalier Minerals is accounted for as noncontrolling ownership interest on our condensed consolidated balance sheets. Additionally, earnings attributable to Bluegrass Minerals are recognized as noncontrolling interest in our condensed consolidated statements of income. See Note 16 – Noncontrolling Interests for more information.
The following table presents the carrying amounts and classification of AllDale I & II’s assets and liabilities included in our condensed consolidated balance sheets:
September 30, | December 31, | ||||||
2026 | | 2025 | |||||
Assets (liabilities): | | (in thousands) |
| ||||
Cash and cash equivalents | $ | | $ | | |||
Trade receivables |
| |
| | |||
Total property, plant and equipment, net |
| |
| | |||
Accounts payable | ( | ( | |||||
Due to affiliates |
| ( | — | ||||
Accrued taxes other than income taxes |
| ( | ( | ||||
AllDale III & IV
AllDale III & IV own oil & gas mineral and royalty interests in multiple producing regions, including the Permian, Anadarko, Bakken and Haynesville basins and resource plays. As discussed in Note 1 – Organization and Presentation, on July 1, 2026, Alliance Minerals acquired certain general partner and limited partner interests in AllDale III & IV for $
We had previously concluded that we were not the primary beneficiary of and did not consolidate AllDale III. AllDale III was structured as a limited partnership wherein the limited partners (1) did not have the ability to remove the general partner and (2) did not participate significantly in operational decisions. Because we only held limited partner interests we did not have the power to direct the activities that most significantly impact AllDale III’s economic performance.
As a result of the AllDale III & IV Acquisition we have concluded that AllDale III and AllDale IV are VIEs which we consolidate as the primary beneficiary because we have the power to direct the activities that most significantly
7
Table of Contents
impact the economic performance of AllDale III and AllDale IV through our acquisition of the general partner interests in addition to having substantial equity ownership through our limited partner interests.
The limited partner interests held by the related parties of Mr. Craft are presented as noncontrolling interests in our condensed consolidated balance sheets. Net income or loss attributable to those limited partner interests is presented as net income attributable to noncontrolling interests in our condensed consolidated statements of income. See Note 16 – Noncontrolling Interests for more information.
The following table presents the carrying amounts and classification of AllDale III & IV’s assets and liabilities included in our condensed consolidated balance sheets:
September 30, | ||||
2026 | ||||
Assets (liabilities): | | (in thousands) |
| |
Cash and cash equivalents | $ | | ||
Trade receivables |
| | ||
Other receivables |
| | ||
Total property, plant and equipment, net |
| | ||
Accounts payable | ( | |||
Due to affiliates |
| ( | ||
Accrued taxes other than income taxes |
| ( | ||
Other current liabilities | ( | |||
Other liabilities | ( | |||
NGP ET IV
We have committed to purchase $
We have concluded that NGP ET IV is a VIE that we do not consolidate. NGP ET IV is structured as a limited partnership with limited partners (i) not having the ability to remove the general partner and (ii) not participating significantly in operational decisions. We are not the primary beneficiary of NGP ET IV because we do not have the power to direct the activities that most significantly impact NGP ET IV’s economic performance. At September 30, 2026 and December 31, 2025, the carrying value of our investment in NGP ET IV was $
Gavin Generation
We have committed to invest up to $
We have concluded that Gavin Generation is a VIE that we do not consolidate. Gavin Generation is structured as a limited partnership with the limited partners (1) not having the ability to remove the general partner and (2) not participating significantly in operational decisions. We are not the primary beneficiary of Gavin Generation because we do not have the power to direct the activities that most significantly impact Gavin Generation’s economic performance. At September 30, 2026 and December 31, 2025, the carrying value of our investment in Gavin Generation was $
8
Table of Contents
4.ACQUISITIONS
Miscellaneous Oil & Gas Acquisitions
During the nine months ended September 30, 2026, we acquired
The following table summarizes the fair value allocation of assets acquired:
(in thousands) | ||||
Mineral interests in proved properties | $ | |||
Mineral interests in unproved properties | ||||
$ | ||||
The fair value of the mineral interests was determined using an income approach consisting of discounted cash flow models. The assumptions used in the discounted cash flow models include estimated production, projected cash flows, forward oil & gas prices and risk adjusted discount rates. Certain assumptions used were not observable in active markets; therefore, the fair value measurements represent Level 3 fair value measurements.
The amounts of revenues and earnings from the mineral interests acquired included in our condensed consolidated statements of income from their respective acquisition dates through September 30, 2026 are immaterial.
The following table represents our supplemental pro forma revenues and earnings for the three and nine months ended September 30, 2026 and 2025 as if the mineral interests acquired had been included in our consolidated results since January 1, 2025. These amounts have been calculated after applying our accounting policies.
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 | |||||||
(in thousands) | |||||||||||||
Revenue | $ | | $ | | $ | | $ | | |||||
Net income | | | | | |||||||||
Net income attributable to ARLP | | | | | |||||||||
AllDale III & IV Acquisition
On July 1, 2026, we acquired certain general partner and limited partner interests in AllDale III & IV for $
Because the underlying mineral interests held by AllDale III & IV include royalty interests in both developed properties and undeveloped properties with different risk profiles, we have determined that the AllDale III & IV Acquisition is a business combination and the underlying assets and liabilities of AllDale III & IV have been recorded at their July 1, 2026 acquisition date fair values on our condensed consolidated balance sheet.
9
Table of Contents
As of the acquisition date of July 1, 2026, the total fair value of the cash paid, our previously held equity method investment in AllDale III, and the noncontrolling interest in AllDale III & IV were as follows:
(in thousands) | ||||
Cash | $ | | ||
Previously held investment in AllDale III | | |||
Noncontrolling interests | | |||
$ | | |||
Prior to the AllDale III & IV Acquisition, we accounted for our investment in AllDale III as an equity method investment. Upon obtaining control of AllDale III, we remeasured our previously held equity investment to its acquisition date fair value of approximately $
The acquisition date fair value of the noncontrolling interests in AllDale III & IV was $
The fair values of the previously held equity method investment and noncontrolling interests were determined using valuation techniques that incorporated significant unobservable inputs and therefore represent Level 3 fair value measurements.
The following table summarizes the fair value allocation of assets acquired and liabilities assumed as of the acquisition date of July 1, 2026:
(in thousands) | ||||
Cash and cash equivalents | $ | | ||
Receivables | | |||
Derivative assets | | |||
Mineral interests in proved properties | | |||
Mineral interests in unproved properties | | |||
Payables | ( | |||
Derivative liabilities | ( | |||
Net assets acquired | $ | | ||
The fair value of the acquired mineral interests was determined using discounted cash flow models based on projected production volumes, forecast commodity prices, reserve adjustment factors and market participant discount rates. Because these valuations incorporate significant unobservable inputs, the acquired mineral interests represent Level 3 fair value measurements. The fair value of acquired derivative instruments was determined using observable market-based inputs, including forward commodity prices and contractual terms of the instruments, and represents a Level 2 fair value measurement. AllDale III & IV's carrying value of the receivables and payables represents their fair value given their short-term nature.
The amounts recognized for the AllDale III & IV Acquisition are provisional as they remain subject to customary post-closing adjustment procedures. Accordingly, we have not completed our assessment of the final acquisition date amounts associated with the acquisition. During the measurement period, we may recognize adjustments to the provisional amounts recorded for the acquisition as additional information becomes available.
10
Table of Contents
We recognized $
The amounts of revenue and earnings, exclusive of the acquisition gain, of AllDale III & IV included in our condensed consolidated statements of income since July 1, 2026 are as follows:
Three Months Ended | |||
September 30, | |||
2026 | | ||
(in thousands) | |||
Revenue | $ | | |
Net income |
| | |
Net income attributable to ARLP |
| | |
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 | |||||||
(in thousands) | |||||||||||||
Revenue | $ | | $ | | $ | | $ | | |||||
Net income | | | |
| | ||||||||
Net income attributable to ARLP | | | | | |||||||||
Two Mile Acquisition
On September 30, 2026, we acquired
The following table summarizes the fair value allocation of assets acquired as of the acquisition date of September 30, 2026:
(in thousands) | ||||
Mineral interests in proved properties | $ | | ||
Mineral interests in unproved properties | | |||
$ | | |||
The fair value of the mineral interests was determined using an income approach consisting of a discounted cash flow model. The assumptions used in the discounted cash flow model included estimated production, projected cash flows, forward oil & gas prices and risk adjusted discount rates. Certain assumptions used are not observable in active markets; therefore, the fair value measurements represent Level 3 fair value measurements.
11
Table of Contents
Because we acquired the mineral interests from Two Mile on September 30, 2026, there are no material revenue and earnings from the Two Mile Acquisition included in our condensed consolidated statements of income for the nine months ended September 30, 2026.
The following represents our supplemental pro forma revenues and earnings for the three and nine months ended September 30, 2026 and 2025 as if the mineral interests acquired in the Two Mile Acquisition had been included in our consolidated results since January 1, 2025. These amounts have been calculated after applying our accounting policies.
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 | |||||||
(in thousands) | |||||||||||||
Revenue | $ | | $ | | $ | | $ | | |||||
Net income | | | |
| | ||||||||
Net income attributable to ARLP | | | | | |||||||||
Auxier Welding Acquisition
On November 2, 2026, we acquired certain assets and liabilities of Auxier Welding, Inc. (“Auxier”) for $
We have determined the assets and liabilities acquired from Auxier should be accounted for as a business combination and will be recorded at their acquisition date fair values on our condensed consolidated balance sheet. Given the recent timing of the acquisition, we have not completed our determination of the fair value of the acquired assets and liabilities as we are in the process of gathering the information needed to determine the appropriate assumptions we intend to use.
5.FAIR VALUE MEASUREMENTS
The following table summarizes certain fair value measurements within the hierarchy:
Fair Value | |||||||||||||
| Carrying | | Level 1 | | Level 2 | | Level 3 | | |||||
(in thousands) | |||||||||||||
September 30, 2026 | |||||||||||||
Recorded on a recurring basis: | |||||||||||||
Digital assets | $ | | $ | | $ | | $ | | |||||
Contingent consideration | $ | | $ | | $ | | $ | | |||||
Derivative liabilities | $ | | $ | | $ | | $ | | |||||
Additional disclosures: | |||||||||||||
Long-term debt | $ | | $ | | $ | | $ | | |||||
December 31, 2025 | |||||||||||||
Recorded on a recurring basis: | |||||||||||||
Digital assets | $ | | $ | | $ | | $ | | |||||
Contingent consideration | $ | | $ | | $ | | $ | | |||||
Additional disclosures: | |||||||||||||
Long-term debt | $ | | $ | | $ | | $ | | |||||
The carrying amounts for cash equivalents, accounts receivable, accounts payable, accrued and other liabilities approximate fair value due to the short maturity of those instruments.
12
Table of Contents
The fair value of our digital assets is based on an exchange quoted price. See Note 7 – Digital Assets for more information on our digital assets.
Our derivative instruments include commodity-based contracts and over-the-counter contracts and are classified as Level 2 measurements under the fair value hierarchy. The classification and amount of these instruments are measured at fair value on a recurring basis. Derivative liabilities are reported in Other current liabilities and Other liabilities in the consolidated balance sheets. See Note 8 – Derivative Financial Instruments for more information.
The fair value measurement of our contingent consideration liability is determined using an option approach methodology simulation based on significant inputs not observable in active markets representing a Level 3 fair value measurement under the fair value hierarchy. Our contingent consideration liability is associated with our acquisition of our Hamilton County Coal, LLC (“Hamilton”) mine in 2015 wherein we agreed to pay the seller additional consideration for the acquisition if the average quarterly sales price exceeds a defined threshold price in any future quarters subject to a maximum of $
The estimated fair value of our long-term debt, including current maturities, is based on interest rates that we believe are currently available to us in active markets for issuance of debt with similar terms and remaining maturities. See Note 11 – Long-Term Debt for additional information on our long-term debt.
Quantitative Information about Level 3 Fair Value Measurements
Contingent Consideration
Our option approach methodology simulation for contingent consideration generates an expected payment for each quarter in Hamilton’s expected mine life by using proprietary internal estimates of our uncommitted coal sales prices and generating a simulated uncommitted coal sales price by applying unobservable inputs through a million simulations. This simulated coal sales price is then used in a calculation of the expected future payments using our proprietary committed coal sales prices and production for each quarter. We then calculate the present value of the estimated future payments. The following table presents quantitative information about certain significant unobservable inputs used in the fair value measurement for our contingent consideration liability. The use of significant unobservable inputs results in uncertainty as of the reporting date, as changes in these unobservable inputs could significantly raise or lower the estimated fair value.
| Valuation Technique(s) |
| Unobservable Input |
| Range/Amount | ||
September 30, 2026 | |||||||
Contingent Consideration | Option approach methodology simulation | Cost of Debt | |||||
Coal price volatility | |||||||
Market price of risk adjustment (annual) | |||||||
December 31, 2025 | |||||||
Contingent Consideration | Option approach methodology simulation | Cost of Debt | |||||
Coal price volatility | |||||||
Market price of risk adjustment (annual) |
| (a) | Averages represent the arithmetic average of the inputs and is not weighted by a relative fair value or notional amount. |
13
Table of Contents
The following table represents changes in our contingent consideration liability:
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
| 2026 | | 2025 | | 2026 | 2025 |
| ||||||
(in thousands) | |||||||||||||
Beginning balance | $ | | $ | | $ | | $ | | |||||
( | | ( | | ||||||||||
Payments | ( | ( | ( | ( | |||||||||
Ending balance | $ | | $ | | $ | | $ | | |||||
| (1) | Noncash changes in the fair value of our contingent consideration liability are included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. |
6.INVENTORIES
Inventories consist of the following:
| September 30, | December 31, | |||||
2026 | | 2025 |
| ||||
(in thousands) | |||||||
Coal | $ | | $ | | |||
Finished goods | | | |||||
Work in process | | | |||||
Raw materials (net of reserve for obsolescence of $ | | | |||||
| | ||||||
Supplies (net of reserve for obsolescence of $ |
| |
| | |||
Total inventories, net | $ | | $ | | |||
The above coal inventory balances reflect lower of cost or net realizable value adjustments of $
7.DIGITAL ASSETS
The following table sets forth our digital assets cost basis and fair value as shown on the condensed consolidated balance sheet:
September 30, 2026 | December 31, 2025 | ||||||||||||||||||
Units | Cost Basis | Fair Value | Units | Cost Basis | Fair Value | ||||||||||||||
Digital assets: | (in thousands, except unit data) | ||||||||||||||||||
| $ | | $ | | | $ | | $ | | ||||||||||
Total | $ | | $ | | $ | | $ | | |||||||||||
8. | DERIVATIVE FINANCIAL INSTRUMENTS |
We acquired certain derivative instruments, which were not designated as hedging instruments for accounting purposes, as part of the AllDale III & IV Acquisition. We are not actively entering into new derivative instruments. These derivative instruments were entered into to mitigate the commodity price risk associated with the mineral interests we
14
Table of Contents
acquired and not for speculative or trading purposes. See Note 5 – Fair Value Measurements for additional fair value information and Note 4 – Acquisitions for more information on the AllDale III & IV Acquisition.
The table below summarizes the fair values and classifications of our derivative instruments, which are not designated as hedging instruments, in our condensed consolidated balance sheets:
| September 30, | | ||||
Classification | Balance Sheet Location | 2026 | ||||
(in thousands) | ||||||
Liabilities: | ||||||
Current liability | $ | | ||||
Long-term liability | | |||||
Total liabilities | $ | | ||||
We do not offset derivative assets and liabilities with the same counterparty. Accordingly, the amounts presented above represent both the gross fair values and the carrying values reported in our condensed consolidated balance sheets.
Changes in the fair values of our derivative assets and liabilities are presented on a net basis in our condensed consolidated statements of income and condensed consolidated statements of cash flows. Any cash impacts of settled derivative instruments are recorded as operating activities in our condensed consolidated statements of cash flows. These changes consist of the following:
Three Months Ended | ||||
September 30, | ||||
| 2026 | |||
(in thousands) | ||||
Beginning fair value of commodity derivative instruments | $ | | ||
Fair value of derivative instruments acquired in business combination | | |||
Loss on oil derivative instruments | ( | |||
Gain on natural gas derivative instruments | | |||
Net cash paid on settlements of oil derivative instruments | | |||
Net cash received on settlements of natural gas derivative instruments | ( | |||
Net change in fair value of commodity derivative instruments | ( | |||
Ending fair value of commodity derivative instruments | $ | ( | ||
The table below summarizes the pre-tax impacts of our derivative instruments, which are not designated as hedging instruments for accounting purposes, within Loss on derivative instruments, net on our condensed consolidated statements of income:
Three Months Ended | ||||
September 30, | ||||
| 2026 | |||
(in thousands) | ||||
Realized | $ | ( | ||
Unrealized | ( | |||
Loss on derivative instruments, net | $ | ( | ||
15
Table of Contents
We had the following open derivative contracts for oil as of September 30, 2026:
| Volumes | | Weighted | | Range (Per Bbl) | | |||||||
Period and Type of Contract | (000 BBL) | Avg. Price | Low | High | |||||||||
Oil Swap Contracts | |||||||||||||
2026 | |||||||||||||
Fourth Quarter | | $ | | $ | | $ | | ||||||
2027 | |||||||||||||
First Quarter | | | | | |||||||||
Second Quarter | | | | | |||||||||
Third Quarter | | | | | |||||||||
Fourth Quarter | | | | | |||||||||
2028 |
| ||||||||||||
First Quarter | | | | | |||||||||
Second Quarter | | | | | |||||||||
Third Quarter | | | | | |||||||||
Fourth Quarter | | | | | |||||||||
As of September 30, 2026, we had
9.LONG-LIVED ASSET IMPAIRMENT
On January 29, 2026, we announced our decision to cease longwall production at our Mettiki mining complex, which is primarily included in our Appalachia Coal Operations reportable segment. We concluded that as a result of this decision, along with uncertainty regarding future longwall production resumption and our evaluation of potential operation scenarios, we would not recover the carrying value of Mettiki’s assets. Accordingly, we adjusted the carrying value of Mettiki’s assets from $
The fair value of the impaired assets was determined using an income approach, which represents a Level 3 fair value measurement under the fair value hierarchy. Our analysis considered two operating scenarios for Mettiki and reflected a probability-weighted discounted cash flow model based on these scenarios. Significant assumptions in the model included proprietary internal estimates of expected future sales volumes, realized coal sales prices, operating costs, capital requirements, the timing of cessation of operations, and a risk-adjusted discount rate. The following table presents quantitative information about certain significant unobservable inputs used in our nonrecurring fair value measurement. The use of significant unobservable inputs results in uncertainty as changes in these unobservable inputs could significantly impact the estimated fair value.
| Valuation Technique(s) |
| Unobservable Input |
| Range/Amount | ||
Mettiki asset group | Income approach methodology | Discount rate | |||||
Low case scenario probability | |||||||
High case scenario probability |
| (a) | Averages represent the arithmetic average of the inputs and is not weighted by a relative fair value or notional amount. |
16
Table of Contents
10.INVESTMENTS
Equity Method Investments
The changes in our equity method investments were as follows:
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | | |||||
(in thousands) | |||||||||||||
Beginning balance | $ | | $ | | $ | | $ | | |||||
Contributions | | | | | |||||||||
Net income on equity method investments | | | | | |||||||||
Distributions received | ( | ( | ( | ( | |||||||||
Removal of equity method investment upon acquisition (1) | ( | | ( | | |||||||||
Ending balance | $ | | $ | | $ | | $ | | |||||
| (1) | Represents the carrying value of our previously held equity method investment in AllDale III immediately prior to obtaining a controlling financial interest on July 1, 2026 as part of the AllDale III & IV Acquisition. See Note 4 – Acquisitions for more information on the AllDale III & IV Acquisition. |
Net income (loss) on equity method investments represents our share of the income or loss of the equity method investments.
Infinitum
As of September 30, 2026 we have an $
The Infinitum Preferred Stock provides for non-cumulative dividends when and if declared by Infinitum’s board of directors and is convertible, at any time, at our option, into shares of common stock of Infinitum. We account for our investment in Infinitum as an equity investment without a readily determinable fair value. Absent an observable price change, it is not practicable to estimate the fair value of our investment in Infinitum because of the lack of a quoted market price for our ownership interests. Therefore, we use a measurement alternative other than fair value to account for our investment.
Infinitum completed its Series F Preferred Stock funding round in the first quarter of 2026 and finalized the value per share of this issuance. In addition to the shares of Series F Preferred Stock we purchased, we also received additional Series D and Series E Preferred Stock in accordance with anti-dilution provisions designed to maintain our initial investment value in those issuances. Some of the additional shares we received under the anti-dilution provisions had a share price that was lower than the Series F Preferred Stock. Infinitum's Series F Preferred Stock issuance represents an observable price change in an orderly transaction for an investment that is similar to our Series D and Series E Preferred Stock investments. We therefore remeasured our shares to reflect the Series F Preferred Stock share price, increasing the carrying value of our investments by $
We have made $
17
Table of Contents
Ascend
On August 22, 2023, we purchased shares of Series D Preferred Stock (the “Ascend Series D Preferred Stock”) in Ascend Elements, Inc. (“Ascend”) for $
The following table presents our debt securities holdings:
September 30, 2025 | ||||||||||
Cost Basis | Unrealized Gains (1) | Fair Value | ||||||||
(in thousands) | ||||||||||
Debt Securities | $ | | $ | | $ | | ||||
| (1) | Unrealized gains in our debt securities are included in the Change in unrealized gains on debt securities line item within our condensed consolidated statements of comprehensive income. |
In December 2025, Ascend issued additional convertible notes senior to our convertible notes with similar multiples which significantly lowered the likelihood of recovery of a multiple of our principal investment. This lower likelihood of recovery of the multiple of our principal investment at redemption in addition to our lack of visibility into Ascend's financial condition and performance as of December 31, 2025, led us to conclude it was likely we would also not recover our principal investment of $
11.LONG-TERM DEBT
Long-term debt consists of the following:
Unamortized Discount and | |||||||||||||
Principal | Debt Issuance Costs | ||||||||||||
September 30, | December 31, | September 30, | December 31, | ||||||||||
| 2026 | | 2025 | | 2026 | | 2025 |
| |||||
(in thousands) | |||||||||||||
Revolving credit facility | $ | | $ | | $ | ( | $ | ( | |||||
Alliance Coal term loan |
| |
| |
| ( |
| ( | |||||
| | ( | ( | ||||||||||
Securitization facility | | | | | |||||||||
February 2024 equipment financing | | | | | |||||||||
Installment purchase arrangement | | | | | |||||||||
Alliance Minerals term loan | | | ( | | |||||||||
| |
| |
| ( |
| ( | ||||||
Less current maturities |
| ( |
| ( |
| |
| | |||||
Total long-term debt | $ | | $ | | $ | ( | $ | ( | |||||
18
Table of Contents
Credit Facility
On January 13, 2023, Alliance Coal, as borrower, entered into a credit agreement with various financial institutions which was amended on June 12, 2024 (the “Credit Agreement”). The Credit Agreement provides for a $
The Credit Agreement is guaranteed by ARLP and certain of its subsidiaries, including the Intermediate Partnership and most of the direct and indirect subsidiaries of Alliance Coal (the “Coal Subsidiary Guarantors”). The Credit Agreement also is secured by substantially all of the assets of the Coal Subsidiary Guarantors and Alliance Coal. Borrowings under the Credit Agreement bear interest, at our option, at either (i) an adjusted one-month, three-month or six-month term rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York, plus the applicable margin or (ii) the base rate plus the applicable margin. The base rate is the highest of (i) the Overnight Bank Funding Rate plus
The Credit Agreement contains various restrictions affecting Alliance Coal and its subsidiaries, including, among other things, restrictions on incurrence of additional indebtedness and liens, sale of assets, investments, mergers and consolidations and transactions with affiliates. In each case, these restrictions are subject to various exceptions. In addition, restrictions apply to cash distributions by Alliance Coal to the Intermediate Partnership if such distribution would result in the debt of Alliance Coal to cash flow ratio (as determined in the Credit Agreement) being more than
8.625% Senior Notes due 2029
On June 12, 2024, the Intermediate Partnership and Alliance Resource Finance Corporation (as co-issuer), a wholly owned subsidiary of the Intermediate Partnership (“Alliance Finance”), issued an aggregate principal amount of $
19
Table of Contents
Accounts Receivable Securitization
Certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership are party to a $
February 2024 Equipment Financing
On February 28, 2024, Alliance Coal entered into an equipment financing arrangement accounted for as debt, wherein Alliance Coal received $
Craft Foundation Installment Purchase Arrangement
On January 29, 2026, Alliance Resource Properties, as borrower, entered into an installment purchase arrangement with the Joseph W. Craft III Foundation, an entity controlled by Mr. Craft, for $
Alliance Minerals Term Loan
On
The Alliance Minerals Term Loan is guaranteed by ARLP, our Intermediate Partnership, certain of Alliance Minerals’ direct and indirect subsidiaries, and AllRoy GP, LLC and its subsidiaries (the "Minerals Subsidiary Guarantors"). The Alliance Minerals Term Loan also is secured by the equity interests in and personal property of Alliance Minerals and the Minerals Subsidiary Guarantors, and by the equity interests of Alliance Minerals and the Minerals Subsidiary Guarantors in the ARLP Partnership’s other oil & gas mineral entities. Borrowings under the Alliance Minerals Term Loan bear interest, at our option, at either (i) an adjusted one-month, three-month or six-month term rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York plus the applicable margin or (ii) the base rate plus the applicable margin. The base rate is the highest of (i) the Administrative Agent’s prime rate, (ii) the Federal Funds Rate plus
20
Table of Contents
The Alliance Minerals Term Loan contains various restrictive covenants applicable to Alliance Minerals and its subsidiaries, including limitations on indebtedness, liens, asset sales, investments, mergers and consolidations, and affiliate transactions, in each case subject to customary exceptions. In addition, the restrictions provide an aggregate limit of $
12.WORKERS’ COMPENSATION AND PNEUMOCONIOSIS
The changes in the workers’ compensation liability, including current and long-term liability balances, for each of the periods presented were as follows:
| Three Months Ended | Nine Months Ended |
| ||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 | |||||||
(in thousands) | |||||||||||||
Beginning balance | $ | | $ | | $ | | $ | | |||||
Changes in accruals |
| |
| |
| |
| | |||||
Payments |
| ( |
| ( |
| ( |
| ( | |||||
Interest accretion |
| |
| |
| |
| | |||||
Valuation loss (gain) (1) |
| | |
| ( | | |||||||
Ending balance | $ | | $ | | $ | | $ | | |||||
| (1) | Our estimate of the liability for the present value of current workers′ compensation benefits is based on our actuarial calculations. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claims development patterns, mortality, medical costs and interest rates. The valuation gain in 2026 is due to an increase in the discount rate from |
We limit our exposure to traumatic injury claims by purchasing a high deductible insurance policy that starts paying benefits after deductibles for a claim have been met. The deductible level may vary by claim year. Our workers’ compensation liability above is presented on a gross basis and does not include our expected receivables from our insurance policy. Our receivables for traumatic injury claims under this policy as of September 30, 2026 are $
21
Table of Contents
Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis, or black lung, benefits to eligible employees and former employees and their dependents. Components of the net periodic benefit cost for each of the periods presented are as follows:
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 |
| ||||||
(in thousands) | |||||||||||||
Service cost | $ | | $ | | $ | | $ | |
| ||||
| |
| |
| |
| | ||||||
| |
| |
| |
| | ||||||
Other adjustments (1) (2) | | | ( | | |||||||||
Net periodic benefit cost | $ | | $ | | $ | | $ | | |||||
| (1) | Interest cost, amortization of net actuarial loss and other adjustments are included in the Other income (expense) line item within our condensed consolidated statements of income. |
| (2) | This line item includes an immaterial adjustment related to the correction of actuarial assumptions for terminated employees in the prior period. |
13.COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS
Eligible employees at certain of our mining operations participate in a defined benefit plan (the “Pension Plan”) that we sponsor. The Pension Plan is closed to new applicants and participants in the Pension Plan are no longer receiving benefit accruals for service. The benefit formula for the Pension Plan is a fixed dollar unit based on years of service. Components of the net periodic benefit credit for each of the periods presented are as follows:
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 | | ||||||
(in thousands) | |||||||||||||
$ | | $ | | $ | | $ | | ||||||
| ( |
| ( |
| ( |
| ( | ||||||
| | | | ||||||||||
Net periodic benefit credit (1) | $ | ( | $ | ( | $ | ( | $ | ( | |||||
| (1) | Net periodic benefit credit for the Pension Plan is included in the Other income (expense) line item within our condensed consolidated statements of income. |
We do not expect to make material contributions to the Pension Plan during 2026.
14.CONTINGENCIES
We are party to various lawsuits, claims and regulatory proceedings incidental to our business. We record an accrual for a loss contingency when we determine that a loss is probable and the amount can be reasonably estimated. We evaluate these matters at least quarterly, considering the status of each proceeding, the advice of legal counsel and our historical experience resolving claims of a similar nature.
For matters where a loss is reasonably possible, we estimate the range of reasonably possible loss in excess of amounts accrued. This may include matters in early stages where discovery has not begun. For all of those matters we base the estimate on known facts and circumstances, our historical experience resolving claims of a similar nature and the amounts at issue. Based on this evaluation, we estimate that the reasonably possible loss in excess of amounts accrued for these matters, individually and in the aggregate, is not material to our consolidated financial statements.
Our estimates are based on currently available information and involve significant judgment. As matters progress, the outcome may differ from our estimates, and we will adjust accruals and disclosures as appropriate.
22
Table of Contents
15.PARTNERS’ CAPITAL
Distributions
Distributions paid or declared during 2025 and 2026 were as follows:
Payment Date | | Per Unit Cash Distribution |
| Total Cash Distribution |
| ||
(in thousands) | |||||||
February 14, 2025 | $ | $ | | ||||
May 15, 2025 | | ||||||
August 14, 2025 | | ||||||
November 14, 2025 | | ||||||
Total | $ | $ | | ||||
February 13, 2026 | $ | $ | | ||||
May 15, 2026 | | ||||||
August 14, 2026 | | ||||||
November 13, 2026 (1) | |||||||
Total | $ | $ | | ||||
| (1) | On October 26, 2026, we declared this quarterly distribution payable on November 13, 2026 to all unitholders of record as of November 6, 2026. |
23
Table of Contents
Change in Partners’ Capital
The following tables present the quarterly change in Partners' Capital for the three and nine months ended September 30, 2026 and 2025:
Accumulated | |||||||||||||||
Number of | Limited | Other | |||||||||||||
Limited Partner | Partners' | Comprehensive | Noncontrolling | Total Partners' | |||||||||||
| Units | | Capital | | Income (Loss) | | Interest | | Capital |
| |||||
(in thousands, except unit data) | |||||||||||||||
Balance at January 1, 2026 |
| | $ | | $ | ( | $ | | $ | | |||||
Comprehensive income: | |||||||||||||||
Net income |
| — |
| |
| — | |
|
| | |||||
Other comprehensive loss |
| — |
| — |
| ( |
| — |
|
| ( | ||||
Total comprehensive income |
|
| | ||||||||||||
Settlement of deferred compensation plans | | ( | — | — | ( | ||||||||||
Common unit-based compensation |
| — |
| | — | — | | ||||||||
Distributions on deferred common unit-based compensation |
| — |
| ( | — | — | ( | ||||||||
Distributions from consolidated company to noncontrolling interest | — | — | — | ( | ( | ||||||||||
Distributions to Partners |
| — | ( | — | — | ( | |||||||||
Balance at March 31, 2026 | | | ( | | | ||||||||||
Comprehensive income: | |||||||||||||||
Net income |
| — |
| |
| — | |
|
| | |||||
Other comprehensive income |
| — |
| — |
| |
| — |
|
| | ||||
Total comprehensive income |
|
| | ||||||||||||
Common unit-based compensation |
| — |
| | — | — | | ||||||||
Distributions on deferred common unit-based compensation |
| — |
| ( | — | — | ( | ||||||||
Distributions from consolidated company to noncontrolling interest | — | — | — | ( | ( | ||||||||||
Distributions to Partners |
| — | ( | — | — | ( | |||||||||
Balance at June 30, 2026 | | | ( | | | ||||||||||
Comprehensive income: | |||||||||||||||
Net income |
| — |
| |
| — | |
|
| | |||||
Other comprehensive income |
| — |
| — |
| |
| — |
|
| | ||||
Total comprehensive income |
|
| | ||||||||||||
Common unit-based compensation |
| — |
| | — | — | | ||||||||
Distributions on deferred common unit-based compensation |
| — |
| ( | — | — | ( | ||||||||
Distributions from consolidated company to noncontrolling interest | — | — | — | ( | ( | ||||||||||
Distributions to Partners |
| — | ( | — | — | ( | |||||||||
Noncontrolling interests acquired in AllDale III & IV Acquisition | — | — | — | | | ||||||||||
Effect of Contribution and Exchange Agreements | — | | ( | — | |||||||||||
Balance at September 30, 2026 |
| | $ | | $ | ( | $ | | $ | | |||||
24
Table of Contents
Accumulated | |||||||||||||||
Number of | Limited | Other | |||||||||||||
Limited Partner | Partners' | Comprehensive | Noncontrolling | Total Partners' | |||||||||||
| Units | | Capital | | Income (Loss) | | Interest | | Capital |
| |||||
(in thousands, except unit data) | |||||||||||||||
Balance at January 1, 2025 |
| | $ | | $ | ( | $ | | $ | | |||||
Comprehensive income: | |||||||||||||||
Net income |
| — |
| |
| | |
|
| | |||||
Other comprehensive income |
| — |
| |
| |
| |
|
| | ||||
Total comprehensive income |
|
| | ||||||||||||
Settlement of deferred compensation plans | | ( | | | ( | ||||||||||
Common unit-based compensation |
| — |
| | | | | ||||||||
Distributions on deferred common unit-based compensation |
| — |
| ( | | | ( | ||||||||
Distributions from consolidated company to noncontrolling interest | — | | | ( | ( | ||||||||||
Distributions to Partners |
| — | ( | | | ( | |||||||||
Balance at March 31, 2025 |
| | | ( | | | |||||||||
Comprehensive income: | |||||||||||||||
Net income |
| — |
| |
| | |
|
| | |||||
Other comprehensive income |
| — |
| |
| |
| |
|
| | ||||
Total comprehensive income |
|
| | ||||||||||||
Common unit-based compensation |
| — |
| | | | | ||||||||
Distributions on deferred common unit-based compensation |
| — |
| ( | | | ( | ||||||||
Distributions from consolidated company to noncontrolling interest | — | | | ( | ( | ||||||||||
Distributions to Partners |
| — | ( | | | ( | |||||||||
Balance at June 30, 2025 |
| | | ( | | | |||||||||
Comprehensive income: | |||||||||||||||
Net income |
| — |
| |
| | |
|
| | |||||
Other comprehensive income |
| — |
| |
| ( |
| |
|
| ( | ||||
Total comprehensive income |
|
| | ||||||||||||
Common unit-based compensation |
| — |
| | | | | ||||||||
Distributions on deferred common unit-based compensation |
| — |
| ( | | | ( | ||||||||
Distributions from consolidated company to noncontrolling interest | — | | | ( | ( | ||||||||||
Distributions to Partners |
| — | ( | | | ( | |||||||||
Balance at September 30, 2025 |
| | $ | | $ | ( | $ | | $ | | |||||
16. | NONCONTROLLING INTERESTS |
Our noncontrolling ownership interest in consolidated subsidiaries is presented in the condensed consolidated balance sheet within partners capital as a separate component from the limited partners' equity. In addition, consolidated net income includes earnings attributable to both the limited partners' and the noncontrolling interests.
The noncontrolling interests balance is comprised of affiliate and non-affiliate ownership interests in the net assets of the ARLP Partnership that we consolidate. As discussed in Note 3 – Variable Interest Entities, the earnings of AllDale III & IV attributable to related parties of Mr. Craft represent an affiliate ownership and the earnings of AllDale I & II attributable to Bluegrass Minerals represent a non-affiliate ownership.
The following table summarizes the components of noncontrolling interests recorded in Partners' Capital for the periods indicated:
| September 30, | December 31, | |||||
2026 | | 2025 |
| ||||
(in thousands) | |||||||
Noncontrolling interests reflected in Partners' Capital: | |||||||
Affiliate | $ | | $ | | |||
Non-Affiliates |
| |
| | |||
Total noncontrolling interests | $ | | $ | | |||
25
Table of Contents
The following table summarizes net income (loss) attributable to each component of the noncontrolling interests for the periods indicated:
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 | | ||||||
(in thousands) | |||||||||||||
Net income (loss) attributable to noncontrolling interest: | |||||||||||||
Affiliate | $ | ( | $ | | $ | ( | $ | | |||||
Non-Affiliates | | | | | |||||||||
$ | | $ | | $ | | $ | | ||||||
The following table summarizes cash distributions paid by ARLP to each component of the noncontrolling interests for the periods indicated:
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 | | ||||||
(in thousands) | |||||||||||||
Distributions paid to noncontrolling interests: | |||||||||||||
Affiliate | $ | | $ | | $ | | $ | | |||||
Non-Affiliates | | | | | |||||||||
$ | | $ | | $ | | $ | | ||||||
17.COMMON UNIT-BASED COMPENSATION PLAN
Long-Term Incentive Plan
A summary of non-vested Long-Term Incentive Plan (“LTIP”) grants of restricted units is as follows:
| Number of units |
| Weighted average grant date fair value per unit |
| Intrinsic value |
| |||
(in thousands) | |||||||||
Non-vested grants at January 1, 2026 | | $ | $ | | |||||
Granted (1) |
| | |||||||
Vested (2) |
| ( |
| ||||||
Forfeited |
| ( |
| ||||||
Non-vested grants at September 30, 2026 |
| |
| | |||||
| (1) | The restricted units granted during 2026 have certain minimum-value guarantees per unit, regardless of whether the awards vest. |
| (2) | During the nine months ended September 30, 2026, we issued |
LTIP expense for grants of restricted units was $
26
Table of Contents
18.REVENUE FROM CONTRACTS WITH CUSTOMERS
The following table illustrates the disaggregation of our revenues by type, including a reconciliation to our segment presentation as presented in Note 22 – Segment Information.
| Coal Operations | Royalties | Other, | ||||||||||||||||
Illinois | | | | Corporate and | | ||||||||||||||
| Basin | | Appalachia | | Oil & Gas | | Coal | | Elimination | | Consolidated | ||||||||
(in thousands) | |||||||||||||||||||
Three Months Ended September 30, 2026 | |||||||||||||||||||
Coal sales | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Oil & gas royalties | | | | | | | |||||||||||||
Coal royalties | | | | | ( | | |||||||||||||
Transportation revenues | | | | | | | |||||||||||||
Other revenues | | | | | | | |||||||||||||
Total revenues | $ | | $ | | $ | | $ | | $ | ( | $ | | |||||||
Three Months Ended September 30, 2025 | |||||||||||||||||||
|
| ||||||||||||||||||
Coal sales | $ | | $ | | $ | | $ | | $ | | $ | ||||||||
Oil & gas royalties | | | | | | ||||||||||||||
Coal royalties | | | | | ( | | |||||||||||||
Transportation revenues | | | | | | ||||||||||||||
Other revenues | | | | | | ||||||||||||||
Total revenues | $ | | $ | | $ | | $ | | $ | ( | $ | | |||||||
Nine Months Ended September 30, 2026 | |||||||||||||||||||
Coal sales | $ | | $ | | $ | | $ | | $ | | $ | ||||||||
Oil & gas royalties | | | | | | ||||||||||||||
Coal royalties | | | | | ( | | |||||||||||||
Transportation revenues | | | | | | ||||||||||||||
Other revenues | | | | | | ||||||||||||||
Total revenues | $ | | $ | | $ | | $ | | $ | ( | $ | | |||||||
Nine Months Ended September 30, 2025 | |||||||||||||||||||
|
| ||||||||||||||||||
Coal sales | $ | | $ | | $ | | $ | | $ | | $ | ||||||||
Oil & gas royalties | | | | | | ||||||||||||||
Coal royalties | | | | | ( | | |||||||||||||
Transportation revenues | | | | | | ||||||||||||||
Other revenues | | | | | | ||||||||||||||
Total revenues | $ | | $ | | $ | | $ | | $ | ( | $ | | |||||||
The following table illustrates the beginning and ending balances of our trade receivables:
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 |
| ||||||
(in thousands) | |||||||||||||
Beginning balance | $ | | $ | | $ | | $ | |
| ||||
Ending balance | $ | | $ | | $ | | $ | | |||||
27
Table of Contents
The following table illustrates the amount of our transaction price for all coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2026 and disaggregated by segment and contract duration.
2029 and | |||||||||||||||
| 2026 | | 2027 | | 2028 | | Thereafter | | Total | ||||||
(in thousands) | |||||||||||||||
Illinois Basin Coal Operations coal revenues | $ | | $ | | $ | | $ | | $ | ||||||
Appalachia Coal Operations coal revenues | | | | | |||||||||||
Total coal revenues | $ | | $ | | $ | | $ | | $ | | |||||
19.RELATED-PARTY TRANSACTIONS
Craft Foundations
In January 2005, we acquired Tunnel Ridge from Alliance Resource Holdings, Inc., a wholly owned subsidiary of ARLP. In connection with this acquisition, we assumed a coal lease and surface land lease with Alliance Resource GP, LLC, an entity indirectly wholly owned by Mr. Craft and Kathleen S. Craft until it was dissolved in December 2020. In December 2018, the property subject to the leases was transferred to The Joseph W. Craft III Foundation and The Kathleen S. Craft Foundation (the “Craft Foundations”).
On January 29, 2026, Alliance Resource Properties purchased all of the ownership interests in the coal reserves and surface rights located in Ohio County, West Virginia and Washington County, Pennsylvania that were subject to the leases from the Craft Foundations for $
Contribution and Exchange Agreements
In connection with the AllDale III & IV Acquisition on July 1, 2026 as discussed in Note 1 – Organization and Presentation, the ARLP Partnership entered into Contribution and Exchange Agreements with the related parties who held general and limited partner interests in AllDale III & IV prior to the AllDale III & IV Acquisition and the related parties who acquired limited partner interests in AllDale III (collectively the “Craft Related Parties”). Pursuant to the Contribution and Exchange Agreements, the parties effected a series of coordinated transactions to restructure the ownership and governance of AllDale III & IV, including exchanging the existing general partner interests held by Alliance Minerals and certain Craft Related Parties for limited partner interests in AllDale III & IV, eliminating the pre-existing profits interests attributable to those general partner interests and assigning the non-economic general partner interests to AllRoy GP, LLC, a wholly owned subsidiary of the ARLP Partnership.
Following the closing, we hold
28
Table of Contents
20.INCOME TAXES
Components of income tax expense are as follows:
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 | | ||||||
(in thousands) | |||||||||||||
Current: | |||||||||||||
Federal | $ | | $ | | $ | | $ | | |||||
State |
| |
| |
| |
| | |||||
Foreign | | | | | |||||||||
| |
| |
| |
| | ||||||
Deferred: | |||||||||||||
Federal |
| |
| |
| |
| | |||||
State |
| |
| |
| |
| | |||||
| |
| |
| |
| | ||||||
Income tax expense | $ | | $ | | $ | | $ | | |||||
The effective income tax rates for our income tax expense for the three and nine months ended September 30, 2026 and 2025 are less than the federal statutory rate, primarily due to the portion of income not subject to income taxes.
Our 2023 through 2025 tax years remain open to examination by tax authorities.
21.EARNINGS PER LIMITED PARTNER UNIT
We utilize the two-class method in calculating basic and diluted earnings per limited partner unit (“EPU”). Net income attributable to ARLP is allocated to limited partners and participating securities with nonforfeitable distributions or distribution equivalents, while net losses attributable to ARLP are allocated only to limited partners but not to participating securities. Our participating securities represent outstanding restricted unit awards under our LTIP.
The following is a reconciliation of net income attributable to ARLP used for calculating basic and diluted earnings per unit and the weighted-average units used in computing EPU:
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | | |||||
(in thousands, except per unit data) | |||||||||||||
Net income attributable to ARLP | $ | | $ | | $ | | $ | | |||||
Less: | |||||||||||||
Distributions to participating securities |
| ( |
| ( |
| ( |
| ( | |||||
Undistributed earnings attributable to participating securities |
| ( |
| ( |
| |
| | |||||
Net income attributable to ARLP available to limited partners | $ | | $ | | $ | | $ | | |||||
Weighted-average limited partner units outstanding – basic and diluted |
| |
| |
| |
| | |||||
Earnings per limited partner unit - basic and diluted (1) | $ | | $ | | $ | | $ | | |||||
| (1) | Diluted EPU gives effect to all potentially dilutive common units outstanding during the period using the treasury stock method. Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive. For the three and nine months ended September 30, 2026, participating securities of |
29
Table of Contents
22.SEGMENT INFORMATION
We operate in the United States as a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers as well as royalty income from oil & gas mineral interests located in key producing regions across the United States. We aggregate multiple operating segments into
The Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View Coal, LLC mining complex, which includes the River View and Henderson County mines and (d) the Hamilton mining complex. The segment also includes activity associated with support services and our non-operating mining complexes.
The Appalachia Coal Operations reportable segment includes (a) the Mettiki mining complex, (b) the Tunnel Ridge, LLC mining complex and (c) the MC Mining, LLC mining complex.
The Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals through its consolidated subsidiaries, including the interests acquired in the AllDale III & IV Acquisition on July 1, 2026. See Note 3 – Variable Interest Entities and Note 4 – Acquisitions for more information.
The Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties that are (a) leased to certain of our mining complexes in the Illinois Basin and Appalachia Basin or (b) located near our operations and external mining operations.
Other, Corporate and Elimination includes marketing and administrative activities, certain of our subsidiaries, primarily consisting of Matrix Design Group, LLC, its subsidiaries, and Alliance Design Group, LLC (collectively referred to as "Matrix Group"), Bitiki KY, LLC, which holds our crypto-mining activities (see Note 7 – Digital Assets), our equity investments (see Note 3 – Variable Interest Entities and Note 10 – Investments), Wildcat Insurance, LLC which assists the ARLP Partnership with its insurance requirements, and AROP Funding and Alliance Finance (both discussed in Note 11 – Long-Term Debt). The eliminations included in Other, Corporate and Elimination primarily represent the intercompany coal royalty transactions described above between our Coal Royalties reportable segment and our coal operations’ mines.
30
Table of Contents
Reportable segment results are presented below.
| Coal Operations | Royalties |
| |||||||||||||
Illinois | | | | |||||||||||||
| Basin | | Appalachia | | Oil & Gas | | Coal | | Total |
| ||||||
(in thousands) |
| |||||||||||||||
Three Months Ended September 30, 2026 | ||||||||||||||||
Revenues - Outside | $ | | $ | | $ | | $ | | $ | | ||||||
Revenues - Intercompany | | | | | | |||||||||||
Total revenues (1) | | | | | | |||||||||||
Less: | ||||||||||||||||
Segment Adjusted EBITDA Expense (2) |
| |
| |
| |
| |
| | ||||||
Transportation expenses | | | | | | |||||||||||
Segment Adjusted EBITDA attributable to Noncontrolling interest | | | | | | |||||||||||
Other segment items (3) | | ( | | | ( | |||||||||||
Segment Adjusted EBITDA attributable to ARLP(4) |
| |
| |
| |
| |
| | ||||||
Capital expenditures (6) |
| |
| |
| |
| |
| | ||||||
Three Months Ended September 30, 2025 | ||||||||||||||||
|
| |||||||||||||||
Revenues - Outside | $ | | $ | | $ | | $ | | $ | | ||||||
Revenues - Intercompany | | | | | | |||||||||||
Total revenues (1) | | | | | | |||||||||||
Less: | ||||||||||||||||
Segment Adjusted EBITDA Expense (2) |
| |
| |
| |
| |
| | ||||||
Transportation expenses | | | | | | |||||||||||
Segment Adjusted EBITDA attributable to Noncontrolling interest | | | | | | |||||||||||
Other segment items (3) | | | ( | | ( | |||||||||||
Segment Adjusted EBITDA attributable to ARLP(4) |
| | | | |
| | |||||||||
Capital expenditures (6) |
| |
| |
| |
| |
| | ||||||
Nine Months Ended September 30, 2026 | ||||||||||||||||
Revenues - Outside | $ | | $ | | $ | | $ | | $ | | ||||||
Revenues - Intercompany | | | | | | |||||||||||
Total revenues (1) | | | | | | |||||||||||
Less: | ||||||||||||||||
Segment Adjusted EBITDA Expense (2) |
| | | | |
| ||||||||||
Transportation expenses | | | | | ||||||||||||
Segment Adjusted EBITDA attributable to Noncontrolling interest | | | | | ||||||||||||
Other segment items (3) | | ( | ( | | ( | |||||||||||
Segment Adjusted EBITDA attributable to ARLP(4) |
| | | | |
| | |||||||||
Total assets (5) |
| | | | |
| | |||||||||
Capital expenditures (6) |
| | | | |
| | |||||||||
Nine Months Ended September 30, 2025 | ||||||||||||||||
|
| |||||||||||||||
Revenues - Outside | $ | | $ | | $ | | $ | | $ | |||||||
Revenues - Intercompany | | | | | | |||||||||||
Total revenues (1) | | | | | | |||||||||||
Less: | ||||||||||||||||
Segment Adjusted EBITDA Expense (2) |
| | | | |
| ||||||||||
Transportation expenses | | | | | ||||||||||||
Segment Adjusted EBITDA attributable to Noncontrolling interest | | | | | ||||||||||||
Other segment items (3) | | | ( | | ( | |||||||||||
Segment Adjusted EBITDA attributable to ARLP(4) |
| | | | |
| | |||||||||
Total assets (5) |
| | | | |
| ||||||||||
Capital expenditures (6) |
| | | | |
| ||||||||||
31
Table of Contents
| (1) | The following is a reconciliation of our total segment revenues to total consolidated revenues: |
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | 2026 | | 2025 | ||||||||
(in thousands) | |||||||||||||
Total segment revenues | $ | | $ | | $ | | $ | | |||||
Other, Corporate and Elimination revenues - Outside | | | | | |||||||||
Other, Corporate and Elimination revenues - Intercompany | ( | ( | ( | ( | |||||||||
Total consolidated revenues | $ | | $ | | $ | | $ | | |||||
Revenues included in Other, Corporate and Elimination are attributable to intercompany eliminations, which are primarily intercompany coal royalties eliminations, outside revenues at the Matrix Group and other outside miscellaneous sales and revenue activities.
| (2) | Segment Adjusted EBITDA Expense includes operating expenses, coal purchases, if applicable, and other income or expense as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA Expense is used as a financial measure by our management to assess the operating performance of our segments. Segment Adjusted EBITDA Expense is a key component of Segment Adjusted EBITDA in addition to coal sales, royalty revenues and other revenues. The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses. |
| (3) | Other segment items include: |
Oil & Gas Royalties – equity method investment income from AllDale III prior to the AllDale III & IV Acquisition and the loss on derivative instruments. (See Note 4 – Acquisitions.)
| (4) | Beginning in the quarter ended September 30, 2026, we updated the definition of Segment Adjusted EBITDA to be inclusive of noncontrolling interest and Segment Adjusted EBITDA attributable to ARLP to be our primary measure of profit or loss, which is consistent with our previous definition of Segment Adjusted EBITDA. Prior periods have been updated to reflect the new definition. Segment Adjusted EBITDA is defined as net income before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses adjusted for certain items that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA attributable to ARLP is defined as Segment Adjusted EBITDA excluding amounts attributable to noncontrolling interests. Segment Adjusted EBITDA attributable to ARLP is used as a financial measure by Mr. Craft, who is also our chief operating decision maker (“CODM”), other management and by external users of our financial statements such as investors, commercial banks, research analysts and others. Our CODM uses Segment Adjusted EBITDA attributable to ARLP in assessing segment performance and deciding how to allocate resources. Segment Adjusted EBITDA attributable to ARLP provides useful information to our CODM and investors regarding our performance and results of operations because Segment Adjusted EBITDA attributable to ARLP (i) provides additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provides investors with the financial analytical framework upon which we base financial, operational, compensation and planning decisions, (iii) presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations and (iv) allows our CODM and management to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. |
32
Table of Contents
The following is a reconciliation of total Segment Adjusted EBITDA attributable to ARLP for our segments to consolidated income before income taxes:
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 |
| 2026 | | 2025 |
| ||||||
(in thousands) | |||||||||||||
Segment Adjusted EBITDA attributable to ARLP – total segments | $ | | $ | | $ | | $ | | |||||
Segment Adjusted EBITDA attributable to noncontrolling interest | | | | | |||||||||
Other, Corporate and Elimination profit (loss) | |
| | |
| ( | |||||||
General and administrative | ( |
| ( |
| ( |
| ( | ||||||
Depreciation, depletion and amortization | ( |
| ( |
| ( |
| ( | ||||||
Asset impairments | | | ( | | |||||||||
Interest expense, net | ( |
| ( |
| ( |
| ( | ||||||
Change in fair value of digital assets | | | ( | | |||||||||
Impairment loss on investments | | | | ( | |||||||||
Unrealized gain (loss) on derivatives | ( | | ( | | |||||||||
Acquisition gain | | | | | |||||||||
Income before income taxes | $ | | $ | | $ | | $ | | |||||
Other, Corporate and Elimination profit (loss) represents profit (loss) from operating segments below the quantitative thresholds when determining our reportable segments as well as the elimination of intersegment profit (loss) between our reportable segments. The operating segments included are those described as part of our Other, Corporate and Eliminations category.
| (5) | The following is a reconciliation of our total segment assets to total consolidated assets: |
| September 30, | ||||||||||||
2026 | | 2025 | |||||||||||
(in thousands) | |||||||||||||
Total segment assets | $ | | $ | | |||||||||
Other, Corporate and Elimination total assets | | | |||||||||||
Total consolidated assets | $ | | $ | | |||||||||
| (6) | Capital expenditures excludes $ |
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | 2026 | | 2025 | ||||||||
(in thousands) | |||||||||||||
Total segment capital expenditures | $ | | $ | | $ | | $ | | |||||
Other, Corporate and Elimination capital expenditures | | | | | |||||||||
Total consolidated capital expenditures | $ | | $ | | $ | | $ | | |||||
33
Table of Contents
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Significant relationships referenced in this management’s discussion and analysis of financial condition and results of operations include the following:
| ● | References to “we,” “us,” “our” or “ARLP Partnership” mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries. |
| ● | References to “ARLP” mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis. |
| ● | References to “MGP” mean Alliance Resource Management GP, LLC, ARLP’s general partner. |
| ● | References to “Mr. Craft” mean Joseph W. Craft III, the Chairman, President and Chief Executive Officer of MGP. |
| ● | References to “Intermediate Partnership” mean Alliance Resource Operating Partners, L.P., the intermediate partnership of Alliance Resource Partners, L.P. |
| ● | References to “Alliance Coal” mean Alliance Coal, LLC, an indirect wholly owned subsidiary of ARLP. |
| ● | References to “Alliance Minerals” mean Alliance Minerals, LLC, an indirect wholly owned subsidiary of ARLP. |
| ● | References to “Alliance Resource Properties” mean Alliance Resource Properties, LLC, an indirect wholly owned subsidiary of ARLP. |
Summary
We are a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located in key producing regions across the United States. Our core objective is to maximize the value of our mineral asset base—both through coal production from our mining operations and through the leasing and development of our coal and oil & gas mineral interests. Our strategy is to provide reliable, baseload fuel for electricity generating customers while positioning the Partnership for long-term growth through investments in energy related technologies and infrastructure. Leveraging our relationships with electric utilities, industrial customers, and government partners, we intend to pursue strategic opportunities that complement our operational strengths. We believe our diverse resource portfolio and targeted investments will continue to create long-term value for our unitholders.
We are the second largest coal producer in the eastern United States and as of September 30, 2026, we operated seven underground mining complexes across Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia and a coal-loading terminal on the Ohio River in Indiana. We manage and report our coal operations under two regions, Illinois Basin and Appalachia. We market our coal production to major domestic and international utilities and industrial customers.
We also own mineral and royalty interests across premier basins and resource plays in the United States including the Permian, Anadarko, Bakken, and after the AllDale III & IV Acquisition on July 1, 2026, Haynesville. We market our oil & gas mineral interests for lease to operators in those regions and generate royalty income from their development of those mineral interests. Please read “Item 1. Financial Statements (Unaudited) – Note 3 – Variable Interest Entities, Note 4 – Acquisitions and Note 19. – Related Party Transactions” for more information on the AllDale III & IV Acquisition.
We also hold coal mineral reserves and resources in Illinois, Indiana, Kentucky, Pennsylvania and West Virginia. Substantially all of our coal mineral resources and a majority of our coal mineral reserves are owned or leased by Alliance Resource Properties, which are (a) leased or subleased to our mining complexes or (b) near other internal and external coal mining operations but not yet leased. We generate intercompany royalty income through the leasing and development of our coal mineral reserves and resources.
Beyond our core mineral platform, we have invested in growth-oriented businesses and energy-related technologies. Our subsidiaries, Matrix Design Group, LLC (and its subsidiaries), and Alliance Design Group, LLC (collectively referred to as "Matrix Group"), develop and market industrial, mining and technology products and services worldwide and our subsidiary, Bitiki KY, LLC (“Bitiki”), mines bitcoin. We have also made investments in emerging energy and infrastructure opportunities, including Infinitum Electric, Inc. (“Infinitum”), NGP Energy Transition IV, L.P. (“NGP ET IV”) and Gavin Generation Holdings A, LP (“Gavin Generation”).
34
Table of Contents
We have four reportable segments, Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties. We also have an “all other” category referred to as Other, Corporate and Elimination. Our two coal operations reportable segments correspond to major coal producing regions in the eastern United States with similar economic characteristics including coal quality, geology, coal marketing opportunities, mining and transportation methods and regulatory issues. Our Oil & Gas Royalties reportable segment includes our oil & gas mineral interests. Our Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties.
| ● | Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View Coal, LLC (“River View”) mining complex, which includes the River View and Henderson County mines and (d) the Hamilton County Coal, LLC (“Hamilton”) mining complex. The segment also includes activity associated with support services and our non-operating mining complexes. |
| ● | Appalachia Coal Operations reportable segment includes (a) the Mettiki Coal, LLC and Mettiki Coal (WV), LLC (collectively, “Mettiki”) mining complex, (b) the Tunnel Ridge, LLC (“Tunnel Ridge”) mining complex and (c) the MC Mining, LLC mining complex. |
| ● | Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals through its consolidated subsidiaries, including mineral interests acquired in the AllDale III & IV Acquisition on July 1, 2026. Please read “Item 1. Financial Statements (Unaudited) – Note 3 – Variable Interest Entities and Note 4 – Acquisitions” for more information on the AllDale III & IV Acquisition. |
| ● | Coal Royalties reportable segment includes substantially all of our coal mineral resources and the majority of our coal mineral reserves owned or leased by Alliance Resource Properties. |
| ● | Other, Corporate and Elimination includes marketing and administrative activities, certain of our subsidiaries, primarily consisting of Matrix Group, Bitiki, which holds our crypto-mining activities, our non oil & gas equity and debt investments, Wildcat Insurance, LLC, which assists the ARLP Partnership with its insurance requirements, AROP Funding, LLC (“AROP Funding”) and Alliance Resource Finance Corporation (“Alliance Finance”), and other miscellaneous activities. The eliminations included in Other, Corporate and Elimination primarily represent the intercompany coal royalty transactions described above between our Coal Royalties reportable segment and our coal operations’ mines. Please read “Item 1. Financial Statements (Unaudited) – Note 3 – Variable Interest Entities, Note 10 – Investments, and Note 11 – Long-Term Debt” for more information on our investments in Infinitum, Gavin Generation, and NGP ET IV as well as AROP Funding and Alliance Finance. |
Recent Developments
During the nine months ended September 30, 2026, excluding the AllDale III & IV and Two Mile acquisitions discussed below, we acquired 1,467 oil & gas net royalty acres through a series of transactions in the Permian Basin for an aggregate cash purchase price of $31.9 million which was funded with cash on hand. The interests include royalty interests in both developed properties and undeveloped properties. Please see “Item 1. Financial Statements (Unaudited) – Note 4 – Acquisitions” for additional information.
Prior to January 29, 2026, certain of the coal mined and to be mined by Tunnel Ridge had been leased from the Craft Foundations. On January 29, 2026, we purchased all of the ownership interests in these coal reserves together with surface rights from the Craft Foundations for an aggregate $15.5 million. Please see “Item 1. Financial Statements (Unaudited) – Note 19 – Related-Party Transactions” for additional information.
In January 2026, we announced our decision to cease longwall production at our Mettiki mining complex due to a series of planned and unplanned outages at a key customer’s plant. The mine has transitioned from a longwall mine to a continuous mining unit operation to better align production with customer demand. Please see “Item 1. Financial Statements (Unaudited) – Note 9 – Long-Lived Asset Impairment” for additional information.
On July 1, 2026, we completed the acquisition of certain general partner and limited partner interests in AllDale III & IV for approximately $206.2 million. The AllDale III & IV Acquisition expands and diversifies our portfolio of mineral and royalty interests through the added control of approximately 48,500 net royalty acres across premier basins
35
Table of Contents
and resource plays including the Permian, Anadarko, Bakken and Haynesville. ARLP funded the acquisition using a combination of cash on hand, borrowings under its revolving credit facility, and a new $150.0 million term loan at Alliance Minerals.
On September 30, 2026, we completed the Two Mile Acquisition for approximately $16.7 million, which was funded with cash on hand. For more information, please see “Item 1. Financial Statements (Unaudited) – Note 4 – Acquisitions.”
On November 2, 2026, we acquired certain assets and liabilities of Auxier Welding, Inc. (“Auxier”) for $23.2 million. The assets and liabilities acquired were used by Auxier to design, fabricate, manufacture, repair, service, and supply mining, industrial, and related equipment, components, systems, and parts. This acquisition will supplement our internal rebuild and technical services for equipment used at our coal operations’ mining complexes. We funded $17.2 million using cash on hand and deferred $6.0 million to be paid out in two $3.0 million installments on or prior to December 1, 2027 and 2028.
Risks and Uncertainties
We face a variety of risks and uncertainties that management considers in the operation and planning of our businesses, which could affect our financial position and results of operations. For additional information regarding our risks and uncertainties that affect our business and the industries in which we operate, see “Item 1A. Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2025.
How We Evaluate Our Performance
Our management uses a variety of financial and operational measurements to analyze our performance. Primary measurements include the following: (1) coal volumes; (2) coal sales; (3) oil & gas volumes; (4) oil & gas royalties; (5) intercompany coal royalties; (6) Segment Adjusted EBITDA Expense; and (7) Segment Adjusted EBITDA attributable to ARLP. Please see below and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information.
Beginning in the quarter ended September 30, 2026, we updated the definition of Segment Adjusted EBITDA to be inclusive of noncontrolling interest and Segment Adjusted EBITDA attributable to ARLP to be the measure we use to analyze our performance. Segment Adjusted EBITDA attributable to ARLP is Segment Adjusted EBITDA excluding amounts attributable to noncontrolling interest. The new definition of Segment Adjusted EBITDA attributable to ARLP is consistent with our previous definition of Segment Adjusted EBITDA that excluded noncontrolling interest; however, we now have the ability to focus either on the performance of our operations both including or excluding noncontrolling interest. Segment Adjusted EBITDA attributable to ARLP is our primary measure of profit or loss. Because Illinois Basin Coal Operations, Appalachia Coal Operations, Coal Royalties, and Other, Corporate and Eliminations do not have noncontrolling interests, the amounts for Segment Adjusted EBITDA are the same as Segment Adjusted EBITDA attributable to ARLP.
36
Table of Contents
Analysis of Historical Results of Operations
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Consolidated Information
Three Months Ended |
| ||||||||||||
September 30, | |||||||||||||
2026 | 2025 | Increase (Decrease) | |||||||||||
(in thousands) | |||||||||||||
Consolidated Total | |||||||||||||
Tons sold |
| 9,348 |
| 8,703 |
| 645 | 7.4 | % | |||||
Tons produced | 9,446 |
| 8,416 |
| 1,030 | 12.2 | % | ||||||
Volume - BOE (1) | 1,450 | 899 |
| 551 | 61.3 | % | |||||||
Coal sales |
| $ | 504,166 | $ | 511,593 |
| $ | (7,427) | (1.5) | % | |||
Oil & gas royalties | $ | 59,761 | $ | 32,055 | $ | 27,706 | 86.4 | % | |||||
Total revenues | $ | 603,015 | $ | 571,367 | $ | 31,648 | 5.5 | % | |||||
Segment Adjusted EBITDA Expense (2) | $ | 339,303 | $ | 359,253 | $ | (19,950) | (5.6) | % | |||||
Net income attributable to ARLP | $ | 139,596 | $ | 95,104 | $ | 44,492 | 46.8 | % | |||||
Segment Adjusted EBITDA (2) | $ | 268,863 | $ | 208,900 | $ | 59,963 | 28.7 | % | |||||
Segment Adjusted EBITDA attributable to ARLP (2) | $ | 260,888 | $ | 206,510 | $ | 54,378 | 26.3 | % | |||||
| (1) | BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel). |
| (2) | For definitions of Segment Adjusted EBITDA, Segment Adjusted EBITDA attributable to ARLP, and Segment Adjusted EBITDA Expense and related reconciliations to their respective comparable GAAP financial measures, please see below under “— Reconciliation of Non-GAAP Financial Measures.” |
Total Revenues
Total revenues for the three months ended September 30, 2026 (“2026 Quarter”) increased 5.5% to $603.0 million compared to $571.4 million for the three months ended September 30, 2025 (“2025 Quarter”) as a result of record oil & gas royalty revenues, increased coal sales volumes and higher other revenues, partially offset by lower coal sales price per ton.
| ● | Coal sales decreased to $504.2 million for the 2026 Quarter compared to $511.6 million for the 2025 Quarter. The decrease was attributable to lower average coal sales prices, which reduced coal sales by $45.3 million, partially offset by higher tons sold, which increased coal sales by $37.9 million. Coal sales price per ton decreased by 8.3% as a result of an increased sales mix of lower priced Hamilton volumes and lower sales price per ton at Tunnel Ridge and Mettiki. Higher coal sales volumes were primarily driven by the resumption of longwall production at Hamilton following its extended longwall move and strong sales at Tunnel Ridge. |
| ● | Oil & gas royalties increased 86.4% to a record $59.8 million for the 2026 Quarter compared to $32.1 million for the 2025 Quarter. The increase was due to significantly higher volumes, which were up 61.3%, primarily as a result of the AllDale III & IV Acquisition and 15.5% higher average sales prices driven by increased realized crude oil prices. |
| ● | Other revenues increased to $28.8 million for the 2026 Quarter compared to $20.0 million for the 2025 Quarter. The increase was due to higher miscellaneous sales and revenue activities in our Appalachian segment. |
Segment Adjusted EBITDA Expense
Segment Adjusted EBITDA Expense decreased 5.6% to $339.3 million for the 2026 Quarter compared to $359.3 million for the 2025 Quarter primarily due to decreased expenses at our coal operations. Segment Adjusted EBITDA Expense for our coal operations decreased 6.6% to $333.1 million due to lower per ton costs, partially offset by higher coal sales volumes. Segment Adjusted EBITDA Expense per ton sold for our coal operations decreased 13.1% to $35.64 per ton sold in the 2026 Quarter compared to $40.99 per ton in the 2025 Quarter, primarily due to increased production at
37
Table of Contents
several mines and the benefits of investment in infrastructure over the past several years that has translated into lower-cost production as well as the following per ton cost decreases:
| ● | Labor and benefit expenses per ton produced decreased 14.5% to $12.64 per ton in the 2026 Quarter from $14.79 per ton in the 2025 Quarter. The decrease of $2.15 per ton was primarily due to higher production and lower labor costs at several mines and decreased medical expenses. |
| ● | Material and supplies expenses per ton produced decreased 17.5% to $11.19 per ton in the 2026 Quarter from $13.57 per ton in the 2025 Quarter. The decrease of $2.38 per ton produced primarily reflects the following decreases: |
| o | $1.14 per ton in cost of sales adjustment for support services, |
| o | $0.46 per ton for environmental and reclamation expenses, |
| o | $0.43 per ton for surface expenses, |
| o | $0.30 per ton for electrical expenses, |
| o | $0.29 per ton for ventilation related expenses, |
| o | $0.25 per ton for various preparation plant expenses, and |
| o | $0.24 per ton for utility expenses, |
partially offsetting these decreases was an increase of $0.43 per ton for miscellaneous materials and supplies.
| ● | Maintenance expenses per ton produced decreased 8.9% to $4.31 per ton in the 2026 Quarter from $4.73 per ton in the 2025 Quarter. The decrease of $0.42 per ton produced was primarily a result of higher production at several mines. |
| ● | Production taxes and royalty expenses per ton incurred as a percentage of coal sales prices and volumes decreased $0.92 per produced ton sold in the 2026 Quarter compared to the 2025 Quarter primarily resulting from lower coal sales prices and a favorable mix of tons sold that were mined in states without severance taxes. |
| ● | We had no sales of outside coal purchases in the 2026 Quarter compared to $4.5 million in the 2025 Quarter. Thus, costs per ton in the 2026 Quarter decreased as the cost of our produced coal is generally lower on a per ton basis than outside coal purchases. |
| ● | Segment Adjusted EBITDA Expense was also lower as a result of a $1.8 million non-cash deferred purchase price reduction recorded in the 2026 Quarter related to the 2015 acquisition of our Hamilton mine compared to an increase of $4.4 million in the 2025 Quarter. |
General and administrative
General and administrative expenses for the 2026 Quarter increased to $27.1 million compared to $21.4 million in the 2025 Quarter. The increase of $5.7 million was primarily due to higher incentive compensation expenses and increased outside services.
Equity method investment income
Equity method investment income was $12.8 million in the 2026 Quarter compared to $4.5 million in the 2025 Quarter. The change was primarily due to increased investment income at Gavin Generation and an increase in the fair value of the net assets at both Gavin Generation and NGP ET IV.
Change in fair value of digital assets
The fair value adjustment on our digital assets increased by $12.7 million for the 2026 Quarter compared to the 2025 Quarter reflecting movement in the price of bitcoin.
Loss on derivative instruments, net
Loss on derivative instruments, net was $7.3 million in the 2026 Quarter primarily due to changes in oil & gas prices decreasing the fair value of our derivative positions that we acquired in the AllDale III & IV Acquisition.
38
Table of Contents
Acquisition gain
We recorded a non-cash acquisition gain of $6.3 million in the 2026 Quarter as a result of the remeasurement to fair value of our previously held equity investment in AllDale III in connection with the AllDale III & IV Acquisition.
Income tax expense
Income tax expense increased by $13.2 million in the 2026 Quarter compared to the 2025 Quarter. The increase was primarily due to higher taxable income and deferred taxes primarily resulting from the acquisition of AllDale III and AllDale IV.
Net income attributable to ARLP
Net income attributable to ARLP for the 2026 Quarter increased 46.8% to $139.6 million, or $1.08 per basic and diluted limited partner unit, compared to $95.1 million, or $0.73 per basic and diluted limited partner unit for the 2025 Quarter, primarily as a result of higher total revenues and equity method investment income, lower operating expenses, increase in the fair value of our digital assets and the acquisition gain. Partially offsetting these increases were higher income tax expenses and a loss on derivative instruments.
Segment Adjusted EBITDA attributable ARLP
Our 2026 Quarter Segment Adjusted EBITDA attributable to ARLP increased 26.3% to $260.9 million from the 2025 Quarter Segment Adjusted EBITDA attributable to ARLP of $206.5 million.
Segment Information
Three Months Ended |
| ||||||||||||
September 30, | |||||||||||||
2026 | | 2025 | | Increase (Decrease) |
| ||||||||
| (in thousands) | |
| | |||||||||
Illinois Basin Coal Operations | |||||||||||||
Tons sold | 7,033 |
| 6,611 |
| 422 | 6.4 | % | ||||||
Coal sales | $ | 359,818 | $ | 337,377 | $ | 22,441 | 6.7 | % | |||||
Other revenues | $ | 3,389 | $ | 1,790 | $ | 1,599 | 89.3 | % | |||||
Segment Adjusted EBITDA Expense | $ | 223,458 | $ | 233,806 | $ | (10,348) | (4.4) | % | |||||
Segment Adjusted EBITDA | $ | 139,749 | $ | 105,361 | $ | 34,388 | 32.6 | % | |||||
Appalachia Coal Operations | |||||||||||||
Tons sold | 2,315 |
| 2,092 |
| 223 | 10.7 | % | ||||||
Coal sales | $ | 144,348 | $ | 174,216 | $ | (29,868) | (17.1) | % | |||||
Other revenues | $ | 7,935 | $ | 675 | $ | 7,260 | n/m | ||||||
Segment Adjusted EBITDA Expense | $ | 107,062 | $ | 120,802 | $ | (13,740) | (11.4) | % | |||||
Segment Adjusted EBITDA | $ | 48,464 | $ | 54,089 | $ | (5,625) | (10.4) | % | |||||
Oil & Gas Royalties | |||||||||||||
Volume - BOE (1) | 1,450 | 899 |
| 551 | 61.3 | % | |||||||
Oil & gas royalties | $ | 59,761 | $ | 32,055 | $ | 27,706 | 86.4 | % | |||||
Other revenues | $ | 492 | $ | 703 | $ | (211) | (30.0) | % | |||||
Segment Adjusted EBITDA Expense | $ | 8,035 | $ | 4,052 | $ | 3,983 | 98.3 | % | |||||
Segment Adjusted EBITDA attributable to ARLP | $ | 43,644 | $ | 27,044 | $ | 16,600 | 61.4 | % | |||||
Coal Royalties | |||||||||||||
Volume - Tons sold (2) | 8,350 | 7,055 |
| 1,295 | 18.4 | % | |||||||
Intercompany coal royalties | $ | 27,285 | $ | 24,662 | $ | 2,623 | 10.6 | % | |||||
Segment Adjusted EBITDA Expense | $ | 9,127 | $ | 7,572 | $ | 1,555 | 20.5 | % | |||||
Segment Adjusted EBITDA | $ | 18,158 | $ | 17,090 | $ | 1,068 | 6.2 | % | |||||
39
Table of Contents
n/m - Percentage change not meaningful.
| (1) | BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel). |
| (2) | Represents tons sold by our Coal Operations segments associated with coal reserves leased from our Coal Royalties segment. |
Illinois Basin Coal Operations – Segment Adjusted EBITDA increased 32.6% to $139.7 million in the 2026 Quarter from $105.4 million in the 2025 Quarter. The increase of $34.3 million was primarily attributable to higher average coal sales volumes and lower operating expenses. Tons sold increased by 6.4% compared to the 2025 Quarter due primarily to increased sales volumes from our Hamilton mine following an extended longwall move earlier in 2026. Segment Adjusted EBITDA Expense decreased to $223.5 million in the 2026 Quarter from $233.8 million in the 2025 Quarter, primarily as a result of reduced operating expenses per ton. Segment Adjusted EBITDA Expense per ton decreased by 10.2% compared to the 2025 Quarter due to higher production at Hamilton and improved per ton costs at our River View operation.
Appalachia Coal Operations – Segment Adjusted EBITDA decreased 10.4% to $48.5 million for the 2026 Quarter from $54.1 million in the 2025 Quarter. The decrease of $5.6 million was primarily attributable to lower coal sales, partially offset by reduced operating expenses and higher other revenues. The decrease in coal sales primarily reflects lower coal sales prices, which decreased by 25.1% compared to the 2025 Quarter primarily due to an increased sales mix of lower priced Tunnel Ridge volumes and lower sales price per ton at Tunnel Ridge and Mettiki. Partially offsetting lower coal sales prices, coal sales volumes increased 10.7% compared to the 2025 Quarter primarily as a result of increased production at Tunnel Ridge due to a longwall move in the 2025 Quarter. Other revenues increased by $7.3 million in the 2026 Quarter reflecting higher miscellaneous revenue activities. Segment Adjusted EBITDA Expense decreased 11.4% to $107.1 million in the 2026 Quarter from $120.8 million in the 2025 Quarter due primarily to lower per ton expenses, partially offset by increased sales volumes. Segment Adjusted EBITDA Expense per ton for the 2026 Quarter decreased by 19.9% compared to the 2025 Quarter as a result of increased production at our Tunnel Ridge operation as well as a higher sales mix of lower-cost Tunnel Ridge volumes.
Oil & Gas Royalties – Segment Adjusted EBITDA attributable to ARLP increased to a record $43.6 million in the 2026 Quarter compared to $27.0 million in the 2025 Quarter primarily due to increased sales volumes and higher average sales prices, partially offset by higher expenses. Oil & gas royalty volumes increased significantly in the 2026 Quarter primarily due to additional volumes from the AllDale III & IV Acquisition. Average sales price per BOE increased 15.5% compared to the 2025 Quarter on higher realized crude oil prices, partially offset by a higher natural gas volume mix following the AllDale III & IV Acquisition.
Coal Royalties – Segment Adjusted EBITDA increased to $18.2 million in the 2026 Quarter compared to $17.1 million in the 2025 Quarter due to higher royalty tons sold, primarily from Tunnel Ridge and Hamilton, partially offset by higher expenses.
40
Table of Contents
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Consolidated Information
Nine Months Ended | |||||||||||||
September 30, | |||||||||||||
| 2026 | 2025 | Increase (Decrease) | | |||||||||
(in thousands) | |||||||||||||
Consolidated Total |
|
| |||||||||||
Tons sold |
|
| 25,766 |
| 24,856 |
| 910 | 3.7 | % | ||||
Tons produced | 25,655 |
| 24,978 |
| 677 | 2.7 | % | ||||||
Volume - BOE (1) | 3,408 | 2,659 |
| 749 | 28.2 | % | |||||||
Coal sales | $ | 1,416,992 | $ | 1,465,573 |
| $ | (48,581) | (3.3) | % | ||||
Oil & gas royalties | $ | 147,395 | $ | 103,612 | $ | 43,783 | 42.3 | % | |||||
Total revenues | $ | 1,670,592 | $ | 1,659,298 | $ | 11,294 | 0.7 | % | |||||
Segment Adjusted EBITDA Expense (2) | $ | 1,010,306 | $ | 1,058,873 | $ | (48,567) | (4.6) | % | |||||
Net income attributable to ARLP | $ | 228,252 | $ | 228,497 | $ | (245) | (0.1) | % | |||||
Segment Adjusted EBITDA (2) | $ | 663,059 | $ | 574,911 | $ | 88,148 | 15.3 | % | |||||
Segment Adjusted EBITDA attributable to ARLP (2) | $ | 650,141 | $ | 567,767 | $ | 82,374 | 14.5 | % | |||||
| (1) | BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel). |
| (2) | For definitions of Segment Adjusted EBITDA, Segment Adjusted EBITDA attributable to ARLP, and Segment Adjusted EBITDA Expense and related reconciliations to their respective comparable GAAP financial measures, please see below under “— Reconciliation of Non-GAAP Financial Measures.” |
Total Revenues
Total revenues for the nine months ended September 30, 2026 (“2026 Period”) increased 0.7% to $1.67 billion compared to $1.66 billion for the nine months ended September 30, 2025 (“2025 Period”) primarily due to record oil & gas royalty revenues and higher other revenues, partially offset by lower coal sales.
| ● | Coal sales decreased to $1.42 billion for the 2026 Period compared to $1.47 billion for the 2025 Period. The decrease was attributable to lower average coal sales prices, which reduced coal sales by $102.2 million, partially offset by higher tons sold, which increased coal sales by $53.7 million. Coal sales price per ton decreased by 6.7% as a result of lower domestic price realizations at several mines resulting from the continued roll-off of higher-priced legacy contracts. Higher coal sales volumes were primarily driven by increased volumes at our River View and Tunnel Ridge operations due to improved recoveries and higher productivity and fewer longwall move days at Tunnel Ridge, partially offset by decreased sales volumes from our Hamilton mine as a result of an extended longwall move during the 2026 Period. |
| ● | Oil & gas royalties increased 42.3% to $147.4 million for the 2026 Period compared to $103.6 million for the 2025 Period. The increase was due to record oil & gas royalty volumes, which increased 28.2%, as a result of the AllDale III & IV Acquisition, increased drilling and completion activities on our interests, other acquisitions of oil & gas mineral interests, and higher average sales prices, which increased 11.0%. |
| ● | Other revenues increased to $79.8 million for the 2026 Period compared to $63.7 million for the 2025 Period. The increase was due to higher miscellaneous sales and revenue activities in our Appalachian segment. |
Segment Adjusted EBITDA Expense
Segment Adjusted EBITDA Expense decreased 4.6% to $1.01 billion for the 2026 Period compared to $1.06 billion for the 2025 Period primarily due to decreased expenses at our coal operations. Segment Adjusted EBITDA Expense for our coal operations decreased 4.4% to $989.7 million due to lower per ton costs, partially offset by higher coal sales volumes. Segment Adjusted EBITDA Expense per ton sold for our coal operations decreased 7.7% to $38.41 per ton sold in the 2026 Period compared to $41.63 per ton in the 2025 Period, primarily due to increased production at several mines as well as the following per ton cost decreases:
41
Table of Contents
| ● | Labor and benefit expenses per ton produced decreased 6.8% to $14.03 per ton in the 2026 Period from $15.06 per ton in the 2025 Period. The decrease of $1.03 per ton was primarily due to lower labor costs at several mines as well as decreased workers’ compensation accruals and medical expenses. |
| ● | Material and supplies expenses per ton produced decreased 7.2% to $12.44 per ton in the 2026 Period from $13.41 per ton in the 2025 Period. The decrease of $0.97 per ton produced primarily reflects the following decreases: |
| o | $0.47 per ton in cost of sales adjustment for support services, |
| o | $0.25 per ton for environmental and reclamation expenses, |
| o | $0.20 per ton for electrical expenses, and |
| o | $0.20 per ton for various preparation plant expenses, |
partially offset by an increase of $0.47 per ton for roof support.
| ● | Maintenance expenses per ton produced decreased 6.3% to $4.44 per ton in the 2026 Period from $4.74 per ton in the 2025 Period. The decrease of $0.30 per ton produced was primarily a result of lower maintenance costs at several mines. |
| ● | Production taxes and royalty expenses per ton incurred as a percentage of coal sales prices and volumes decreased $0.49 per produced ton sold in the 2026 Period compared to the 2025 Period primarily resulting from lower coal sales prices and a favorable mix of tons sold that were mined in states without severance taxes. |
| ● | We had no sales of outside coal purchases in the 2026 Period compared to $19.0 million in the 2025 Period. Thus, costs per ton in the 2026 Period decreased as the cost of our produced coal is generally lower on a per ton basis than outside coal purchases. |
General and administrative
General and administrative expenses for the 2026 Period increased to $77.0 million compared to $62.3 million in the 2025 Period. The increase of $14.7 million was primarily due to higher incentive compensation expenses and increased outside services.
Depreciation, depletion and amortization
Depreciation, depletion and amortization expense increased to $245.9 million for the 2026 Period compared to $223.2 million for the 2025 Period primarily as a result of new mine infrastructure and equipment placed in service during the second half of 2025 at our Hamilton and River View operations as well as increased sales volumes in the 2026 Period.
Asset impairments
During the 2026 Period, we recorded $37.8 million of non-cash asset impairment charges due to our decision to cease longwall production at our Mettiki mining complex, along with uncertainty regarding future longwall production resumption and our evaluation of potential operation scenarios. Please read "Item 1. Financial Statements (Unaudited) – Note 9 – Long-Lived Asset Impairment."
Equity method investment income
Equity method investment income was $26.5 million in the 2026 Period compared to $0.9 million in the 2025 Period. The change was primarily due to increased investment income at Gavin Generation and an increase in the fair value of the net assets at both Gavin Generation and NGP ET IV.
Change in fair value of digital assets
The fair value adjustment on our digital assets decreased by $12.5 million for the 2026 Period compared to the 2025 Period reflecting movement in the price of bitcoin.
42
Table of Contents
Impairment loss on investments
During the 2025 Period, we recorded a $25.0 million impairment on our equity investment in Ascend. Please read “Item 1. Financial Statements (Unaudited) – Note 10 – Investments” for more information.
Net income attributable to ARLP
Net income attributable to ARLP for the 2026 Period remained consistent with the 2025 Period. In the 2026 Period, net income attributable to ARLP benefited from higher revenues, lower operating expenses, reduced outside coal purchases, increased equity method investment income and the impact of an impairment loss taken in the 2025 Period. Offsetting these increases were higher depreciation, the change in the fair value of our digital assets, increased income tax expense and a $37.8 million non-cash asset impairment charge during the 2026 Period at our Mettiki mine.
Segment Adjusted EBITDA attributable to ARLP
Our 2026 Period Segment Adjusted EBITDA attributable to ARLP increased 14.5% to $650.1 million from the 2025 Period Segment Adjusted EBITDA attributable to ARLP of $567.8 million.
Segment Information
Nine Months Ended |
| ||||||||||||
September 30, | |||||||||||||
2026 | | 2025 | | Increase (Decrease) |
| ||||||||
| (in thousands) | |
| | |||||||||
Illinois Basin Coal Operations | |||||||||||||
Tons sold | 19,468 |
| 19,318 |
| 150 | 0.8 | % | ||||||
Coal sales | $ | 999,845 | $ | 1,014,452 | $ | (14,607) | (1.4) | % | |||||
Other revenues | $ | 7,952 | $ | 6,265 | $ | 1,687 | 26.9 | % | |||||
Segment Adjusted EBITDA Expense | $ | 664,637 | $ | 674,954 | $ | (10,317) | (1.5) | % | |||||
Segment Adjusted EBITDA | $ | 343,160 | $ | 345,763 | $ | (2,603) | (0.8) | % | |||||
Appalachia Coal Operations | |||||||||||||
Tons sold | 6,298 |
| 5,538 |
| 760 | 13.7 | % | ||||||
Coal sales | $ | 417,147 | $ | 451,121 | $ | (33,974) | (7.5) | % | |||||
Other revenues | $ | 23,243 | $ | 2,183 | $ | 21,060 | n/m | ||||||
Segment Adjusted EBITDA Expense | $ | 319,791 | $ | 354,199 | $ | (34,408) | (9.7) | % | |||||
Segment Adjusted EBITDA | $ | 123,842 | $ | 99,105 | $ | 24,737 | 25.0 | % | |||||
Oil & Gas Royalties | |||||||||||||
Volume - BOE (1) | 3,408 | 2,659 |
| 749 | 28.2 | % | |||||||
Oil & gas royalties | $ | 147,395 | $ | 103,612 | $ | 43,783 | 42.3 | % | |||||
Other revenues | $ | 1,169 | $ | 1,560 | $ | (391) | (25.1) | % | |||||
Segment Adjusted EBITDA Expense | $ | 21,223 | $ | 14,331 | $ | 6,892 | 48.1 | % | |||||
Segment Adjusted EBITDA attributable to ARLP | $ | 114,959 | $ | 85,249 | $ | 29,710 | 34.9 | % | |||||
Coal Royalties | |||||||||||||
Volume - Tons sold (2) | 22,499 | 17,619 |
| 4,880 | 27.7 | % | |||||||
Intercompany coal royalties | $ | 69,108 | $ | 58,069 | $ | 11,039 | 19.0 | % | |||||
Other revenues | $ | 291 | $ | — | $ | 291 | n/m | ||||||
Segment Adjusted EBITDA Expense | $ | 26,005 | $ | 19,767 | $ | 6,238 | 31.6 | % | |||||
Segment Adjusted EBITDA | $ | 43,394 | $ | 38,302 | $ | 5,092 | 13.3 | % | |||||
n/m - Percentage change not meaningful.
| (1) | BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel). |
| (2) | Represents tons sold by our Coal Operations segments associated with coal reserves leased from our Coal Royalties segment. |
43
Table of Contents
Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased to $343.2 million in the 2026 Period from $345.8 million in the 2025 Period. The decrease of $2.6 million was primarily attributable to lower coal sales partially offset by reduced operating expenses. The decrease in coal sales reflects lower coal sales prices, which decreased by 2.2% compared to the 2025 Period as a result of the expiration of higher priced legacy contracts. Segment Adjusted EBITDA Expense decreased to $664.6 million in the 2026 Period from $675.0 million in the 2025 Period, primarily as a result of reduced operating expenses per ton. Segment Adjusted EBITDA Expense per ton decreased by 2.3% compared to the 2025 Period due primarily to increased sales volumes from our River View operations during the 2026 Period.
Appalachia Coal Operations – Segment Adjusted EBITDA increased 25.0% to $123.8 million for the 2026 Period from $99.1 million in the 2025 Period. The increase of $24.7 million was primarily attributable to reduced operating expenses and higher other revenues, partially offset by lower coal sales. The decrease in coal sales primarily reflects lower coal sales prices, which decreased by 18.7% compared to the 2025 Period primarily due to an increased sales mix of lower priced Tunnel Ridge sales volumes in the 2026 Period and reduced sales price per ton at Tunnel Ridge and Mettiki. Partially offsetting lower coal sales prices, coal sales volumes increased 13.7% compared to the 2025 Period primarily as a result of increased production at Tunnel Ridge due to improved recoveries, higher productivity, and fewer longwall move days during the 2026 Period. Other revenues increased by $21.1 million in the 2026 Period reflecting higher miscellaneous revenue activities. Segment Adjusted EBITDA Expense decreased 9.7% to $319.8 million in the 2026 Period from $354.2 million in the 2025 Period due primarily to lower per ton expenses, partially offset by increased sales volumes. Segment Adjusted EBITDA Expense per ton for the 2026 Period decreased by 20.6% compared to the 2025 Period as a result of increased production at our Tunnel Ridge operation as well as a higher sales mix of lower-cost Tunnel Ridge volumes.
Oil & Gas Royalties – Segment Adjusted EBITDA attributable to ARLP increased to a record $115.0 million in the 2026 Period compared to $85.2 million in the 2025 Period primarily due to increased sales volumes and higher average sales prices, partially offset by higher expenses. Oil & gas royalty volumes increased significantly in the 2026 Period primarily due to additional volumes from the AllDale III & IV Acquisition, increased drilling and completion activities on our interests, and other acquisitions of oil & gas mineral interests. Average sales price per BOE increased 11.0% compared to the 2025 Period.
Coal Royalties – Segment Adjusted EBITDA increased to $43.4 million in the 2026 Period compared to $38.3 million in the 2025 Period due to higher royalty tons sold, primarily from Tunnel Ridge and River View, partially offset by lower average royalty rates per ton received from the Partnership’s mining subsidiaries.
Reconciliation of Non-GAAP Financial Measures
Segment Adjusted EBITDA and Segment Adjusted EBITDA attributable to ARLP
We define Segment Adjusted EBITDA (a non-GAAP financial measure) as net income before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses adjusted for certain items that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA attributable to ARLP (a non-GAAP financial measure) is defined as Segment Adjusted EBITDA excluding amounts attributable to noncontrolling interests. Segment Adjusted EBITDA attributable to ARLP is a key component of consolidated Adjusted EBITDA attributable to ARLP, which is used as a supplemental financial measure by management and by external users of our financial statements such as investors, commercial banks, research analysts and others. We believe that the presentation of consolidated Adjusted EBITDA attributable to ARLP provides useful information to investors regarding our performance and results of operations because Adjusted EBITDA attributable to ARLP, when used in conjunction with related GAAP financial measures, (i) provides additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provides investors with the financial analytical framework upon which we base financial, operational, compensation and planning decisions and (iii) presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations.
Segment Adjusted EBITDA attributable to ARLP is also used as a supplemental measure by our management for reasons similar to those stated in the previous explanation of Adjusted EBITDA attributable to ARLP. In addition, the exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA attributable to ARLP allows management to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments, and also allows management to evaluate the portion of operating performance attributable to our unitholders and available for reinvestment or distribution.
44
Table of Contents
The following is a reconciliation of net income, the most comparable GAAP financial measure, to consolidated Segment Adjusted EBITDA and Segment Adjusted EBITDA attributable to ARLP:
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 |
| ||||||
(in thousands) | |||||||||||||
Net income | $ | 141,325 | $ | 96,818 | $ | 233,620 | $ | 233,403 | |||||
General and administrative |
| 27,113 |
| 21,373 |
| 76,990 |
| 62,333 | |||||
Depreciation, depletion and amortization |
| 82,279 |
| 78,211 |
| 245,910 |
| 223,180 | |||||
Asset impairments (1) |
| — |
| — |
| 37,820 |
| — | |||||
Interest expense, net |
| 15,252 |
| 10,351 |
| 38,925 |
| 26,600 | |||||
Change in fair value of digital assets | (16,488) | (3,739) | 1,486 | (11,021) | |||||||||
Unrealized loss on derivatives | 6,667 | — | 6,667 | — | |||||||||
Acquisition gain (2) | (6,327) | — | (6,327) | — | |||||||||
Impairment loss on investments (3) | — | — | — | 25,000 | |||||||||
Income tax expense |
| 19,042 |
| 5,886 |
| 27,968 |
| 15,416 | |||||
Consolidated Segment Adjusted EBITDA | $ | 268,863 | $ | 208,900 | $ | 663,059 | $ | 574,911 | |||||
Segment Adjusted EBITDA attributable to noncontrolling interest | (7,975) | (2,390) | (12,918) | (7,144) | |||||||||
Segment Adjusted EBITDA attributable to ARLP | $ | 260,888 | $ | 206,510 | $ | 650,141 | $ | 567,767 | |||||
| (1) | Non-cash asset impairment charges due to decision in January 2026 to cease longwall production at our Mettiki mining complex. |
| (2) | Gain recognized as a result of the remeasurement of our previously held equity method investment in AllDale III in connection with the AllDale III & IV Acquisition. |
| (3) | Impairment loss on investments related to an investment in convertible notes of a battery materials company. |
Segment Adjusted EBITDA Expense
We define Segment Adjusted EBITDA Expense (a non-GAAP financial measure) as the sum of operating expenses, coal purchases and other income or expenses as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations. Transportation expenses are excluded as these expenses are passed through to our customers and, consequently, we do not realize any gain or loss on transportation revenues. Segment Adjusted EBITDA Expense is used as a supplemental financial measure by our management to assess the operating performance of our segments. Segment Adjusted EBITDA Expense is a key component of Segment Adjusted EBITDA in addition to coal sales, royalty revenues and other revenues. The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses. We also review Segment Adjusted EBITDA Expense on a per ton basis for cost trends at our coal operations by dividing Segment Adjusted EBITDA expense by coal sales volumes.
The following is a reconciliation of operating expenses, the most comparable GAAP financial measure, to consolidated Segment Adjusted EBITDA Expense:
| Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||||
2026 | | 2025 | | 2026 | | 2025 |
| ||||||
(in thousands) | |||||||||||||
Operating expenses (excluding depreciation, depletion and amortization) | $ | 339,160 | $ | 354,604 | $ | 1,021,810 | $ | 1,040,328 | |||||
Outside coal purchases |
| — |
| 4,514 |
| — |
| 19,038 | |||||
Other expense (income) | 143 | 135 | (11,504) | (493) | |||||||||
Consolidated Segment Adjusted EBITDA Expense | $ | 339,303 | $ | 359,253 | $ | 1,010,306 | $ | 1,058,873 | |||||
45
Table of Contents
Liquidity and Capital Resources
Liquidity
We have historically satisfied our working capital requirements and funded our capital expenditures, investments, contractual obligations and debt service obligations with cash generated from operations, cash provided by the issuance of debt or equity, borrowings under credit and securitization facilities and other financing transactions. We believe that existing cash balances, future cash flows from operations and investments, borrowings under credit facilities and cash provided from the issuance of debt or equity will be sufficient to meet our working capital requirements, capital expenditures and additional investments, debt payments, contractual obligations, commitments and distribution payments. Nevertheless, our ability to satisfy our working capital requirements and additional investments, to satisfy our contractual obligations, to fund planned capital expenditures, to service our debt obligations or to pay distributions will depend upon our future operating performance and access to and cost of financing sources, which will be affected by prevailing economic conditions generally, and in both the coal and oil & gas industries specifically, as well as other financial and business factors, some of which are beyond our control. Based on our recent operating cash flow results, current cash position, anticipated future cash flows and sources of financing that we expect to have available, we anticipate being in compliance with the covenants of our credit agreements and expect to have sufficient liquidity to fund our operations and growth strategies. However, to the extent operating cash flow or access to and cost of financing sources are materially different than expected, future covenant compliance or liquidity may be adversely affected. Please read “Item 1A. Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2025.
Commodity Derivatives
In the AllDale III & IV Acquisition we acquired various derivative instruments entered into to mitigate the impact of commodity price volatility on cash generated from a portion of production on our oil & gas mineral interests. We have not designated our derivative instruments as fair value or cash flow hedges, even though they reduce our exposure to changes in oil and natural gas prices; therefore, the gains and losses arising from changes in fair value affect the amount of income we ultimately realize. We are not actively entering into new derivative instruments.
Our open derivative contracts consist of fixed-price swap contracts. Under fixed-price swap contracts, a counterparty is required to make a payment to us if the settlement price is less than the swap strike price. Conversely, we are required to make a payment to the counterparty if the settlement price is greater than the swap strike price. Our open oil derivative contracts as of September 30, 2026 are detailed in “Item 1. Financial Statements (Unaudited) – Note 8 – Derivative Financial Instruments.”
Unit Repurchase Program
We have $80.6 million remaining authorized under our unit repurchase program as of September 30, 2026. No units were repurchased during the nine months ended September 30, 2026. The program has no time limit and we may repurchase units from time to time in the open market or in other privately negotiated transactions. The unit repurchase program authorization does not obligate us to repurchase any dollar amount or number of units. The timing of any future unit repurchases and the ultimate number of units to be purchased will depend on several factors, including business and market conditions, our future financial performance, and other capital priorities. Please read “Part II - Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” of this Quarterly Report on Form 10-Q for more information on the unit repurchase program.
Accounts Receivable Securitization
In January 2026, we extended the term of the accounts receivable securitization facility (the “Securitization Facility”) to January 2027. The borrowing availability under the facility is a maximum of $75.0 million. For additional information on the Securitization Facility, please see “Item 1. Financial Statements (Unaudited) – Note 11 – Long-Term Debt.”
Alliance Minerals Term Loan
On July 1, 2026, Alliance Minerals, as borrower, entered into a term loan for an aggregate principal amount of $150.0 million (the “Alliance Minerals Term Loan”). The Alliance Minerals Term Loan matures on January 1, 2028. For
46
Table of Contents
additional information on the Alliance Minerals Term Loan, please see “Item 1. Financial Statements (Unaudited) – Note 11 – Long-Term Debt.”
AllDale III & IV Acquisition
On July 1, 2026, we completed the AllDale III & IV Acquisition for approximately $206.2 million, which was funded using a combination of cash on hand, borrowings under our revolving credit facility and proceeds from the Alliance Minerals Term Loan. For more information, please see “Item 1. Financial Statements (Unaudited) – Note 4 – Acquisitions.”
Two Mile Acquisition
On September 30, 2026, we completed the Two Mile Acquisition for approximately $16.7 million, which was funded with cash on hand. For more information, please see “Item 1. Financial Statements (Unaudited) – Note 4 – Acquisitions.”
Cash Flows
Cash provided by operating activities was $511.5 million for the 2026 Period compared to $507.3 million for the 2025 Period. The increase in cash provided by operating activities was primarily due to the increase in net income adjusted for non-cash items and favorable working capital changes primarily related to accrued payroll and related benefits, prepaid expenses and other miscellaneous changes compared to the 2025 Period. These increases were partially offset by unfavorable working capital changes primarily related to trade and other receivables and inventories compared to the 2025 Period.
Net cash used in investing activities was $462.5 million for the 2026 Period compared to $251.0 million for the 2025 Period. The increase in cash used in investing activities was primarily due to increased business combination acquisitions including the AllDale III & IV Acquisition in the 2026 Period as compared to the 2025 Period. This increase was partially offset by decreases in contributions to equity method investments and reduced capital expenditures during the 2026 Period.
Net cash used in financing activities was $35.5 million for the 2026 Period compared to $298.8 million for the 2025 Period. The decrease in cash used in financing activities was primarily attributable to increased borrowings under both the revolving credit facility and Securitization Facility, proceeds received under the Alliance Minerals Term Loan, and reduced distributions paid to partners in the 2026 Period as compared to the 2025 Period. These decreases were partially offset by increased payments on the revolving credit facility and Securitization Facility in the 2026 Period compared to the 2025 Period.
Cash Requirements
Management anticipates having sufficient cash flow to meet 2026 cash requirements, including capital expenditures, acquisitions of oil & gas mineral interests, scheduled payments on long-term debt, lease obligations, asset retirement obligation costs and workers’ compensation and pneumoconiosis costs, with our September 30, 2026 cash and cash equivalents of $84.8 million, cash flows from operations, or borrowings under our revolving credit facility and Securitization Facility, if necessary. We project average estimated annual maintenance capital expenditures over the next five years of approximately $7.23 per ton produced. Our anticipated total capital expenditures, including maintenance capital expenditures, for 2026 are estimated in the range of $270.0 million to $290.0 million. We will continue to have significant cash requirements over the long term, which may require us to incur debt or seek additional equity capital. The availability and cost of additional capital will depend upon prevailing market conditions, the market price of our common units and several other factors over which we have limited control, as well as our financial condition and results of operations.
Debt Obligations
See “Item 1. Financial Statements (Unaudited) – Note 11 – Long-Term Debt” of this Quarterly Report on Form 10-Q for a discussion of our long-term debt obligations.
47
Table of Contents
We also have an agreement with a bank to provide additional letters of credit in the amount of $5.0 million to maintain surety bonds to secure certain asset retirement obligations and our obligations for workers’ compensation benefits. On September 30, 2026, we had $5.0 million in letters of credit outstanding under this agreement.
Related-Party Transactions
We have related-party transactions and activities with Mr. Craft, MGP and their respective affiliates as well as other related parties. These related-party transactions and activities relate principally to (1) an installment purchase obligation with The Joseph W. Craft III Foundation resulting from our January 2026 acquisition of ownership interests in certain coal reserves and associated surface rights that we had previously been leasing from The Joseph W. Craft III Foundation and The Kathleen S. Craft Foundation, (2) the use of aircraft, (3) master supply and services agreements for the purchase and servicing of electronic components and other parts used in mining equipment, and (4) distributions associated with contribution and exchange agreements entered into with related parties of Mr. Craft in connection with the AllDale III & IV Acquisition on July 1, 2026. We also have related-party transactions with (a) WKY CoalPlay LLC, a company owned by entities related to Mr. Craft, regarding three mineral leases, and (b) entities in which we hold equity investments. For more information, please read “Item 1. Financial Statements (Unaudited) – Note 10 – Investments, Note 11 – Long-Term Debt, Note 16 – Noncontrolling Interests and Note 19 – Related-Party Transactions” of this Quarterly Report on Form 10-Q. Please read our Annual Report on Form 10-K for the year ended December 31, 2025, “Item 8. Financial Statements and Supplementary Data—Note 21 – Related-Party Transactions” for additional information concerning related-party transactions.
New Accounting Standards
See “Item 1. Financial Statements (Unaudited) – Note 2. New Accounting Standards” of this Quarterly Report on Form 10-Q for a discussion of new accounting standards.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Commodity Price Risk
We have significant long-term sales contracts. Many of the long-term sales contracts are subject to price adjustment provisions, which periodically permit an increase or decrease in the contract price, typically to reflect changes in specified indices or changes in production costs resulting from regulatory changes, or both.
Our results of operations are highly dependent upon the prices we receive for our coal, oil and natural gas. We have exposure to coal and oil & gas sales prices and price risk for supplies that are used directly or indirectly in the normal course of coal and oil & gas production such as electricity, steel and other supplies. Regarding coal, the short-term sales contracts favored by some of our coal customers leave us more exposed to risks of declining coal price periods. We manage our risk for these items through strategic sourcing contracts for normal quantities required by our operations.
Our oil & gas mineral interest royalties are exposed to the impact of fluctuations in the market price of oil, natural gas and NGLs, as well as other market factors, such as market volatility and energy commodity price correlations. Our portfolio consists of derivative contracts that hedge or could potentially hedge the price risk exposure from our oil and gas mineral interest royalties. The fair value of our derivative instruments was a net liability of $4.7 million at September 30, 2026. We have some risk associated with these market fluctuations through the various derivatives instruments we hold. The fair value of derivative contracts is subject to many factors, including changes in energy commodity market prices and the liquidity and volatility of the markets in which the contracts are transacted. See “Item 1. Financial Statements (Unaudited) – Note 8 – Derivative Financial Instruments” of this Quarterly Report on Form 10-Q for more information on our derivative instruments.
An assumed increase or decrease in crude oil forward prices used in the valuation of our crude oil fixed price swap derivatives of $5.00 per Bbl would increase or decrease our derivative liabilities by approximately $2.7 million as of September 30, 2026. However, any cash derivative gain or loss would be substantially offset by a decrease or increase, respectively, in the actual sales value of production not economically hedged by the derivative instruments.
48
Table of Contents
Credit Risk
Most of our coal is sold to U.S. electric utilities or into the international markets through brokered transactions. Therefore, our credit risk is primarily with domestic electric power generators and reputable global brokerage firms. Our policy is to independently evaluate each customer’s creditworthiness prior to entering into transactions and to constantly monitor outstanding accounts receivable. When deemed appropriate by our credit management department, we will take steps to reduce our credit exposure to customers that do not meet our credit standards or whose credit has deteriorated. These steps may include obtaining letters of credit or cash collateral, requiring prepayments for shipments or establishing customer trust accounts held for our benefit in the event of a failure to pay. Such credit risks from customers may impact the borrowing capacity of our Securitization Facility. See “Item 1. Financial Statements (Unaudited) – Note 11 – Long-Term Debt” of this Quarterly Report on Form 10-Q for more information on our Securitization Facility.
Our derivative financial instruments also expose us to credit risk in the event of non-performance by counterparties. While we do not require our counterparties to our derivative contracts to post collateral, we do evaluate the credit standing of such counterparties as we deem appropriate. This evaluation includes reviewing a counterparty’s credit rating. As of September 30, 2026, we had two counterparties, both of which are rated Baa1 or better by Moody’s.
Exchange Rate Risk
The majority of our transactions are denominated in United States dollars, and as a result, we do not have material exposure to currency exchange-rate risks. However, because we periodically sell our coal internationally in United States dollars, general economic conditions in foreign markets and changes in foreign currency exchange rates may provide our foreign competitors with a competitive advantage. If our competitors’ currencies decline against the United States dollar or against foreign purchasers’ local currencies, those competitors may be able to offer lower prices for coal to these purchasers. Furthermore, if the currencies of overseas purchasers were to significantly decline in value in comparison to the United States dollar, those purchasers may seek decreased prices for the coal we sell to them. Consequently, currency fluctuations could adversely affect the competitiveness of our coal in international markets.
Interest Rate Risk
Borrowings under our revolving credit facility and related term loan, Securitization Facility and Alliance Minerals Term Loan are at variable rates and, as a result, we have interest rate exposure on any amounts drawn under these facilities. Historically, our earnings have not been materially affected by changes in interest rates and we have not utilized interest rate derivative instruments related to our outstanding debt. We had $80.0 million outstanding under the revolving credit facility, $20.0 million outstanding under the Securitization Facility, $21.1 million in borrowings under Alliance Coal Term Loan and $131.3 million in borrowings under Alliance Minerals Term Loan at September 30, 2026.
There were no other changes in our quantitative and qualitative disclosures about market risk as set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 4.CONTROLS AND PROCEDURES
We maintain controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports we file with the Securities and Exchange Commission (“SEC”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act) as of September 30, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these controls and procedures are effective as of September 30, 2026.
There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) identified in connection with our evaluation that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarterly period ended September 30, 2026.
49
Table of Contents
FORWARD-LOOKING STATEMENTS
Certain statements and information in this Quarterly Report on Form 10-Q, and certain oral statements made from time to time by our representatives, constitute “forward-looking statements.” These statements are based on our beliefs as well as assumptions made by, and information currently available to, us. When used in this document, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “may,” “outlook,” “plan,” “project,” “potential,” “should,” “will,” “would,” and similar expressions identify forward-looking statements. Without limiting the foregoing, all statements relating to our future outlook, anticipated capital expenditures, future cash flows and borrowings, and sources of funding are forward-looking statements. These forward-looking statements are based on our current expectations and beliefs concerning future developments and reflect our current views with respect to future events and are subject to numerous assumptions that we believe are reasonable, but are open to a wide range of uncertainties and business risks, and actual results could differ materially from those discussed in these statements. Among the factors that could cause actual results to differ from those in the forward-looking statements are:
| ● | decline in the coal industry’s share of electricity generation, including as a result of environmental concerns related to coal mining and combustion, the cost and perceived benefits of other sources of electricity and fuels, such as oil & gas, nuclear energy, and renewable fuels and the retirement of coal-fired power plants in the U.S.; |
| ● | our ability to provide fuel for growth in domestic energy demand, should it materialize; |
| ● | changes in macroeconomic and market conditions and market volatility, and the impact of such changes and volatility on our financial position; |
| ● | changes in global economic and geo-political conditions or changes in industries in which our customers operate; |
| ● | changes in commodity prices, demand and availability which could affect our operating results and cash flows; |
| ● | impacts of geopolitical events, including the conflicts in Ukraine and in the Middle East, including Iran and disruption of maritime traffic through the Strait of Hormuz; |
| ● | actions of the major oil-producing countries with respect to oil production volumes and prices and the direct and indirect impacts over the near and long term on oil & gas exploration and production operations at the properties in which we hold mineral interests; |
| ● | changes in competition in domestic and international coal markets and our ability to respond to such changes; |
| ● | potential shut-ins of production by the operators of the properties in which we hold oil & gas mineral interests due to low commodity prices or the lack of downstream demand or storage capacity; |
| ● | risks associated with the expansion of and investments into the infrastructure of our operations and properties, including the timing of such investments coming online; |
| ● | our ability to identify and complete acquisitions and to successfully integrate such acquisitions into our business and achieve the anticipated benefits therefrom; |
| ● | our ability to identify and invest in new energy and infrastructure ventures; |
| ● | the success of our development and growth plans for our wholly owned subsidiary, Matrix Design Group, LLC, and our investments in emerging and other infrastructure and technology companies; |
| ● | dependence on significant customer contracts, and failure of customers to renew existing contracts upon expiration; |
| ● | adjustments made in price, volume, or terms to existing coal supply agreements; |
| ● | the effects of and changes in trade, monetary and fiscal policies and laws, and the results of central bank policy actions, including interest rates, bank failures, and associated liquidity risks; |
| ● | the effects of and changes in taxes or tariffs and other trade measures adopted or threatened by the United States and foreign governments, including the imposition of or increase in tariffs on steel and/or other raw materials; |
| ● | legislation, regulations, and court decisions and interpretations thereof, both domestic and foreign, including those relating to the environment and the release of greenhouse gases, such as state legislation seeking to impose liability on a wide range of energy companies under greenhouse gas “superfund” laws, mining, miner health and safety, hydraulic fracturing, and health care; |
| ● | deregulation of the electric utility industry or the effects of any adverse change in the coal industry, electric utility industry, or general economic conditions; |
| ● | investors’ and other stakeholders’ attention to sustainability matters; |
| ● | liquidity constraints, including those resulting from any future unavailability of financing; |
| ● | customer bankruptcies, cancellations or breaches to existing contracts, or other failures to perform; |
| ● | customer delays, failure to take coal under contracts or defaults in making payments; |
| ● | our productivity levels and margins earned on our coal sales; |
| ● | disruptions to oil & gas exploration and production operations at the properties in which we hold mineral interests; |
50
Table of Contents
| ● | changes in equipment, raw material, service or labor costs or availability, including due to inflationary pressures or tariffs; |
| ● | changes in our ability to recruit, hire and maintain labor; |
| ● | our ability to maintain satisfactory relations with our employees; |
| ● | increases in labor costs, including increases in the costs of health insurance, adverse changes in work rules, or cash payments or projections associated with workers’ compensation claims; |
| ● | increases in transportation costs and risk of transportation delays or interruptions; |
| ● | operational interruptions due to geologic, permitting, labor, weather, supply chain shortage of equipment or mine supplies, or other factors; |
| ● | risks associated with major mine-related accidents, mine fires, mine floods or other interruptions; |
| ● | results of litigation, including claims not yet asserted; |
| ● | foreign currency fluctuations that could adversely affect the competitiveness of our coal abroad; |
| ● | difficulty maintaining our surety bonds for mine reclamation as well as workers’ compensation and black lung benefits; |
| ● | difficulty in making accurate assumptions and projections regarding post-mine reclamation as well as pension, black lung benefits, and other post-retirement benefit liabilities; |
| ● | uncertainties in estimating and replacing our coal mineral reserves and resources; |
| ● | uncertainties in estimating and replacing our oil & gas reserves; |
| ● | uncertainties in the amount of oil & gas production due to the level of drilling and completion activity by the operators of our oil & gas properties; |
| ● | the impact of current and potential changes to federal or state tax rules and regulations, including a loss or reduction of benefits from certain tax deductions and credits; |
| ● | difficulty obtaining commercial property insurance, and risks associated with our participation in the commercial insurance property program; |
| ● | evolving cybersecurity risks, such as those involving unauthorized access, denial-of-service attacks, malicious software, data privacy breaches by employees, insiders or others with authorized access, cyber or phishing attacks, ransomware, malware, social engineering, physical breaches, or other actions; |
| ● | difficulty in making accurate assumptions and projections regarding future revenues and costs associated with equity investments in companies we do not control; and |
| ● | other factors, including those discussed in “Item 1A. Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2025, and “Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2025. |
If one or more of these or other risks or uncertainties materialize, or should our underlying assumptions prove incorrect, our actual results could differ materially from those described in any forward-looking statement. When considering forward-looking statements, you should also keep in mind our risk factors and legal proceedings. Known material factors that could cause our actual results to differ from those in the forward-looking statements are described in “Item 1. Legal Proceedings” and “Item 1A. Risk Factors” below. We disclaim any obligation to update or revise any forward-looking statements or to announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments unless required by law.
You should consider the information above when reading or considering any forward-looking statements contained in:
| ● | this Quarterly Report on Form 10-Q; |
| ● | other reports filed by us with the SEC; |
| ● | our press releases; |
| ● | our website www.arlp.com; and |
| ● | written or oral statements made by us or any of our officers or other authorized persons acting on our behalf. |
51
Table of Contents
PART II
OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
The information in Note 14. Contingencies to the Unaudited Condensed Consolidated Financial Statements included in "Part I. Item 1. Financial Statements (Unaudited)" of this Quarterly Report on Form 10-Q herein is hereby incorporated by reference. See also "Item 3. Legal Proceedings" of our Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 1A.RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I - Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results. The risks described in these reports are not our only risks. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial based on current knowledge and factual circumstances, if such knowledge or facts change, also may materially adversely affect our business, financial condition and/or operating results in the future.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In January 2023, the board of directors authorized us to repurchase up to a total of $100.0 million of ARLP common units from that date. We have $80.6 million remaining authorized under our unit repurchase program as of September 30, 2026. The unit repurchase program is intended to enhance ARLP’s ability to achieve its goal of creating long-term value for its unitholders and provides another means, along with quarterly cash distributions, of returning cash to unitholders. The program has no time limit and ARLP may repurchase units from time to time in the open market or in other privately negotiated transactions. The unit repurchase program authorization does not obligate ARLP to repurchase any dollar amount or number of units and repurchases may be commenced or suspended from time to time without prior notice.
During the three months ended September 30, 2026, we did not repurchase and retire any units pursuant to the unit repurchase program. ARLP has had a unit repurchase program in place since May 31, 2018 and since its inception, we have repurchased and retired 6,390,446 units at an average unit price of $17.67 for an aggregate purchase price of $112.9 million.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.MINE SAFETY DISCLOSURES
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q.
ITEM 5.OTHER INFORMATION
During the three months ended September 30, 2026, no
52
Table of Contents
ITEM 6.EXHIBITS
Incorporated by Reference | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit | Exhibit Description | Form | SEC | Exhibit | Filing Date | Filed | ||||||||||||||
3.1 | Amended and Restated Certificate of Limited Partnership of Alliance Resource Partners, L.P. | 8-K | 000-26823 17990766 | 3.6 | 07/28/2017 | |||||||||||||||
3.2 | Fourth Amended and Restated Agreement of Limited Partnership of Alliance Resource Partners, L.P. | 8-K | 000-26823 17990766 | 3.2 | 07/28/2017 | |||||||||||||||
3.3 | Amendment No. 1 to Fourth Amended and Restated Agreement of Limited Partnership of Alliance Resource Partners, L.P. | 10-K | 000-26823 18634634 | 3.9 | 02/23/2018 | |||||||||||||||
3.4 | Amendment No. 2 to Fourth Amended and Restated Agreement of Limited Partnership of Alliance Resource Partners, L.P. | 8-K | 000-26823 18883834 | 3.3 | 06/06/2018 | |||||||||||||||
3.5 | Amendment No. 3 to Fourth Amended and Restated Agreement of Limited Partnership of Alliance Resource Partners, L.P. | 8-K | 000-26823 18883834 | 3.4 | 06/06/2018 | |||||||||||||||
3.6 | Certificate of Limited Partnership of Alliance Resource Operating Partners, L.P. | S-1/A | 333-78845 99669102 | 3.8 | 07/23/1999 | |||||||||||||||
3.7 | First Amendment to Certificate of Limited Partnership of Alliance Resource Operating Partners, L.P. | 10-Q | 000-26823 241184062 | 3.7 | 08/07/2024 | |||||||||||||||
3.8 | Second Amendment to Certificate of Limited Partnership of Alliance Resource Operating Partners, L.P. | 10-Q | 000-26823 241184062 | 3.8 | 08/07/2024 | |||||||||||||||
3.9 | Third Amendment to Certificate of Limited Partnership of Alliance Resource Operating Partners, L.P. | 10-Q | 000-26823 241184062 | 3.9 | 08/07/2024 | |||||||||||||||
3.10 | Amended and Restated Agreement of Limited Partnership of Alliance Resource Operating Partners, L.P. | 10-K | 000-26823 583595 | 3.2 | 03/29/2000 | |||||||||||||||
3.11 | Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of Alliance Resource Operating Partners, L.P. | 8-K | 000-26823 18883834 | 3.5 | 06/06/2018 | |||||||||||||||
3.12 | Certificate of Formation of Alliance Resource Management GP, LLC | S-1/A | 333-78845 99669102 | 3.7 | 07/23/1999 | |||||||||||||||
3.13 | Third Amended and Restated Operating Agreement of Alliance Resource Management GP, LLC | 8-K | 000-26823 18883834 | 3.7 | 06/06/2018 | |||||||||||||||
53
Table of Contents
Incorporated by Reference | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit | Exhibit Description | Form | SEC | Exhibit | Filing Date | Filed | ||||||||||||||
3.14 | Certificate of Formation of MGP II, LLC | 8-K | 000-26823 17990766 | 3.5 | 07/28/2017 | |||||||||||||||
3.15 | Amended and Restated Operating Agreement of MGP II, LLC | 8-K | 000-26823 17990766 | 3.4 | 07/28/2017 | |||||||||||||||
10.1 | Subscription Agreement for Partnership Interest in AllDale Minerals III, LP and Membership Interest in AllDale Minerals Management III, LLC, dated July 1, 2026, by and among Alliance Minerals, LLC, AllDale Minerals III, LP, AllDale Minerals Management III, LLC and Dale Operating Company. | 10-Q | 000-26823 261249123 | 10.1 | 08/06/2026 | |||||||||||||||
10.2 | Subscription Agreement for Partnership Interest in AllDale Minerals IV, LP and Membership Interest in AllDale Minerals Management IV, LLC, dated July 1, 2026, by and among Alliance Minerals, LLC, AllDale Minerals IV, LP, AllDale Minerals Management IV, LLC and Dale Operating Company. | 10-Q | 000-26823 261249123 | 10.2 | 08/06/2026 | |||||||||||||||
10.3 | Contribution and Exchange Agreement, dated July 1, 2026, by and among AllDale Minerals Management III, LLC, AllDale Minerals III, LP, Alliance Minerals, LLC, KC-AllDale, LLC, The Joseph W. Craft III Foundation, CC OilPlay LLC and AllRoy GP, LLC. | 10-Q | 000-26823 261249123 | 10.3 | 08/06/2026 | |||||||||||||||
10.4 | Contribution and Exchange Agreement, dated July 1, 2026, by and among AllDale Minerals Management IV, LLC, AllDale Minerals IV, LP, Alliance Minerals, LLC, KC-AllDale IV, LLC and AllRoy GP, LLC. | 10-Q | 000-26823 261249123 | 10.4 | 08/06/2026 | |||||||||||||||
10.5 | Master Supply, Distribution, and Services Agreement, dated July 1, 2026, by and between Saminco Solutions LLC and Matrix Design Africa (PTY) LTD. | 10-Q | 000-26823 261249123 | 10.5 | 08/06/2026 | |||||||||||||||
10.6 | Credit Agreement, dated July 1, 2026, among Alliance Resource Partners, L.P., Alliance Resource Operating Partners, L.P., Alliance Minerals, LLC, the lenders party thereto from time to time, and Truist Bank, as Administrative Agent. | 10-Q | 000-26823 261249123 | 10.6 | 08/06/2026 | |||||||||||||||
54
Table of Contents
Incorporated by Reference | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit | Exhibit Description | Form | SEC | Exhibit | Filing Date | Filed | ||||||||||||||
31.1 | Certification of Joseph W. Craft III, President and Chief Executive Officer of Alliance Resource Management GP, LLC, the general partner of Alliance Resource Partners, L.P., dated November 6, 2026, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| ||||||||||||||||||
31.2 | Certification of Cary P. Marshall, Senior Vice President and Chief Financial Officer of Alliance Resource Management GP, LLC, the general partner of Alliance Resource Partners, L.P., dated November 6, 2026, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| ||||||||||||||||||
32.1 | Certification of Joseph W. Craft III, President and Chief Executive Officer of Alliance Resource Management GP, LLC, the general partner of Alliance Resource Partners, L.P., dated, November 6, 2026, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| ||||||||||||||||||
32.2 | Certification of Cary P. Marshall, Senior Vice President and Chief Financial Officer of Alliance Resource Management GP, LLC, the general partner of Alliance Resource Partners, L.P., dated November 6, 2026, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| ||||||||||||||||||
95.1 | Federal Mine Safety and Health Act Information |
| ||||||||||||||||||
101 | Interactive Data File (Form 10-Q for the quarter ended September 30, 2026 filed in Inline XBRL). |
| ||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| ||||||||||||||||||
* Or furnished, in the case of Exhibits 32.1 and 32.2.
55
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in Tulsa, Oklahoma, on November 6, 2026.
ALLIANCE RESOURCE PARTNERS, L.P. | |||
By: | Alliance Resource Management GP, LLC | ||
its general partner | |||
/s/ Joseph W. Craft, III | |||
Joseph W. Craft, III | |||
Chairman, President and Chief Executive | |||
Officer, duly authorized to sign on behalf | |||
/s/ Megan J. Cordle | |||
Megan J. Cordle | |||
Vice President, Controller and | |||
Chief Accounting Officer | |||
56