ALLIANCE RESOURCE PARTNERS LP Q4 FY2024 earnings call

• Full-year 2024 Results: Total revenues $2.4 billion, adjusted EBITDA $714.2 million, net income $360.9 million. Coal sales volumes 33.3 million tons, lower than 2023 due to elevated customer inventories, mild weather, low natural gas prices.
• Fourth Quarter 2024 Results: Total revenues $590.1 million, down from 2023 quarter. Coal sales price per ton $59.97, production 6.9 million tons, sales volumes 8.4 million tons.
• Operational Challenges: Appalachia mining conditions at Tunnel Ridge and Mettiki, shipping delays at MC Mining, lower production in Illinois basin due to export pricing.
• Safety: Fourth quarter 2024 was one of the safest periods ever for Alliance.
• Digital Assets: Bitcoin mining operation positively impacted net income, fair value of digital assets $45 million at end of 2024 quarter.

Coal Operations

• Full-year 2024: Total revenues were $2.4 billion, adjusted EBITDA was $714.2 million, net income was $360.9 million, and earnings per unit were $2.77. Coal sales volumes came in at 33.3 million tons, 1.1 million tons lower than 2023.
• Fourth Quarter 2024: Total revenues were $590.1 million. Coal sales volumes were 8.4 million tons, down 2.3% vs 2023 quarter. Segment-adjusted EBITDA expense per ton sold for coal operations was $48.09, an increase vs 2023 and sequential quarters. Appalachia coal sales volumes were down due to challenging mining conditions, while Illinois Basin coal sales volumes increased.

Oil and Gas Royalties

• Full-year 2024: Achieved another record year of volumes on a BOE basis.
• Fourth Quarter 2024: Total revenues were $48.5 million, down 8.6% vs 2023 quarter. Year-over-year decrease in revenues reflected lower realized oil and gas commodity pricing, offset by increased volumes.

• Coal Sales Volumes: 2025 expected to be in the range of 32.25 million tons to 34.25 million tons, with over 78% of volumes committed and priced at the midpoint of the range.
• Sales Pricing: Illinois Basin guided to $50 to $53 per ton, Appalachia to $76 to $82 per ton.
• Costs: Illinois basin segment-adjusted EBITDA expense per ton expected to be $35 to $38, Appalachia $53 to $60.
• Capital Expenditures: 2025 guidance $285 million to $320 million, down from 2024's $429 million.
• Oil and Gas Royalties: Expected sales of 1.55 to 1.65 million barrels of oil, 6.1 to 6.5 million McF of natural gas, and 775,000 to 825,000 barrels of natural gas liquids.

• Mining Conditions: Challenging conditions at Tunnel Ridge and Mettiki impacting production, with mis-shipments carrying over to 2025.
• Market Volatility: Impact of natural gas prices, export pricing, and commodity price volatility on oil and gas royalties.
• Regulatory Uncertainty: Impact of changing regulations on coal and oil and gas operations, including potential effects of new administration policies.

Q: Nathan Martin asked about tariffs and their impact on ARLP's business and coal markets.

A: Joe Craft stated it's hard to predict exactly, but tariffs on Canada/Mexico likely limited, and tariffs to China should not impact much as most products are domestic-based.

Q: Mark Reichman inquired about Appalachia operations and if operational issues are in the rear view mirror.

A: Joe Craft mentioned longwall moves in February at Tunnel Ridge and Mettiki, with hopes for improved conditions, but Mettiki remains somewhat unpredictable.

Q: David Marsh asked about factors that might swing Illinois Basin pricing back up.

A: Joe Craft said weather, supply-demand imbalance, and contract prices supporting higher prices could help.

Q: Dave Storms asked about domestic inventory levels and regulatory changes in the oil and gas segment.

A: Joe Craft said domestic inventory levels near balance, and the oil and gas segment has competitive demand for acquiring new assets with opportunities in 2025.