ALLIANCE RESOURCE PARTNERS LP

The following is a reconciliation of the changes in workers’ compensation liability (including current and long-term liability balances):

The discount rate used to calculate the estimated present value of future obligations for workers’ compensation was 5.17% and 4.66% at December 31, 2024 and 2023, respectively.

The valuation gain in 2024 was primarily attributable to a favorable change in claims development and an increase in the discount rate used to calculate the estimated present value of the future obligations. The valuation gain in 2023 was primarily attributable to a favorable change in claims development partially offset by a decrease in the discount rate used to calculate the estimated present value of the future obligations.

As of December 31, 2024 and 2023, we had $106.8 million and $99.4 million, respectively, in surety bonds and letters of credit outstanding to secure workers’ compensation obligations.

We limit our exposure to traumatic injury claims by purchasing a high deductible insurance policy that starts paying benefits after deductibles for the particular claim year have been met. Our workers’ compensation liability above is presented on a gross basis and does not include our expected receivables on our insurance policy. Our receivables for traumatic injury claims under this policy as of December 31, 2024 and 2023 were $3.7 million and $4.1 million, respectively. Our receivables are included inOther long-term assets on our consolidated balance sheets.

The following is a reconciliation of the changes in pneumoconiosis benefit obligations:

The following is a reconciliation of the changes in the pneumoconiosis benefit obligation recognized in accumulated other comprehensive loss:

The discount rate used to calculate the estimated present value of future obligations for pneumoconiosis benefits was 5.51%,4.81% and 5.0% at December 31, 2024, 2023 and 2022, respectively.

The actuarial gain component of the change in benefit obligations in 2024 was primarily attributable to a) favorable changes in the discount rate, b) favorable demographics in the at-risk population, and c) favorable assumption changes related to Federal and State benefit levels. These favorable changes were partially offset by unfavorable assumption changes regarding future average medical benefits and adjustment based on new hires or re-hires. The actuarial loss component of the change in benefit obligations in 2023 was primarily attributable to a) unfavorable changes in the discount rate, b) unfavorable demographics in the at-risk population, c) unfavorable black lung claims experience, d) unfavorable assumption changes regarding future average medical benefits, and e) unfavorable assumption changes related to Federal and State benefit levels.

Summarized below is information about the amounts recognized in the accompanying consolidated balance sheets for pneumoconiosis and workers’ compensation benefits:

Both the pneumoconiosis benefit and workers’ compensation obligations were unfunded at December 31, 2024 and 2023.

The pneumoconiosis benefit and workers’ compensation expense consists of the following components: