ALLIANCE RESOURCE PARTNERS LP

Alliance Resource Partners, L.P. is a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located in key producing regions across the United States. The company is the second largest coal producer in the eastern United States and as of December 31, 2025, operated seven underground mining complexes across Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia and a coal-loading terminal on the Ohio River in Indiana. The company also owns mineral and royalty interests in approximately 70,000 ¹ net royalty acres, including approximately 4,000 ² net royalty acres attributable to its equity interest in AllDale III, in premier oil & gas producing regions in the United States, primarily the Permian, Anadarko, and Williston Basins.

The company operates in a highly competitive coal market and its principal competitors include American Consolidated Natural Resources Inc., Core Natural Resources, Inc., Alpha Metallurgical Resources, Inc., Foresight Energy Resources LLC, and Peabody Energy Corporation. The company also competes directly with smaller producers in the Illinois Basin and Appalachian regions and competes with companies that produce coal from foreign countries in international markets. In the oil & gas sector, the company competes with companies that acquire mineral interests, integrated enterprises that explore for and produce hydrocarbons, and entities that operate midstream, refining, or marketing businesses, many of which possess greater financial and human resources.

The company generates revenue through coal production and sales from its mining operations, royalty income from oil & gas mineral interests, and royalty income from coal mineral interests leased to its mining complexes. The company markets its coal through established customer relationships and competitive bidding processes, with a significant portion of volumes sold under long-term coal supply agreements. During 2025, approximately 86.5% ³ of total coal sales were under long-term contracts with committed term expirations ranging from 2026 to 2030. The company also participates in international coal markets, primarily through brokered transactions shipping to end-users in Europe, Africa, Asia, North America, and South America.

The company manages and reports its coal operations under two regions, Illinois Basin and Appalachia. In 2025, the Illinois Basin segment produced 26.1 ⁴ million tons of coal and the Appalachia segment produced 7.1 ⁵ million tons, for total production of 33.2 ⁶ million tons. The company sold 33.0 ⁷ million tons of coal in 2025, of which 73% ⁸ were leased from Alliance Resource Properties. The coal sold in 2025 was approximately 18.7% ⁹ low-sulfur coal, 51.8% ¹⁰ medium-sulfur coal, and 29.5% ¹¹ high-sulfur coal. Of the 2025 tons sold, 89.2% ¹² were purchased by domestic electric utilities and 8.6% ¹³ were sold into international markets through brokered transactions. For tons sold to domestic electric utilities, 100% ¹⁴ were sold to utility plants with installed pollution control devices. The Btu content of the company's coal ranges from 11,400 ¹⁵ to 13,200 ¹⁶.

The company's oil & gas mineral interest business includes all activities related to the oil & gas mineral interests held directly or indirectly by Alliance Minerals and includes Alliance Minerals' equity interest in AllDale III. For the year ended December 31, 2025, production from the company's oil & gas mineral interests, not including its equity interest in AllDale III, was 1,628 ¹⁷ MBbls of oil, 6,674 ¹⁸ MMcf of natural gas, 908 ¹⁹ MBbls of natural gas liquids, and 3,648 ²⁰ MBOE. The company's Coal Royalties segment includes approximately 509.6 ²¹ million tons of reserves and substantially all of the 1.07 ²² billion tons of its coal mineral resources. The company's other growth investments include Matrix Group, which develops and markets industrial, mining and technology products and services worldwide, and Bitiki, which mines bitcoin. As of December 31, 2025, Bitiki had 3,702 ²³ active miners and 1,056 ²⁴ hosted machines, and held 592.01 ²⁵ bitcoin valued at $51.8 million ²⁶.

On October 31, 2025, the company acquired approximately 190 ²⁷ oil & gas net royalty acres in the Midland and Delaware Basins from 89 Energy for a purchase price of $10.0 million ²⁸. On December 31, 2025, the company increased its investment in Infinitum to $82.5 million ²⁹ by purchasing $14.9 million ³⁰ of Series F Preferred Stock. In February 2025, the company committed to invest up to $25 million ³¹ in limited partner interests in Gavin Generation, and as of December 31, 2025, had funded $17.3 million ³² of this commitment after giving effect to returns on its investment. On January 29, 2026, the decision was made to cease longwall production at the Mettiki Complex and primarily satisfy remaining contractual commitments from existing inventory.

For the year ended December 31, 2025, total revenues were $2,586.484 million ³³, compared to $2,477.861 million ³⁴ for the year ended December 31, 2024. Net income was $592.482 million ³⁵ for 2025, compared to $482.000 million ³⁶ for 2024. Diluted net income per limited partner unit was $4.81 ³⁷ for 2025, compared to $2.77 ³⁸ for 2024.

The company's growth strategy includes expanding its oil & gas mineral interests portfolio through acquisitions. On October 31, 2025, the company acquired approximately 190 ³⁹ oil & gas net royalty acres in the Midland and Delaware Basins from 89 Energy for a purchase price of $10.0 million ⁴⁰, enhancing its ownership position in the Permian Basin and furthering its business strategy to grow its Oil & Gas Royalties segment. The company expects reserve additions and related cash flows to grow through further development of its existing mineral interests as well as acquisitions of additional mineral interests.

The company's growth strategy also includes investments in growth-oriented businesses and energy-related technologies through its subsidiary AROP II, which aims to make strategic investments in what the company believes to be attractive opportunities that support the growth and development of technology and energy and related infrastructure. The company intends to pursue opportunities that leverage its core competencies and relationships with electric utilities, industrial customers, and federal and state governments. The company has made investments in Infinitum, a developer and manufacturer of electric motors featuring printed circuit board stators, NGP ET IV, which focuses on investments that are part of the energy transition, and Gavin Generation, which owns an interest in a joint venture that indirectly owns and operates a coal-fired power plant.The filing does not contain a specific operational outlook regarding supply chain, manufacturing capacity, technology infrastructure investments, or headcount strategy.The company faces headwinds from extensive environmental laws and regulations that could reduce demand for coal as a fuel source, including regulations related to greenhouse gas emissions, air emissions, water discharge, and hazardous substances. The company also faces risks from changes in coal prices and oil & gas prices, including as a result of global geopolitical tensions, which could impact results of operations. Additionally, the company faces risks from the inability to obtain and renew permits and surety bonds necessary for operations, which could limit its ability to continue or expand operations.

The company faces constraints from its dependency on unaffiliated operators to explore and drill on its oil & gas properties, which limits its ability to control the timing and quantity of production. The company also faces risks from potential disruptions in supply chains, inflationary pressures, and unexpected increases in raw material costs, which could impact the profitability of its operations.

The company faces material risks from the extensive environmental laws and regulations that could reduce demand for coal as a fuel source, including regulations related to greenhouse gas emissions, air emissions, water discharge, and hazardous substances, which could have a material adverse effect on its business, financial condition, and results of operations. The company is exposed to risks from changes in coal prices and oil & gas prices, including as a result of global geopolitical tensions, which could impact its results of operations and cash flows. The company faces risks from its dependency on unaffiliated operators to explore and drill on its oil & gas properties, which limits its ability to control the timing and quantity of production and the resulting royalty income. The company also faces risks from the inability to obtain and renew permits and surety bonds necessary for operations, which could limit its ability to continue or expand its mining operations. Additionally, the company is exposed to risks from potential disruptions in supply chains, inflationary pressures, and unexpected increases in raw material costs, which could impact the profitability of its operations.

Management's message emphasizes that the company is a diversified natural resource company whose core objective is to maximize the value of its mineral asset base, both through coal production from its mining operations and through the leasing and development of its coal and oil & gas mineral interests. Management states that the company's strategy is to provide reliable, baseload fuel for electricity generating customers while positioning the Partnership for long-term growth through investments in energy and related infrastructure. Management believes the company's diverse resource portfolio and targeted investments will continue to create long-term value for its unitholders.