| Segment Information |
20.SEGMENT INFORMATION We operate in the United States as a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers as well as royalty income from oil & gas mineral interests located in key producing regions across the United States. We aggregate multiple operating segments into four reportable segments, Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties. We also have an “all other” category referred to as Other, Corporate and Elimination. Our two coal operations reportable segments correspond to major coal producing regions in the eastern United States with similar economic characteristics including coal quality, geology, coal marketing opportunities, mining and transportation methods and regulatory issues. The two coal operations reportable segments include seven mining complexes operating in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia and a coal loading terminal on the Ohio River in Indiana. Our Oil & Gas Royalties reportable segment includes our oil & gas mineral interests which are located primarily across premier basins and resource plays including the Permian, Anadarko, Bakken, and after the AllDale III & IV Acquisition on July 1, 2026, Haynesville. The operations within our Oil & Gas Royalties reportable segment primarily include receiving royalties and lease bonuses for our oil & gas mineral interests. Our Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties, which are either (a) leased to our mining complexes or (b) near our coal mining operations and external mining operations but not yet leased. The Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View Coal, LLC mining complex, which includes the River View and Henderson County mines and (d) the Hamilton mining complex. The segment also includes activity associated with support services and our non-operating mining complexes. The Appalachia Coal Operations reportable segment includes (a) the Mettiki mining complex, (b) the Tunnel Ridge, LLC mining complex and (c) the MC Mining, LLC mining complex. The Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals through its consolidated subsidiaries and prior to the AllDale III & IV Acquisition on July 1, 2026, our equity method investment in AllDale III. See Note 3 – Variable Interest Entities and Note 4 – Acquisitions for more information. The Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties that are (a) leased to certain of our mining complexes in the Illinois Basin and Appalachia Basin or (b) located near our operations and external mining operations. Other, Corporate and Elimination includes marketing and administrative activities, certain of our subsidiaries, primarily consisting of Matrix Design Group, LLC, its subsidiaries, and Alliance Design Group, LLC (collectively referred to as "Matrix Group"), Bitiki KY, LLC, which holds our crypto-mining activities (see Note 7 – Digital Assets), our non-oil & gas equity investments (see Note 3 – Variable Interest Entities and Note 9 – Investments), Wildcat Insurance, LLC which assists the ARLP Partnership with its insurance requirements, and AROP Funding and Alliance Finance (both discussed in Note 10 – Long-Term Debt). The eliminations included in Other, Corporate and Elimination primarily represent the intercompany coal royalty transactions described above between our Coal Royalties reportable segment and our coal operations’ mines. Reportable segment results are presented below. | | | | | | | | | | | | | | | | | | | Coal Operations | | Royalties | | | | | | | Illinois | | | | | | | | | | | | | Basin | | Appalachia | | Oil & Gas | | Coal | | Total | | | | | (in thousands) | | Three Months Ended June 30, 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenues - Outside | | $ | 337,888 | | $ | 151,897 | | $ | 46,527 | | $ | — | | $ | 536,312 | | Revenues - Intercompany | | | 1,584 | | | — | | | — | | | 22,723 | | | 24,307 | | Total revenues (1) | | | 339,472 | | | 151,897 | | | 46,527 | | | 22,723 | | | 560,619 | | Less: | | | | | | | | | | | | | | | | | Segment Adjusted EBITDA Expense (2) | | | 229,177 | | | 101,277 | | | 7,224 | | | 9,754 | | | 347,432 | | Transportation expenses | | | 6,083 | | | 1,427 | | | — | | | — | | | 7,510 | | Other segment items (3) | | | — | | | — | | | 1,291 | | | — | | | 1,291 | | Segment Adjusted EBITDA (4) | | | 104,212 | | | 49,193 | | | 38,012 | | | 12,969 | | | 204,386 | | | | | | | | | | | | | | | | | | | Capital expenditures (6) | | | 37,466 | | | 9,579 | | | — | | | — | | | 47,045 | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenues - Outside | | $ | 350,247 | | $ | 145,983 | | $ | 35,501 | | $ | — | | $ | 531,731 | | Revenues - Intercompany | | | — | | | — | | | — | | | 17,612 | | | 17,612 | | Total revenues (1) | | | 350,247 | | | 145,983 | | | 35,501 | | | 17,612 | | | 549,343 | | Less: | | | | | | | | | | | | | | | | | Segment Adjusted EBITDA Expense (2) | | | 231,189 | | | 112,829 | | | 4,558 | | | 5,795 | | | 354,371 | | Transportation expenses | | | 4,829 | | | 3,729 | | | — | | | — | | | 8,558 | | Other segment items (3) | | | — | | | — | | | 1,060 | | | — | | | 1,060 | | Segment Adjusted EBITDA (4) | | | 114,229 | | | 29,425 | | | 29,883 | | | 11,817 | | | 185,354 | | | | | | | | | | | | | | | | | | | Capital expenditures (6) | | | 50,072 | | | 15,226 | | | — | | | 102 | | | 65,400 | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenues - Outside | | $ | 656,850 | | $ | 292,000 | | $ | 88,311 | | $ | 291 | | $ | 1,037,452 | | Revenues - Intercompany | | | 1,584 | | | — | | | — | | | 41,823 | | | 43,407 | | Total revenues (1) | | | 658,434 | | | 292,000 | | | 88,311 | | | 42,114 | | | 1,080,859 | | Less: | | | | | | | | | | | | | | | | | Segment Adjusted EBITDA Expense (2) | | | 442,763 | | | 212,729 | | | 13,188 | | | 16,878 | | | 685,558 | | Transportation expenses | | | 12,260 | | | 3,893 | | | — | | | — | | | 16,153 | | Other segment items (3) | | | — | | | — | | | 2,504 | | | — | | | 2,504 | | Segment Adjusted EBITDA (4) | | | 203,411 | | | 75,378 | | | 72,619 | | | 25,236 | | | 376,644 | | | | | | | | | | | | | | | | | | | Total assets (5) | | | 1,070,838 | | | 420,593 | | | 920,383 | | | 308,896 | | | 2,720,710 | | Capital expenditures (6) | | | 94,360 | | | 31,127 | | | — | | | 15,500 | | | 140,987 | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenues - Outside | | $ | 693,242 | | $ | 285,479 | | $ | 72,414 | | $ | — | | $ | 1,051,135 | | Revenues - Intercompany | | | — | | | — | | | — | | | 33,407 | | | 33,407 | | Total revenues (1) | | | 693,242 | | | 285,479 | | | 72,414 | | | 33,407 | | | 1,084,542 | | Less: | | | | | | | | | | | | | | | | | Segment Adjusted EBITDA Expense (2) | | | 441,148 | | | 233,397 | | | 10,279 | | | 12,195 | | | 697,019 | | Transportation expenses | | | 11,692 | | | 7,066 | | | — | | | — | | | 18,758 | | Other segment items (3) | | | — | | | — | | | 2,368 | | | — | | | 2,368 | | Segment Adjusted EBITDA (4) | | | 240,402 | | | 45,016 | | | 59,767 | | | 21,212 | | | 366,397 | | | | | | | | | | | | | | | | | | | Total assets (5) | | | 1,076,634 | | | 472,142 | | | 847,300 | | | 308,959 | | | 2,705,035 | | Capital expenditures (6) | | | 102,657 | | | 46,054 | | | — | | | 147 | | | 148,858 | |
| (1) | The following is a reconciliation of our total segment revenues to total consolidated revenues: |
| | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30, | | June 30, | | | | 2026 | | 2025 | | 2026 | | 2025 | | | | | (in thousands) | | Total segment revenues | | $ | 560,619 | | $ | 549,343 | | $ | 1,080,859 | | $ | 1,084,542 | | Other, Corporate and Elimination revenues - Outside | | | 15,248 | | | 15,732 | | | 30,125 | | | 36,796 | | Other, Corporate and Elimination revenues - Intercompany | | | (24,307) | | | (17,612) | | | (43,407) | | | (33,407) | | Total consolidated revenues | | $ | 551,560 | | $ | 547,463 | | $ | 1,067,577 | | $ | 1,087,931 | |
Revenues included in Other, Corporate and Elimination are attributable to intercompany eliminations, which are primarily intercompany coal royalties eliminations, outside revenues at the Matrix Group and other outside miscellaneous sales and revenue activities. | (2) | Segment Adjusted EBITDA Expense includes operating expenses, coal purchases, if applicable, and other income or expense as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA Expense is used as a financial measure by our management to assess the operating performance of our segments. Segment Adjusted EBITDA Expense is a key component of Segment Adjusted EBITDA in addition to coal sales, royalty revenues and other revenues. The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses. |
| (3) | Other segment items include: |
Oil & Gas Royalties – equity method investment income from AllDale III and income allocated to noncontrolling interest | (4) | Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses adjusted for certain items that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA is used as a financial measure by Mr. Craft, who is also our chief operating decision maker (“CODM”), other management and by external users of our financial statements such as investors, commercial banks, research analysts and others. Our CODM uses Segment Adjusted EBITDA in assessing segment performance and deciding how to allocate resources. Segment Adjusted EBITDA provides useful information to our CODM and investors regarding our performance and results of operations because Segment Adjusted EBITDA (i) provides additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provides investors with the financial analytical framework upon which we base financial, operational, compensation and planning decisions, (iii) presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations and (iv) allows our CODM and management to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. |
The following is a reconciliation of total Segment Adjusted EBITDA for our segments to consolidated income before income taxes: | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30, | | June 30, | | | | 2026 | | 2025 | | 2026 | | 2025 | | | | | (in thousands) | | Segment Adjusted EBITDA – total segments | | $ | 204,386 | | $ | 185,354 | | $ | 376,644 | | $ | 366,397 | | Other, Corporate and Elimination profit (loss) | | | 7,122 | | | (3,050) | | | 13,913 | | | (3,578) | | General and administrative | | | (25,836) | | | (20,380) | | | (49,877) | | | (40,960) | | Depreciation, depletion and amortization | | | (81,277) | | | (76,340) | | | (163,631) | | | (144,969) | | Asset impairments | | | — | | | — | | | (37,820) | | | — | | Interest expense, net | | | (12,247) | | | (8,682) | | | (23,673) | | | (16,249) | | Change in fair value of digital assets | | | (6,345) | | | 12,856 | | | (17,974) | | | 7,282 | | Impairment loss on investments | | | — | | | (25,000) | | | — | | | (25,000) | | Noncontrolling interest | | | 1,986 | | | 1,615 | | | 3,639 | | | 3,192 | | Income before income taxes | | $ | 87,789 | | $ | 66,373 | | $ | 101,221 | | $ | 146,115 | |
Other, Corporate and Elimination profit (loss) represents profit (loss) from operating segments below the quantitative thresholds when determining our reportable segments as well as the elimination of intersegment profit (loss) between our reportable segments. The operating segments included are those described as part of our Other, Corporate and Eliminations category. | (5) | The following is a reconciliation of our total segment assets to total consolidated assets: |
| | | | | | | | | | June 30, | | | | 2026 | | 2025 | | | | | (in thousands) | | Total segment assets | | $ | 2,720,710 | | $ | 2,705,035 | | Other, Corporate and Elimination total assets | | | 221,082 | | | 164,411 | | Total consolidated assets | | $ | 2,941,792 | | $ | 2,869,446 | |
| (6) | Capital expenditures excludes $15.1 million and $31.3 million paid towards oil & gas reserve acquisitions for the three and six months ended June 30, 2026, respectively, and $2.7 million paid towards oil & gas reserve acquisitions for the six months ended June 30, 2025. |
| | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30, | | June 30, | | | | 2026 | | 2025 | | 2026 | | 2025 | | | | | (in thousands) | | Total segment capital expenditures | | $ | 47,045 | | $ | 65,400 | | $ | 140,987 | | $ | 148,858 | | Other, Corporate and Elimination capital expenditures | | | 2,969 | | | 1,617 | | | 4,717 | | | 4,935 | | Total consolidated capital expenditures | | $ | 50,014 | | $ | 67,017 | | $ | 145,704 | | $ | 153,793 | |
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