ALLIANCE RESOURCE PARTNERS LP

For the period ended Dec 31, 2023. Filed Feb 23, 2024.

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FY2023 · Filed Feb 23, 2024

ARLP$24.76+1.5%Stored close · as of Nov 9, 2026

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Contents

23. 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 and international utilities and industrial users as well as royalty income from oil & gas mineral interests. 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. Ourtwo 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. Thetwo coal operations reportable segments include seven mining complexes operating in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia and a coal loading terminal in Indiana on the Ohio River. Our Oil & Gas Royalties reportable segment includes our oil & gas mineral interests which are located primarily in the Permian (Delaware and Midland), Anadarko (SCOOP/STACK) and Williston (Bakken) basins. 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 but not yet leased.

The Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC's ("Gibson ") mining complex, (b) the Warrior Coal, LLC ("Warrior") mining complex, (c) the River View mining complex and (d) the Hamilton mining complex. The segment also includes our Mt. Vernon Transfer Terminal, LLC ("Mt. Vernon") coal loading terminal in Indiana which operates on the Ohio River, Mid-America Carbonates, LLC ("MAC") and other support services, and our non-operating mining complexes.

The Appalachia Coal Operations reportable segment includes (a) the Mettiki mining complex, (b) the Tunnel Ridge mining complex and (c) the MC Mining, LLC ("MC Mining") mining complex.

The Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals' through its consolidated subsidiaries as well as equity interests held in AllDale III (Note 12 – Equity Investments).

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 both the Illinois Basin Coal Operations and Appalachia

Coal Operations reportable segments or (b) located near our operations and external mining operations. Approximately 60% of the coal sold by our coal operations' mines was leased from our Coal Royalties entities.

Other, Corporate and Elimination includes marketing and administrative activities, Matrix Design Group, LLC, its subsidiaries, and Alliance Design Group, LLC (collectively referred to as the "Matrix Group"), our investments in Francis, Infinitum, NGP ET IV and Ascend (see Note 12 – Equity Investments), Wildcat Insurance, which assists the ARLP Partnership with its insurance requirements, AROP Funding and Alliance Finance (both discussed in Note 6 – Long-Term Debt) and other miscellaneous activities. 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 · · Other, · · ·
· · Illinois · · · · · · Corporate and · · ·
· Basin · Appalachia · Oil & Gas · Coal · · Elimination · Consolidated
· · (in thousands)
Year Ended December 31, 2023

Revenues - Outside (1)	$1,481,556	$883,334	$141,525	$42	$60,244	$2,566,701
Revenues - Intercompany	—	—	—	65,572	(65,572)	—
Total revenues (1)	1,481,556	883,334	141,525	65,614	(5,328)	2,566,701

Segment Adjusted EBITDA Expense (2)	861,288	516,471	16,532	24,451	(14,024)	1,404,718
Segment Adjusted EBITDA (3)	514,118	330,723	121,508	41,163	4,661	1,012,173
Total assets	966,102	488,427	781,184	315,592	237,121	2,788,426
Capital expenditures (4)	257,885	116,217	—	400	4,836	379,338

Year Ended December 31, 2022

Revenues - Outside (1)	$1,296,305	$928,087	$154,897	$56	$40,622	$2,419,967
Revenues - Intercompany	—	—	—	60,624	(60,624)	—
Total revenues (1)	1,296,305	928,087	154,897	60,680	(20,002)	2,419,967

Segment Adjusted EBITDA Expense (2)	806,080	464,029	15,395	21,871	(23,497)	1,283,878
Segment Adjusted EBITDA (3)	420,684	426,402	143,179	38,809	3,495	1,032,569
Total assets	779,018	431,913	778,465	321,587	417,038	2,728,021
Capital expenditures (4)	158,624	76,603	—	38,276	12,891	286,394

Year Ended December 31, 2021

Revenues - Outside (1)	$919,597	$545,539	$86,439	$69	$27,586	$1,579,230
Revenues - Intercompany	—	—	—	51,402	(51,402)	—
Total revenues (1)	919,597	545,539	86,439	51,471	(23,816)	1,579,230

Segment Adjusted EBITDA Expense (2)	613,303	344,332	11,051	18,269	(33,198)	953,757
Segment Adjusted EBITDA (3)	265,292	172,601	76,920	33,202	9,383	557,398
Total assets	676,091	420,144	698,702	285,943	146,601	2,227,481
Capital expenditures (4)	60,166	47,577	—	45	15,196	122,984

(1)	Revenues included in the Other, Corporate and Elimination column 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 and other income. Transportation expenses are excluded as transportation revenues are recognized in an amount equal to transportation expenses when title passes to the customer.

The following is a reconciliation ofOperating expenses (excluding depreciation, depletion and amortization), the most comparable GAAP financial measure,* to *consolidated Segment Adjusted EBITDA Expense:

· · · · · · · · · ·
· · Year Ended December 31,
· 2023 · 2022 · 2021
· · (in thousands) ·
Operating expenses (excluding depreciation, depletion and amortization)	$1,368,787	$1,288,082	$944,419
Outside coal purchases	36,149	151	6,372
Other expense (income)	(218)	(4,355)	2,966
Segment Adjusted EBITDA Expense	$1,404,718	$1,283,878	$953,757

(3)

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 expense. Management therefore is able 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. Net income, the most comparable GAAP financial measure, is reconciled to consolidated Segment Adjusted EBITDA:


· · Year Ended December 31,
· 2023 · 2022 · 2021
· · (in thousands) ·
Net income	$636,170	$588,158	$183,369
Noncontrolling interest	(6,052)	(1,958)	(598)
Net income attributable to ARLP	$630,118	$586,200	$182,771
General and administrative	79,096	80,425	70,275
Depreciation, depletion and amortization	267,982	276,670	264,794
Interest expense, net	26,697	35,296	39,141
Income tax expense	8,280	53,978	417
Consolidated Segment Adjusted EBITDA	$1,012,173	$1,032,569	$557,398

(4)	Capital expenditures shown exclude $110.9 million, $92.6 million and $31.0 million paid for oil & gas acquisitions in 2023, 2022 and 2021, respectively. See Note 3 – Acquisitions for more information.

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