We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Name | Symbol | Market | Type |
|---|---|---|---|
| Alliance Resource Partners LP | NASDAQ:ARLP | NASDAQ | Trust |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.58 | -6.13% | 24.21 | 24.22 | 24.28 | 25.00 | 23.56 | 25.00 | 796,245 | 20:02:02 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | Commission | (IRS Employer |
(Address of principal executive offices and zip code)
(
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
On July 29, 2024, Alliance Resource Partners, L.P. (the "Partnership") announced, via press release, its quarterly earnings and operating results for the quarter ended June 30, 2024. A copy of the Partnership's press release is attached hereto as Exhibit 99.1.
ITEM 5.02. | DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. |
On July 26, 2024, the Partnership announced, via press release, that on July 24, 2024, John H. Robinson notified Alliance Resource Management GP, LLC ("MGP"), the general partner of the Partnership, that he will retire from the board of directors of MGP (the "Board of Directors") at the end of the year. Mr. Robinson's decision to retire is not the result of any disagreement with Partnership or the Board of Directors on any matters relating to the Partnership's operations, policies or practices. The Partnership also announced that Paul H. Vining has been elected to the Board of Directors and will serve as lead director but will not serve on any committee of the Board of Directors. In such capacity, Mr. Vining will assist the Board of Directors and the Partnership's management team on planning and other initiatives as directed from time to time by the Board of Directors or Mr. Craft.
Prior to his election to the Board of Directors, Mr. Vining received $30,000 a month (plus reimbursement for reasonable expenses) as a consultant to the Partnership throughout 2023 and through the date of his election. Following his election to the Board of Directors, Mr. Vining will no longer provide consulting services to the Partnership.
A copy of the Partnership's press release is attached hereto as Exhibit 99.2.
ITEM 8.01. | OTHER EVENTS. |
On July 26, 2024, the Partnership announced, via press release, that the Board of Directors approved a cash distribution for the quarter ended June 30, 2024 of $0.70 per unit to unitholders of record as of the close of trading on August 7, 2024, payable August 14, 2024. A copy of the Partnership's press release is attached hereto as Exhibit 99.2.
Concurrent with the notice of his retirement, Mr. Robinson stepped down from his role as Chairman of the Compensation Committee, but he will remain a member of the Audit, Compensation and Conflicts Committees until his retirement at the end of the year. Board of Director member Nick Carter, who is a member of the Compensation Committee, has been appointed as Chairman of such committee. In addition, Wilson M. Torrence, who is the Chairman of the Audit Committee, has been appointed as a member of the Conflicts Committee.
In addition to news regarding the Board of Directors, the Partnership is announcing that Mark A. Watson has been promoted to the role of Senior Vice President – Operations and Technology of MGP.
The information furnished in these Items 2.02 and 8.01 including information in Exhibits 99.1 and 99.2 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically referenced in any such filings.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit |
| Description | |
99.1 | Alliance Resource Partners, L.P. press release dated July 29, 2024. | ||
99.2 | Alliance Resource Partners, L.P. press release dated July 26, 2024. | ||
104 | Cover Page Interactive Data File (formatted as inline XBRL). | ||
2
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 hereunto duly authorized.
Alliance Resource Partners, L.P. | ||
By: | Alliance Resource Management GP, LLC, | |
its general partner | ||
By: | /s/ Cary P. Marshall | |
Cary P. Marshall | ||
Senior Vice President and Chief Financial Officer | ||
Date: July 29, 2024
3
Exhibit 99.1
PRESS RELEASE
ALLIANCE RESOURCE PARTNERS, L.P.
Reports Second Quarter Financial and Operating Results; Declares Quarterly Cash Distribution of $0.70 Per Unit and Updates 2024 Guidance
2024 Quarter Highlights
| ● | Second quarter 2024 total revenue of $593.4 million, net income of $100.2 million, and EBITDA of $177.7 million |
| ● | Coal sales price realizations of $65.30 per ton sold, up 3.8% year-over-year |
| ● | Increased oil & gas royalty volumes to 817 MBOE, up 6.8% year-over-year |
| ● | In June 2024, issued $400 million in 8.625% Senior Notes due 2029 and redeemed outstanding balance of Senior Notes due 2025 |
| ● | Extended revolving credit facility maturity to March 2028 |
| ● | Enhanced liquidity position to $666.0 million, which included $203.7 million in cash and $462.3 million of borrowings available under credit facilities |
| ● | In July 2024, declared quarterly cash distribution of $0.70 per unit, or $2.80 per unit annualized |
TULSA, OKLAHOMA, July 29, 2024 — Alliance Resource Partners, L.P. (NASDAQ: ARLP) ("ARLP" or the "Partnership") today reported financial and operating results for the three and six months ended June 30, 2024 (the "2024 Quarter" and "2024 Period," respectively). This release includes comparisons of results to the three and six months ended June 30, 2023 (the "2023 Quarter" and "2023 Period," respectively) and to the quarter ended March 31, 2024 (the "Sequential Quarter"). All references in the text of this release to "net income" refer to "net income attributable to ARLP." For a definition of EBITDA and related reconciliation to its comparable GAAP financial measure, please see the end of this release.
Total revenues in the 2024 Quarter decreased 7.6% to $593.4 million compared to $641.8 million for the 2023 Quarter primarily as a result of reduced coal sales volumes, which declined 11.8% primarily due to transportation delays, partially offset by increased coal sales price realizations, which rose 3.8% to $65.30 per ton sold in the 2024 Quarter compared to $62.93 per ton sold in the 2023 Quarter. Net income for the 2024 Quarter was $100.2 million, or $0.77 per basic and diluted limited partner unit, compared to $169.8 million, or $1.30 per basic and diluted limited partner unit, for the 2023 Quarter as a result of lower revenues and increased total operating expenses. EBITDA for the 2024 Quarter was $177.7 million compared to $249.2 million in the 2023 Quarter.
Page 1
Compared to the Sequential Quarter, total revenues in the 2024 Quarter decreased 9.0% primarily as a result of lower tons sold. Lower revenues and a $3.7 million reduction in the fair value of our digital assets, partially offset by reduced operating expenses, reduced net income and EBITDA by 36.6% and 24.4%, respectively, compared to the Sequential Quarter.
Total revenues decreased 4.6% to $1.25 billion for the 2024 Period compared to $1.30 billion for the 2023 Period primarily due to lower coal sales, partially offset by higher oil & gas royalties and other revenues. Net income for the 2024 Period was $258.2 million, or $1.98 per basic and diluted limited partner unit, compared to $361.0 million, or $2.75 per basic and diluted limited partner unit, for the 2023 Period as a result of lower revenues and increased total operating expenses. EBITDA for the 2024 Period was $412.7 million compared to $520.1 million in the 2023 Period.
CEO Commentary
"During the 2024 Quarter we enhanced our liquidity position," highlighted Joseph W. Craft III, Chairman, President, and Chief Executive Officer. "The successful completion of our Senior Notes offering further strengthened our balance sheet and represents a vote of confidence from the capital markets for our business strategy and plans for execution. As we have said time and again, reliable, affordable, baseload energy is a cornerstone of our nation’s economy, and our strong financial position means we are well-positioned to provide strategic energy supply from our well-capitalized and strategically located coal mines and growing minerals acreage portfolio for many years to come."
"Coal sales volumes during the 2024 Quarter were impacted by flooding on the Ohio River delaying barge deliveries. Rail and port logistics were disrupted by the Baltimore bridge incident, which as time progressed impacted shipments from our Appalachia rail operations. These delays, combined with lower export sales, lifted our inventories higher by 0.8 million tons compared to the Sequential Quarter," commented Mr. Craft. "Our well-contracted order book continued to provide stability for our business, delivering improvements in coal sales pricing per ton compared to both the 2023 Quarter and the Sequential Quarter. Additionally, our Oil & Gas Royalties segment reported a 6.8% increase in BOE volumes year-over-year during the 2024 Quarter as our Permian-weighted minerals portfolio continues to realize production growth from recently drilled and completed wells."
Page 2
Segment Results and Analysis
|
| | |
| | |
| % Change |
| | |
| |
| |
| | 2024 Second | | 2023 Second | | Quarter / | | 2024 First | | % Change | |||||
(in millions, except per ton and per BOE data) | | Quarter | | Quarter | | Quarter | | Quarter | | Sequential | |||||
| | | | | | | | | | | | | | | |
Coal Operations (1) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Illinois Basin Coal Operations | | | | | | | | | | | | | | | |
Tons sold |
| | 5.787 |
| | 6.066 |
| (4.6) | % |
| | 6.437 |
| (10.1) | % |
Coal sales price per ton sold | | $ | 57.37 | | $ | 54.70 |
| 4.9 | % |
| $ | 57.58 |
| (0.4) | % |
Segment Adjusted EBITDA Expense per ton | | $ | 37.35 | | $ | 35.39 |
| 5.5 | % |
| $ | 36.21 |
| 3.1 | % |
Segment Adjusted EBITDA | | $ | 118.0 | | $ | 119.6 |
| (1.3) | % |
| $ | 140.3 |
| (15.9) | % |
| | | | | | | | | | | | | | | |
Appalachia Coal Operations | | | | | | | | | | | | | | | |
Tons sold | |
| 2.064 | |
| 2.838 |
| (27.3) | % |
|
| 2.237 |
| (7.7) | % |
Coal sales price per ton sold | | $ | 87.54 | | $ | 80.52 |
| 8.7 | % |
| $ | 85.49 |
| 2.4 | % |
Segment Adjusted EBITDA Expense per ton | | $ | 66.26 | | $ | 42.04 |
| 57.6 | % |
| $ | 52.53 |
| 26.1 | % |
Segment Adjusted EBITDA | | $ | 45.3 | | $ | 109.6 |
| (58.6) | % |
| $ | 74.2 |
| (39.0) | % |
| | | | | | | | | | | | | | | |
Total Coal Operations | | | | | | | | | | | | | | | |
Tons sold | |
| 7.851 | |
| 8.904 |
| (11.8) | % |
|
| 8.674 |
| (9.5) | % |
Coal sales price per ton sold | | $ | 65.30 | | $ | 62.93 |
| 3.8 | % |
| $ | 64.78 |
| 0.8 | % |
Segment Adjusted EBITDA Expense per ton | | $ | 45.37 | | $ | 37.85 |
| 19.9 | % |
| $ | 40.85 |
| 11.1 | % |
Segment Adjusted EBITDA | | $ | 160.2 | | $ | 226.2 |
| (29.2) | % |
| $ | 210.9 |
| (24.0) | % |
| | | | | | | | | | | | | | | |
Royalties (1) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Oil & Gas Royalties | | | | | | | | | | | | | | | |
BOE sold (2) | |
| 0.817 | |
| 0.765 |
| 6.8 | % |
|
| 0.898 | | (9.0) | % |
Oil percentage of BOE | | | 43.6 | % | | 45.2 | % | (3.5) | % | | | 44.2 | % | (1.4) | % |
Average sales price per BOE (3) | | $ | 44.60 | | $ | 43.27 |
| 3.1 | % |
| $ | 41.22 |
| 8.2 | % |
Segment Adjusted EBITDA Expense | | $ | 4.6 | | $ | 3.6 |
| 30.1 | % |
| $ | 4.9 |
| (6.2) | % |
Segment Adjusted EBITDA | | $ | 31.3 | | $ | 29.1 |
| 7.6 | % |
| $ | 31.4 |
| (0.5) | % |
| | | | | | | | | | | | | | | |
Coal Royalties | | | | | | | | | | | | | | | |
Royalty tons sold | | | 4.973 |
| | 5.118 |
| (2.8) | % |
| | 5.512 |
| (9.8) | % |
Revenue per royalty ton sold | | $ | 3.33 | | $ | 3.24 |
| 2.8 | % |
| $ | 3.39 |
| (1.8) | % |
Segment Adjusted EBITDA Expense | | $ | 6.6 | | $ | 5.6 |
| 18.5 | % |
| $ | 6.3 |
| 5.9 | % |
Segment Adjusted EBITDA | | $ | 10.0 | | $ | 11.0 |
| (9.3) | % |
| $ | 12.4 |
| (20.0) | % |
| | | | | | | | | | | | | | | |
Total Royalties | | | | | | | | | | | | | | | |
Total royalty revenues | | $ | 53.0 | | $ | 50.0 | | 6.1 | % | | $ | 56.1 | | (5.4) | % |
Segment Adjusted EBITDA Expense | | $ | 11.3 | | $ | 9.2 |
| 23.0 | % |
| $ | 11.2 |
| 0.6 | % |
Segment Adjusted EBITDA | | $ | 41.2 | | $ | 40.0 |
| 3.0 | % |
| $ | 43.8 |
| (6.0) | % |
| | | | | | | | | | | | | | | |
Consolidated Total | | | | | | | | | | | | | | | |
Total revenues | | $ | 593.4 | | $ | 641.8 | | (7.6) | % | | $ | 651.7 | | (9.0) | % |
Segment Adjusted EBITDA Expense | | $ | 363.2 | | $ | 338.4 |
| 7.3 | % |
| $ | 358.3 |
| 1.4 | % |
Segment Adjusted EBITDA | | $ | 202.0 | | $ | 269.4 |
| (25.0) | % |
| $ | 260.6 |
| (22.5) | % |
| (1) | For definitions of Segment Adjusted EBITDA Expense and Segment Adjusted EBITDA and related reconciliations to comparable GAAP financial measures, please see the end of this release. Segment Adjusted EBITDA Expense per ton is defined as Segment Adjusted EBITDA Expense – Coal Operations (as reflected in the reconciliation table at the end of this release) divided by total tons sold. |
| (2) | Barrels of oil equivalent ("BOE") for natural gas volumes is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel). |
| (3) | Average sales price per BOE is defined as oil & gas royalty revenues excluding lease bonus revenue divided by total BOE sold. |
Page 3
Coal Operations
In the Illinois Basin, coal sales prices increased by 4.9% compared to the 2023 Quarter as a result of improved domestic price realizations. In Appalachia, coal sales price per ton increased by 8.7% and 2.4% compared to the 2023 Quarter and Sequential Quarter, respectively, due primarily to increased domestic pricing from our Tunnel Ridge mine. Sales volumes decreased by 4.6% and 10.1% in the Illinois Basin compared to the 2023 Quarter and Sequential Quarter, respectively, due primarily to decreased tons sold from our Hamilton mine due to reduced domestic demand, partially offset by increased export sales volumes from our Gibson South operation. Appalachian coal sales volumes during the 2024 Quarter decreased by 27.3% and 7.7% compared to the 2023 Quarter and Sequential Quarter, respectively, primarily due to logistical challenges caused by flooding on the Ohio River and rail and port logistics complications caused by the Baltimore bridge collapse on March 26, 2024. ARLP ended the 2024 Quarter with total coal inventory of 2.6 million tons, representing an increase of 0.8 million tons and 0.7 million tons compared to the end of the 2023 Quarter and Sequential Quarter, respectively.
Segment Adjusted EBITDA Expense per ton for the 2024 Quarter increased by 5.5% and 3.1% in the Illinois Basin compared to the 2023 Quarter and Sequential Quarter, respectively, due primarily to reduced production at our Hamilton mine and lower recoveries at our River View operation. The lower recoveries at River View were attributable to the initial mining in the #11 seam that was necessary to slope into the # 9 seam at the new Henderson County mine, which was completed earlier this month. In Appalachia, Segment Adjusted EBITDA Expense per ton for the 2024 Quarter increased by 57.6% and 26.1% compared to the 2023 Quarter and Sequential Quarter, respectively, due to reduced production across the region as a result of longwall moves at our Tunnel Ridge and Mettiki mines and challenging mining conditions at all three operations, resulting in lowered recoveries, equipment availability and increased costs related to roof control and maintenance during the 2024 Quarter.
Royalties
Segment Adjusted EBITDA for the Oil & Gas Royalties segment increased 7.6% to $31.3 million in the 2024 Quarter compared to $29.1 million in the 2023 Quarter due to increased oil & gas volumes, which rose 6.8% to 817 MBOE sold in the 2024 Quarter compared to 765 MBOE in the 2023 Quarter as a result of increased drilling and completion activities on our interests, acquisitions of additional oil & gas mineral interests, and higher average sales price per BOE, which increased by 3.1%. Segment Adjusted EBITDA was in-line with the Sequential Quarter as lower volumes were primarily offset by higher prices and decreased expenses.
Segment Adjusted EBITDA for the Coal Royalties segment in the 2024 Quarter decreased by $1.0 million and $2.4 million compared to the 2023 Quarter and Sequential Quarter, respectively. Lower royalty tons sold due to lower sales volumes at our Hamilton and River View operations contributed to lower Segment Adjusted EBITDA for the 2024 Quarter.
Page 4
As of June 30, 2024, total debt and finance leases outstanding were $503.9 million, including $400 million in newly issued Senior Notes due 2029. The Partnership’s total and net leverage ratios were 0.61 times and 0.36 times debt to trailing twelve months Adjusted EBITDA, respectively, as of June 30, 2024. ARLP ended the 2024 Quarter with total liquidity of $666.0 million, which included $203.7 million of cash and cash equivalents and $462.3 million of borrowings available under its revolving credit and accounts receivable securitization facilities.
During the 2024 Quarter, the Partnership issued $400 million in 8.625% Senior Notes due 2029 and redeemed the outstanding balance of $284.6 million in ARLP's 7.5% Senior Notes due 2025. The Partnership also amended its revolving credit facility to extend the maturity date to March 9, 2028.
Distributions
On July 26, 2024, we announced that the Board of Directors of ARLP’s general partner (the "Board") approved a cash distribution to unitholders for the 2024 Quarter of $0.70 per unit (an annualized rate of $2.80 per unit), payable on August 14, 2024, to all unitholders of record as of the close of trading on August 7, 2024. The announced distribution is consistent with the cash distributions for the 2023 Quarter and Sequential Quarter.
Outlook
"For the first half of 2024, utility coal burn has been essentially flat with 2023," commented Mr. Craft. "Since the start of this summer, cooling demand has been strong across many parts of the country driven by recent record-breaking temperatures and accelerating coal-based power generation. This is encouraging considering the very mild 2024 winter and persistently low natural gas prices. At the same time, while demand is holding up, U.S. thermal coal production has slowed significantly (Eastern U.S. production down 11% year-over-year) as utilities are relying on consuming coal from their elevated inventories to meet this demand. Weather forecasts suggest this heat wave will continue through August and an industry publication is projecting demand will exceed supply by close to 20 million tons in the second half of 2024."
"Turning to the export markets, net back pricing for high sulfur Illinois Basin coal has declined to a level that we have decided it is prudent to slow down production for the back half of the year. Therefore, we are adjusting 2024 full-year guidance for our coal operations. At the midpoint, we now expect to sell approximately 34.0 million tons in 2024, or 2.6% below the mid-point of our original guidance for the year. Due to the increased summer burn, we now expect more than half of our uncontracted tonnage position will be sold in the domestic market."
Mr. Craft continued, "Looking at our Oil & Gas Royalties platform, year-to-date performance and continued strong activity across our Permian Basin acreage has set the tone for another robust year. As a result, we are pleased to increase volumetric guidance across all three commodity streams within our Oil & Gas Royalties segment."
Mr. Craft concluded, "The increase in coal-fired generation and inventory drawdown is constructive for the U.S. thermal coal market and for ARLP as we look forward to next year and beyond. We remain confident in the core fundamentals expected to drive rapid growth in electricity demand for many years to come, including the increasing power requirements stemming from AI, data centers, and the onshoring of U.S. manufacturing."
Page 5
ARLP is updating and providing the following guidance for the full year ended December 31, 2024 (the "2024 Full Year"):
| | | | | |
2024 Full Year Guidance | |||||
| | | | | |
Coal Operations | | | | | |
Volumes (Million Short Tons) | | | | | |
Illinois Basin Sales Tons | | | | | 24.25 — 25.0 |
Appalachia Sales Tons | | | | | 9.25 — 9.50 |
Total Sales Tons | | | | | 33.50 — 34.50 |
| | | | | |
Committed & Priced Sales Tons | | | | | |
2024 — Domestic / Export / Total | | | | | 27.5 / 5.2 / 32.7 |
2025 — Domestic / Export / Total | | | | | 15.5 / 1.1 / 16.6 |
| | | | | |
Coal Sales Price Per Ton Sold (1) | | | | | |
Illinois Basin | | | | | $56.25 — $57.00 |
Appalachia | | | | | $83.00 — $84.00 |
Total | | | | | $63.75 — $64.50 |
| | | | | |
Segment Adjusted EBITDA Expense Per Ton Sold (2) | | | | | |
Illinois Basin | | | | | $36.00 — $38.00 |
Appalachia | | | | | $57.00 — $60.00 |
Total | | | | | $43.00 — $45.00 |
| | | | | |
Royalties | | | | | |
Oil & Gas Royalties | | | | | |
Oil (000 Barrels) | | | | | 1,500 — 1,600 |
Natural gas (000 MCF) | | | | | 5,800 — 6,200 |
Liquids (000 Barrels) | | | | | 750 — 800 |
Segment Adjusted EBITDA Expense (% of Oil & Gas Royalties Revenue) | | | | | ~ 13.0% |
| | | | | |
Coal Royalties | | | | | |
Royalty tons sold (Million Short Tons) | | | | | 20.4 — 21.5 |
Revenue per royalty ton sold | | | | | $3.15 — $3.35 |
Segment Adjusted EBITDA Expense per royalty ton sold | | | | | $1.15 — $1.25 |
| | | | | |
Consolidated (Millions) | | | | | |
Depreciation, depletion and amortization | | | | | $280 — $300 |
General and administrative | | | | | $80 — $85 |
Net interest expense | | | | | $34 — $36 |
Income tax expense | | | | | $17 — $19 |
Total capital expenditures | | | | | $420 — $460 |
Growth capital expenditures | | | | | $25 — $30 |
Maintenance capital expenditures | | | | | $395 — $430 |
| (1) | Sales price per ton is defined as total coal sales revenue divided by total tons sold. |
| (2) | Segment Adjusted EBITDA Expense is defined as operating expenses, coal purchases and other expenses. |
Page 6
Conference Call
A conference call regarding ARLP's 2024 Quarter financial results is scheduled for today at 10:00 a.m. Eastern. To participate in the conference call, dial (877) 407-0784 and request to be connected to the Alliance Resource Partners, L.P. earnings conference call. International callers should dial (201) 689-8560 and request to be connected to the same call. Investors may also listen to the call via the "Investors" section of ARLP's website at www.arlp.com.
An audio replay of the conference call will be available for approximately one week. To access the audio replay, dial U.S. Toll Free (844) 512-2921; International Toll (412) 317-6671 and request to be connected to replay using access code 13747640.
About Alliance Resource Partners, L.P.
ARLP is a diversified energy company that is currently the largest coal producer in the eastern United States, supplying reliable, affordable energy domestically and internationally to major utilities, metallurgical and industrial users. ARLP also generates operating and royalty income from mineral interests it owns in strategic coal and oil & gas producing regions in the United States. In addition, ARLP is evolving and positioning itself as a reliable energy partner for the future by pursuing opportunities that support the advancement of energy and related infrastructure.
News, unit prices and additional information about ARLP, including filings with the Securities and Exchange Commission ("SEC"), are available at www.arlp.com. For more information, contact the investor relations department of ARLP at (918) 295-7673 or via e-mail at investorrelations@arlp.com.
Investor Relations Contact
Cary P. Marshall
Senior Vice President and Chief Financial Officer
918-295-7673
investorrelations@arlp.com
***
The statements and projections used throughout this release are based on current expectations. These statements and projections are forward-looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions or other business combinations that may occur after the date of this release. We have included more information below regarding business risks that could affect our results.
FORWARD-LOOKING STATEMENTS: With the exception of historical matters, any matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. Those forward-looking statements include expectations with respect to our future financial performance, coal and oil & gas consumption and expected future prices, our ability to increase unitholder distributions in future quarters, business plans and potential growth with respect to our energy and infrastructure transition investments, optimizing cash flows,
Page 7
reducing operating and capital expenditures, infrastructure projects at our existing properties, growth in domestic electricity demand, preserving liquidity and maintaining financial flexibility, and our future repurchases of units and senior notes, among others. These risks to our ability to achieve these outcomes include, but are not limited to, the following: 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 planned 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; the outcome or escalation of current hostilities in Ukraine and the Israel-Gaza conflict; the severity, magnitude and duration of any future pandemics and impacts of such pandemics and of businesses' and governments' responses to such pandemics on our operations and personnel, and on demand for coal, oil, and natural gas, the financial condition of our customers and suppliers and operators, available liquidity and capital sources and broader economic disruptions; actions of the major oil-producing countries with respect to oil production volumes and prices could have 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; 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 transition ventures; the success of our development plans for our wholly owned subsidiary, Matrix Design Group, LLC, and our investments in emerging infrastructure and technology companies; dependence on significant customer contracts, including renewing 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, 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 by the United States and foreign governments; 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 the Environmental Protection Agency's recently promulgated emissions regulations for coal-fired power plants, 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' increasing attention to environmental, social, and governance 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; changes in equipment, raw material, service or labor costs or availability, including due to inflationary pressures; changes
Page 8
in our ability to recruit, hire and maintain labor; our ability to maintain satisfactory relations with our employees; increases in labor costs including costs of health insurance and taxes resulting from the Affordable Care Act, 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; uncertainties in the future of the electric vehicle industry and the market for EV charging stations; 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; and difficulty in making accurate assumptions and projections regarding future revenues and costs associated with equity investments in companies we do not control.
Additional information concerning these, and other factors can be found in ARLP's public periodic filings with the SEC, including ARLP's Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 23, 2024, and ARLP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed on May 9, 2024. Except as required by applicable securities laws, ARLP does not intend to update its forward-looking statements.
Page 9
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING DATA
(In thousands, except unit and per unit data)
(Unaudited)
| | Three Months Ended | | Six Months Ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||||
| | | | | | | | | | | | | |
Tons Sold | | | 7,851 | | | 8,904 | | | 16,525 | | | 17,373 | |
Tons Produced | | | 8,437 | | | 9,397 | | | 17,551 | | | 18,641 | |
Mineral Interest Volumes (BOE) | | | 817 | | | 765 | | | 1,715 | | | 1,524 | |
| | | | | | | | | | | | | |
SALES AND OPERATING REVENUES: | | | | | | | | | | | | | |
Coal sales | | $ | 512,659 | | $ | 560,331 | | $ | 1,074,538 | | $ | 1,139,115 | |
Oil & gas royalties | | | 36,429 | | | 33,087 | | | 73,459 | | | 67,584 | |
Transportation revenues | |
| 26,701 | |
| 30,527 | |
| 57,454 | |
| 60,765 | |
Other revenues | |
| 17,561 | |
| 17,891 | |
| 39,596 | |
| 37,294 | |
Total revenues | |
| 593,350 | |
| 641,836 | |
| 1,245,047 | |
| 1,304,758 | |
| | | | | | | | | | | | | |
EXPENSES: | | | | | | | | | | | | | |
Operating expenses (excluding depreciation, depletion and amortization) | |
| 351,605 | |
| 334,402 | |
| 715,464 | |
| 673,125 | |
Transportation expenses | |
| 26,701 | |
| 30,527 | |
| 57,454 | |
| 60,765 | |
Outside coal purchases | |
| 10,608 | |
| 4,209 | |
| 19,720 | |
| 4,209 | |
General and administrative | |
| 20,562 | |
| 20,130 | |
| 42,691 | |
| 41,215 | |
Depreciation, depletion and amortization | |
| 66,454 | |
| 68,639 | |
| 132,003 | |
| 134,189 | |
Total operating expenses | |
| 475,930 | |
| 457,907 | |
| 967,332 | |
| 913,503 | |
| | | | | | | | | | | | | |
INCOME FROM OPERATIONS | |
| 117,420 | |
| 183,929 | |
| 277,715 | |
| 391,255 | |
| | | | | | | | | | | | | |
Interest expense, net | |
| (9,277) | |
| (9,433) | |
| (17,026) | |
| (22,109) | |
Interest income | |
| 2,084 | |
| 2,625 | |
| 3,360 | |
| 5,415 | |
Equity method investment loss | |
| (152) | |
| (1,994) | |
| (705) | |
| (1,942) | |
Change in fair value of digital assets | | | (3,748) | |
| — | |
| 8,105 | |
| — | |
Other income (expense) | |
| (958) | |
| 177 | |
| (1,564) | |
| (396) | |
INCOME BEFORE INCOME TAXES | |
| 105,369 | |
| 175,304 | |
| 269,885 | |
| 372,223 | |
| | | | | | | | | | | | | |
INCOME TAX EXPENSE | |
| 3,860 | |
| 3,999 | |
| 8,809 | |
| 8,240 | |
| | | | | | | | | | | | | |
NET INCOME | | | 101,509 | | | 171,305 | | | 261,076 | | | 363,983 | |
| | | | | | | | | | | | | |
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | | | (1,322) | | | (1,515) | | | (2,832) | | | (3,008) | |
| | | | | | | | | | | | | |
NET INCOME ATTRIBUTABLE TO ARLP | | $ | 100,187 | | $ | 169,790 | | $ | 258,244 | | $ | 360,975 | |
| | | | | | | | | | | | | |
NET INCOME ATTRIBUTABLE TO ARLP | | | | | | | | | | | | | |
GENERAL PARTNER | | $ | — | | $ | — | | $ | — | | $ | 1,384 | |
LIMITED PARTNERS | | $ | 100,187 | | $ | 169,790 | | $ | 258,244 | | $ | 359,591 | |
| | | | | | | | | | | | | |
EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED | | $ | 0.77 | | $ | 1.30 | | $ | 1.98 | | $ | 2.75 | |
| | | | | | | | | | | | | |
WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED | |
| 128,061,981 | |
| 127,183,439 | |
| 127,866,439 | |
| 127,236,097 | |
Page 10
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)
(Unaudited)
| | June 30, | | December 31, | | ||
| | 2024 |
| 2023 | | ||
ASSETS |
| | | | | |
|
CURRENT ASSETS: | | | | | | | |
Cash and cash equivalents | | $ | 203,703 | | $ | 59,813 | |
Trade receivables | |
| 226,436 | |
| 282,622 | |
Other receivables | |
| 9,677 | |
| 9,678 | |
Inventories, net | |
| 196,225 | |
| 127,556 | |
Advance royalties | |
| 6,173 | |
| 7,780 | |
Digital assets | |
| 28,335 | |
| 9,579 | |
Prepaid expenses and other assets |
|
| 14,492 |
|
| 19,093 | |
Total current assets | |
| 685,041 | |
| 516,121 | |
PROPERTY, PLANT AND EQUIPMENT: | | | | | | | |
Property, plant and equipment, at cost | |
| 4,350,389 | |
| 4,172,544 | |
Less accumulated depreciation, depletion and amortization | |
| (2,240,277) | |
| (2,149,881) | |
Total property, plant and equipment, net | |
| 2,110,112 | |
| 2,022,663 | |
OTHER ASSETS: | | | | | | | |
Advance royalties | |
| 77,518 | |
| 71,125 | |
Equity method investments | |
| 45,088 | |
| 46,503 | |
Equity securities | | | 92,541 | |
| 92,541 | |
Operating lease right-of-use assets | | | 16,694 | | | 16,569 | |
Other long-term assets | |
| 25,952 | |
| 22,904 | |
Total other assets | |
| 257,793 | |
| 249,642 | |
TOTAL ASSETS | | $ | 3,052,946 | | $ | 2,788,426 | |
| | | | | | | |
LIABILITIES AND PARTNERS' CAPITAL | | | | | | | |
CURRENT LIABILITIES: | | | | | | | |
Accounts payable | | $ | 131,547 | | $ | 108,269 | |
Accrued taxes other than income taxes | |
| 22,291 | |
| 21,007 | |
Accrued payroll and related expenses | |
| 31,569 | |
| 29,884 | |
Accrued interest | |
| 1,821 | |
| 3,558 | |
Workers' compensation and pneumoconiosis benefits | |
| 15,856 | |
| 15,913 | |
Other current liabilities | |
| 46,061 | |
| 28,498 | |
Current maturities, long-term debt, net | |
| 22,029 | |
| 20,338 | |
Total current liabilities | |
| 271,174 | |
| 227,467 | |
LONG-TERM LIABILITIES: | | | | | | | |
Long-term debt, excluding current maturities, net | |
| 461,995 | |
| 316,821 | |
Pneumoconiosis benefits | |
| 130,187 | |
| 127,249 | |
Accrued pension benefit | |
| 7,620 | |
| 8,618 | |
Workers' compensation | |
| 36,532 | |
| 37,257 | |
Asset retirement obligations | |
| 148,284 | |
| 146,925 | |
Long-term operating lease obligations | |
| 14,107 | |
| 13,661 | |
Deferred income tax liabilities | |
| 32,758 | |
| 33,450 | |
Other liabilities | |
| 16,171 | |
| 18,381 | |
Total long-term liabilities | |
| 847,654 | |
| 702,362 | |
Total liabilities | |
| 1,118,828 | |
| 929,829 | |
| | | | | | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | |
| | | | | | | |
PARTNERS' CAPITAL: | | | | | | | |
ARLP Partners' Capital: | | | | | | | |
Limited Partners - Common Unitholders 128,061,981 and 127,125,437 units outstanding, respectively | |
| 1,970,759 | |
| 1,896,027 | |
Accumulated other comprehensive loss | |
| (59,645) | |
| (61,525) | |
Total ARLP Partners' Capital | |
| 1,911,114 | |
| 1,834,502 | |
Noncontrolling interest | | | 23,004 | | | 24,095 | |
Total Partners' Capital | | | 1,934,118 | | | 1,858,597 | |
TOTAL LIABILITIES AND PARTNERS' CAPITAL | | $ | 3,052,946 | | $ | 2,788,426 | |
Page 11
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | Six Months Ended | | ||||
| | June 30, | | ||||
| | 2024 |
| 2023 | | ||
| | | | | | | |
CASH FLOWS FROM OPERATING ACTIVITIES | | $ | 425,439 | | $ | 500,720 | |
| | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | |
Property, plant and equipment: | | | | | | | |
Capital expenditures | | | (225,288) | | | (185,017) | |
Change in accounts payable and accrued liabilities | | | 4,944 | | | (25,630) | |
Proceeds from sale of property, plant and equipment | |
| 969 | | | 2,468 | |
Contributions to equity method investments | | | (1,290) | | | (1,334) | |
JC Resources acquisition | | | — | | | (64,999) | |
Oil & gas reserve asset acquisitions | | | (4,720) | | | (3,935) | |
Other | | | 2,392 | | | 4,136 | |
Net cash used in investing activities | | | (222,993) | | | (274,311) | |
| | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | |
Borrowings under securitization facility | | | 75,000 | | | — | |
Payments under securitization facility | | | (75,000) | | | — | |
Proceeds from equipment financings | | | 54,626 | | | — | |
Payments on equipment financings | | | (5,935) | | | (7,565) | |
Borrowings under revolving credit facilities | | | 20,000 | | | — | |
Payments under revolving credit facilities | | | (20,000) | | | — | |
Borrowing under long-term debt | | | 400,000 | | | 75,000 | |
Payments on long-term debt | | | (292,811) | | | (65,474) | |
Payment of debt issuance costs | | | (11,379) | | | (11,744) | |
Payments for purchases of units under unit repurchase program | | | — | | | (19,432) | |
Payments for tax withholdings related to settlements under deferred compensation plans | | | (13,292) | | | (10,334) | |
Excess purchase price over the contributed basis from JC Resources acquisition | | | — | | | (7,251) | |
Cash retained by JC Resources in acquisition | | | — | | | (2,933) | |
Distributions paid to Partners | | | (181,982) | | | (182,868) | |
Other | | | (7,783) | | | (4,932) | |
Net cash used in financing activities | | | (58,556) | | | (237,533) | |
| | | | | | | |
NET CHANGE IN CASH AND CASH EQUIVALENTS | | | 143,890 | | | (11,124) | |
| | | | | | | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | | | 59,813 | | | 296,023 | |
| | | | | | | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | | $ | 203,703 | | $ | 284,899 | |
Page 12
Reconciliation of Non-GAAP Financial Measures
Reconciliation of GAAP "net income attributable to ARLP" to non-GAAP "EBITDA" and "Distributable Cash Flow" (in thousands).
EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes and depreciation, depletion and amortization and Adjusted EBITDA is EBITDA modified for certain items that we characterize as unrepresentative of our ongoing operations, such as litigation accruals or fluctuations in the fair value of our digital assets. Distributable cash flow ("DCF") is defined as Adjusted EBITDA excluding equity method investment earnings, interest expense (before capitalized interest), interest income, income taxes and estimated maintenance capital expenditures and adding distributions from equity method investments and litigation expense accrual. Distribution coverage ratio ("DCR") is defined as DCF divided by distributions paid to partners.
Management believes that the presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) provide additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation and planning decisions and (iii) present measurements that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations.
EBITDA, Adjusted EBITDA, DCF and DCR should not be considered as alternatives to net income attributable to ARLP, net income, income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. EBITDA and DCF are not intended to represent cash flow and do not represent the measure of cash available for distribution. Our method of computing EBITDA, Adjusted EBITDA, DCF and DCR may not be the same method used to compute similar measures reported by other companies, or EBITDA, Adjusted EBITDA, DCF and DCR may be computed differently by us in different contexts (i.e., public reporting versus computation under financing agreements).
Page 13
| | Three Months Ended | | Six Months Ended | | Three Months Ended |
| |||||||||
| | June 30, | | June 30, | | March 31, |
| |||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| 2024 |
| |||||
| | | | | | | | | | | | | | | | |
Net income attributable to ARLP | | $ | 100,187 | | $ | 169,790 | | $ | 258,244 | | $ | 360,975 | | $ | 158,057 | |
Depreciation, depletion and amortization | |
| 66,454 | |
| 68,639 | |
| 132,003 | |
| 134,189 | |
| 65,549 | |
Interest expense, net | |
| 9,979 | |
| 8,024 | |
| 18,750 | |
| 19,317 | |
| 8,771 | |
Capitalized interest | |
| (2,786) | |
| (1,216) | |
| (5,084) | |
| (2,623) | |
| (2,298) | |
Income tax expense | |
| 3,860 | |
| 3,999 | |
| 8,809 | |
| 8,240 | |
| 4,949 | |
EBITDA | |
| 177,694 | |
| 249,236 | |
| 412,722 | |
| 520,098 | |
| 235,028 | |
Litigation expense accrual (1) | | | — | | | — | | | 15,250 | | | — | | | 15,250 | |
Change in fair value of digital assets (2) | | | 3,748 | | | — | | | (8,105) | | | — | | | (11,853) | |
Adjusted EBITDA | | | 181,442 | | | 249,236 | | | 419,867 | | | 520,098 | | | 238,425 | |
Equity method investment loss | |
| 152 | | | 1,994 | |
| 705 | | | 1,942 | | | 553 | |
Distributions from equity method investments | | | 1,118 | | | 960 | | | 2,000 | | | 1,974 | | | 882 | |
Interest expense, net | |
| (9,979) | |
| (8,024) | |
| (18,750) | |
| (19,317) | |
| (8,771) | |
Income tax expense | |
| (3,860) | |
| (3,999) | |
| (8,809) | |
| (8,240) | |
| (4,949) | |
Deferred income tax benefit (3) | | | (962) | | | (209) | | | (1,069) | | | (581) | | | (107) | |
Litigation expense accrual (1) | | | — | | | — | | | (15,250) | | | — | | | (15,250) | |
Estimated maintenance capital expenditures (4) | |
| (65,471) | |
| (66,249) | |
| (136,196) | |
| (131,419) | |
| (70,725) | |
Distributable Cash Flow | | $ | 102,440 | | $ | 173,709 | | $ | 242,498 | | $ | 364,457 | | $ | 140,058 | |
Distributions paid to partners | | $ | 90,736 | | $ | 90,930 | | $ | 181,982 | | $ | 182,868 | | $ | 91,246 | |
Distribution Coverage Ratio | |
| 1.13 | |
| 1.91 | |
| 1.33 | |
| 1.99 | |
| 1.53 | |
| (1) | Litigation expense accrual is a $15.3 million accrual relating to the settlement (which is subject to court approval) of certain litigation as described in Item 1 of Part II of ARLP’s Form 10-Q filed on May 9, 2024 with the SEC for the period ended March 31, 2024. |
| (2) | On January 1, 2024, ARLP elected to early adopt new accounting guidance which clarifies the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to measure certain crypto assets at fair value, with the change in fair value included in net income. |
| (3) | Deferred income tax benefit is the amount of income tax benefit during the period on temporary differences between the tax basis and financial reporting basis of recorded assets and liabilities. These differences generally arise in one period and reverse in subsequent periods to eventually offset each other and do not impact the amount of distributable cash flow available to be paid to partners. |
| (4) | Maintenance capital expenditures are those capital expenditures required to maintain, over the long-term, the existing infrastructure of our coal assets. We estimate maintenance capital expenditures on an annual basis based upon a five-year planning horizon. For the 2024 planning horizon, average annual estimated maintenance capital expenditures are assumed to be $7.76 per ton produced compared to an estimated $7.05 per ton produced in 2023. Our actual maintenance capital expenditures fluctuate depending on various factors, including maintenance schedules and timing of capital projects, among others. |
Reconciliation of GAAP "Cash flows from operating activities" to non-GAAP "Free cash flow" (in thousands).
Free cash flow is defined as cash flows from operating activities less capital expenditures and the change in accounts payable and accrued liabilities from purchases of property, plant and equipment. Free cash flow should not be considered as an alternative to cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Our method of computing free cash flow may not be the same method used by other companies. Free cash flow is a supplemental liquidity measure used by our management to assess our ability to generate excess cash flow from our operations.
Page 14
| | Three Months Ended | | Six Months Ended | | Three Months Ended |
| |||||||||
| | June 30, | | June 30, | | March 31, |
| |||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| 2024 |
| |||||
| | | | | | | | | | | | | | | | |
Cash flows from operating activities | | $ | 215,766 | | $ | 279,032 | | $ | 425,439 | | $ | 500,720 | | $ | 209,673 | |
Capital expenditures | | | (101,442) | | | (89,543) | | | (225,288) | | | (185,017) | | | (123,846) | |
Change in accounts payable and accrued liabilities | | | 613 | | | (37,740) | | | 4,944 | | | (25,630) | | | 4,331 | |
Free cash flow | | $ | 114,937 | | $ | 151,749 | | $ | 205,095 | | $ | 290,073 | | $ | 90,158 | |
Reconciliation of GAAP "Operating Expenses" to non-GAAP "Segment Adjusted EBITDA Expense" and Reconciliation of non-GAAP " EBITDA" to "Segment Adjusted EBITDA" (in thousands).
Segment Adjusted EBITDA Expense is defined as 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 such as litigation accruals. Transportation expenses are excluded as these expenses are passed on to our customers and, consequently, we do not realize any margin 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 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. Segment Adjusted EBITDA Expense – Coal Operations represents Segment Adjusted EBITDA Expense from our wholly-owned subsidiary, Alliance Coal, LLC ("Alliance Coal"), which holds our coal mining operations and related support activities.
| | Three Months Ended | | Six Months Ended | | Three Months Ended |
| |||||||||
| | June 30, | | June 30, | | March 31, |
| |||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| 2024 |
| |||||
| | | | | | | | | | | | | | | | |
Operating expense | | $ | 351,605 | | $ | 334,402 | | $ | 715,464 | | $ | 673,125 | | $ | 363,859 | |
Litigation expense accrual (1) | | | — | | | — | | | (15,250) | | | — | | | (15,250) | |
Outside coal purchases | |
| 10,608 | |
| 4,209 | |
| 19,720 | |
| 4,209 | |
| 9,112 | |
Other expense (income) | |
| 958 | |
| (177) | |
| 1,564 | |
| 396 | |
| 606 | |
Segment Adjusted EBITDA Expense | | | 363,171 | | | 338,434 | | | 721,498 | | | 677,730 | | | 358,327 | |
Segment Adjusted EBITDA Expense – Non Coal Operations (2) | | | (6,996) | | | (1,409) | | | (11,009) | | | (4,829) | | | (4,013) | |
Segment Adjusted EBITDA Expense – Coal Operations | | $ | 356,175 | | $ | 337,025 | | $ | 710,489 | | $ | 672,901 | | $ | 354,314 | |
| (1) | Litigation expense accrual is a $15.3 million accrual relating to the settlement (which is subject to court approval) of certain litigation as described in Item 1 of Part II of ARLP’s Form 10-Q filed on May 9, 2024 with the SEC for the period ended March 31, 2024. |
| (2) | Non Coal Operations represent activity outside of Alliance Coal and primarily consist of Total Royalties, our investments in the advancement of energy and related infrastructure and various eliminations primarily between Alliance Coal and our Coal Royalty segment. |
Page 15
Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization, change in fair value of digital assets, litigation accruals and general and administrative expenses. Segment Adjusted EBITDA – Coal Operations represents Segment Adjusted EBITDA from our wholly-owned subsidiary, Alliance Coal, which holds our coal mining operations and related support activities and allows management to focus primarily on the operating performance of our Illinois Basin and Appalachia segments.
| | Three Months Ended | | Six Months Ended | | Three Months Ended |
| |||||||||
| | June 30, | | June 30, | | March 31, |
| |||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 | | 2024 |
| |||||
| | | | | | | | | | | | | | | | |
Adjusted EBITDA (See reconciliation to GAAP above) | | $ | 181,442 | | $ | 249,236 | | $ | 419,867 | | $ | 520,098 | | $ | 238,425 | |
General and administrative | |
| 20,562 | |
| 20,130 | |
| 42,691 | |
| 41,215 | |
| 22,129 | |
Segment Adjusted EBITDA | | | 202,004 | | | 269,366 | | | 462,558 | | | 561,313 | | | 260,554 | |
Segment Adjusted EBITDA – Non Coal Operations (1) | | | (41,775) | | | (43,140) | | | (91,434) | | | (89,413) | | | (49,659) | |
Segment Adjusted EBITDA – Coal Operations | | $ | 160,229 | | $ | 226,226 | | $ | 371,124 | | $ | 471,900 | | $ | 210,895 | |
| (1) | Non Coal Operations represent activity outside of Alliance Coal and primarily consist of Total Royalties, our investments in the advancement of energy and related infrastructure and various eliminations primarily between Alliance Coal and our Coal Royalty segment. |
Page 16
Exhibit 99.2
PRESS RELEASE
ALLIANCE RESOURCE PARTNERS, L.P.
Declares Quarterly Distribution of $0.70 Per Unit; Announces Robinson Retirement from Alliance Board, Vining Election to Alliance Board, and Watson promotion to Senior Vice President
TULSA, OKLAHOMA, July 26, 2024 – Alliance Resource Partners, L.P. (NASDAQ: ARLP) today announced that the Board of Directors of ARLP's general partner ("Board of Directors") approved a cash distribution to its unitholders for the quarter ended June 30, 2024 (the "2024 Quarter").
ARLP unitholders of record as of the close of trading on August 7, 2024 will receive a cash distribution for the 2024 Quarter of $0.70 per unit (an annualized rate of $2.80 per unit), payable on August 14, 2024. The announced distribution is consistent with the cash distributions of $0.70 per unit for the quarters ended June 30, 2023 and March 31, 2024.
As previously announced, ARLP will report financial results for the 2024 Quarter before the market opens on Monday, July 29, 2024 and Alliance management will discuss these results during a conference call beginning at 10:00 a.m. Eastern that same day.
To participate in the conference call, dial (877) 407-0784 and request to be connected to the Alliance Resource Partners, L.P. earnings conference call. International callers should dial (201) 689-8560 and request to be connected to the same call. Investors may also listen to the call via the "Investors" section of ARLP's website at www.arlp.com.
An audio replay of the conference call will be available for approximately one week. To access the audio replay, dial U.S. Toll Free (844) 512-2921; International Toll (412) 317-6671 and request to be connected to replay using access code 13747640.
In addition to the cash distribution for the 2024 Quarter, ARLP is announcing that John H. Robinson will retire from the Board of Directors at the end of the year.
"John has been an invaluable asset of Alliance since 1999," said Mr. Joseph W. Craft III, Chairman, President and CEO of ARLP's general partner. "John's service on the Board of Directors has been instrumental to ARLP's success since its inception and we are grateful for his thoughtful guidance over the years and wish him the best in retirement."
Mr. Robinson has stepped down as Chairman of the Compensation Committee, but he will remain a member of the Audit, Compensation and Conflicts Committee until his retirement at the end of
Page 1
the year. Board of Director member Nick Carter, who is a member of the Compensation Committee, has been appointed as Chairman of such committee. In addition, Wilson M. Torrence, who is the Chairman of the Audit Committee, has been appointed as a member of the Conflicts Committee.
ARLP is also announcing that on July 24, 2024, Paul H. Vining has been elected to the Board of Directors and will serve as the board's lead director. In such capacity, Mr. Vining will assist the Board of Directors and ARLP's management team on planning and other initiatives as directed from time to time by the Board of Directors or Mr. Craft.
"I am pleased to welcome Paul to the ARLP team," Mr. Craft said. "Paul's extensive background and leadership in the natural resources mining industry brings a unique level of knowledge and experience of global energy markets to the Board of Directors. We look forward to working with Paul as lead director to continue positioning ARLP as a reliable energy provider now and into the future."
Mr. Vining has served as Chairman of the Board of Directors of Westmoreland Mining, LLC, a privately held coal producer, since October 2019, and as Chairman of the Board of Directors of The Frazier Quarry Inc. since July 2023. From May through July 2022, Mr. Vining served as Chairman of the Board of Directors of Allegiance Coal Limited (ASX: AHQ) and from 2016 to 2019 served as a member of the Board of Directors of the general partner of then NYSE-listed Foresight Energy LP. Mr. Vining began his career in 1979 as a mineral engineer and has held a variety of senior executive positions over the years with several companies, including as Chief Executive Officer of Minerals Refining Company throughout 2022, Executive Vice President Global Investment and Development for Xcoal Energy and Resources LLC from 2019 to 2021, and Chief Executive Officer of The Cline Group, LLC from 2015 to 2019. Prior to that, Mr. Vining held senior executive positions in several major companies including as Chief Operating Officer and then President of Alpha Natural Resources, Inc., President and Chief Operating Officer of Patriot Coal Company, Chief Executive Officer of Magnum Coal Company, Chief Commercial Officer of Arch Coal Inc. and Chief Commercial Officer of Peabody Energy, Corporation. Earlier in his career, Mr. Vining held various commercial and marketing positions at Massey Energy Company, Occidental Petroleum Corp., and ENI S.p.A. Mr. Vining holds a Bachelor and a Master of Science degree in Mining and Minerals Engineering from Columbia University and a Bachelor of Science degree in Chemistry from the College of William and Mary.
In addition to news regarding the Board of Directors, ARLP is announcing that Mark A. Watson has been promoted to the role of Senior Vice President – Operations and Technology of the Partnership's general partner.
"Please join me in congratulating Mark on his promotion to Senior Vice President," commented Mr. Craft. "Mark has been with Alliance since starting as an intern in 1994, holds a Bachelor of Science degree and a Master of Science degree in Electrical Engineering from the University of Kentucky, and has contributed significantly to the operations side as well as the technology development side of ARLP's business over many years. Mark's strong leadership and expertise at our Matrix Design Group ("Matrix") has seen Matrix expand its products and services beyond the domestic underground mining industry into the international mining and industrial markets positioning Matrix to accelerate innovation and growth at ARLP. In Mark's expanded role he will continue to lead Matrix as well as advance other technology growth opportunities in different markets for ARLP."
Page 2
Concurrent with this announcement we are providing qualified notice to brokers and nominees that hold ARLP units on behalf of non-U.S. investors under Treasury Regulation Section 1.1446-4(b) and (d) and Treasury Regulation Section 1.1446(f)-4(c)(2)(iii). Brokers and nominees should treat one hundred percent (100%) of ARLP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. In addition, brokers and nominees should treat one hundred percent (100%) of the distribution as being in excess of cumulative net income for purposes of determining the amount to withhold. Accordingly, ARLP's distributions to non-U.S. investors are subject to federal income tax withholding at a rate equal to the highest applicable effective tax rate plus ten percent (10%). Nominees, and not ARLP, are treated as the withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
About Alliance Resource Partners, L.P.
ARLP is a diversified energy company that is currently the largest coal producer in the eastern United States, supplying reliable, affordable energy domestically and internationally to major utilities, metallurgical and industrial users. ARLP also generates operating and royalty income from mineral interests it owns in strategic coal and oil & gas producing regions in the United States. In addition, ARLP is evolving and positioning itself as a reliable energy partner for the future by pursuing opportunities that support the advancement of energy and related infrastructure.
News, unit prices and additional information about ARLP, including filings with the Securities and Exchange Commission ("SEC"), are available at www.arlp.com. For more information, contact the investor relations department of ARLP at (918) 295-7673 or via e-mail at investorrelations@arlp.com.
Investor Relations Contact
Cary P. Marshall
Senior Vice President and Chief Financial Officer
918-295-7673
investorrelations@arlp.com
Page 3
Document and Entity Information |
Jul. 24, 2024 |
|---|---|
| Document - Document and Entity Information | |
| Document Type | 8-K |
| Document Period End Date | Jul. 24, 2024 |
| Entity File Number | 0-26823 |
| Entity Registrant Name | ALLIANCE RESOURCE PARTNERS LP |
| Entity Incorporation, State or Country Code | DE |
| Entity Tax Identification Number | 73-1564280 |
| Entity Address, Address Line One | 1717 South Boulder Avenue |
| Entity Address, Adress Line Two | Suite 400 |
| Entity Address, State or Province | OK |
| Entity Address, City or Town | Tulsa |
| Entity Address, Postal Zip Code | 74119 |
| City Area Code | 918 |
| Local Phone Number | 295-7600 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Units |
| Trading Symbol | ARLP |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | false |
| Entity Central Index Key | 0001086600 |
| Amendment Flag | false |
1 Year Alliance Resource Partners Chart |
1 Month Alliance Resource Partners Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Hot Features
Premium
