Highlights
- Increased coal sales volumes to 8.7 million tons, up 2.4%
year-over-year
- Record oil & gas royalty volumes of 898 MBOE, up 18.3%
year-over-year and 11.0% sequentially
- First quarter 2024 total revenue of $651.7 million, net income
of $158.1 million, and EBITDA of $235.0 million
- Enhanced liquidity position to $551.3 million, which included
$134.0 million in cash and $417.3 million of borrowings available
under credit facilities
- In April 2024, declared quarterly cash distribution of $0.70
per unit, or $2.80 per unit annualized
Alliance Resource Partners, L.P. (NASDAQ: ARLP) ("ARLP" or the
"Partnership") today reported financial and operating results for
the quarter ended March 31, 2024 (the "2024 Quarter"). This release
includes comparisons of results to the quarter ended March 31, 2023
(the "2023 Quarter") and to the quarter ended December 31, 2023
(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 slightly to $651.7
million compared to $662.9 million for the 2023 Quarter primarily
as a result of lower average coal sales prices, partially offset by
higher oil & gas royalties and other revenues. Net income for
the 2024 Quarter was $158.1 million, or $1.21 per basic and diluted
limited partner unit, compared to $191.2 million, or $1.45 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 $235.0 million compared to $270.9
million in the 2023 Quarter.
Compared to the Sequential Quarter, total revenues in the 2024
Quarter increased 4.2% primarily as a result of higher average coal
sales prices, which increased 6.9% to $64.78 per ton sold compared
to $60.60 per ton sold in the Sequential Quarter. Net income and
EBITDA in the 2024 Quarter increased 36.9% and 28.6%, respectively,
compared to the Sequential Quarter.
CEO Commentary
"We had a solid start to the year operationally, with all our
mines running as expected and strong volumes coming from our Oil
& Gas Royalties segment," commented Joseph W. Craft III,
Chairman, President and Chief Executive Officer. "Our contracted
coal position also contributed to our performance for the 2024
Quarter mitigating the impact of mild winter weather and low
natural gas prices. On the strength of our heavily contracted coal
order book and continued growth in our Oil & Gas Royalties
business, we are pleased to reiterate full-year guidance."
Segment Results and Analysis
% Change
2024 First
2023 First
Quarter /
2023 Fourth
% Change
(in millions, except per ton and per
BOE data)
Quarter
Quarter
Quarter
Quarter
Sequential
Coal Operations
(1)
Illinois Basin
Coal Operations
Tons sold
6.437
6.190
4.0
%
6.419
0.3
%
Coal sales price per ton sold
$
57.58
$
54.43
5.8
%
$
55.06
4.6
%
Segment Adjusted EBITDA Expense per
ton
$
36.21
$
33.45
8.3
%
$
35.26
2.7
%
Segment Adjusted EBITDA
$
140.3
$
132.0
6.3
%
$
130.1
7.8
%
Appalachia Coal
Operations
Tons sold
2.237
2.279
(1.8
)%
2.194
2.0
%
Coal sales price per ton sold
$
85.49
$
106.13
(19.4
)%
$
76.82
11.3
%
Segment Adjusted EBITDA Expense per
ton
$
52.53
$
55.20
(4.8
)%
$
63.52
(17.3
)%
Segment Adjusted EBITDA
$
74.2
$
116.6
(36.3
)%
$
29.8
149.4
%
Total Coal
Operations
Tons sold
8.674
8.469
2.4
%
8.613
0.7
%
Coal sales price per ton sold
$
64.78
$
68.34
(5.2
)%
$
60.60
6.9
%
Segment Adjusted EBITDA Expense per
ton
$
40.85
$
39.66
3.0
%
$
42.91
(4.8
)%
Segment Adjusted EBITDA
$
210.9
$
245.7
(14.2
)%
$
156.2
35.0
%
Royalties
(1)
Oil & Gas
Royalties
BOE sold (2)
0.898
0.759
18.3
%
0.809
11.0
%
Oil percentage of BOE
44.2
%
47.3
%
(6.6
)%
46.3
%
(4.5
)%
Average sales price per BOE (3)
$
41.22
$
45.42
(9.2
)%
$
44.60
(7.6
)%
Segment Adjusted EBITDA Expense
$
4.9
$
4.4
11.7
%
$
4.7
5.7
%
Segment Adjusted EBITDA
$
31.4
$
30.0
4.5
%
$
31.0
1.1
%
Coal
Royalties
Royalty tons sold
5.512
5.057
9.0
%
5.018
9.8
%
Revenue per royalty ton sold
$
3.39
$
3.07
10.4
%
$
3.33
1.8
%
Segment Adjusted EBITDA Expense
$
6.3
$
5.4
16.3
%
$
6.6
(5.3
)%
Segment Adjusted EBITDA
$
12.4
$
10.1
22.9
%
$
10.2
22.5
%
Total
Royalties
Total royalty revenues
$
56.1
$
51.1
9.8
%
$
53.0
5.7
%
Segment Adjusted EBITDA Expense
$
11.2
$
9.8
14.2
%
$
11.3
(0.7
)%
Segment Adjusted EBITDA
$
43.8
$
40.2
9.2
%
$
41.2
6.4
%
Consolidated
Total
Total revenues
$
651.7
$
662.9
(1.7
)%
$
625.4
4.2
%
Segment Adjusted EBITDA Expense
$
358.3
$
339.3
5.6
%
$
376.6
(4.9
)%
Segment Adjusted EBITDA
$
260.6
$
291.9
(10.7
)%
$
203.2
28.2
%
_______________________ (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.
Coal Operations
In the Illinois Basin, coal sales prices increased by 5.8% and
4.6% compared to the 2023 Quarter and Sequential Quarter,
respectively, as a result of improved domestic price realizations.
In Appalachia, coal sales price per ton decreased by 19.4% compared
to the 2023 Quarter due primarily to reduced domestic pricing from
our Tunnel Ridge mine, which benefited from significantly elevated
pricing during the 2023 Quarter. Compared to the Sequential
Quarter, Appalachian coal sales prices were higher by 11.3% as a
result of improved domestic price realizations across the region.
Tons sold increased by 4.0% in the Illinois Basin compared to the
2023 Quarter due primarily to increased sales volumes from our
Hamilton and Warrior mines. Appalachian coal sales volumes
decreased by 1.8% compared to the 2023 Quarter primarily due to
fewer operating units at our MC Mining operation. Compared to the
Sequential Quarter, tons sold in Appalachia increased by 2.0% as a
result of increased volumes from our Mettiki operation, which
experienced challenging geologic conditions in the Sequential
Quarter. ARLP ended the 2024 Quarter with total coal inventory of
1.9 million tons, representing an increase of 0.6 million tons and
0.5 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 8.3% in the Illinois Basin compared to the 2023
Quarter, due primarily to reduced production and recoveries at our
River View mine. Compared to the Sequential Quarter, Segment
Adjusted EBITDA Expense per ton in the Illinois Basin increased by
2.7% due to higher inventory charges at several mines. In
Appalachia, Segment Adjusted EBITDA Expense per ton decreased by
4.8% and 17.3% compared to the 2023 Quarter and Sequential Quarter,
respectively, due to increased production and recoveries at our
Mettiki mine during the 2024 Quarter.
Royalties
Segment Adjusted EBITDA for the Oil & Gas Royalties segment
increased to $31.4 million in the 2024 Quarter compared to $30.0
million and $31.0 million in the 2023 Quarter and Sequential
Quarter, respectively. Improved Segment Adjusted EBITDA in the 2024
Quarter was due to record oil & gas volumes, which rose to 898
MBOE sold in the 2024 Quarter, representing increases of 18.3% and
11.0% compared to the 2023 Quarter and Sequential Quarter,
respectively, as a result of increased drilling and completion
activities on our interests and acquisitions of additional oil
& gas mineral interests.
Segment Adjusted EBITDA for the Coal Royalties segment increased
to $12.4 million for the 2024 Quarter compared to $10.1 million and
$10.2 million for the 2023 Quarter and Sequential Quarter,
respectively. Higher average royalty rates per ton and increased
royalty tons sold contributed to improved results for the 2024
Quarter.
Balance Sheet and Liquidity
As of March 31, 2024, total debt and finance leases outstanding
were $441.0 million, including $284.6 million in ARLP’s 2025 senior
notes. The Partnership’s total and net leverage ratios were 0.49
times and 0.34 times debt to trailing twelve months Adjusted
EBITDA, respectively, as of March 31, 2024. ARLP ended the 2024
Quarter with total liquidity of $551.3 million, which included
$134.0 million of cash and cash equivalents and $417.3 million of
borrowings available under its revolving credit and accounts
receivable securitization facilities.
During the 2024 Quarter, the Partnership increased its accounts
receivable securitization facility by 50% to $90.0 million and
entered into a new $54.6 million, four-year amortizing term loan
maturing February 2028 to replace a prior equipment financing that
matured in November 2023.
Distributions
On April 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 May 15, 2024, to all
unitholders of record as of the close of trading on May 8, 2024.
The announced distribution is consistent with the cash
distributions for the 2023 Quarter and Sequential Quarter.
Outlook
"With our operations running as expected year-to-date and a
well-contracted order book, we are reiterating our full-year
guidance," commented Mr. Craft. "We continue to maintain a small,
uncontracted tonnage position that we can flex to either domestic
or export markets as demand dictates, while our Oil & Gas
Royalties business is off to a strong start that should set the
tone for another robust year."
"Our focus in 2024 will continue to be the safe operations of
our assets, delivering the same level of reliability that our
customers value so greatly, while also executing major
infrastructure projects at our Tunnel Ridge, Hamilton, Warrior and
River View complexes," Mr. Craft continued. "Over the past year,
grid planners nearly doubled the five-year electricity demand
growth forecast (from 2.6% to 4.7%) on a nationwide basis per FERC
filings. We expect this rapid growth in electricity demand will
lead to delays and extensions in the premature closure of critical
coal power plants in the markets we serve. We are making
investments today that will position us to be the low-cost,
reliable provider in a market seeking to respond to accelerated
demand associated with the electrification of new industry, and
rapid load growth associated with data centers and artificial
intelligence. These trends represent fundamental changes to
consumption patterns, reinforcing our belief that coal, and our
operations in particular, will remain critical to a reliable,
affordable grid for many years to come."
ARLP is reiterating 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
24.5 — 25.8
Appalachia Sales Tons
9.5 — 10.0
Total Sales Tons
34.0 — 35.8
Committed &
Priced Sales Tons
2024 — Domestic / Export / Total
28.1 / 4.5 / 32.6
2025 — Domestic / Export / Total
15.2 / 1.1 / 16.3
Coal Sales Price Per
Ton Sold (1)
Illinois Basin
$54.50 — $56.00
Appalachia
$80.50 — $83.50
Total
$61.75 — $63.75
Segment Adjusted
EBITDA Expense Per Ton Sold (2)
Illinois Basin
$35.25 — $37.25
Appalachia
$54.25 — $57.25
Total
$41.00 — $43.00
Royalties
Oil & Gas
Royalties
Oil (000 Barrels)
1,400 — 1,500
Natural gas (000 MCF)
5,600 — 6,000
Liquids (000 Barrels)
675 — 725
Segment Adjusted EBITDA Expense (% of Oil
& Gas Royalties Revenue)
~ 12.0%
Coal
Royalties
Royalty tons sold (Million Short Tons)
20.4 — 22.2
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
$20 — $25
Income tax expense
$17 — $19
Total capital expenditures
$450 — $500
Growth capital expenditures
$25 — $30
Maintenance capital expenditures
$425 — $470
_______________________ (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.
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 13745713.
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.
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, 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 electricity 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 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, 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 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. Except as required
by applicable securities laws, ARLP does not intend to update its
forward-looking statements.
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
March 31,
2024
2023
Tons Sold
8,674
8,469
Tons Produced
9,114
9,244
Mineral Interest Volumes (BOE)
898
759
SALES AND OPERATING REVENUES:
Coal sales
$
561,879
$
578,784
Oil & gas royalties
37,030
34,497
Transportation revenues
30,753
30,238
Other revenues
22,035
19,403
Total revenues
651,697
662,922
EXPENSES:
Operating expenses (excluding
depreciation, depletion and amortization)
363,859
338,723
Transportation expenses
30,753
30,238
Outside coal purchases
9,112
—
General and administrative
22,129
21,085
Depreciation, depletion and
amortization
65,549
65,550
Total operating expenses
491,402
455,596
INCOME FROM OPERATIONS
160,295
207,326
Interest expense, net
(7,749
)
(12,676
)
Interest income
1,276
2,790
Equity method investment income (loss)
(553
)
52
Change in fair value of digital assets
11,853
—
Other expense
(606
)
(573
)
INCOME BEFORE INCOME TAXES
164,516
196,919
INCOME TAX EXPENSE
4,949
4,241
NET INCOME
159,567
192,678
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTEREST
(1,510
)
(1,493
)
NET INCOME ATTRIBUTABLE TO ARLP
$
158,057
$
191,185
NET INCOME ATTRIBUTABLE TO ARLP
GENERAL PARTNER
$
—
$
1,384
LIMITED PARTNERS
$
158,057
$
189,801
EARNINGS PER LIMITED PARTNER UNIT -
BASIC AND DILUTED
$
1.21
$
1.45
WEIGHTED-AVERAGE NUMBER OF UNITS
OUTSTANDING – BASIC AND DILUTED
127,670,897
127,289,340
ALLIANCE RESOURCE PARTNERS,
L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except unit
data)
(Unaudited)
March 31,
December 31,
2024
2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
133,957
$
59,813
Trade receivables
272,191
282,622
Other receivables
9,208
9,678
Inventories, net
162,197
127,556
Advance royalties
6,173
7,780
Digital assets
30,325
9,579
Prepaid expenses and other assets
16,891
19,093
Total current assets
630,942
516,121
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost
4,284,051
4,172,544
Less accumulated depreciation, depletion
and amortization
(2,204,392
)
(2,149,881
)
Total property, plant and equipment,
net
2,079,659
2,022,663
OTHER ASSETS:
Advance royalties
78,933
71,125
Equity method investments
45,693
46,503
Equity securities
92,541
92,541
Operating lease right-of-use assets
16,357
16,569
Other long-term assets
21,662
22,904
Total other assets
255,186
249,642
TOTAL ASSETS
$
2,965,787
$
2,788,426
LIABILITIES AND PARTNERS'
CAPITAL
CURRENT LIABILITIES:
Accounts payable
$
107,600
$
108,269
Accrued taxes other than income taxes
21,367
21,007
Accrued payroll and related expenses
27,301
29,884
Accrued interest
9,067
3,558
Workers' compensation and pneumoconiosis
benefits
15,913
15,913
Other current liabilities
46,295
28,498
Current maturities, long-term debt,
net
76,422
20,338
Total current liabilities
303,965
227,467
LONG-TERM LIABILITIES:
Long-term debt, excluding current
maturities, net
354,619
316,821
Pneumoconiosis benefits
128,809
127,249
Accrued pension benefit
8,112
8,618
Workers' compensation
36,843
37,257
Asset retirement obligations
147,769
146,925
Long-term operating lease obligations
13,684
13,661
Deferred income tax liabilities
33,060
33,450
Other liabilities
17,522
18,381
Total long-term liabilities
740,418
702,362
Total liabilities
1,044,383
929,829
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
ARLP Partners' Capital:
Limited Partners - Common Unitholders
128,061,981 and 127,125,437 units outstanding, respectively
1,958,382
1,896,027
Accumulated other comprehensive loss
(60,602
)
(61,525
)
Total ARLP Partners' Capital
1,897,780
1,834,502
Noncontrolling interest
23,624
24,095
Total Partners' Capital
1,921,404
1,858,597
TOTAL LIABILITIES AND PARTNERS'
CAPITAL
$
2,965,787
$
2,788,426
ALLIANCE RESOURCE PARTNERS,
L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES
$
209,673
$
221,688
CASH FLOWS FROM INVESTING
ACTIVITIES:
Property, plant and equipment:
Capital expenditures
(123,846
)
(95,474
)
Change in accounts payable and accrued
liabilities
4,331
12,110
Proceeds from sale of property, plant and
equipment
164
2,395
Contributions to equity method
investments
(625
)
(540
)
JC Resources acquisition
—
(64,999
)
Oil & gas reserve asset
acquisitions
(1,822
)
(2,800
)
Other
1,286
2,160
Net cash used in investing activities
(120,512
)
(147,148
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under securitization
facility
75,000
—
Payments under securitization facility
(30,000
)
—
Proceeds from equipment financings
54,626
—
Payments on equipment financings
(1,976
)
(3,759
)
Borrowings under revolving credit
facilities
20,000
—
Payments under revolving credit
facilities
(20,000
)
—
Borrowing under long-term debt
—
75,000
Payments on long-term debt
(4,688
)
(26,633
)
Payment of debt issuance costs
—
(11,653
)
Payments for purchases of units under unit
repurchase program
—
(18,209
)
Payments for tax withholdings related to
settlements under deferred compensation plans
(13,292
)
(9,320
)
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
(91,246
)
(91,938
)
Other
(3,441
)
(2,617
)
Net cash used in financing activities
(15,017
)
(99,313
)
NET CHANGE IN CASH AND CASH
EQUIVALENTS
74,144
(24,773
)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD
59,813
296,023
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
133,957
$
271,250
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).
Three Months Ended
Three Months Ended
March 31,
December 31,
2024
2023
2023
Net income attributable to ARLP
$
158,057
$
191,185
$
115,444
Depreciation, depletion and
amortization
65,549
65,550
68,400
Interest expense, net
8,771
11,293
7,210
Capitalized interest
(2,298
)
(1,407
)
(2,274
)
Income tax expense (benefit)
4,949
4,241
(3,361
)
EBITDA
235,028
270,862
185,419
Litigation expense accrual (1)
15,250
—
—
Change in fair value of digital assets
(2)
(11,853
)
—
—
Adjusted EBITDA
238,425
270,862
185,419
Equity method investment loss (income)
553
(52
)
(2,316
)
Distributions from equity method
investments
882
1,014
1,040
Interest expense, net
(8,771
)
(11,293
)
(7,210
)
Income tax benefit (expense)
(4,949
)
(4,241
)
3,361
Deferred income tax benefit (3)
(107
)
(372
)
(5,992
)
Litigation expense accrual (1)
(15,250
)
—
—
Estimated maintenance capital expenditures
(4)
(70,725
)
(65,170
)
(55,554
)
Distributable Cash Flow
$
140,058
$
190,748
$
118,748
Distributions paid to partners
$
91,246
$
91,938
$
90,812
Distribution Coverage Ratio
1.53
2.07
1.31
_______________________ (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 3 of
Part I of ARLP’s Form 10-K filed on February 23, 2024 with the SEC
for the period ended December 31, 2023.
(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 expense (benefit) is
the amount of income tax expense (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.
Three Months Ended
Three Months Ended
March 31,
December 31,
2024
2023
2023
Cash flows from operating activities
$
209,673
$
221,688
$
93,933
Capital expenditures
(123,846
)
(95,474
)
(83,982
)
Change in accounts payable and accrued
liabilities
4,331
12,110
(6,689
)
Free cash flow
$
90,158
$
138,324
$
3,262
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
Three Months Ended
March 31,
December 31,
2024
2023
2023
Operating expense
$
363,859
$
338,723
$
356,563
Litigation expense accrual (1)
(15,250
)
—
—
Outside coal purchases
9,112
—
20,410
Other expense (income)
606
573
(391
)
Segment Adjusted EBITDA Expense
358,327
339,296
376,582
Segment Adjusted EBITDA Expense – Non Coal
Operations (2)
(4,013
)
(3,420
)
(7,028
)
Segment Adjusted EBITDA Expense – Coal
Operations
$
354,314
$
335,876
$
369,554
_______________________ (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 3 of
Part I of ARLP’s Form 10-K filed on February 23, 2024 with the SEC
for the period ended December 31, 2023.
(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.
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
Three Months Ended
March 31,
December 31,
2024
2023
2023
Adjusted EBITDA (See reconciliation to
GAAP above)
$
238,425
$
270,862
$
185,419
General and administrative
22,129
21,085
17,784
Segment Adjusted EBITDA
260,554
291,947
203,203
Segment Adjusted EBITDA – Non Coal
Operations (1)
(49,659
)
(46,273
)
(47,026
)
Segment Adjusted EBITDA – Coal
Operations
$
210,895
$
245,674
$
156,177
_______________________ (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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240429162468/en/
Cary P. Marshall Senior Vice President and Chief Financial
Officer 918-295-7673 investorrelations@arlp.com
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