ALLIANCE RESOURCE PARTNERS LP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (type 10-Q)

Significant relationships referenced in this management’s discussion and
analysis of financial condition and results of operations include the following:

References to “we,” “us,” “our” or “ARLP Partnership” mean the business and

? operations of Alliance Resource Partners, L.P., the parent company, as well as

its consolidated subsidiaries.

? References to “ARLP” mean Alliance Resource Partners, L.P., individually as the

parent company, and not on a consolidated basis.

? References to “MGP” mean Alliance Resource Management GP, LLC, ARLP’s general

partner.

? References to “Mr. Craft” mean Joseph W. Craft III, the Chairman, President and

Chief Executive Officer of MGP.

References to “Intermediate Partnership” mean Alliance Resource Operating

? Partners, L.P., the intermediate partnership of Alliance Resource Partners,

L.P.

? References to “Alliance Coal” mean Alliance Coal, LLC, the holding company for

our coal mining operations.

? References to “Alliance Minerals” mean Alliance Minerals, LLC, the holding

company for our oil and gas mineral interests.

References to “Alliance Resource Properties” mean Alliance Resource Properties,

? LLC, the land holding company for certain of our coal mineral interests,

including the subsidiaries of Alliance Resource Properties, LLC.

Summary

We are a diversified natural resource company operating in the United States
that generates operating and royalty income from the production and marketing of
coal to major domestic and international utilities and industrial users as well
as royalty income from oil & gas mineral interests located in strategic
producing regions across the United States. We began coal mining operations in
1971 and, since then, have grown through acquisitions and internal development
in strategic producing regions to become the second-largest coal producer in the
eastern United States. Our mining operations are located near many of the major
eastern utility generating plants and on major coal hauling railroads in the
eastern United States. Two of our mines have loading facilities located on the
banks of the Ohio River. As is customary in the coal industry, we have entered
into long-term coal supply agreements with many of our customers. In addition
to our mining operations, in 2007, Alliance Resource Properties began acquiring
control of coal mineral interests and leasing the coal mineral reserves and
resources to our mining operations. In 2014, we began acquiring oil & gas
mineral interests in premier oil & gas producing regions across the United
States.

We have four reportable segments, Illinois Basin Coal Operations, Appalachia
Coal Operations, Oil & Gas Royalties and Coal Royalties. We also have an “all
other” category referred to as Other, Corporate and Elimination. Our two coal
operations reportable segments correspond to major coal producing regions in the
eastern United States with similar economic characteristics including coal
quality, geology, coal marketing opportunities, mining and transportation
methods and regulatory issues. The two coal operations reportable segments
include seven mining complexes operating in Illinois, Indiana, Kentucky,
Maryland, Pennsylvania and West Virginia and a coal-loading terminal in Indiana
on the Ohio River. Our Oil & Gas Royalties reportable segment includes our oil
& gas mineral interests which are located primarily in the Permian (Delaware and
Midland), Anadarko (SCOOP/STACK), and Williston (Bakken) basins. Our ownership
in these basins includes approximately 57,000 net royalty acres, which provides
us with diversified exposure to industry leading operators consistent with our
general strategy to grow our oil & gas mineral interest business. We market our
oil & gas mineral interests for lease to operators in those regions and generate
royalty income from the leasing and development of those mineral interests. Our
Coal Royalties reportable segment includes coal mineral reserves and resources
owned or leased by Alliance Resource Properties, which are either a) leased to
our mining complexes or (b) near our coal mining operations but not yet leased.

Illinois Basin Coal Operations reportable segment includes operating mining

complexes (a) the Gibson County Coal, LLC (“Gibson”) mining complex, which

? includes the Gibson South mine, (b) the Warrior Coal, LLC (“Warrior”) mining

complex, (c) the River View Coal, LLC (“River View”) mining complex and (d) the

Hamilton County Coal, LLC (“Hamilton”) mining complex. The segment also

includes our Mt. Vernon Transfer Terminal,

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LLC (“Mt. Vernon”) coal-loading terminal in Indiana which operates on the Ohio

River, Mid-America Carbonates, LLC (“MAC”) and other support services, and our

non-operating Illinois Basin mining complexes.

Appalachia Coal Operations reportable segment includes operating mining

complexes (a) the Mettiki mining complex, (b) the Tunnel Ridge, LLC (“Tunnel

? Ridge”) mining complex and (c) the MC Mining, LLC (“MC Mining”) mining complex.

The Mettiki mining complex includes Mettiki Coal (WV), LLC’s Mountain View mine

and Mettiki Coal, LLC’s preparation plant.

Oil & Gas Royalties reportable segment includes oil & gas mineral interests

held by AR Midland, LP (“AR Midland”) and AllDale I & II and includes Alliance

? Minerals’ equity interests in both AllDale III (Note 9 – Investment) and

Cavalier Minerals. Please read “Item 1. Financial Statements (Unaudited)-Note

9 – Investment” of this Quarterly Report on Form 10-Q for more information on

AllDale III.

Coal Royalties reportable segment includes coal mineral reserves and resources

owned or leased by Alliance Resource Properties that are (a) leased to certain

of our mining complexes in both the Illinois Basin Coal Operations and

? Appalachia Coal Operations reportable segments or (b) located near our

operations and external mining operations. Approximately two thirds of the

coal sold by our Coal Operations’ mines is leased from our Coal Royalties

entities.

Other, Corporate and Elimination includes marketing and administrative

activities, Matrix Design Group, LLC and its subsidiaries (“Matrix Design”),

Alliance Design Group, LLC (“Alliance Design”) (collectively, Matrix Design and

Alliance Design referred to as the “Matrix Group”), Pontiki Coal, LLC’s

workers’ compensation and pneumoconiosis liabilities, Wildcat Insurance, LLC

(“Wildcat Insurance”), which assists the ARLP Partnership with its insurance

? requirements, AROP Funding, LLC (“AROP Funding”) and Alliance Resource Finance

Corporation (“Alliance Finance”) (both discussed in Note 6 – Long-Term Debt)

and other miscellaneous activities. The eliminations included in Other,

Corporate and Elimination primarily represent the intercompany coal royalty

transactions described above between our Coal Royalties reportable segment and

our coal operations’ mines. Please read “Item 1. Financial Statements

(Unaudited)-Note 6 – Long-Term Debt” of this Quarterly Report on Form 10-Q for

more information on AROP Funding and Alliance Finance.

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

Total revenues for the three months ended March 31, 2022 (“2022 Quarter”)
increased 44.6% to $460.9 million compared to $318.6 million for the three
months ended March 31, 2021 (the “2021 Quarter”) as a result of higher coal
sales volumes and prices, which rose 19.5% and 13.0%, respectively, and higher
oil & gas royalty volumes and prices, which increased by 26.3% and 74.9%,
respectively. Total operating expenses increased to $373.0 million in the 2022
Quarter, compared to $282.3 million in the 2021 Quarter, due primarily to
increased coal sales volumes and inflationary cost pressures. Income before
income taxes increased 221.0% to $79.7 million in the 2022 Quarter as compared
to $24.8 million in the 2021 Quarter. During the 2022 Quarter, we recognized a
one-time non-cash income tax charge of $37.3 million and current income tax
expense of $4.8 million associated with our election to have Alliance Minerals
treated as a taxable entity for federal and state income tax purposes.

Reflecting higher revenues, partially offset by increased total operating and
income tax expenses, net income attributable to ARLP for the 2022 Quarter
increased to $36.7 million, or $0.28 per basic and diluted limited partner unit,
compared to $24.7 million, or $0.19 per basic and diluted limited partner unit,
for the 2021 Quarter.

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Three Months Ended March 31,
2022 2021 2022 2021

(in thousands) (per ton / per BOE sold)
Coal – Tons sold 8,162 6,828 N/A N/A
Coal – Tons produced 9,178 8,001 N/A N/A
Coal – Coal sales $ 388,360 $ 287,487 $ 47.58 $ 42.10
Coal – Segment Adjusted EBITDA Expense
(1) (2) $ 268,527 $ 202,932 $ 32.90 $ 29.72
Oil & Gas Royalties – BOE sold 505 400 N/A N/A

Oil & Gas Royalties – Royalties (3) $ 30,927 $ 13,999 $ 61.26 $ 35.02
Coal Royalties – Tons sold

5,553 4,521 N/A N/A

Coal Royalties – Intercompany royalties $ 15,167 $ 11,301 $ 2.73 $ 2.50

For a definition of Segment Adjusted EBITDA Expense and related
(1) reconciliation to comparable generally accepted accounting principles

(“GAAP”) financial measures, please see below under “-Reconciliation of
non-GAAP “Segment Adjusted EBITDA Expense” to GAAP “Operating Expenses.”

Coal – Segment Adjusted EBITDA Expense is defined as consolidated Segment
(2) Adjusted EBITDA Expense excluding expenses of our Oil & Gas Royalties segment

and is adjusted for intercompany transactions with our Coal Royalties

segment.

(3) Average sales price per BOE is defined as oil & gas royalty revenues

excluding lease bonus revenue divided by total BOE sold.

Coal sales. Coal sales increased $100.9 million or 35.1% to $388.4 million for
the 2022 Quarter from $287.5 million for the 2021 Quarter. The increase was
attributable to a volume variance of $56.2 million resulting from increased tons
sold and a price variance of $44.7 million due to higher average coal sales
prices. Improved coal demand in both the domestic and export markets during the
2022 Quarter drove coal sales volumes higher by 19.5% to 8.2 million tons sold
compared to 6.8 million tons sold in the 2021 Quarter. Coal sales price
realizations increased by 13.0% in the 2022 Quarter to $47.58 per ton sold,
compared to $42.10 per ton sold during the 2021 Quarter, due to favorable market
conditions.

Coal – Segment Adjusted EBITDA Expense. Segment Adjusted EBITDA Expense for our
coal operations increased 32.3% to $268.5 million, as a result of higher coal
sales volumes and inflationary cost pressures. On a per ton basis, Segment
Adjusted EBITDA Expense for our coal operations increased 10.7% to $32.90 per
ton sold in the 2022 Quarter compared to $29.72 per ton in the 2021 Quarter,
primarily due to certain cost increases, which are discussed below by category:

Labor and benefit expenses per ton produced, excluding workers’ compensation,

? increased 2.3% to $9.65 per ton in the 2022 Quarter from $9.43 per ton in the

2021 Quarter. The increase of $0.22 per ton was primarily due to increased

labor costs at several mines.

Material and supplies expenses per ton produced increased 28.5% to $12.79 per

ton in the 2022 Quarter from $9.95 per ton in the 2021 Quarter. The increase

of $2.84 per ton produced primarily reflects increases of $1.74 per ton for

? roof support, $0.53 per ton for contract labor used in the mining process,

$0.34 per ton for power and fuel used in the mining process, $0.26 per ton for

certain ventilation expenses and $0.25 per ton for various preparation plant

expenses, partially offset by a decrease of $0.76 per ton in longwall

subsidence expense.

Maintenance expenses per ton produced increased 25.8% to $3.22 per ton in the

? 2022 Quarter from $2.56 per ton in the 2021 Quarter. The increase of $0.66 per

ton produced was primarily as a result of inflationary cost pressures.

Segment Adjusted EBITDA Expense increases per ton were partially offset by the
following decrease:

Production taxes and royalty expenses per ton incurred as a percentage of coal

sales prices and volumes decreased $0.39 per produced ton sold in the 2022

Quarter compared to the 2021 Quarter primarily as a result of a $0.60 per ton

? decrease in the federal black lung excise tax, effective January 1, 2022, a

favorable state tons sold mix decreasing severance taxes per ton, in addition

to decreased excise taxes per ton resulting from a greater mix of export

shipments.

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Oil & gas royalties. Oil & gas royalty revenues increased to $30.9 million in
the 2022 Quarter compared to $14.0 million for the 2021 Quarter. The increase
of $16.9 million was primarily due to significantly higher sales price
realizations per BOE and increased volumes in the 2022 Quarter.

Other revenues. Other revenues were principally comprised of Matrix Design
sales and other miscellaneous sales and revenue activities. Other revenues
increased to $12.2 million in the 2022 Quarter from $6.1 million in the 2021
Quarter. The increase of $6.1 million was primarily due to increased sales of
mining technology products by our Matrix Design subsidiary and other smaller
variances in the 2022 Quarter.

Depreciation, depletion and amortization. Depreciation, depletion and
amortization expense increased to $63.3 million for the 2022 Quarter compared to
$59.2 million for the 2021 Quarter primarily as a result of increased coal sales
and oil & gas volumes.

Income tax expense (benefit). Income tax expense increased to $42.7 million for
the 2022 Quarter compared to an income tax benefit of $0.01 million for the 2021
Quarter as a result of our election during the 2022 Quarter to convert Alliance
Minerals from a partnership pass-through entity to a taxable entity for federal
and state income tax purposes. We recognized a one-time non-cash income tax
charge of $37.3 million and a current income tax expense of $4.8 million during
the 2022 Quarter associated with this election. Please read “Item 1. Financial
Statements (Unaudited)-Note 7 – Income Taxes” of this Quarterly Report on Form
10-Q.

Transportation revenues and expenses. Transportation revenues and expenses were
$29.4 million and $11.1 million for the 2022 and 2021 Quarters, respectively.

The increase of $18.3 million was primarily attributable to increased average
third-party transportation rates in the 2022 Quarter and increased coal
shipments for which we arrange third-party transportation. Transportation
revenues are recognized when title to the coal passes to the customer and
recognized in an amount equal to the corresponding transportation expenses.

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Segment Adjusted EBITDA. Our 2022 Quarter Segment Adjusted EBITDA increased
$61.1 million to $170.9 million from the 2021 Quarter Segment Adjusted EBITDA of
$109.8 million. Segment Adjusted EBITDA, tons sold, coal sales, other revenues,
Segment Adjusted EBITDA Expense, oil & gas royalties, BOE volume, coal royalties
and coal royalties tons sold by segment are as follows:

Three Months Ended
March 31,
2022 2021 Increase (Decrease)

(in thousands)
Segment Adjusted EBITDA
Illinois Basin Coal Operations $ 78,215 $ 57,673 $ 20,542 35.6 %
Appalachia Coal Operations 51,103 31,506 19,597 62.2 %
Oil & Gas Royalties 28,552 11,946 16,606 139.0 %
Coal Royalties 10,348 7,273 3,075 42.3 %
Other, Corporate and Elimination (1) 2,686 1,423 1,263 88.8 %

Total Segment Adjusted EBITDA (2) $ 170,904 $ 109,821 $ 61,083 55.6 %

Coal – Tons sold
Illinois Basin Coal Operations 5,882 4,760 1,122 23.6 %
Appalachia Coal Operations 2,280 2,068 212 10.3 %
Total tons sold 8,162 6,828 1,334 19.5 %

Coal sales
Illinois Basin Coal Operations $ 253,905 $ 182,641 $ 71,264 39.0 %
Appalachia Coal Operations 134,455 104,846 29,609 28.2 %
Total coal sales $ 388,360 $ 287,487 $ 100,873 35.1 %

Other revenues
Illinois Basin Coal Operations $ 1,900 $ 613 $ 1,287 210.0 %
Appalachia Coal Operations 363 385 (22) (5.7) %
Oil & Gas Royalties 34 21 13 61.9 %
Other, Corporate and Elimination 9,907 5,049 4,858 96.2 %
Total other revenues $ 12,204 $ 6,068 $ 6,136 101.1 %

Segment Adjusted EBITDA Expense
Illinois Basin Coal Operations $ 177,589 $ 125,581 $ 52,008 41.4 %
Appalachia Coal Operations 83,715 73,726 9,989 13.5 %
Oil & Gas Royalties 3,001 2,058 943 45.8 %
Coal Royalties 4,819 4,028 791 19.6 %
Other, Corporate and Elimination (1) (7,944) (7,676) (268) (3.5) %

Total Segment Adjusted EBITDA Expense $ 261,180 $ 197,717 $ 63,463 32.1 %

Oil & Gas Royalties
Volume – BOE (3) 505 400 105 26.3 %
Oil & gas royalties $ 30,927 $ 13,999 $ 16,928 120.9 %

Coal Royalties
Volume – Tons sold (4) 5,553 4,521 1,032 22.8 %
Intercompany coal royalties $ 15,167 $ 11,301 $ 3,866 34.2 %

Other, Corporate and Elimination includes the elimination of intercompany
(1) coal royalty revenues and expenses between our Coal Royalties Segment and our

Coal Operations Segments in addition to the expenses for the other
miscellaneous activities included in this category.

For a definition of Segment Adjusted EBITDA and related reconciliation to
(2) comparable GAAP financial measures, please see below under “-Reconciliation

of non-GAAP “Segment Adjusted EBITDA” to GAAP “net income.”

(3) Barrels of oil equivalent (“BOE”) is calculated on a 6:1 basis (6,000 cubic

feet of natural gas to one barrel).

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(4) Represents tons sold by our Coal Operations Segments associated with coal

reserves leased from our Coal Royalties Segment.

Illinois Basin Coal Operations – Segment Adjusted EBITDA increased to $78.2
million in the 2022 Quarter from $57.7 million in the 2021 Quarter. The
increase of $20.5 million was primarily attributable to higher coal sales, which
increased 39.0% to $253.9 million in the 2022 Quarter from $182.6 million in the
2021 Quarter, partially offset by increased operating expenses. The increase in
coal sales reflects higher tons sold, which rose 23.6% in the 2022 Quarter as a
result of increased sales volumes across all mines in the region, and higher
coal sales price realizations. Coal sales price per ton sold in the 2022 Quarter
increased by 12.5% compared to the 2021 Quarter reflecting increased domestic
prices and significantly higher export prices due to favorable market
conditions. Segment Adjusted EBITDA Expense increased 41.4% to $177.6 million
in the 2022 Quarter from $125.6 million in the 2021 Quarter primarily as a
result of increased sales volumes and higher expenses per ton. Segment Adjusted
EBITDA Expense per ton increased $3.81 per ton sold to $30.19 from $26.38 per
ton sold in the 2021 Quarter primarily as a result of inflationary cost
pressures on numerous expense items, including roof support, power and
labor-related expenses, lower recoveries across the region and a longwall move
at our Hamilton mine in the 2022 Quarter, partially offset by reduced selling
expense.

Appalachia Coal Operations – Segment Adjusted EBITDA increased 62.2% to $51.1
million for the 2022 Quarter from $31.5 million in the 2021 Quarter. The
increase of $19.6 million was primarily attributable to higher coal sales, which
increased 28.2% to $134.5 million in the 2022 Quarter from $104.8 million in the
2021 Quarter, due to increased prices and volumes. Coal sales prices increased
by 16.3% compared to the 2021 Quarter primarily due to significantly higher
export price realizations at our Mettiki and MC Mining operations. Coal sales
volumes increased 10.3% compared to the 2021 Quarter as a result of higher
export volumes. Segment Adjusted EBITDA Expense increased 13.5% to $83.7
million in the 2022 Quarter from $73.7 million in the 2021 Quarter due to
increased sales volumes and per ton expenses. Segment Adjusted EBITDA Expense
per ton increased $1.07 per ton sold to $36.72 compared to $35.65 per ton sold
in the 2021 Quarter, as a result of inflationary cost pressures on numerous
expense items, including labor-related expenses and supply and maintenance
costs, and a longwall move at our Tunnel Ridge and Mettiki mines in the 2022
Quarter, partially offset by lower subsidence expense and reduced selling
expenses.

Oil & Gas Royalties – Segment Adjusted EBITDA increased to $28.6 million for the
2022 Quarter from $11.9 million in the 2021 Quarter. The increase of $16.7
million was primarily due to significantly higher sales price realizations,
which increased 74.9% to a record $61.26 per BOE, and increased volumes in the
2022 Quarter.

Coal Royalties – Segment Adjusted EBITDA increased 42.3% to $10.3 million for
the 2022 Quarter from $7.3 million in the 2021 Quarter. The increase of $3.0
million was a result of increased royalty tons sold and higher average royalty
rates per ton.

Reconciliation of non-GAAP “Segment Adjusted EBITDA” to GAAP “net income” and
reconciliation of non-GAAP “Segment Adjusted EBITDA Expense” to GAAP “Operating
Expenses”

Segment Adjusted EBITDA (a non-GAAP financial measure) is defined as net income
attributable to ARLP before net interest expense, income taxes, depreciation,
depletion and amortization and general and administrative expenses. Segment
Adjusted EBITDA is a key component of consolidated EBITDA, which is used as a
supplemental financial measure by management and by external users of our
financial statements such as investors, commercial banks, research analysts and
others. We believe that the presentation of EBITDA provides useful information
to investors regarding our performance and results of operations because EBITDA,
when used in conjunction with related GAAP financial measures, (i) provides
additional information about our core operating performance and ability to
generate and distribute cash flow, (ii) provides investors with the financial
analytical framework upon which we base financial, operational, compensation and
planning decisions and (iii) presents a measurement that investors, rating
agencies and debt holders have indicated is useful in assessing us and our
results of operations.

Segment Adjusted EBITDA is also used as a supplemental financial measure by our
management for reasons similar to those stated in the previous explanation of
EBITDA. In addition, the exclusion of corporate general and administrative
expenses from consolidated Segment Adjusted EBITDA allows management to focus
solely on the evaluation of segment operating profitability as it relates to our
revenues and operating expenses, which are primarily controlled by our segments.

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The following is a reconciliation of consolidated Segment Adjusted EBITDA to net
income, the most comparable GAAP financial measure:

Three Months Ended
March 31,
2022 2021

(in thousands)

Consolidated Segment Adjusted EBITDA $ 170,904 $ 109,821
General and administrative

(18,596) (15,504)

Depreciation, depletion and amortization (63,314) (59,202)
Interest expense, net

(9,627) (10,379)
Income tax (expense) benefit (42,715) 12
Net income attributable to ARLP $ 36,652 $ 24,748
Noncontrolling interest 290 78
Net income $ 36,942 $ 24,826

Segment Adjusted EBITDA Expense (a non-GAAP financial measure) includes
operating expenses and other income (expense). Transportation expenses are
excluded as these expenses are passed through to our customers and,
consequently, we do not realize any gain or loss 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 Segment Adjusted 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.

The following is a reconciliation of consolidated Segment Adjusted EBITDA
Expense to operating expense, the most comparable GAAP financial measure:

Three Months Ended
March 31,
2022 2021

(in thousands)
Segment Adjusted EBITDA Expense $ 261,180 $ 197,717
Other income (expense) 566 (1,197)
Operating expenses (excluding depreciation,
depletion and amortization) $ 261,746 $ 196,520

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Liquidity and Capital Resources

Liquidity

We have historically satisfied our working capital requirements and funded our
capital expenditures, investments, contractual obligations and debt service
obligations with cash generated from operations, cash provided by the issuance
of debt or equity, borrowings under the Revolving Credit Facility and
Securitization Facility and other financing transactions. We believe that
existing cash balances, future cash flows from operations and investments,
borrowings under credit facilities and cash provided from the issuance of debt
or equity will be sufficient to meet our working capital requirements, capital
expenditures and additional investments, debt payments, contractual obligations,
commitments and any distribution payments. Nevertheless, our ability to satisfy
our working capital requirements, to satisfy our contractual obligations, to
fund planned capital expenditures, to service our debt obligations or to pay
distributions will depend upon our future operating performance and access to
and cost of financing sources, which will be affected by prevailing economic
conditions generally, and in both the coal and oil & gas industries
specifically, as well as other financial and business factors, some of which are
beyond our control, including the COVID-19 pandemic. Based on our recent
operating cash flow results, current cash position, anticipated future cash
flows and sources of financing that we expect to have available, we anticipate
remaining in compliance with the covenants of the Credit Agreement and expect to
have sufficient liquidity to fund our operations and growth strategies.

However, to the extent operating cash flow or access to and cost of financing
sources are materially different than expected, future covenant compliance or
liquidity may be adversely affected. Please read “Item 1A. Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2021.

In May 2018, the Board approved the establishment of a unit repurchase program
authorizing us to repurchase up to $100 million of ARLP common units. The
program has no time limit and we may repurchase units from time to time in the
open market or in other privately negotiated transactions. The unit repurchase
program authorization does not obligate us to repurchase any dollar amount or
number of units. Since inception through March 31, 2022, we have purchased
units for a total of $93.5 million under the program. During the three months
ended March 31, 2022, we did not repurchase and retire any units. The timing of
any future unit repurchases and the ultimate number of units to be purchased
will depend on a number of factors, including business and market conditions,
our future financial performance, and other capital priorities. Please read
“Part II – Item 2. Unregistered Sales of Equity Securities and Use of Proceeds”
of this Quarterly Report on Form 10-Q for more information on unit repurchase
program.

We currently have an effective universal shelf Registration Statement on Form
S-3 that provides for the registration and sale of an unspecified amount of our
equity or debt securities. We may over time, and subject to market conditions,
in one or more offerings, offer and sell any of the securities described in the
prospectus.

Cash Flows

Cash provided by operating activities was $89.0 million for the 2022 Quarter
compared to $54.6 million for the 2021 Quarter. The increase in cash provided
by operating activities was primarily due to an increase in net income adjusted
for non-cash items and a favorable working capital change related to other
assets and liabilities, partially offset by unfavorable working capital changes
related to trade receivables, inventories and accrued payroll and related
benefits compared to the 2021 Quarter.

Net cash used in investing activities was $45.5 million for the 2022 Quarter
compared to $22.7 million for the 2021 Quarter. The increase in cash used in
investing activities was primarily attributable to an increase in capital
expenditures during the 2022 Quarter.

Net cash used in financing activities was $37.7 million for the 2022 Quarter
compared to $53.0 million for the 2021 Quarter. The decrease in cash used in
financing activities was primarily attributable to reduced borrowings and
payments on the Revolving Credit Facility and the Securitization Facility,
partially offset by increased cash distributions paid to unitholders compared to
the 2021 Quarter.

Cash Requirements

Management anticipates having sufficient cash flow to meet 2022 cash
requirements, including capital expenditures, scheduled payments on long-term
debt, lease obligations, asset retirement obligation costs and workers’
compensation and pneumoconiosis costs, with our March 31, 2022 cash and cash
equivalents of $128.2 million and cash

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flows from operations, or borrowings under our Revolving Credit Facility and
Securitization Facility if necessary. We currently project average estimated
annual maintenance capital expenditures over the next five years of
approximately $5.66 per ton produced. Our anticipated total capital
expenditures, including maintenance capital expenditures, for 2022 are estimated
in a range of $230.0 million to $240.0 million. We will continue to have
significant cash requirements over the long term, which may require us to incur
debt or seek additional equity capital. The availability and cost of additional
capital will depend upon prevailing market conditions, the market price of our
common units and several other factors over which we have limited control, as
well as our financial condition and results of operations.

Debt Obligations

See “Item 1. Financial Statements (Unaudited)-Note 6 – Long-Term Debt” of this
Quarterly Report on Form 10-Q for a discussion of our long-term debt
obligations.

We also have an agreement with a bank to provide additional letters of credit in
an amount of $5.0 million to maintain surety bonds to secure certain asset
retirement obligations and our obligations for workers’ compensation benefits.

On March 31, 2022, we had $5.0 million in letters of credit outstanding under
this agreement.

Related-Party Transactions

We have related-party transactions and activities with Mr. Craft, MGP and their
respective affiliates. These related-party transactions and activities relate
principally to 1) coal mineral leases with The Joseph W. Craft III Foundation
and The Kathleen S. Craft Foundation, 2) the use of aircraft, and 3) providing
administrative services with respect to certain oil & gas mineral interests Mr.
Craft acquired in 2019. We also have related-party transactions with (a) WKY
CoalPlay, LLC (“WKY CoalPlay”) regarding four mineral leases, (b) Bluegrass
Minerals Management, LLC (“Bluegrass Minerals”) through its noncontrolling
ownership interest in our consolidated subsidiary, Cavalier Minerals and (c)
with our equity interest in AllDale III. For more information regarding
Bluegrass Minerals and AllDale III, please read “Item 1. Financial Statements
(Unaudited)-Note 8 – Variable Interest Entities” and “-Note 9 – Investment” of
this Quarterly Report on Form 10-Q. Please read our Annual Report on Form 10-K
for the year ended December 31, 2021, “Item 8. Financial Statements and
Supplementary Data-Note 21 – Related-Party Transactions” for additional
information concerning related-party transactions.

New Accounting Standards

See “Item 1. Financial Statements (Unaudited)-Note 2 – New Accounting Standards”
of this Quarterly Report on Form 10-Q for a discussion of new accounting
standards.

Other Information

Insurance

Effective December 1, 2021, we renewed our annual property and casualty
insurance program. Our property insurance was procured from our wholly owned
captive insurance company, Wildcat Insurance. Wildcat Insurance charged certain
of our subsidiaries for the premiums on this program and in return purchased
reinsurance for the program in the standard market. The maximum limit in the
commercial property program is $100.0 million per occurrence, excluding a $1.5
million deductible for property damage, a 75- or 90-day waiting period for
underground business interruption depending on the mining complex and an
additional $10.0 million overall aggregate deductible. We have elected to retain
a 10% participating interest in our commercial property insurance program. We
can make no assurances that we will not experience significant insurance claims
in the future that could have a material adverse effect on our business,
financial condition, results of operations and ability to purchase property
insurance in the future. Also, exposures exist for which no insurance may be
available and for which we have not reserved. In addition, the insurance
industry has been subject to efforts by environmental activists to restrict
coverages available for fossil-fuel companies.

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