Alliance Resource Partners, L.P. (ARLP)

収益の仕組み

Most of the money comes from selling tons of coal. In fiscal 2025 coal sales were $1,932.5 million of $2,194.8 million of total revenues, with oil & gas royalties adding $137.8 million, transportation revenues (customers reimburse freight the partnership arranges) $36.6 million and other revenues $87.8 million. Coal is sold largely under multi-year supply agreements: approximately 86.5% of 2025 coal sales were under long-term contracts with committed expirations running from 2026 to 2030, and about 84.6% of tonnage was sold under contracts longer than one year. Many of those contracts carry price-reopener or index-adjustment clauses, so a long contract fixes volume more firmly than price. Exports were roughly 8.6% of tons sold in 2025 and go mostly through brokers. The royalty side works differently and carries no operating cost: when acreage is leased, ARLP takes an upfront lease bonus and a fixed share of production or revenue, free of drilling, completion and plugging costs. Coal royalties are earned almost entirely from ARLP's own mines, so they are intercompany and disappear on consolidation.

セグメント別売上高

ARLP owns much of the ground it mines — about 73% of the coal its mines sold in 2025 came from reserves leased from its own royalty entities, and at year-end it held access to roughly 586.3 million tons of reserves and 1.07 billion tons of resources. Its Illinois Basin longwall and room-and-pillar mines sit close to water: about 45.8% of 2025 volume left the mines by barge, 34.8% by rail and 19.4% by truck, and freight is a large part of the delivered cost a utility pays. Owning the reserve and sitting on the river are real, durable cost advantages against higher-cost producers. They are narrow rather than wide because the 10-K itself calls the coal market highly competitive, naming American Consolidated Natural Resources, Core Natural Resources, Alpha Metallurgical Resources, Foresight Energy and Peabody among its rivals, and because a cost edge inside a shrinking end-market protects margin without protecting volume.

Both halves of the business follow commodity cycles. The 10-K says domestic coal pricing is primarily driven by the consumption patterns of electricity-generating utilities, which depend on overall economic conditions, regulation, weather and technology, plus competition from natural gas, nuclear and renewables and the relative delivered cost of those fuels; export pricing depends on global economic conditions, weather and global supply and demand. The royalty half tracks oil and gas prices, and the partnership discloses that it holds no hedging arrangements. Two things soften the swings without removing them: roughly 86.5% of 2025 coal sales sat under long-term contracts expiring between 2026 and 2030, so volume is visible a few years out, and the royalty segments carry almost no operating cost. But price is the softer part of those contracts — reopener clauses reset it periodically — and 2025 showed the pattern, with total revenues down 10.4% to $2.19 billion mainly on lower coal pricing and transportation revenues. Beginners should treat this as a cyclical business with a contract buffer, not a defensive one.

主なリスク

• Distributions are not guaranteed — The first risk factor the partnership lists is that cash distributions to unitholders are not guaranteed. The general partner has discretion over the level of cash reserves, which can reduce the cash available to distribute, and cost reimbursements owed to the general partner could be substantial.
• Dependence on a few customers — The partnership states that in 2025 it derived more than 10% of total revenues from each of Louisville Gas and Electric Company and American Electric Power Company, Inc. Losing one of them without a replacement buying equivalent tonnage on similar terms, or a cut in volumes or a change in pricing terms, could have a material adverse effect on the business, financial condition and results of operations.
• Contracts can be renegotiated, suspended or terminated — Long-term sales contracts contain price-reopener provisions that reset the price at periodic intervals; an adjustment to a significantly lower price would hurt operating margins, and failure to agree can trigger early termination. Several contracts also let customers suspend or terminate on events beyond their control, and most require coal to fall within stated ranges for heat content, sulfur, ash and other characteristics, with penalties, rejection of shipments or termination if specifications are missed.
• Coal and oil & gas price swings, with no hedging — Changes in coal and oil & gas prices, including from global geopolitical tensions, can hit results. The filing lists among the drivers the price and availability of alternative fuels, worldwide energy consumption, transportation capacity, competition from other suppliers, and domestic and foreign regulation and taxes; a substantial or extended decline in coal prices would cut revenues where existing supply agreements do not protect them. The partnership separately flags that its lack of hedging arrangements leaves it exposed to commodity prices.
• Environmental rules can shrink coal demand — The partnership lists extensive environmental laws and regulations that could reduce demand for coal as a fuel source, alongside costly legislative and regulatory compliance and initiatives that could have negative impacts on the business. It also notes that changes in utilities' consumption patterns could affect its ability to sell coal and the price of its natural gas.
• Unforeseen mining conditions — Unanticipated mine operating conditions can hit profitability. The list includes seismic activity, ground failures, rock bursts and cave-ins, employee injuries or fatalities, labour interruptions, higher reclamation costs, inability to acquire or renew mining rights and permits, and transportation cost or availability swings; the filing states that prolonged disruption at any mine would reduce revenues and profitability.
• Permits and surety bonds — Mining requires numerous permits and approvals whose rules are complex and change over time, with regulators exercising considerable discretion over timing and scope and the public able to comment or go to court. Permits may not be issued, maintained or renewed, or may come with conditions that restrict economic mining; the partnership specifically cites EPA scrutiny of Clean Water Act Section 404 discharge permits, including a past use of the EPA's veto power.
• Limited unitholder rights and conflicts of interest — Unitholders do not elect the general partner or vote on its officers and directors, control of the general partner can pass to a third party without their consent, and units held by anyone owning 20.0% or more of a class (other than the general partner and its affiliates) cannot be voted on any matter. The partnership agreement limits the general partner's fiduciary duties, lets it act in its sole discretion on many decisions, and the filing lists a series of conflicts of interest that may let the general partner favour its own interests.
• Royalties depend on operators the partnership does not control — The oil & gas royalty business depends on unaffiliated operators to explore and drill, which limits ARLP's ability to control the timing and quantity of production. The partnership also flags delays in royalty payments, optional royalty payments and the suspension of the right to receive royalty payments as risks.
• Debt and access to financing — The partnership lists indebtedness as a risk that could adversely impact it, and states that financing may not be available on favourable terms or at all. It notes that its ability to fund capital expenditures, service debt and pay distributions depends on future operating performance and on the cost of and access to financing sources, several of which are beyond its control.

主要顧客が売上高の30.6%を占める

Two utilities each took more than 10% of total revenues in 2025: Louisville Gas and Electric Company and American Electric Power Company, Inc. The major-customer table shows $344.9 million from one and $327.8 million from the other, $672.6 million together, or about 30.6% of the $2,194.8 million of consolidated revenues. Their coal supply agreements expire in 2030 and 2028 respectively. No other single customer reached 10%. Trade receivables from major customers were $25.3 million at 31 December 2025, down from $50.1 million a year earlier, and the partnership says its credit loss experience has historically been insignificant.