Alliance Resource Partners, L.P.

Greetings. Welcome to Alliance Resource Partners' fourth quarter 2025 earnings conference call. At this time, all participants will be in listen-only mode. The question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded.

At this time, questions.

Before beginning, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the Securities and Exchange Commission and are also reflected in this morning's press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize, If our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, the partnership has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by law to do so. Finally, we will also be discussing certain non-GAAP financial measures Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of ARLP's press release, which has been posted on our website and furnished to the SEC on Form 8K. With the required preliminaries out of the way, I will begin with a review of our fourth quarter 2025 results, discuss our 2026 guidance, then turned the call over to Joe Kraft, our Chairman, President, and Chief Executive Officer, for his comments. For the fourth quarter of 2025, which we refer to as the 2025 quarter, adjusted EBITDA was $191.1 million, up 54.1% from the fourth quarter of 2024, which we refer to as the 2024 quarter, and up 2.8% compared to the third quarter of 2025, which we refer to as the sequential quarter. Our net income attributable to ARLP in the 2025 quarter was 82.7 million or 64 cents per unit as compared to 16.3 million or 12 cents per unit in the 2024 quarter. This was the result of lower operating expenses, lower impairment charges, and higher investment income including $20 million in investment income in the 2025 quarter, of which $17.5 million was related to our share of an increase in the fair value of a coal-fired power plant indirectly owned and operated by an equity method investee. This helped offset a $15.4 million decrease in the fair value of our digital assets. Total revenues were $535.5 million in the 2025 quarter compared to $590.1 million in the 2024 quarter. This year-over-year decline was driven primarily by lower coal sales and transportation revenues, partially offset by record oil and gas royalty volumes. Compared to the sequential quarter, total revenues decreased 6.3% due to lower coal sales volumes and prices. Average coal sales price per ton for the 2025 quarter was $57.57. A 4% decrease versus the 2024 quarter and a 2.1% decrease sequentially. As noted during prior calls, higher priced legacy coal contracts entered into during the 2022 energy crisis continue to roll off and are being replaced at coal pricing levels assumed in our 2026 guidance ranges. Total coal production in the 2025 quarter was 8.2 million tons compared to 6.9 million tons in the 2024 quarter. Coal sales volumes were 8.1 million tons down from 8.4 and 8.7 million tons compared to the 2024 and sequential quarters. Segment adjusted EBITDA expense per ton sold for our coal operations was $40.24 per ton in the 2025 quarter, a decrease of 16.3 and 1.8% versus the 2024 and sequential quarters. In the Illinois Basin, coal sales volumes were 6.5 million tons in the 2025 quarter, down approximately 2% compared to both the 2024 and sequential quarters, primarily due to timing of committed deliveries. I would like to highlight the outstanding performance at our Hamilton Mining Complex where we achieved record production volumes and saleable yield during the 2025 full year. Segment adjusted EBITDA expense per ton in the Illinois Basin decreased 14.4% compared to the 2024 quarter, due primarily to increased production to Hamilton, resulting from fewer long haul move days and improved recoveries. Compared to the sequential quarter, Illinois Basin expense per ton decreased 3.8%. In our Appalachia region, coal sales volumes were 1.7 million tons in the 2025 quarter, down from 1.8 and 2.1 million tons in the 2024 and sequential quarters, respectively. This decrease was caused primarily by timing of committed sales at our Metiki mine and Tunnel Ridge volumes that were impacted by December longwall junk necessitated by a block of support coal needed to be left beneath four gas pipelines. Segment adjusted EBITDA expense per ton decreased 17.5% versus the 2024 quarter due primarily to increased production at our MC Mining and Metiki operations and higher recoveries at Tunnel Ridge. Compared to the sequential quarter, segment adjusted EBITDA expense increased 9.7%, primarily due to lower production and recoveries across the region. As I mentioned earlier at Metiki, A series of outages at a key customer's plant negatively impacted our shipments in the 2025 quarter. We have recently been informed that the plant expects additional outages during 2026, and they are not in a position to commit to purchase any additional tons from Metiki for the foreseeable future. Metiki depends on this customer purchasing a minimum of 1 million tons per year, and with no clear alternative customer to absorb production, issuing Warren Act notices became unavoidable. Medtiki expects to fulfill its existing contractual commitments, which are scheduled to conclude in March 2026, primarily from existing inventory. For the 2025 full year, segment adjusted EBITDA less capital expenditures at Medtiki was approximately $3.5 million. The anticipated impact of reduced sales volumes at Medtiki is reflected in our 2026 guidance. And additionally, the partnership will evaluate any potential impairment related to this decision during the first quarter of 2026. ARLP ended the 2025 quarter with 1.1 million tons of coal inventory, representing an increase of 0.4 and 0.1 million tons compared to the 2024 quarter and sequential quarter respectively. In the 2025 quarter, Hamilton continued to produce record levels, accelerating the completion of District 3, which we felt was necessary due to deterioration in the active leader entries. This will result in an extended longwall move that started last week, while the first longwall panel in District 4 awaits completion, scheduled for the first week of May 2026. In our royalty segments, we delivered strong results during the 2025 quarter. Total revenue was 56.8 million, up 17.2% year-over-year due to higher coal royalty tons, higher revenue per ton sold, and record oil and gas BOE volumes, which helped offset lower benchmark oil prices. For the full year 2025, our oil and gas royalty segment achieved another record year of volumes on a BOE basis. In the 2025 quarter, BOE volumes increased 20.2% year-over-year, and 10% sequentially, resulting in segment adjusted EBITDA of $30 million. As discussed last quarter, a high royalty interest multi-well development pad in the Permian Delaware Basin was awaiting completion. Those wells were brought online during the 2025 quarter, and we are now benefiting from flush production from those recent completions. Additionally, acquisition activity picked up in the 2025 quarter, and we completed 14.4 million of oil and gas minerals acquisitions. Segment adjusted EBITDA for our coal royalty segment increased to 14.6 million in the 2025 quarter, compared to 10.5 million in the 2024 quarter due to higher royalty tons sold, primarily from Tunnel Ridge. Turning now to our strong balance sheet, as well as our cash flows, as of December 31st, 2025, Our total and net leverage ratios improved to 0.66 and 0.56 times debt to trailing 12 months adjusted EBITDA. Total liquidity was 518.5 million, which included 71.2 million of cash and cash equivalents on hand. Additionally, we held 592 Bitcoins valued at 51.8 million at year end. For the 2025 quarter, after 44.8 million in capital expenditures, Alliance generated free cash flow of 93.8 million. We reported distributable cash flow of 100.1 million. And based on our 60 cent per unit quarterly cash distribution, this represented us paying out 77.7% of distributable cash flow and resulting in a distribution coverage ratio of 1.29 times. Looking now to our initial 2026 guidance detailed in this morning's release, There are a few notable areas that I would like to highlight. We anticipate ARLP's overall coal sales volumes for 2026 to increase and be in the range of 33.75 to 35.25 million tons. This guidance assumes the impact of reduced coal sales volumes at our Metiki mine and still represents an increase in sales volumes of 0.75 to 2.25 million tons across the Illinois basin and at Tunnel Ridge versus 2025. Demand fundamentals continue to strengthen, supported by higher natural gas prices and low growth from data centers and U.S. manufacturing, driving increased demand for our coal supply. Contracting activity has been robust, with over 93% of expected volumes in 2026 already committed and priced at the midpoint of our guidance. This is materially better than where we were 12 months ago. In total, we anticipate 2026 full year average realized coal pricing to be approximately 3 to 6% below fourth quarter 2025 levels. In the Illinois Basin, we anticipate 2026 sales pricing to be in the range of $50 to $52 per ton as compared to $52.09 in 2025. and $66 to $71 per ton for 2026 in Appalachia as compared to $81.99 per ton in 2025, which included a larger mix of higher priced metiki tons. On the cost side, we expect full year segment adjusted EBITDA expense per ton to be in a range of $33 to $35 per ton in the Illinois Basin as compared to $34.71 per ton in 2025 and $49 to $53 per ton in Appalachia for 2026 as compared to $63.82 in 2025, which included a larger mix of higher cost metiki tons. On a quarterly basis for 2026, it is reasonable to assume first quarter 2026 segment adjusted EBITDA expense per ton to be 6 to 10% higher than the 2025 quarter, as a result of the extended longwall outage in the Illinois Basin at our Hamilton mine. Across our mining portfolio, particularly at Riverview and Tunnel Ridge, we expect an improvement in segment adjusted EBITDA expense per ton in 2026, and the same for Hamilton in the back half of 2026, supporting our efforts to preserve operating margins with continued cost discipline and operational execution. In our oil and gas royalty segment, we expect volumes of 1.5 to 1.6 million barrels of oil, 6.3 to 6.7 million CF of natural gas, and 825 to 875,000 barrels of natural gas liquids. Segment adjusted EBITDA expense is expected to be approximately 14% of oil and gas royalty revenues. We remain committed to investing in our oil and gas royalties business and will continue to pursue disciplined growth in this segment in 2026. Additionally, at the midpoint of our 2026 guidance, coal royalty tons sold are expected to be 6 million tons higher or 25% above 2025 levels, reflecting higher volumes at our Hamilton and Tunnel Ridge mines. And finally, we're expecting 2026 capital expenditures to be 280 to $300 million, And for distribution coverage purposes, estimated maintenance capital per ton produced has been updated and is assumed to be $7.23 per ton produced in 2026 versus $7.28 per ton produced in 2025. And with that, I will turn the call over to Joe for comments on the market and his outlook for ARLP. Joe?