0001104659-26-020468
SEC filingRevenue fell 10.4% to $2.19B and net income dropped 13.8% to $311.2M, driven by lower coal pricing and volumes.
Alliance Resource Partners, L.P. (ARLP) describes itself as a diversified natural resource company that generates operating and royalty income from the production and marketing of coal, as well as royalty income from oil & gas mineral interests. 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 six states and a coal-loading terminal on the Ohio River in Indiana. Beyond core mineral operations, ARLP invests in growth-oriented businesses through its subsidiary Matrix Group (industrial and mining technology products) and Bitiki (bitcoin mining), and holds investments in Infinitum, NGP ET IV, and Gavin Generation.
The company manages and reports its coal operations under two regions: Illinois Basin and Appalachia. The Illinois Basin includes four mining complexes: Gibson, River View, Hamilton, and Warrior. Appalachia includes three complexes: Tunnel Ridge, Mettiki, and MC Mining. Additionally, the Oil & Gas Royalties segment encompasses mineral interests in the Permian, Anadarko, and Williston Basins, covering approximately 70,000 net royalty acres. The Coal Royalties segment includes approximately 509.6 million tons of reserves and 1.07 billion tons of resources owned or leased by Alliance Resource Properties. Revenue share by segment is not explicitly disclosed in this section.
The company produces bituminous coal of various sulfur and heat contents, serving both thermal and metallurgical markets. Key product categories include low-sulfur, medium-sulfur, and high-sulfur coal with Btu content ranging from 11,400 to 13,200. Beyond coal, Matrix Group offers data network, communication, tracking systems, proximity detection systems, collision avoidance systems, and data analytics software. Bitiki operates crypto-mining activities and hosts third-party miners, holding 592.01 bitcoin as of December 31, 2025.
Coal is marketed through established customer relationships and competitive bidding, with approximately 86.5% of 2025 sales under long-term contracts expiring between 2026 and 2030. Domestic electric utilities accounted for 89.2% of tons sold, while 8.6% were sold into international markets via brokered transactions to destinations in Europe, Africa, Asia, North America, and South America. The remainder went to domestic industrial and reseller customers. Two customers, Louisville Gas and Electric Company and American Electric Power Company Inc., each represented more than 10% of total revenue in 2025. Transport modes include barge (45.8% of volume), rail (34.8%), and truck (19.4%).
The coal market is highly competitive. Principal competitors named 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 with smaller producers in the Illinois Basin and Appalachia, as well as international coal producers for export sales. In mineral interest acquisition, competition includes mineral aggregators, operators, private equity sponsors, and land companies, with many competitors possessing greater financial and human resources.
ARLP's core objective is to maximize the value of its mineral asset base through coal production and leasing of coal and oil & gas mineral interests. Key strategic pillars include providing reliable baseload fuel for electricity generating customers, positioning for long-term growth through investments in energy and related infrastructure, leveraging relationships with utilities and government partners to pursue complementary opportunities, and continuing to identify and make strategic investments in technology and energy infrastructure that may create new platforms for future business lines.
As of December 31, 2025, ARLP employed 3,575 full-time employees: 2,895 in active coal mining, 236 at Matrix Design, 237 in other operating activities, and 207 corporate employees. None of the workforce is subject to a collective bargaining agreement. Retention is strong, with over 47% of employees serving more than five years and a typical employee having approximately four years of experience with the Partnership. The company offers competitive compensation, comprehensive benefits, on-site medical clinics at each coal operation, and emphasizes workplace safety through regular training and monitoring.
Total revenues decreased 10.4% to $2.19 billion in 2025 from $2.45 billion in 2024, primarily due to lower coal sales pricing and transportation revenues. Coal sales dropped to $1.93 billion, driven by a 7.5% decline in average sales price (reducing revenue by $157.0M) and a 1.1% decrease in tons sold (reducing revenue by $22.3M). Transportation revenues fell $76.0M. Oil & gas royalties were essentially flat at $137.8M. Net income attributable to ARLP decreased 13.8% to $311.2 million ($2.40 per unit) from $360.9 million ($2.77 per unit) in 2024, reflecting lower revenues and a $4.4 million decrease in the fair value of digital assets, partially offset by lower operating expenses and increased equity method investment income. Segment Adjusted EBITDA Expense decreased 9.1% to $1.39 billion, driven by a 9.3% decline in coal operations’ expense to $1.36 billion, with per-ton costs down 8.4% to $41.29.
Illinois Basin Coal Operations’ Segment Adjusted EBITDA fell 3.6% to $456.7 million as lower coal sales prices (down 7.7%) outweighed a 4.0% increase in tons sold and reduced operating expenses. Appalachia Coal Operations saw a sharper 18.5% decline to $133.7 million, with tons sold down 15.6% and average price down 1.8%, partially offset by lower per-ton costs. Oil & Gas Royalties Segment Adjusted EBITDA rose slightly (0.5%) to $117.5 million, as a 7.2% increase in BOE volumes and higher other revenues offset a 7.0% drop in average price per BOE to $37.79. Coal Royalties posted a 20.2% increase to $52.9 million, driven by a 14.4% rise in royalty tons sold and higher average royalty rates.
Management targets 2026 capital expenditures between $280 million and $300 million and projects average annual maintenance capital over the next five years at approximately $7.23 per ton produced. The company expects to fund operations and growth through cash from operations, existing cash ($71.2M at year-end), and credit facilities. Strategic priorities include expanding coal operations, extending mine lives, investing in oil & gas mineral interests, and strengthening Matrix Group and energy-related technologies. No specific revenue or earnings guidance was provided.
Cash and cash equivalents decreased sharply to $71.2 million at December 31, 2025 from $137.0 million a year earlier. Total debt (net of discount and issuance costs) stood at $450.8 million, with principal maturities of $463.5 million. The debt profile shows near-term maturities of $28.0 million in 2026 and a large $400.0 million bullet due in 2029 (the 8.625% Senior Notes). Shareholders' equity remained relatively stable at $1.86 billion. Inventories increased to $142.6 million (up from $120.7 million), driven by coal inventory write-downs and higher stockpiles.
The Notes disclose $94.3 million in contractual commitments at year-end, primarily related to operating leases, coal mineral reserve leases, and other agreements. Additionally, the contingent consideration liability (related to the Hamilton mine acquisition) was valued at $18.0 million, up from $13.1 million due to changes in coal price assumptions and discount rates. Asset retirement obligations totaled $157.6 million, with estimated payments of $4.3 million in 2026 and $246.7 million thereafter, supported by $158.0 million in surety bonds.
No unit repurchases occurred in 2025. Distributions to partners totaled $333.7 million, reflecting a quarterly run rate of about $0.65 per unit (implied yield ~6-7%). Capital expenditures were $263.3 million, significantly lower than the prior year's $428.7 million, primarily due to reduced mine development spending. Net debt decreased by $39.9 million as the company repaid $14.1 million of equipment financings and term loans while issuing no new debt. The securitization facility had no outstanding borrowings at year-end.
Segment-level financial data is not provided in the Notes excerpts available; the information is likely found in Note 25, which was not included in the input. Therefore, no segment breakdown can be extracted.
The provided document excerpt does not include the actual cash flow statement figures. Page 101, which contains the Consolidated Statements of Cash Flows, is not included in the text. Therefore, no analysis of cash flow quality, CFO vs net income, capex intensity, or free cash flow coverage can be performed. The input only contains the table of contents and audit report, which do not disclose any cash flow numbers.