Alliance Resource Partners, L.P. Reports Strong First Quarter Performance; Completes $75.1 Million Oil & Gas Mineral Interest Acquisitions; Declares Quarterly Cash Distribution of $0.70 Per Unit; and Updates 2023 Guidance
2023 Quarter Highlights
-
Revenue of
$662.9 million 43.0% year-over-year -
Net income of
$191.2 million $1.45 402.0% increase compared to$38.1 million $0.28 -
EBITDA of
$270.9 million 75.2% year-over-year -
Completed
$75.1 million -
In March 2023, repurchased
$26.6 million -
Repurchased and retired 860,060 common units for an aggregate purchase price of
$18.2 million -
Declared a quarterly cash distribution of
$0.70 $2.80 100.0% compared to the 2022 Quarter
Compared to our record setting quarter ended December 31, 2022 (the "Sequential Quarter"), total revenues decreased by
CEO Commentary
"ARLP delivered impressive results during the first quarter of 2023," commented Joseph W. Craft III, Chairman, President and Chief Executive Officer. "Relying upon a solid coal sales contract book, we were able to achieve significantly higher realized pricing per ton sold relative to the prior year. Additionally, our coal operations were able to keep our operating costs per ton in-line with the Sequential Quarter despite a difficult inflationary environment and unexpected operating challenges in the 2023 Quarter."
Mr. Craft added, "We remain optimistic our 2023 financial results will be at record levels. Even though recent mild weather and lower natural gas prices have softened the near-term domestic utility markets, we expect export demand to be sufficient to allow us to increase sales compared to last year."
Segment Results and Analysis
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% Change |
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2023 First |
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2022 First |
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Quarter / |
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2022 Fourth |
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% Change |
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(in millions, except per ton and per BOE data) |
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Quarter |
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Quarter |
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Quarter |
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Quarter |
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Sequential |
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Coal Operations (1) |
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Tons sold |
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6.190 |
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5.882 |
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5.2 |
% |
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6.288 |
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(1.6 |
)% |
Coal sales price per ton sold |
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$ |
54.43 |
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$ |
43.17 |
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26.1 |
% |
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$ |
57.47 |
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(5.3 |
)% |
Segment Adjusted EBITDA Expense per ton |
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$ |
33.45 |
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$ |
30.19 |
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10.8 |
% |
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$ |
37.98 |
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(11.9 |
)% |
Segment Adjusted EBITDA |
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$ |
132.0 |
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$ |
78.2 |
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68.8 |
% |
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$ |
124.4 |
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6.2 |
% |
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Appalachia Coal Operations |
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Tons sold |
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2.279 |
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2.280 |
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— |
% |
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3.021 |
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(24.6 |
)% |
Coal sales price per ton sold |
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$ |
106.13 |
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$ |
58.97 |
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80.0 |
% |
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$ |
89.41 |
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18.7 |
% |
Segment Adjusted EBITDA Expense per ton |
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$ |
55.20 |
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$ |
36.72 |
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50.3 |
% |
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$ |
42.46 |
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30.0 |
% |
Segment Adjusted EBITDA |
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$ |
116.6 |
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$ |
51.1 |
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128.1 |
% |
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$ |
148.9 |
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(21.7 |
)% |
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Total Coal Operations |
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Tons sold |
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8.469 |
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8.162 |
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3.8 |
% |
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9.309 |
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(9.0 |
)% |
Coal sales price per ton sold |
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$ |
68.34 |
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$ |
47.58 |
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43.6 |
% |
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$ |
67.84 |
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0.7 |
% |
Segment Adjusted EBITDA Expense per ton |
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$ |
39.66 |
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$ |
32.07 |
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23.7 |
% |
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$ |
39.75 |
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(0.2 |
)% |
Segment Adjusted EBITDA |
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$ |
245.7 |
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$ |
129.0 |
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90.4 |
% |
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$ |
270.5 |
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(9.2 |
)% |
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Royalties (1) |
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Oil & Gas Royalties (4) |
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BOE sold (2) |
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0.759 |
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0.544 |
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39.5 |
% |
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0.715 |
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6.2 |
% |
Oil percentage of BOE |
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47.3 |
% |
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44.0 |
% |
7.5 |
% |
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44.9 |
% |
5.3 |
% |
Average sales price per BOE (3) |
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$ |
45.42 |
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$ |
61.35 |
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(26.0 |
)% |
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$ |
55.53 |
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(18.2 |
)% |
Segment Adjusted EBITDA Expense |
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$ |
4.4 |
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$ |
3.3 |
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35.0 |
% |
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$ |
4.6 |
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(4.0 |
)% |
Segment Adjusted EBITDA |
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$ |
30.0 |
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$ |
30.8 |
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(2.6 |
)% |
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$ |
35.3 |
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(14.8 |
)% |
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Coal Royalties |
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Royalty tons sold |
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5.057 |
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5.553 |
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(8.9 |
)% |
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5.305 |
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(4.7 |
)% |
Revenue per royalty ton sold |
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$ |
3.07 |
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$ |
2.73 |
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12.5 |
% |
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$ |
2.68 |
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14.6 |
% |
Segment Adjusted EBITDA Expense |
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$ |
5.4 |
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$ |
4.8 |
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11.8 |
% |
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$ |
6.1 |
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(11.8 |
)% |
Segment Adjusted EBITDA |
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$ |
10.1 |
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$ |
10.3 |
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(2.2 |
)% |
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$ |
8.2 |
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23.9 |
% |
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Total Royalties (4) |
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Total royalty revenues |
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$ |
51.1 |
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$ |
48.7 |
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4.9 |
% |
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$ |
54.1 |
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(5.6 |
)% |
Segment Adjusted EBITDA Expense |
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$ |
9.8 |
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$ |
8.1 |
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21.2 |
% |
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$ |
10.7 |
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(8.5 |
)% |
Segment Adjusted EBITDA |
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$ |
40.2 |
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$ |
41.2 |
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(2.5 |
)% |
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$ |
43.4 |
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(7.5 |
)% |
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Consolidated Total (4)(5) |
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Total revenues |
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$ |
662.9 |
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$ |
463.4 |
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43.0 |
% |
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$ |
704.2 |
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(5.9 |
)% |
Segment Adjusted EBITDA Expense |
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$ |
339.3 |
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$ |
261.5 |
|
29.8 |
% |
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$ |
375.5 |
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(9.6 |
)% |
Segment Adjusted EBITDA |
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$ |
291.9 |
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$ |
173.2 |
|
68.6 |
% |
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$ |
314.9 |
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(7.3 |
)% |
(1) |
For definitions of Segment Adjusted EBITDA Expense and Segment Adjusted EBITDA and related reconciliations to comparable GAAP financial measures, please see the end of this release. Segment Adjusted EBITDA Expense per ton is defined as Segment Adjusted EBITDA Expense – Coal Operations (as reflected in the reconciliation table at the end of this release) divided by total tons sold. During the 2023 Quarter, we redefined Total Coal Operations to reflect the activity of our wholly-owned subsidiary, Alliance Coal, LLC ("Alliance Coal"), which is the holding company for our coal mining operations. We have retrospectively adjusted Total Coal Operations in the 2022 and Sequential Quarters to be on the same basis. |
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(2) |
Barrels of oil equivalent ("BOE") for natural gas volumes is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel). |
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(3) |
Average sales price per BOE is defined as oil & gas royalty revenues excluding lease bonus revenue divided by total BOE sold. |
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(4) |
Prior periods have been recast to reflect the JC Resources Acquisition as though we, rather than JC Resources, acquired the mineral interests in 2019. |
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(5) |
Reflects total consolidated results, which include our other and corporate activities and eliminations in addition to the |
Coal Operations
ARLP's coal sales prices per ton increased significantly compared to the 2022 Quarter as improved price realizations in both the domestic and export markets drove coal sales prices higher by
Segment Adjusted EBITDA Expense per ton increased by
Royalties
Segment Adjusted EBITDA for the Oil & Gas Royalties segment decreased to
Segment Adjusted EBITDA for the Coal Royalties segment decreased
Balance Sheet and Liquidity
In January 2023, ARLP entered into a new
During the 2023 Quarter, ARLP purchased
Unit Repurchase Program
ARLP repurchased and retired 860,060 units at an average unit price of
Distributions
As previously announced on April 28, 2023, the Board of Directors of ARLP's general partner (the "Board") approved a cash distribution to unitholders for the 2023 Quarter of
2023 Quarter Acquisitions of Oil & Gas Royalties
On February 22, 2023, ARLP closed on the previously announced acquisition of mineral interests in approximately 2,682 oil & gas net royalty acres in the
Outlook
"Our contracted coal sales book positions us well to deliver strong results for 2023 despite natural gas prices being materially below what we projected at the beginning of the year," commented Mr. Craft. "Entering the summer peak demand months, we continue to have a small, uncontracted tonnage position that we plan to sell into international markets for delivery in the second half of this year. We also expect several domestic customers will be actively seeking sizeable commitments for coal to be delivered in 2024 and 2025."
Mr. Craft added, "OPEC's recent decision to reduce supply is expected to favorably impact oil pricing compared to the 2023 Quarter, which should benefit our Oil & Gas Royalties segment where we have increased our full year 2023 oil & gas volume guidance. While lower natural gas prices also impact our royalty revenue, it is important to note that our trailing three-month cash flow by product consisted of
ARLP is providing the following updated guidance for the 2023 full year:
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2023 Full Year Guidance |
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Coal Operations |
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Volumes (Million Short Tons) |
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25.5 — 27.0 |
Appalachia Sales Tons |
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10.5 — 11.0 |
Total Sales Tons |
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36.0 — 38.0 |
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Committed & Priced Sales Tons |
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2023 — Domestic/Export/Total |
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30.1/4.2/34.3 |
2024 — Domestic/Export/Total |
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22.4/1.0/23.4 |
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Per Ton Estimates |
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Coal Sales Price per ton sold (1) |
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Segment Adjusted EBITDA Expense per ton sold (2) |
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Royalties |
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Oil & Gas Royalties |
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Oil (000 Barrels) |
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1,400 — 1,500 |
Natural gas (000 MCF) |
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|
4,750 — 5,250 |
Liquids (000 Barrels) |
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|
565 — 615 |
Segment Adjusted EBITDA Expense (% of Oil & Gas Royalties Revenue) |
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~ |
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Coal Royalties |
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Royalty tons sold (Million Short Tons) |
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20.4 — 22.6 |
Revenue per royalty ton sold |
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Segment Adjusted EBITDA Expense per royalty ton sold |
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Consolidated (Millions) |
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Depreciation, depletion and amortization |
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General and administrative |
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Net interest expense |
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Income tax expense |
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Total capital expenditures |
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Growth capital expenditures |
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Maintenance capital expenditures |
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Acquisition of oil & gas royalties (3) |
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| (1) | Sales price per ton is defined as total coal sales revenue divided by total tons sold. |
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| (2) | Segment Adjusted EBITDA Expense is defined as operating expenses, coal purchases and other expenses. |
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| (3) |
Acquisition of oil & gas royalties reflects the |
Conference Call
A conference call regarding ARLP's 2023 Quarter financial results is scheduled for today at 11:00 a.m. Eastern. To participate in the conference call, dial (877) 407-0784 and request to be connected to the Alliance Resource Partners, L.P. earnings conference call. International callers should dial (201) 689-8560 and request to be connected to the same call. Investors may also listen to the call via the "investor relations" section of ARLP's website at www.arlp.com.
An audio replay of the conference call will be available for approximately one week. To access the audio replay, dial
About Alliance Resource Partners, L.P.
ARLP is a diversified energy company that is currently the largest coal producer in the eastern
News, unit prices and additional information about ARLP, including filings with the Securities and Exchange Commission ("SEC"), are available at www.arlp.com. For more information, contact the investor relations department of ARLP at (918) 295-7673 or via e-mail at investorrelations@arlp.com.
The statements and projections used throughout this release are based on current expectations. These statements and projections are forward-looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions or other business combinations that may occur after the date of this release. We have included more information below regarding business risks that could affect our results.
FORWARD-LOOKING STATEMENTS: With the exception of historical matters, any matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. Those forward-looking statements include expectations with respect to our future financial performance, coal and oil & gas consumption and expected future prices, our ability to increase unitholder distributions in future quarters, business plans and potential growth with respect to our energy and infrastructure transition investments, optimizing cash flows, reducing operating and capital expenditures, preserving liquidity and maintaining financial flexibility, and our future repurchases of units and senior notes, among others. These risks to our ability to achieve these outcomes include, but are not limited to, the following: decline in the coal industry's share of electricity generation, including as a result of environmental concerns related to coal mining and combustion and the cost and perceived benefits of other sources of electricity and fuels, such as oil & gas, nuclear energy, and renewable fuels; changes in macroeconomic and market conditions and market volatility, and the impact of such changes and volatility on our financial position; changes in global economic and geo-political conditions or changes in industries in which our customers operate; changes in commodity prices, demand and availability which could affect our operating results and cash flows; the outcome or escalation of current hostilities in
Additional information concerning these, and other factors can be found in ARLP's public periodic filings with the SEC, including ARLP's Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 24, 2023. Except as required by applicable securities laws, ARLP does not intend to update its forward-looking statements.
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING DATA |
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(In thousands, except unit and per unit data) |
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(Unaudited) |
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Three Months Ended |
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March 31, |
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|
|
2023 |
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2022* |
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Tons Sold |
|
|
8,469 |
|
|
|
8,162 |
|
|
Tons Produced |
|
|
9,244 |
|
|
|
9,178 |
|
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Mineral Interest Volumes (BOE) |
|
|
759 |
|
|
|
544 |
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SALES AND OPERATING REVENUES: |
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Coal sales |
|
$ |
578,784 |
|
|
$ |
388,360 |
|
|
Oil & gas royalties |
|
|
34,497 |
|
|
|
33,396 |
|
|
Transportation revenues |
|
|
30,238 |
|
|
|
29,372 |
|
|
Other revenues |
|
|
19,403 |
|
|
|
12,294 |
|
|
Total revenues |
|
|
662,922 |
|
|
|
463,422 |
|
|
|
|
|
|
|
|
|
|
||
EXPENSES: |
|
|
|
|
|
|
|
||
Operating expenses (excluding depreciation, depletion and amortization) |
|
|
338,723 |
|
|
|
262,023 |
|
|
Transportation expenses |
|
|
30,238 |
|
|
|
29,372 |
|
|
General and administrative |
|
|
21,085 |
|
|
|
18,622 |
|
|
Depreciation, depletion and amortization |
|
|
65,550 |
|
|
|
64,140 |
|
|
Total operating expenses |
|
|
455,596 |
|
|
|
374,157 |
|
|
|
|
|
|
|
|
|
|
||
INCOME FROM OPERATIONS |
|
|
207,326 |
|
|
|
89,265 |
|
|
|
|
|
|
|
|
|
|
||
Interest expense, net |
|
|
(12,676 |
) |
|
|
(9,662 |
) |
|
Interest income |
|
|
2,790 |
|
|
|
35 |
|
|
Equity method investment income |
|
|
52 |
|
|
|
883 |
|
|
Other income (expense) |
|
|
(573 |
) |
|
|
567 |
|
|
INCOME BEFORE INCOME TAXES |
|
|
196,919 |
|
|
|
81,088 |
|
|
|
|
|
|
|
|
|
|
||
INCOME TAX EXPENSE |
|
|
4,241 |
|
|
|
42,715 |
|
|
|
|
|
|
|
|
|
|
||
NET INCOME |
|
|
192,678 |
|
|
|
38,373 |
|
|
|
|
|
|
|
|
|
|
||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST |
|
|
(1,493 |
) |
|
|
(290 |
) |
|
|
|
|
|
|
|
|
|
||
NET INCOME ATTRIBUTABLE TO ARLP |
|
$ |
191,185 |
|
|
$ |
38,083 |
|
|
|
|
|
|
|
|
|
|
||
NET INCOME ATTRIBUTABLE TO ARLP |
|
|
|
|
|
|
|
||
GENERAL PARTNER |
|
$ |
1,384 |
|
|
$ |
1,431 |
|
|
LIMITED PARTNERS |
|
$ |
189,801 |
|
|
$ |
36,652 |
|
|
|
|
|
|
|
|
|
|
||
EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED |
|
$ |
1.45 |
|
|
$ |
0.28 |
|
|
|
|
|
|
|
|
|
|
||
WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED |
|
|
127,289,340 |
|
|
|
127,195,219 |
|
|
* Recast to reflect the JC Resources Acquisition as though we, rather than JC Resources, acquired the mineral interests in 2019. |
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ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES |
|||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||||
(In thousands, except unit data) |
|||||||||
(Unaudited) |
|||||||||
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|
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|
|
March 31, |
|
December 31, |
|
||||
|
|
2023 |
|
2022* |
|
||||
ASSETS |
|
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|
|
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|
||
CURRENT ASSETS: |
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
271,250 |
|
|
$ |
296,023 |
|
|
Trade receivables |
|
|
266,334 |
|
|
|
241,412 |
|
|
Other receivables |
|
|
9,892 |
|
|
|
8,601 |
|
|
Inventories, net |
|
|
108,648 |
|
|
|
77,326 |
|
|
Advance royalties |
|
|
5,824 |
|
|
|
7,556 |
|
|
Prepaid expenses and other assets |
|
|
19,330 |
|
|
|
26,675 |
|
|
Total current assets |
|
|
681,278 |
|
|
|
657,593 |
|
|
PROPERTY, PLANT AND EQUIPMENT: |
|
|
|
|
|
|
|
||
Property, plant and equipment, at cost |
|
|
4,018,071 |
|
|
|
3,931,422 |
|
|
Less accumulated depreciation, depletion and amortization |
|
|
(2,108,819 |
) |
|
|
(2,050,754 |
) |
|
Total property, plant and equipment, net |
|
|
1,909,252 |
|
|
|
1,880,668 |
|
|
OTHER ASSETS: |
|
|
|
|
|
|
|
||
Advance royalties |
|
|
75,331 |
|
|
|
67,713 |
|
|
Equity method investments |
|
|
48,949 |
|
|
|
49,371 |
|
|
Equity securities |
|
|
42,000 |
|
|
|
42,000 |
|
|
Operating lease right-of-use assets |
|
|
15,944 |
|
|
|
14,950 |
|
|
Other long-term assets |
|
|
14,995 |
|
|
|
15,726 |
|
|
Total other assets |
|
|
197,219 |
|
|
|
189,760 |
|
|
TOTAL ASSETS |
|
$ |
2,787,749 |
|
|
$ |
2,728,021 |
|
|
|
|
|
|
|
|
|
|
||
LIABILITIES AND PARTNERS' CAPITAL |
|
|
|
|
|
|
|
||
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
||
Accounts payable |
|
$ |
115,106 |
|
|
$ |
95,122 |
|
|
Accrued taxes other than income taxes |
|
|
23,554 |
|
|
|
22,967 |
|
|
Accrued payroll and related expenses |
|
|
33,772 |
|
|
|
39,623 |
|
|
Accrued interest |
|
|
13,002 |
|
|
|
5,000 |
|
|
Workers' compensation and pneumoconiosis benefits |
|
|
14,098 |
|
|
|
14,099 |
|
|
Other current liabilities |
|
|
51,706 |
|
|
|
53,790 |
|
|
Current maturities, long-term debt, net |
|
|
22,224 |
|
|
|
24,970 |
|
|
Total current liabilities |
|
|
273,462 |
|
|
|
255,571 |
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
|
||
Long-term debt, excluding current maturities, net |
|
|
436,659 |
|
|
|
397,203 |
|
|
Pneumoconiosis benefits |
|
|
100,825 |
|
|
|
100,089 |
|
|
Accrued pension benefit |
|
|
12,250 |
|
|
|
12,553 |
|
|
Workers' compensation |
|
|
40,117 |
|
|
|
39,551 |
|
|
Asset retirement obligations |
|
|
143,010 |
|
|
|
142,254 |
|
|
Long-term operating lease obligations |
|
|
13,424 |
|
|
|
12,132 |
|
|
Deferred income tax liabilities |
|
|
35,583 |
|
|
|
35,814 |
|
|
Other liabilities |
|
|
25,258 |
|
|
|
24,828 |
|
|
Total long-term liabilities |
|
|
807,126 |
|
|
|
764,424 |
|
|
Total liabilities |
|
|
1,080,588 |
|
|
|
1,019,995 |
|
|
|
|
|
|
|
|
|
|
||
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
PARTNERS' CAPITAL: |
|
|
|
|
|
|
|
||
ARLP Partners' Capital: |
|
|
|
|
|
|
|
||
Limited Partners - Common Unitholders 127,195,219 units outstanding |
|
|
1,721,938 |
|
|
|
1,656,025 |
|
|
General Partner's interest |
|
|
— |
|
|
|
66,548 |
|
|
Accumulated other comprehensive loss |
|
|
(40,489 |
) |
|
|
(41,054 |
) |
|
Total ARLP Partners' Capital |
|
|
1,681,449 |
|
|
|
1,681,519 |
|
|
Noncontrolling interest |
|
|
25,712 |
|
|
|
26,507 |
|
|
Total Partners' Capital |
|
|
1,707,161 |
|
|
|
1,708,026 |
|
|
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
|
$ |
2,787,749 |
|
|
$ |
2,728,021 |
|
|
* Recast to reflect the JC Resources Acquisition as though we, rather than JC Resources, acquired the mineral interests in 2019. |
|||||||||
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES |
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||
(In thousands) |
|||||||||
(Unaudited) |
|||||||||
|
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
|
||||||
|
|
March 31, |
|
||||||
|
|
2023 |
|
2022* |
|
||||
|
|
|
|
|
|
|
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
$ |
223,259 |
|
|
$ |
90,626 |
|
|
|
|
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
||
Property, plant and equipment: |
|
|
|
|
|
|
|
||
Capital expenditures |
|
|
(95,474 |
) |
|
|
(59,153 |
) |
|
Change in accounts payable and accrued liabilities |
|
|
12,110 |
|
|
|
13,551 |
|
|
Proceeds from sale of property, plant and equipment |
|
|
2,395 |
|
|
|
928 |
|
|
Contributions to equity method investments |
|
|
(540 |
) |
|
|
— |
|
|
JC Resources acquisition |
|
|
(64,999 |
) |
|
|
— |
|
|
Oil & gas reserve acquisition |
|
|
(2,800 |
) |
|
|
— |
|
|
Other |
|
|
589 |
|
|
|
(851 |
) |
|
Net cash used in investing activities |
|
|
(148,719 |
) |
|
|
(45,525 |
) |
|
|
|
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
||
Payments on equipment financings |
|
|
(3,759 |
) |
|
|
(4,472 |
) |
|
Borrowing under long-term debt |
|
|
75,000 |
|
|
|
— |
|
|
Payments on long-term debt |
|
|
(26,633 |
) |
|
|
— |
|
|
Payments on finance lease obligations |
|
|
(278 |
) |
|
|
(203 |
) |
|
Payment of debt issuance costs |
|
|
(11,653 |
) |
|
|
— |
|
|
Payments for purchases of units under unit repurchase program |
|
|
(18,209 |
) |
|
|
— |
|
|
Payments for tax withholdings related to settlements under deferred compensation plans |
|
|
(9,320 |
) |
|
|
— |
|
|
Excess purchase price over the contributed basis from JC Resources acquisition |
|
|
(7,251 |
) |
|
|
— |
|
|
Cash retained by JC Resources in acquisition |
|
|
(2,933 |
) |
|
|
(1,590 |
) |
|
Distributions paid to Partners |
|
|
(91,938 |
) |
|
|
(32,750 |
) |
|
Other |
|
|
(2,339 |
) |
|
|
(298 |
) |
|
Net cash used in financing activities |
|
|
(99,313 |
) |
|
|
(39,313 |
) |
|
|
|
|
|
|
|
|
|
||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
(24,773 |
) |
|
|
5,788 |
|
|
|
|
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
|
296,023 |
|
|
|
122,403 |
|
|
|
|
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
271,250 |
|
|
$ |
128,191 |
|
|
* Recast to reflect the JC Resources Acquisition as though we, rather than JC Resources, acquired the mineral interests in 2019. |
|||||||||
Reconciliation of Non-GAAP Financial Measures
Reconciliation of GAAP "net income attributable to ARLP" to non-GAAP "EBITDA" and "Distributable Cash Flow" (in thousands).
EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes and depreciation, depletion and amortization. Distributable cash flow ("DCF") is defined as EBITDA excluding interest expense (before capitalized interest), interest income, income taxes and estimated maintenance capital expenditures. Distribution coverage ratio ("DCR") is defined as DCF divided by distributions paid to partners.
Management believes that the presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) provide additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation and planning decisions and (iii) present measurements that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations.
EBITDA, DCF and DCR should not be considered as alternatives to net income attributable to ARLP, net income, income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. EBITDA and DCF are not intended to represent cash flow and do not represent the measure of cash available for distribution. Our method of computing EBITDA, DCF and DCR may not be the same method used to compute similar measures reported by other companies, or EBITDA, DCF and DCR may be computed differently by us in different contexts (i.e., public reporting versus computation under financing agreements).
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
Three Months Ended |
|
||||||||
|
|
March 31, |
|
December 31, |
|
||||||||
|
|
2023 |
|
2022 (1) |
|
2022 (1) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||
Net income attributable to ARLP |
|
$ |
191,185 |
|
|
$ |
38,083 |
|
|
$ |
216,881 |
|
|
Depreciation, depletion and amortization |
|
|
65,550 |
|
|
|
64,140 |
|
|
|
74,171 |
|
|
Interest expense, net |
|
|
11,293 |
|
|
|
9,697 |
|
|
|
7,963 |
|
|
Capitalized interest |
|
|
(1,407 |
) |
|
|
(70 |
) |
|
|
(417 |
) |
|
Income tax expense (benefit) |
|
|
4,241 |
|
|
|
42,715 |
|
|
|
(1,668 |
) |
|
EBITDA |
|
|
270,862 |
|
|
|
154,565 |
|
|
|
296,930 |
|
|
Interest expense, net |
|
|
(11,293 |
) |
|
|
(9,697 |
) |
|
|
(7,963 |
) |
|
Income tax (expense) benefit |
|
|
(4,241 |
) |
|
|
(42,715 |
) |
|
|
1,668 |
|
|
Deferred income tax expense (benefit) (2) |
|
|
(372 |
) |
|
|
37,294 |
|
|
|
(2,473 |
) |
|
Estimated maintenance capital expenditures (3) |
|
|
(65,170 |
) |
|
|
(51,947 |
) |
|
|
(47,731 |
) |
|
Distributable Cash Flow |
|
$ |
189,786 |
|
|
$ |
87,500 |
|
|
$ |
240,431 |
|
|
Distributions paid to partners |
|
$ |
91,938 |
|
|
$ |
32,750 |
|
|
$ |
65,449 |
|
|
Distribution Coverage Ratio |
|
|
2.06 |
|
|
|
2.67 |
|
|
|
3.67 |
|
|
(1) |
Recast to reflect the JC Resources Acquisition as though we, rather than JC Resources, acquired the mineral interests in 2019. |
|
(2) |
Deferred income tax expense (benefit) is the amount of income tax expense (benefit) during the period on temporary differences between the tax basis and financial reporting basis of recorded assets and liabilities. These differences generally arise in one period and reverse in subsequent periods to eventually offset each other and do not impact the amount of distributable cash flow available to be paid to partners. |
|
(3) |
Maintenance capital expenditures are those capital expenditures required to maintain, over the long-term, the existing infrastructure of our coal assets. We estimate maintenance capital expenditures on an annual basis based upon a five-year planning horizon. For the 2023 planning horizon, average annual estimated maintenance capital expenditures are assumed to be |
Reconciliation of GAAP "Cash flows from operating activities" to non-GAAP "Free cash flow" (in thousands).
Free cash flow is defined as cash flows from operating activities less capital expenditures and the change in accounts payable and accrued liabilities from purchases of property plant and equipment. Free cash flow should not be considered as an alternative to cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Our method of computing free cash flow may not be the same method used by other companies. Free cash flow is a supplemental liquidity measure used by our management to assess our ability to generate excess cash flow from our operations.
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
Three Months Ended |
|
||||||||
|
|
March 31, |
|
December 31, |
|
||||||||
|
|
2023 |
|
2022 (1) |
|
2022 (1) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities |
|
$ |
223,259 |
|
|
$ |
90,626 |
|
|
$ |
246,143 |
|
|
Capital expenditures |
|
|
(95,474 |
) |
|
|
(59,153 |
) |
|
|
(65,108 |
) |
|
Change in accounts payable and accrued liabilities |
|
|
12,110 |
|
|
|
13,551 |
|
|
|
(3,544 |
) |
|
Free cash flow |
|
$ |
139,895 |
|
|
$ |
45,024 |
|
|
$ |
177,491 |
|
|
(1) Recast to reflect the JC Resources Acquisition as though we, rather than JC Resources, acquired the mineral interests in 2019. |
|||||||||||||
Reconciliation of GAAP "Operating Expenses" to non-GAAP "Segment Adjusted EBITDA Expense" and Reconciliation of non-GAAP " EBITDA" to "Segment Adjusted EBITDA" (in thousands).
Segment Adjusted EBITDA Expense includes operating expenses, coal purchases, if applicable, and other income or expense. Transportation expenses are excluded as these expenses are passed on to our customers and, consequently, we do not realize any margin on transportation revenues. Segment Adjusted EBITDA Expense is used as a supplemental financial measure by our management to assess the operating performance of our segments. Segment Adjusted EBITDA Expense is a key component of EBITDA in addition to coal sales, royalty revenues and other revenues. The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses. Segment Adjusted EBITDA Expense – Coal Operations represents Segment Adjusted EBITDA Expense from our wholly-owned subsidiary, Alliance Coal, which holds our coal mining operations and related support activities.
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
Three Months Ended |
|
||||||||
|
|
March 31, |
|
December 31, |
|
||||||||
|
|
2023 |
|
2022 (1) |
|
2022 (1) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||
Operating expense |
|
$ |
338,723 |
|
|
$ |
262,023 |
|
|
$ |
378,515 |
|
|
Other expense (income) |
|
|
573 |
|
|
|
(567 |
) |
|
|
(3,016 |
) |
|
Segment Adjusted EBITDA Expense |
|
|
339,296 |
|
|
|
261,456 |
|
|
|
375,499 |
|
|
Segment Adjusted EBITDA Expense – Non Coal Operations (2) |
|
|
(3,420 |
) |
|
|
286 |
|
|
|
(5,452 |
) |
|
Segment Adjusted EBITDA Expense – Coal Operations |
|
$ |
335,876 |
|
|
$ |
261,742 |
|
|
$ |
370,047 |
|
|
(1) |
Recast to reflect the JC Resources Acquisition as though we, rather than JC Resources, acquired the mineral interests in 2019. |
|
(2) |
Non Coal Operations represent activity outside of Alliance Coal and primarily consist of Total Royalties, our investments in the advancement of energy and related infrastructure and various eliminations primarily between Alliance Coal and our Coal Royalty segment. |
Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization, general and administrative expenses and settlement gains. Segment Adjusted EBITDA – Coal Operations represents Segment Adjusted EBITDA from our wholly-owned subsidiary, Alliance Coal, which holds our coal mining operations and related support activities and allows management to focus primarily on the operating performance of our
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
Three Months Ended |
|
||||||||
|
|
March 31, |
|
December 31, |
|
||||||||
|
|
2023 |
|
2022 (1) |
|
2022 (1) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||
EBITDA (See reconciliation to GAAP above) |
|
$ |
270,862 |
|
|
$ |
154,565 |
|
|
$ |
296,930 |
|
|
General and administrative |
|
|
21,085 |
|
|
|
18,622 |
|
|
|
17,963 |
|
|
Segment Adjusted EBITDA |
|
|
291,947 |
|
|
|
173,187 |
|
|
|
314,893 |
|
|
Segment Adjusted EBITDA – Non Coal Operations (2) |
|
|
(46,273 |
) |
|
|
(44,182 |
) |
|
|
(44,428 |
) |
|
Segment Adjusted EBITDA – Coal Operations |
|
$ |
245,674 |
|
|
$ |
129,005 |
|
|
$ |
270,465 |
|
|
(1) |
Recast to reflect the JC Resources Acquisition as though we, rather than JC Resources, acquired the mineral interests in 2019. |
|
(2) |
Non Coal Operations represent activity outside of Alliance Coal and primarily consist of Total Royalties, our investments in the advancement of energy and related infrastructure and various eliminations primarily between Alliance Coal and our Coal Royalty segment. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230502005334/en/
Investor Relations Contact
Cary P. Marshall
Senior Vice President and Chief Financial Officer
918-295-7673
investorrelations@arlp.com
Source: Alliance Resource Partners, L.P.
