Alliance Resource Partners L P : Investor Presentation November 2024

Published: 2024-11-05 16:42:41 ET ARLP

Reliable Energy

For Today

And Tomorrow

Alliance Resource Partners, L.P.

Investor Presentation

November 2024

ibdrootprojectsIBD-NYabramis2024926850_110. Investor Presentation 1. Non-Deal Roadshow PresentationARLP Investor Presentation (15-May-2024).pptx

Legal Disclaimers

Forward-looking Statements

This presentation contains forward-looking statements and information that are based on the beliefs of Alliance Resource Partners, L.P. and its subsidiaries (collectively, "Alliance", "ARLP", the "Partnership", "we", "us" or "our"), as well as assumptions made by and information currently available to them. When used in this presentation, words such as "anticipate," "project," "expect," "plan," "goal," "forecast," "intend," "could," "believe," "may," "continue," "estimate," "foresee," "future," "outlook," "potential," "should," "target," "will," "would," and similar expressions and statements regarding the plans and objectives of the Partnership for future operations, are intended to identify forward-looking statements. Actual results may differ materially from results contemplated by our forward-looking statements.

Any forward-looking statement in this presentation reflects the Partnership's current views with respect to future events and is subject to these views and other risks, uncertainties and assumptions relating to our operations, operating results, growth strategy and liquidity. We urge you to carefully review the disclosures we make concerning risks and other factors that may affect our business and operating results, including those made under the heading "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as such risk factors may be amended, supplemented or superseded from time to time by other reports the Partnership files with the Securities and Exchange Commission.

We caution you that any forward-looking statements in this presentation and the documents incorporated herein by reference are not guarantees of future performance and you should not place undue reliance on such statements or documents, which speak only as of the date on which they are made.

The Partnership does not intend, and undertakes 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.

Alliance Resource Partners, L.P.

ibdrootprojectsIBD-NYabramis2024926850_110. Investor Presentation 1. Non-Deal Roadshow PresentationARLP Investor Presentation (15-May-2024).pptx

Legal Disclaimers

Non-GAAP Financial Measures

This presentation contains certain non-GAAP financial measures. These measures include Distributable Cash Flow, Distribution Coverage Ratio, EBITDA, EBITDA Margin, Adjusted EBITDA, Segment Adjusted EBITDA, Free Cash Flow and Net Leverage. Definitions and reconciliations to the nearest historical GAAP financial measures are included in Appendix of this presentation. These non-GAAP financial measures should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or any other measures prepared under GAAP.

The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort. Adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with reasonable certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant

Industry and Market Data

This Presentation has been prepared by the Partnership and includes market data and other statistical information from third party sources, including independent industry publications, government publications or other published independent sources, information obtained from customers, operators, trade and business organizations and publicly available information. Although the Partnership believes these third-party sources are reliable as of their respective dates, the Partnership has not independently verified the accuracy or completeness of this information. Some data is also based on the Partnership's good faith estimates, which are derived from management's knowledge and experience in the industry and the Partnership's review of internal sources and the third-party sources described above. The use or display of third parties' trademarks, service marks, trade names or products in this Presentation is not intended to, and does not imply, a relationship with us or an endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this Presentation may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, their rights or the right of the applicable licensor to these trademarks, service marks and trade names.

Alliance Resource Partners, L.P.

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Alliance Resource Partners, L.P. Snapshot

Company Description

Key Statistics (Q3'24 LTM)

Total

$776

Adj.

Market

$2,484 Revenue

EBITDA2

$3,282 Capitalization3

Million

$313 FCF2

0.4x

Net

$3,605

Enterprise

Million

Leverage2

Million

Value3

Alliance Adj. EBITDA Over Time ($ million)1,2

Alliance Business Overview

17%

23%

19%

18%

21%

$952

$39

$933

$41

$143

$776

$122

$44

$487

$122

Coal

Mineral Royalties

Matrix & New Ventures

$388

$24

$33

Largest coal producer in

Growing portfolio of mineral

Investing in high-growth

$77

$847

$845

eastern U.S., operating seven

and royalty interests in

platforms like Matrix, which

$42

$690

underground mining

strategic oil & gas producing

provides safety and

$385

$438

complexes serving major

regions of the U.S. as well as

productivity solutions to the

domestic and international

strategic coal reserves in

mining and industrial sectors

($63)

($61)

($77)

($75)

($80)

electric power generation

basins in which we operate

markets

2020

2021

2022

2023

Q3'24 LTM

Coal

O&G Royalties

Coal Royalties

G&A / Other

Royalties Seg Adj. EBITDA % Total

1 Segment Adjusted EBITDA is displayed for Coal Operations (excluding Coal Royalties), O&G Royalties, and other segments. Alliance Adj. EBITDA includes corporate G&A expense. 2 This is a non-GAAP financial measure. Please see Appendix for a definition and reconciliation to its comparable GAAP measure. 3 As of 25-October-2024.

Alliance Resource Partners, L.P.

ibdrootprojectsIBD-NYabramis2024926850_110. Investor Presentation 1. Non-Deal Roadshow PresentationARLP Investor Presentation (15-May-2024).pptx

Master Limited Partnership ("MLP") Overview1

What Is An MLP?

MLP Tax Advantages (Distributions & Basis)

Summary Organizational Structure

Limited Partner

General Partner

Public Unitholders

128,061,981 Units

Alliance Resource Partners, L.P.

(NASDAQ: ARLP)

Operating Subsidiaries

Alliance Historical Cash Distributions

~$4.3 Billion Cumulative Cash Distributions Paid Since Partnership Inception in 1999

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Please note this is for informational purposes only and should not be construed as offering tax advice. Consult your tax advisor regarding your own situation.

1 Sources: Energy Infrastructure Council. Vinson & Elkins: An Introduction: Master Limited Partnerships

Alliance Resource Partners, L.P.

ibdrootprojectsIBD-NYabramis2024926850_110. Investor Presentation 1. Non-Deal Roadshow PresentationARLP Investor Presentation (15-May-2024).pptx

Key Investment Highlights

Consistently Strong Adjusted EBITDA Margins Through A Well-Covered, Multi-Year Coal Contract Book

Permian-Weighted Minerals Position with Robust Growth Through Commodity Cycles

5 Meaningful Exposure to Top-Tier Operators in the Permian Basin with Significant Running Room Over Alliance's Royalty Position

Activity on Acreage Meaningfully Exceeds Level Required to Maintain Production

Strong Cash Flow Generation Through the Commodity Cycles

Disciplined Financial Principles & Capital Allocation Strategy

Alliance Resource Partners, L.P.

ibdrootprojectsIBD-NYabramis2024926850_110. Investor Presentation 1. Non-Deal Roadshow PresentationARLP Investor Presentation (15-May-2024).pptx

Largest Coal Producer in Eastern U.S. Strategically Located in Close Proximity to Domestic Customers

Asset and Operations Overview

Illinois Basin Asset Locations

Gibson South

River View

Hamilton

Warrior

Mt. Vernon Transfer Terminal

Appalachia Asset Locations:

Tunnel Ridge

Mettiki

H. MC Mining

Legend

Appalachia

Operating Mining

24.7 MM

9.7 MM

Complex

FY23 Tons Sold

Illinois Basin

Transfer Terminal

(72% of total)

(28% of total)

Third-Party Export Terminal

Heat Content

11,581

12,656

(Btus per pound)1

Reserves and Resources

1,502.6

225.4

(million)2

Key Strengths

Contracted with long-term, high-quality

customers

Low-cost operations that generate strong

FCF through-the-cycle

Strategically located to serve both domestic

and export markets

Well-positioned to serve growing U.S.

electricity demand

Strong growth from MENA and Asia provides

optionality

1 As of 31-Dec-2023. Represents a weighted average of each mine by total resources. 2 As of 31-Dec-2023. Includes ~557.7M tons of reserves and ~1,062.6M tons of resources included in Coal Royalties segment and leased/subleased to our mining complexes.

Alliance Resource Partners, L.P.

ibdrootprojectsIBD-NYabramis2024926850_110. Investor Presentation 1. Non-Deal Roadshow PresentationARLP

ConsistentlyInvestor Presentation (15-MayStrong-2024).pptx Coal Operations Segment Adjusted EBITDA1 Margins through a Well-Covered, Multi- Year Coal Contract Book

$45/t

$565

30%

COVID-19 Disruption

$44/t

$43/t

$385

$438

30%

$59/t

$64/t

$847

$845

$690

38%

36%

32%

2019

2020

2021

2022

2023

Q3'24 LTM

EBITDA Margin

Coal (Illinois & Appalachia Basins) Segment Adjusted EBITDA1 ($mm)

Average Realized Price ($/t)

Customers with a longstanding relationship:

1 This is a non-GAAP financial measure. Please see Appendix for a definition and reconciliation to its comparable GAAP measure.

Alliance Resource Partners, L.P.

ibdrootprojectsIBD-NYabramis2024926850_110. Investor Presentation 1. Non-Deal Roadshow PresentationARLP

SignificantInvestor Presentation (15Growth-May-2024).pptxin U.S. Electricity Demand from EVs, On-Shoring Manufacturing, and Data Centers (including AI) is Delaying Coal-Fired Power Plant Retirements

U.S. Electricity Demand (TWh)

5,100

4,900

4,700

Impact

Of AI

4,500

Data

Centers

4,300

All other

trends

(e.g. EVs,

4,100

reshoring,

etc.)

3,900

2010

2015

2020

2025E

2030E

Demand for Electricity Leads to Delays in Coal Power

Plant retirements in the United States

"Different states in the US are

"Forecast reflects the accelerated

starting to run out of electricity

growth…driven by the electrification of

…that lack of capacity in the

multiple sectors combined with

electric grids in the industrial world

consumer demands for technology..

with AI and EVs is creating

underscores the need to maintain and

enormous investment

develop enough generation resources

opportunities"

to serve that growing demand"

Stephen Schwarzman, co-founder

Kenneth S. Seiler, senior vice

and chairman of Blackstone

president of PJM Planning

Sources: Grid Strategies Report (December 2023), Wells Fargo Research, EIA Annual Energy Outlook 2023, Electric Power Projections by electricity market module regions. Global EIA EV Outlook 2024. 1 Department of Energy (March 2024). 2 IEA Global EV Outlook 2024.

Alliance Resource Partners, L.P.

ibdrootprojectsIBD-NYabramis2024926850_110. Investor Presentation 1. Non-Deal Roadshow PresentationARLP

HighInvestor Presentation-Quality(15-MayO&G-2024).pptx Mineral Acreage Portfolio With Meaningful Exposure to Top-Tier Operators in

Permian Basin

Alliance's mineral interests consist of high quality, liquids-weighted assets across core regions of top-tier L48 Basins

Minerals Overview1,2

MIDLAND

DELAWARE

ANADARKO

WILLISTON

Net Royalty Acres By Basin2

Net Production by Fluid2,3

NGL 25%

69,372

9,890

Oil

Total

Net

45%

NRA

boepd

Gas

30%

In Process Wells2,4 by Operator

Others

927 Gross

3.08 Net

WIPs

Source: Enverus. 1 Active Rigs as of 01-Apr-2024. 2 Based on ARLP and ADIII royalties position as of 31-Dec-2023. 3 Production based on Q3 2024 daily average for ARLP and ADIII. 4 In Process Wells include active permits + recent drilling or DUC wells as of 30-Sep-2024.

Alliance Resource Partners, L.P.

Disclaimer

ARLP - Alliance Resource Partners LP published this content on November 05, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 05, 2024 at 21:36:06.820.