ALLIANCE RESOURCE PARTNERS LP

Significant Relationships Referenced in Notes to Condensed Consolidated Financial Statements

Organization

ARLP is a Delaware limited partnership listed on the NASDAQ Global Select Market under the ticker symbol “ARLP.” ARLP was formed in May 1999 and completed its initial public offering on August 19, 1999 when it acquired substantially all of the coal production and marketing assets of Alliance Resource Holdings, Inc., a Delaware corporation, and its subsidiaries. We are managed by our general partner, MGP, a Delaware limited liability company which holds a non-economic general partner interest in ARLP.

On July 1, 2026, Alliance Minerals acquired certain general partner and limited partner interests in AllDale Minerals III, LP (“AllDale III”) & AllDale Minerals IV, LP ("AllDale IV", and collectively with AllDale III, "AllDale III & IV") for $206.2 million, subject to customary post-closing adjustments (the “AllDale III & IV Acquisition”). The AllDale III & IV Acquisition expands and diversifies the ARLP Partnership's portfolio of mineral and royalty interests through the acquisition of approximately 48,500 net royalty acres across premier basins and resource plays including the Permian, Anadarko, Bakken and Haynesville. See Note 3 – Variable Interest Entities, Note 4 – Acquisitions and Note 19 – Related Party Transactions for more information.

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of September 30, 2026 and December 31, 2025, the results of our operations and comprehensive income for the three and nine months ended September 30, 2026 and 2025 and cash flows for the nine months ended September 30, 2026 and 2025. All intercompany transactions and accounts have been eliminated. Certain immaterial amounts in the prior period have been reclassified to conform to the current period presentation.

These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all the information normally included with financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2026.

Use of Estimates

The preparation of the ARLP Partnership’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates.

Derivative Financial Instruments

Our investments in oil & gas mineral interests expose us to changes in the market price for oil, natural gas and natural gas liquids. To manage risks related to fluctuations in prices attributable to projected oil and natural gas production on our mineral interests, we hold derivative contracts on a portion of production at AllDale III & IV. Such instruments are variable-to-fixed price swaps. A fixed-price swap contract between us and a counterparty specifies a fixed commodity price and a future settlement date. We are not actively entering into new derivative instruments and do not hold derivative instruments for speculative or trading purposes.

Derivative instruments that have not settled in cash are reflected at fair value as either derivative assets or liabilities in the ARLP Partnership’s accompanying consolidated balance sheets. We do not specifically designate derivative instruments as fair value or cash flow hedges, even though they reduce our exposure to changes in oil and natural gas prices; therefore, gains and losses arising from changes in the fair value of derivatives are recognized on a net basis in the condensed consolidated statements of income withinLoss on derivative instruments, net. Cash flows arising from the settlement of derivative instruments are classified as operating activities in the ARLP Partnership’s condensed consolidated statements of cash flows.