Alliance Resource Partners, L.P

ARLP’s operating footprint is concentrated in the eastern United States, with seven underground mining complexes across Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia, plus a coal-loading terminal on the Ohio River in Indiana. The coal business is managed in two regions—Illinois Basin and Appalachia—reflecting differences in geology, coal quality, transportation options, and marketing opportunities. Its oil & gas mineral interests are located in key U.S. producing regions, primarily the Permian, Anadarko, and Williston Basins, creating exposure to U.S. shale development activity and regulatory conditions around drilling and hydraulic fracturing. While production assets are U.S.-based, ARLP participates in export markets with shipments to end-users in Europe, Africa, Asia, North America, and South America. Geographic mix matters because delivered coal economics depend heavily on rail/river logistics and proximity to customers, while royalties depend on basin-level operator activity and infrastructure.

ARLP’s results are exposed to coal demand and pricing, which are driven by utility dispatch economics versus natural gas, nuclear, and renewables, as well as weather and regulatory developments. Contract structures can mitigate some cost variability through price adjustments, but they may not fully offset changes in production and operating costs, and disputes can lead to early termination or volume reductions. Customer concentration and credit risk are material given reliance on large utilities and the risk that customers may refuse shipments despite contractual obligations. The partnership also faces operational and regulatory risks typical of underground mining, including safety incidents, permitting constraints, and reclamation obligations, as well as transportation/logistics constraints that affect delivered cost. In its oil & gas royalties business, activity and revenues depend on operator drilling and hydraulic fracturing, which are subject to commodity price cycles and potential regulatory restrictions; ARLP also highlights cyber/terrorism risks due to reliance on digital systems and the strategic nature of energy assets.