Q2 2024 Alliance Resource Partners L.P. Earnings Call

Greetings and welcome to the Alliance Resource Partners LP second quarter 2024 earnings conference call.

Operator: Conference call. At this time, all participants are in a listen-only mode.

Operator: At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Cary Marshall, Senior Vice President and Chief Financial Officer. Thank you, sir. You may begin. Thank you, and good morning, and welcome everyone.

Operator: A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone key pack. As a reminder, this conference is being recorded.

Speaker Change: At this time, all participants are in a listen-only mode.

Speaker Change: A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Cary Marshall: It is now my pleasure to introduce your host, Cary Marshall, Senior Vice President and Chief Financial Officer.

Speaker Change: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Cary Marshall, Senior Vice President and Chief Financial Officer. Thank you, sir. You may begin.

Operator: Thank you, sir. You may begin. Thank you.

Cary P. Marshall: Earlier this morning, Alliance Resource Partners released its second quarter 2024 financial and operating results, which we refer to as our 2024 quarter. And we will now discuss those results as well as our perspective on current market conditions and updated outlook for 2024. Following our prepared remarks, we will open the call to answer your questions.

Cary Marshall: And good morning, and welcome everyone. Earlier this morning, Alliance Resource Partners released its second quarter 2024 financial and operating results, which we refer to as our 2024 quarter. And we will now discuss those results as well as our perspective on current market conditions and updated outlook for 2024. Following our prepared remarks, we will open the call to answer your questions. Before beginning, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the Securities and Exchange Commission and are also reflected in this morning's press release.

Cary P. Marshall: Thank you, and good morning, and welcome everyone. Earlier this morning, Alliance Resource Partners released its second quarter 2024 financial and operating results.

Speaker Change: which we refer to as our 2024 quarter, and we will now discuss those results as well as our perspective on current market conditions and updated outlook for 2024.

Cary P. Marshall: Before beginning, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the Securities and Exchange Commission and are also reflected in this morning's press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected.

Speaker Change: Following our prepared remarks, we will open the call to answer your questions.

Cary P. Marshall: In providing these remarks, the Partnership has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, unless required by law to do so. Finally, we will also be discussing certain non-GAAP financial measures. Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of this morning's press release, which has been posted on our website and furnished to the SEC on Form 8K.

Speaker Change: Before beginning, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the Securities and Exchange Commission and are also reflected in this morning's press release.

Cary Marshall: While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, the partnership has no obligation to publicly update or revise any forward-looking statement, whether it is a result of new information, future events, or otherwise, unless required by law to do so. Finally, we will also be discussing certain non-GAAP financial measures. Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of this morning's press release, which has been posted on our website and furnished to the SEC on Form 8-K.

Speaker Change: While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected.

Speaker Change: In providing these remarks, the partnership has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by law to do so.

Speaker Change: Finally, we will also be discussing certain non-GAAP financial measures.

Speaker Change: Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of this morning's press release, which has been posted on our website and furnished to the SEC on Form 8K.

Cary Marshall: Also, we have discovered that a version of the earnings release that was published by BusinessWire this morning had an obvious typographical error in the line item for income from operations for the three months ended June 30, 2023. Earlier this morning, we filed our second quarter 2024 earnings release with the SEC under the cover of a Form 8-K. And we refer you to the earnings release attached to our Form 8-K, which is correct and does not contain this error.

Cary P. Marshall: Also, we have discovered that a version of the earnings release that was published by Business Wire this morning had an obvious typographical error in the line item for income from operations for the three months ended June 30, 2023. Earlier this morning, we filed our second quarter 2024 earnings release with the SEC under the cover of a Form 8K, and we refer you to the earnings release attached to our Form 8K, which is correct and does not contain this error.

Speaker Change: Also, we have discovered that a version of the earnings release that was published by Business Wire this morning had an obvious typographical error in the line item for income from operations for the three months ended June 30, 2023.

Speaker Change: Earlier this morning we filed our second quarter 2024 earnings release with the SEC under the cover of a Form 8K, and we refer you to the earnings release attached to our Form 8K, which is correct and does not contain this error.

Cary Marshall: With the required preliminaries out of the way, I will begin with a review of our results for the second quarter, given an update to our 2024 guidance, then turn the call over to Joe Kraft, our chairman, president and chief executive officer, for his comments. In June, we successfully issued 400 million of 8.625 percent senior unsecured notes due in 2029. And we redeemed the outstanding balance of 284.6 million of ARLP senior notes that were due in 2025. We also extended the maturity of our 425 million dollar revolving credit facility to March of 2028 and amended certain terms to provide us additional flexibility, including the right to upsize the recently issued senior notes by $200 million.

Cary P. Marshall: With the required preliminaries out of the way, I will begin with a review of our results for the second quarter, give an update on our 2024 guidance, and then turn the call over to Joe Craft, our Chairman, President, and Chief Executive Officer, for his comments. In June, we successfully issued $400 million of 8.625% senior unsecured notes due in 2029, and we redeemed the outstanding balance of 284.6 million of ARLP senior notes that were due in 2025.

Speaker Change: With the required preliminaries out of the way, I will begin with a review of our results for the second quarter, give an update to our 2024 guidance, then turn the call over to Joe Craft, our Chairman, President, and Chief Executive Officer, for his comments.

Speaker Change: In June , we successfully issued $400 million of 8.625% senior unsecured notes due in 2029.

Speaker Change: And we redeemed the outstanding balance of $284.6 million of ARLP's senior notes that were due in 2025.

Cary P. Marshall: We also extended the maturity of our $425 million revolving credit facility to March of 2028 and amended certain terms to provide us additional flexibility, including the right to upsize the recently issued senior notes by $200 million. The successful completion of the senior notes offering increased our liquidity by $100 million, further strengthened our balance sheet, and represents a vote of confidence from the capital markets and ARLP's ability to execute its business. The vision we communicated to investors was obviously well received as the offering was significantly oversubscribed.

Speaker Change: We also extended the maturity of our $425 million revolving credit facility to March of 2028 and amended certain terms to provide us additional flexibility, including the right to upsize the recently issued senior notes by $200 million.

Cary Marshall: The successful completion of the senior notes offering increased our liquidity by $100 million, further strengthened our balance sheet, and represents a vote of confidence from the capital markets and ARLP's ability to execute its business plan. The vision we communicated to investors was obviously well received, as the offering was significantly oversubscribed. We emphasized our track record over the past 25 years as a reliable low-cost coal producer with access to both domestic and export markets that is proven to be a strong cash flow generator over the years. We also shared our view that we are poised to capitalize on the expected increase in US electricity demand driven by electric vehicles, unsure manufacturing, data centers, and the AI revolution.

Speaker Change: The successful completion of the Senior Notes Offering increased our liquidity by $100 million, further strengthened our balance sheet, and represents a vote of confidence from the capital markets and ARLP's ability to execute its business plan.

Speaker Change: The vision we communicated to investors was obviously well received as the offering was significantly oversubscribed.

Cary P. Marshall: We emphasize our track record over the past 25 years as a reliable, low-cost coal producer with access to both domestic and export markets that have proven to be a strong cash flow generator over the years. We also shared our view that we are poised to capitalize on the expected increase in U.S. electricity demand driven by electric vehicles, onshore manufacturing, data centers, and the AI revolution. The value and prospects for our unlevered oil and gas royalty segment were also a major contributor to the offering's success.

Speaker Change: We emphasize our track record over the past 25 years as a reliable, low-cost coal producer with access to both domestic and export markets that has proven to be a strong cash flow generator over the years.

Speaker Change: We also shared our view that we are poised to capitalize on the expected increase in U.S. electricity demand driven by electric vehicles, onshore manufacturing, data centers, and the AI revolution.

Cary Marshall: The value and prospects for our unlevered oil and gas royalty segment was also a major contributor to the offering success. In particular, we outlined our expectation of continued growth in segment adjusted EBITDA and pre cash flow from the high margin oil and gas royalties business, which has grown from the segment adjusted EBITDA of $42 million in 2020 to $122 million in 2023. During the 2024 quarter, our own and gas royalty segment continued to pose solid results as volumes for oil and gas minerals reached 817,000 barrels of oil equivalent, or BOE, a 6.8% increase year over year.

Speaker Change: The value and prospects for our unlevered oil and gas royalty segment was also a major contributor to the offering success.

Cary P. Marshall: In particular, we outlined our expectation of continued growth in segment-adjusted EBITDA and pre-cash flow from the high-margin oil and gas royalties business, which has grown from a segment adjusted EBITDA of $42 million in 2020 to $122 million in 2023. During the 2024 quarter, our oil and gas royalty segment continued to post solid results as volumes for oil and gas minerals reached 817,000 barrels of oil equivalent, or BOE, a 6.8% increase year over year. Average realized sales prices per BOE were up 3.1% versus the second quarter of 2023, which we refer to as the 2023 quarter. Reflecting higher commodity prices, sequentially, average realized sales prices per BOE were 8.2% higher.

Speaker Change: In particular, we outlined our expectation of continued growth in segment-adjusted EBITDA and pre-cash flow from the high-margin oil and gas royalties business.

Speaker Change: which has grown from a segment-adjusted EBITDA of $42 million in 2020 to $122 million in 2023.

Speaker Change: During the 2024 quarter, our oil and gas royalties segment continued to post solid results as volumes for oil and gas minerals reached 817,000 barrels of oil equivalent or BOE, a 6.8% increase year over year.

Cary Marshall: Average realized sales prices per BOE were up 3.1% versus the second quarter of 2023, which we refer to as our 2023 Quarter. Reflecting higher commodity prices sequentially, average realized sales prices per BOE were 8.2% higher.

Speaker Change: Average realized sales prices per BOE were up 3.1 percent versus the second quarter of 2023 which we refer to as our 2023 quarter.

Speaker Change: Reflecting higher commodity prices, sequentially, average realized sales prices per BOE were 8.2% higher.

Cary Marshall: Turning to results for our coal segment, delayed shipments due to high water levels and lock outages on the Ohio River and lower than expected export shipments caused our coal inventories to grow by 800,000 tons by the end of the 2024 quarter. Coal sales volumes for the 2024 quarter decreased 11.8% to 7.9 million tons, while coal production declined 10.2% to 8.4 million tons compared to the 2023 quarter. In the Illinois Basin, sales volumes were down 4.6% as compared to the 2023 quarter, reflecting lower sales at our Hamilton Mine. And in AppLatcha, sales volumes were down 27.3% as compared to the 2023 quarter, reflecting lower shipments from our MC mining and Tunnel Ridge mines.

Cary P. Marshall: Turning to results for our coal segment, delayed shipments due to high water levels and lock outages on the Ohio River and lower than expected export shipments caused our coal inventories to grow by 800,000 tons by the end of the 2024 quarter. Coal sales volumes for the 2024 quarter decreased 11.8% to 7.9 million tons, while coal production declined 10.2% to 8.4 million tons compared to the 2023 quarter. In the Illinois Basin, sales volumes were down 4.6% as compared to the 2023 quarter, reflecting lower sales at our Hamilton refinery, and in Appalachia, sales volumes were down 27.3% as compared to the 2023 quarter, reflecting lower shipments from our MC Mining and Tunnel Ridge.

Speaker Change: Turning to results for our coal segment, delayed shipments due to high water levels and lock outages on the Ohio River and lower than expected export shipments caused our coal inventories to grow by 800,000 tons by the end of the 2024 quarter.

Speaker Change: Coal sales volumes for the 2024 quarter decreased 11.8% to 7.9 million tons, while coal production declined 10.2% to 8.4 million tons compared to the 2023 quarter.

Speaker Change: In the Illinois Basin, sales volumes were down 4.6% as compared to the 2023 quarter, reflecting lower sales at our Hamilton mine.

Speaker Change: And in Appalachia, sales volumes were down 27.3% as compared to the 2023 quarter, reflecting lower shipments from our MC Mining and Tunnel Ridge Mines.

Cary Marshall: Compared to the sequential quarter, coal sales volumes decreased 9.5%, while coal production declined 7.4%. In the Illinois Basin, sales volumes were down 10.1% mostly from our Hamilton Mine. And in AppLatcha, shipments were down 7.7%, primarily attributed to the floodwaters impacting shipments at our Tunnel Ridge mine. Reflecting the strength of our well-contracted order book, coal sales price per ton sold for the 2024 quarter was up 3.8% year over year, which included a higher revenue mix of Illinois Basin sales. funds. By region, we realized a 4.9% increase in the Illinois Basin and an 8.7% increase in Appalachia.

Cary P. Marshall: Compared to the sequential quarter, coal sales volumes decreased 9.5% while coal production declined 7.4%. In the Illinois Basin, sales volumes were down 10.1%, mostly from our Hamilton mine. And in Appalachia, shipments were down 7.7%, primarily due to the floodwaters impacting shipments at our Tunnel Ridge mine.

Speaker Change: Compared to the sequential quarter, coal sales volumes decreased nine and a half percent, while coal production declined 7.4 percent.

Speaker Change: In the Illinois Basin, sales volumes were down 10.1% mostly from our Hamilton mine, and in Appalachia, shipments were down 7.7%, primarily attributed to the flood waters impacting shipments at our Tunnel Ridge mine.

Cary P. Marshall: Reflecting the strength of our well-contracted order book, coal sales price per ton sold for the 2024 quarter was up 3.8% year over year, which included a higher revenue mix of Illinois Basin sales. By region, we realized a 4.9% increase in the Illinois Basin and an 8.7% increase in Appalachia. The increase in the Illinois Basin was due to improved domestic price realizations, and in Appalachia due to higher realized prices at our Tunnel Ridge operation.

Speaker Change: Reflecting the strength of our well-contracted order book, coal sales price per ton sold for the 2024 quarter was up 3.8% year-over-year, which included a higher revenue mix of Illinois Basin sales tons.

Speaker Change: By region, we realized a 4.9% increase in the Illinois Basin and an 8.7% increase in Appalachia.

Cary Marshall: The increase in the Illinois Basin was due to improved domestic price realizations in Appalachia due to higher realized pricing at our Tunnel Ridge operation. Compared to the sequential quarter, the average wholesale's price per ton increased 0.8% to $65.30 per ton compared to $64.78 per ton sold sequentially. Coal sales price per ton sold declined in the Illinois Basin by 0.4% and rose in Appalachia by 2.4%. Our coal relative segment experienced the decrease in volumes primarily from our River View and Hamilton mines, and an increase in prices during the 2024 quarter was coal relative tons sold down 2.8% and coal relative revenue per ton up 2.8% year over year.

Speaker Change: The increase in the Illinois Basin was due to improved domestic price realizations and Appalachia due to higher realized pricing at our Tunnel Ridge operation.

Cary P. Marshall: Compared to the sequential quarter, the average coal sales price per ton increased 0.8% to $65.30 per ton, compared to $64.78 per ton sold sequentially. Cold sales price per ton sold declined in the Illinois Basin by 0.4% and rose in Appalachia by 2.4%.

Speaker Change: Compared to the sequential quarter, the average coal sales price per ton increased 0.8% to $65.30 per ton compared to $64.78 per ton sold sequentially.

Speaker Change: Coal sales price per ton sold declined in the Illinois Basin by 0.4% and rose in Appalachia by 2.4%.

Cary P. Marshall: Our coal royalty segment experienced a decrease in volumes, primarily from our Riverview and Hamilton mines, and an increase in prices during the 2024 quarter, with coal royalty tons sold down 2.8% and coal royalty revenue per ton up 2.8% year over year. Sequentially, coal royalty tent sold, we're off 9.8%. As a result, consolidated total revenues for the 2024 quarter were $593.4 million, down 7.6% from $641.8 million in the year-ago period. Additionally, sequentially, consolidated total revenues were down 9%.

Speaker Change: Our coal royalty segment experienced a decrease in volumes primarily from our Riverview and Hamilton mines and an increase in prices during the 2024 quarter with coal royalty tons sold down 2.8 percent and coal royalty revenue per ton up 2.8 percent year-over-year.

Cary Marshall: Sequentially, coal relative tons sold were off 9.8%. As a result, consolidated total revenues for the 2024 quarter are $593.4 million, down 7.6% from $641.8 million in the year-ago period. Sequentially, consolidated total revenues were down 9%. Segment adjusted EBITDA expense per ton sold for the 2024 quarter increased by 5.5% and 3.1% in the Illinois Basin compared to the 2023 and sequential quarters, respectively, due primarily to reduced production at our Hamilton operation and lower recoveries at River View. In Appalachia, segment adjusted EBITDA expense per ton sold increased by 57.6% and 26.1% in the 2024 quarter compared to the 2023 and sequential quarters, respectively.

Speaker Change: Sequentially, co-royalty tenants sold were off 9.8 percent.

Speaker Change: As a result, consolidated total revenues for the 2024 quarter were $593.4 million, down 7.6% from $641.8 million in the year-ago period.

Cary P. Marshall: Segment-adjusted EBITDA expense per ton sold for the 2024 quarter increased by 5.5% and 3.1% in the Illinois Basin compared to the 2023 and sequential quarters, respectively, due primarily to reduced production at our Hamilton operation and lower recoveries at Riverview. In Appalachia, segment-adjusted EBITDA expense per ton sold increased by 57.6 and 26.1 percent in the 2024 quarter The Appalachian Pertine has increased.

Speaker Change: Sequentially, consolidated total revenues were down 9%.

Speaker Change: Segment-adjusted EBITDA expense per ton sold for the 2024 quarter increased by 5.5 and 3.1 percent in the Illinois Basin compared to the 2023 and sequential quarters respectively.

Speaker Change: Due primarily to reduced production at our Hamilton operation and lower recoveries at Riverview

Speaker Change: In Appalachia, segment-adjusted EBITDA expense per ton sold increased by 57.6% and 26.1% in the 2024 quarter compared to the 2023 and sequential quarters respectively.

Cary Marshall: The Appalachia per ton increases were due to reduced production across the region as a result of long-long moves, challenging mining conditions that lowered recoveries at all three operations, and increased costs related to roof control and maintenance during the 2024 quarter. For the 2024 quarter, we completed long-long moves at Metiki and Atunnel Ridge, while a plan move at Hamilton was moved into July. We now anticipate two long-long moves in the third quarter, with one each in the Illinois Basin in Appalachia and three long-long moves in the fourth quarter, with one in the Illinois Basin and two in Appalachia.

Cary P. Marshall: We're due to reduce production across the region as a result of long, long moves, challenging mining conditions that lowered recoveries at all three operations, and increased costs related to roof control and maintenance during the 2024 quarter. For the 2024 quarter, we completed long-wall moves at Metiki and at Tunnel Ridge, while a planned move at Hamilton was moved into July. We now anticipate two longwall moves in the third quarter, with one each in the Illinois Basin and Appalachia, and three longwall moves in the fourth quarter, with one in the Illinois Basin and two in Appalachia. Coal inventory levels were 2.6 million tons at the end of the 2024 quarter.

Speaker Change: The Appalachia per ton increases were due to reduced production across the region as a result of longwall moves, challenging mining conditions that lowered recoveries at all three operations,

Speaker Change: and increased costs related to roof control and maintenance during the 2024 quarter.

Speaker Change: For the 2024 quarter, we completed long-wall moves at Metiki and at Tunnel Ridge, while a planned move at Hamilton was moved into July .

Speaker Change: We now anticipate two longwall moves in the third quarter, with one each in the Illinois Basin and Appalachia, and three longwall moves in the fourth quarter, with one in the Illinois Basin and two in Appalachia.

Cary Marshall: Whole inventory levels were 2.6 million tons at the end of the 2024 quarter. We expect sales tonnage being higher than production levels in the back half of the year and, as a result, anticipate more normal inventory levels of 0.5 to 1 million tons at your end. We anticipate these inventory levels to be reduced radically throughout the balance of the year. During the 2024 quarter, we saw a decrease in the fair value of the partnership's digital assets of $3.7 million based upon a month in Bitcoin price of $62,678, while the amount of Bitcoin we own increased 6.3%.

Cary P. Marshall: We expect sales tonnage to be higher than production levels in the back half of the year and, as a result, anticipate more normal inventory levels of 0.5 to 1 million tons at year end. We anticipate these inventory levels to be significantly reduced throughout the balance of the year during the 2024 quarter. We saw a decrease in the fair value of the partnership's digital assets of $3.7 million based on a month-end Bitcoin price of $62,678, while the amount of Bitcoin we own increased by 6.3%.

Speaker Change: Total inventory levels were 2.6 million tons at the end of the 2024 quarter. We expect sales tonnage being higher than production levels in the back half of the year, and as a result, anticipate more normal inventory levels of 0.5 to 1 million tons at year end.

Speaker Change: We anticipate these inventory levels to be reduced radically throughout the balance of the year.

Speaker Change: During the 2024 quarter, we saw a decrease in the fair value of the partnership's digital assets of $3.7 million, based upon a month-end Bitcoin price of $62,678, while the amount of Bitcoin we own increased 6.3%.

Cary Marshall: As we described last quarter, we started mining Bitcoin in 2020 as a pilot project to monetize already paid for yet underutilize electricity load capacity at our Riverview. We now own approximately 452 bitcoins, valued at 28.3 million at the end of the 2024 quarter. I note that earlier this morning, when I checked the Bitcoin price, it was at approximately $69,647, up approximately 11% from the price at the end of the 2024 quarter. Our net income for the 2024 quarter, attributable to the ARLP, was 100.2 million or 77 cents per unit, which compared to 169.8 million or $1.30 per unit in the year-ago period.

Cary P. Marshall: As we described last quarter, we started mining Bitcoin in 2020 as a pilot project to monetize already paid for yet underutilized electricity load capacity at our Riverview mine. We now own approximately 452 bitcoins valued at 28.3 million at the end of the 2024 quarter. I note that earlier this morning when I checked the Bitcoin price, it was at approximately $69,647, up approximately 11% from the price at the end of the 2024 quarter.

Speaker Change: As we described last quarter, we started mining Bitcoin in 2020 as a pilot project to monetize already paid for, yet underutilized electricity load capacity at our Riverview mine.

Speaker Change: We now own approximately 452 bitcoins valued at $28.3 million at the end of the 2024 quarter.

Speaker Change: I note that earlier this morning, when I checked the Bitcoin price, it was at approximately $69,647, up approximately 11% from the price at the end of the 2024 quarter.

Cary P. Marshall: Our net income for the 2024 quarter attributable to ARLP was $100.2 million, or $0.77 per unit, which compared to $169.8 million or $1.30 per unit in the year-ago period. Adjusted EBITDA in the 2024 quarter was $181.4 million, which compared to $249.2 million in the prior year period. Net Income and Adjusted EBITDA for the sequential quarter were $158.1 and $238.1 million, respectively.

Speaker Change: Our net income for the 2024 quarter attributable to ARLP was $100.2 million or $0.77 per unit.

Cary Marshall: Adjusted EBITDA on the 2024 quarter was $181.4 million, which compared to $249.2 million in the prior year period. Net income and adjusted EBITDA on the sequential quarter were 158.1 and 238.1 million, respectively. These decreases reflect the lower revenues and higher total operating expenses mentioned previously. Now turning to our balance sheet and uses of cash, free cash flow of 114.9 million for the 2024 quarter was up 27% from the sequential quarter. Alliance generated 215.8 million of cash flows from operating activities in the 2024 quarter, slightly more than the 209.7 million in the sequential quarter. Alliance also invested 101.4 million in capital expenditures in the 2024 quarter, down from 123.8 million in the sequential quarter, and paid a quarterly distribution of 70 cents per unit.

Speaker Change: which compared to $169.8 million or $1.30 per unit in the year ago period. Adjusted EBITDA in the 2024 quarter was $181.4 million, which compares to $249.2 million in the prior year period.

Speaker Change: Net Income, and Adjusted EBITDA on the sequential quarter.

Cary P. Marshall: These decreases reflect the lower revenues and higher total operating expenses mentioned previously. Now turning to our balance sheet and uses of cash, free cash flow of $114.9 million for the 2024 quarter was up 27% from the sequential. Alliance generated $215.8 million of cash flows from operating activities in the 2024 quarter, slightly more than the $209.7 million in the sequential quarter.

Speaker Change: were $158.1 and $238.1 million respectively.

Speaker Change: These decreases reflect the lower revenues and higher total operating expenses mentioned previously.

Speaker Change: Now, turning to our balance sheet and uses of cash, free cash flow of $114.9 million for the 2024 quarter was up 27% from the sequential quarter.

Speaker Change: Alliance generated $215.8 million of cash flows from operating activities in the 2024 quarter, slightly more than the $209.7 million in the sequential quarter.

Speaker Change: Alliance also invested $101.4 million in capital expenditures in the 2024 quarter down from $123.8 million in the sequential quarter and paid a quarterly distribution of $0.70 per unit.

Cary P. Marshall: Alliance also invested $101.4 million in capital expenditures in the 2024 quarter, down from $123.8 million in the sequential quarter, and paid a quarterly distribution of $0.70 per unit. At quarter end, our total and net leverage ratios were 0.61 and 0.36 times total debt trailing 12 months adjusted EBIT, and our liquidity increased to $666 million, which included approximately $203.7 million of cash and cash equivalents on the balance sheet, compared to $59.8 million at the beginning of the year.

Cary Marshall: At quarter end, our total leverage ratios were 0.61 and 0.36 times total debt trailing 12 months adjusted EBITDA. And our liquidity increased to 666 million, which included approximately 203.7 million of cash and cash equivalents on the balance sheet, compared to 59.8 million at the beginning of the year.

Speaker Change: At quarter end, our total net leverage ratios were 0.61 and 0.36 times total debt trailing 12 months adjusted EBITDA.

Speaker Change: And our liquidity increased to $666 million, which included approximately $203.7 million of cash and cash equivalents on the balance sheet, compared to $59.8 million at the beginning of the year.

Cary Marshall: Now turning to our updated guidance detailed in this morning's release. Based on our results year to date and outlook for markets through year end, we are adjusting our full-year guidance. As mentioned in this morning's press release, although demand for cooling has been strong since the start of this summer, accelerating coal-based power generation and US thermal coal production has slowed down. We are seeing our domestic utility customers rely mainly on their elevated inventories to meet this demand. In the export markets, net back pricing for high sulfur, Illinois Basin coal is at a level that we have decided is prudent to slow down production for the back half of the year or until prices are more favorable.

Cary P. Marshall: Now turning to our updated guidance detailed in this morning's release. Based on our results year-to-date and outlook for markets through year-end, we are adjusting our full-year guidance. As mentioned in this morning's press release, although demand for cooling has been strong since the start of this summer, accelerating coal-based power generation, and U.S. thermal coal production has slowed down, we are seeing our domestic utility customers rely mainly on their elevated inventories to meet this demand.

Speaker Change: Now turning to our updated guidance detailed in this morning's release.

Speaker Change: Based on our results year-to-date, and outlook for markets through year-end, we are adjusting our full-year guidance. As mentioned in this morning's press release,

Speaker Change: Although demand for cooling has been strong since the start of this summer, accelerating coal-based power generation and U.S. thermal coal production has slowed down, we are seeing our domestic utility customers rely mainly on their elevated inventories to meet this demand.

Cary P. Marshall: In the export markets, net back pricing for high sulfur Illinois basin coal is at a level that we have decided it is prudent to slow down production for the back half of the year or until prices are more favorable. As a result, our revised guidance expects total coal sales volumes for 2024 to fall within a range between 33.5 to 34.5 million tons, with a new midpoint of 34 million tons that is 2.6% below our original guidance midpoint for the year. We expect the Illinois Basin sales volumes to be in a range of 24.25 to 25 million tons and for Appalachian sales volumes to be in a range of 9.25 to 9.5 million tons this year.

Speaker Change: In the export markets, net back pricing for high sulfur Illinois basin coal is at a level that we have decided it is prudent to slow down production for the back half of the year or until prices are more favorable.

Cary Marshall: As a result, our revised guidance expects total coal sales volumes for 2024 to fall within a range between 33.5 to 34.5 million tons, with a new midpoint of 34 million tons that is 2.6% below our original guidance midpoint for the year. We expect Illinois Basin sales volumes to be in a range of 24.25 million tons, and for Appalachia sales volumes to be in a range of 9.5 million tons this year. We made some minor adjustments to our committed sales and price sales tons to reflect modest net contracting activity and movement in the timing of customer shipments that occurred during the 2024 quarter.

Speaker Change: As a result, our revised guidance expects total coal sales volumes for 2024 to fall within a range between 33.5 to 34.5 million tons.

Speaker Change: With a new midpoint of 34 million tons, that is 2.6% below our original guidance midpoint for the year.

Speaker Change: We expect the Illinois Basin sales volumes to be in a range of 24 1?4 to 25 million tons, and for Appalachia sales volumes to be in a range of 9 1?4 to 9 1?2 million tons this year.

Cary P. Marshall: We made some minor adjustments to our committed sales and price sales tons to reflect modest net contracting activity and movement in the timing of customer shipments that occurred during the 2024 quarter. At the end of the 2024 quarter, our committed tonnage for 2024 was 32.7 million tons, or approximately 96% of our expected sales tons at the midpoint of our updated guidance. Of that total, 27.5 million tons are currently committed to the domestic market, while 5.2 million tons are committed to export.

Speaker Change: We made some minor adjustments to our committed sales and price sales tons to reflect modest net contracting activity and movement in the timing of customer shipments that occurred during the 2024 quarter.

Cary Marshall: At the end of the 2024 quarter, our committed tonnage for 2024 was 32.7 million tons, or approximately 96% of our expected sales tons at the midpoint of our updated guidance range. Of that total, 27.5 million tons are currently committed to the domestic market, while 5.2 million tons are committed to the export markets. We anticipate due to the summer burn continuing to be above average, there will be opportunities for spot sales to domestic utilities in the fourth quarter of this year. As a result, we are now planning for over half of our 2024 unsold coal position to be sold in the domestic market.

Speaker Change: At the end of the 2024 quarter, our committed tonnage for 2024 was 32.7 million tons, or approximately 96% of our expected sales tons at the midpoint of our updated guidance range.

Speaker Change: Of that total, 27.5 million tons are currently committed to the domestic market, while 5.2 million tons are committed to the export markets.

Cary P. Marshall: We anticipate, due to the summer burn continuing to be above average, there will be opportunities for spot sales to domestic utilities in the fourth quarter of this year. As a result, we are now planning for over half of our 2024 unsold coal position to be sold in the domestic market. We also anticipate that over the next three months, we will secure additional commitments for deliveries in 2025 and beyond, as most of our customers are actively in the market wanting to firm up their books for the near future.

Speaker Change: We anticipate, due to the summer burn continuing to be above average, there will be opportunities for spot sales to domestic utilities in the fourth quarter of this year.

Speaker Change: As a result, we are now planning for over half of our 2024 unsold coal position to be sold in the domestic market.

Cary Marshall: We also anticipate over the next three months, we will secure additional commitments for deliveries in 2025 and beyond, as most of our customers are actively in the market wanting to firm up their book for the near future. Based on the lower coal sales volumes, we increased our expectation for sales price per ton sold to be in a range of 63.75 to 64.50 per ton as compared to 61.75 to 63.75 previously. In the Illinois Basin, we expect pricing of $56 in a quarter to $57 a ton versus the previous range of $54.50 to $56, and in Appalachia, we now expect pricing of $83.84 to $84 per ton versus the previous range of $80.50 to $83.50 per ton.

Speaker Change: We also anticipate, over the next three months, we will secure additional commitments for deliveries in 2025 and beyond, as most of our customers are actively in the market wanting to firm up their book for the near future.

Cary P. Marshall: Based on the lower coal sales volumes, we increased our expectation for the sales price per ton sold to be in a range of $63.75 to $64.50 per ton as compared to $61.75 to $63.75 previously. In the Illinois Basin, we expect pricing of $56.25 to $57.00 a ton versus the previous range of $54.50 to $56.00. And in Appalachia, we now expect prices of $83 to $84 per ton versus the previous range of $80.50 to $83.50.

Speaker Change: Based on the lower coal sales volumes, we increased our expectation for sales price per ton sold to be in a range of $63.75 to $64.50 per ton as compared to $61.75 to $63.75 previously.

Speaker Change: In the Illinois Basin, we expect pricing of $56.25 to $57 a ton versus the previous range of $54.50 to $56.

Speaker Change: And in Appalachia, we now expect pricing of $83 to $84 per ton versus the previous range of $80.50 to $83.50 per ton.

Cary Marshall: For segment adjusted evit dye expense per tonn, we now expect a range of $43 to $45 per tonn versus the previous range of $41 to $43. In the Illinois Basin, we expect cost to be in a range of $36 to $38 per ton, while in Appalachia, we expect our per ton cost to be in the $57 to $60 range. As it relates to volumes for our only gas roll of these segment, we are raising our guidance as we continue to see strong activity from our Permian Basin 8 range. For oil, we expect 1.5 to 1.6 million barrels versus 1.4 to 1.5 million barrels previously.

Cary P. Marshall: For segment-adjusted EBITDA expense per ton, we now expect a range of $43 to $45 per ton versus the previous range of $41 to $43. In the Illinois basin, we expect costs to be in a range of $36 to $38 per ton, while in Appalachia, we expect our per ton cost to be in the $57 to $60 range.

Speaker Change: For segment-adjusted EBITDA expense per ton, we now expect a range of $43 to $45 per ton.

Speaker Change: versus the previous range of $41 to $43. In the Illinois Basin, we expect cost to be in a range of $36 to $38 per ton, while in Appalachia, we expect our per ton cost to be in the $57 to $60 range.

Cary P. Marshall: As it relates to volumes for our oil and gas royalties segment, we are raising our guidance as we continue to see strong activity from our Permian Basin 8. For oil, we expect 1.5 to 1.6 million barrels versus 1.4 to 1.5 million barrels previously. For natural gas, we expect 5.8 to 6.2 million MCF versus 5.6 to 6 million MCF previously. And for liquids, we expect 750 to 800,000 barrels versus 675 to 725,000 barrels previously.

Speaker Change: As it relates to volumes for our oil and gas royalties segment, we are raising our guidance as we continue to see strong activity from our Permian Basin aid reach.

Speaker Change: For oil, we expect 1.5 to 1.6 million barrels versus 1.4 to 1.5 million barrels previously.

Cary Marshall: For natural gas, we expect 5.8 to 6.2 million MCF versus 5.6 to 6 million MCF previously. And for liquids, we expect 750,000 to 800,000 barrels versus 675,000 to 725,000 barrels previously. We are excited by the momentum we continue to build in our mental's business.

Speaker Change: For natural gas, we expect 5.8 to 6.2 million mcf versus 5.6 to 6 million mcf previously. And for liquids, we expect 750 to 800,000 barrels versus 675 to 725,000 barrels previously.

Cary P. Marshall: We are excited by the momentum we continue to build in our minerals business. And finally, we are lowering our guidance for maintenance capital expenditures to be in the $395 to $430 million range, versus $420 to $470 million previously. Interest expense, which reflects the impact of our refinancing activities, is now expected to be in a range of $34 to $36 million.

Cary Marshall: And finally, we are lowering our guidance from maintenance capital expenditures to be in the $395 to $430 million range versus $420 to $470 million previously. Interest expense, which reflects the impact of our refinancing activities, is now expected to be in a range of $34 to $36 million. The remainder of our guidance from ranges remains the same.

Speaker Change: We are excited by the momentum we continue to build in our minerals business.

Speaker Change: And finally, we are lowering our guidance for maintenance capital expenditures to be in the $395 to $430 million range.

Speaker Change: versus $420 to $470 million previously. Interest expense, which reflects the impact of our refinancing activities, is now expected to be in a range of $34 to $36 million.

Cary P. Marshall: The remainder of our guidance ranges remain the same. And with that, I will turn the call over to Joe for comments on the market and his outlook for ARLP.

Cary Marshall: And with that, I will turn the call over to Joe for comments on the market and his outlook for ARLP.

Speaker Change: The remainder of our guidance ranges remain the same.

Speaker Change: And with that, I will turn the call over to Joe for comments on the market and his outlook for ARLP. Joe? Thank you, Cary, and good morning, everyone.

Joseph Craft: Joe? Thank you, Kerry.

Joseph W. Craft: Thank you, Cary. And good morning, everyone. I would like to reiterate the significance of completing our senior notes offering in June. As Cary said, the successful offering further strengthens our balance sheet and represents a vote of confidence from the capital market, which will allow RLP to pursue its growth initiatives in coal, oil, and gas royalties, and other new business ventures. We continue to advance major infrastructure projects at Tunnel Ridge, Hamilton, Warrior, and the Riverview Complex.

Joseph Craft: Good morning, everyone. I would like to reiterate the significance of completing our senior notes offering in June. As Cary said, the successful offering further strengthens our balance sheet and represents a vote of confidence from the capital markets, which will allow RLP to pursue its growth initiatives in coal, oil and gas royalties, and other new business ventures. We continue to advance major infrastructure projects at Tunnel Ridge, Hamilton, Warrior, and the Riverview Complex. Starting next year, we expect our investments and these minds will make them more productive and improve their cost structure. When coupled with our enhanced liquidity position, we plan to remain the most reliable low-cost producer in our operating regions for many years to come.

Joseph W. Craft: I would like to reiterate the significance of completing our senior notes offering in June .

Joseph W. Craft: As Cary said, the successful offering further strengthens our balance sheet and represents a vote of confidence from the capital markets.

Joseph W. Craft: which will allow ARLP to pursue its growth initiatives in coal, oil and gas royalties, and other new business ventures.

Speaker Change: We continue to advance major infrastructure projects at Tunnel Ridge, Hamilton, Warrior, and the Riverview Complex.

Joseph W. Craft: Starting next year, we expect our investments in these mines will make them more productive and improve their cost structure. When coupled with our enhanced liquidity position, we plan to remain the most reliable, low-cost producer in our operating regions for many years to come. As we think about the outlook for the coal industry and the markets we serve, a number of key themes continue to resonate, making us particularly bullish on our intermediate and longer-term prospects for the U.S. coal industry at large. First, looking at current trends in supply and demand. Year-to-date domestic utility coal burn in 2024 is essentially flat with 2023.

Speaker Change: Starting next year, we expect our investments in these mines will make them more productive and improve their cost structure.

Speaker Change: When coupled with our enhanced liquidity position, we plan to remain the most reliable, low-cost producer in our operating regions for many years to come.

Joseph Craft: As we think about the outlook for the coal industry and the markets we serve, a number of key themes continue to resonate, making us particularly bullish on our intermediate and longer-term prospects for the US coal industry at large. First, looking at current trends in supply and demand, your-to-date domestic utility coal burn in 2024 is essentially flat with 2023. At the same time, US thermal coal production has slowed significantly, with eastern US production down 11% year over year. Further, we are encouraged that as summer progresses, demand for cooling has been strong across many parts of the country, driven by recent record-breaking temperatures that is pushing co-based power generation ahead of last year's pace.

Speaker Change: As we think about the outlook for the coal industry and the markets we serve, a number of key themes continue to resonate, making us particularly bullish on our intermediate and longer-term prospects for the U.S. coal industry at large.

Joseph W. Craft: At the same time, U.S. thermal coal production has slowed significantly, with Eastern U.S. production down 11% year over year. Furthermore, we are encouraged that as summer progresses, demand for cooling has been strong across many parts of the country, driven by recent record-breaking temperatures that are pushing coal-based power generation ahead of last year's pace. Weather forecasts suggest this heat wave will continue through August, and one industry publication is projecting coal demand will exceed supply by close to 20 million tons in the second half of 2024.

Speaker Change: First, looking at current trends in supply and demand.

Speaker Change: Year-to-date domestic utility coal burn in 2024 is essentially flat with 2023.

Speaker Change: At the same time, U.S. thermal coal production has slowed significantly, with eastern U.S. production down 11% year over year.

Speaker Change: Further, we are encouraged that as summer progresses, demand for cooling has been strong across many parts of the country, driven by recent record-breaking temperatures.

Joseph Craft: Weather forecast suggests this heatway will continue through August, and one industry publication is projecting coal demand will exceed supply by close to 20 million times in the second half of 2024. Therefore, it is reasonable to expect coal stockpiles will decline for producers and utilities as we close out the year, supporting improved pricing potential heading into next year. Turning to the export market, our guidance has not changed for our lower sulfur steam coal and met coal offerings. As Kerry said earlier, at the time we completed our updated guidance forecast, recent bids for our high sulfur kilonoid basin coal did not meet our minimum pricing thresholds, explaining our reduced sales volume guidance this quarter.

Speaker Change: that is pushing coal-based power generation ahead of last year's pace.

Speaker Change: Weather forecasts suggest this heat wave will continue through August , and one industry publication is projecting coal demand will exceed supply by close to 20 million tons in the second half of 2024.

Joseph W. Craft: Therefore, it is reasonable to expect coal stockpiles will decline for producers and utilities as we close out the year, supporting improved pricing potential heading into next year. Turning to the export market, our guidance has not changed for our lower sulfur steam coal and met coal offerings.

Speaker Change: Therefore, it is reasonable to expect co-stockpiles will decline for producers and utilities as we close out the year supporting improved pricing potential heading into next year.

Speaker Change: Turning to the export market, our guidance has not changed for our lower sulfur steam coal and METCO offerings.

Joseph W. Craft: As Cary said earlier, at the time we completed our updated guidance forecast, recent bids for our high sulfur Illinois basing coal did not meet our minimum pricing thresholds, explaining our reduced sales volume guidance this quarter. However, since then... API 2 index pricing jumped higher last Friday, up around $8 per ton from the beginning of the week. If this upward trend continues, we can respond quickly by adding back volumes to meet market demand.

Speaker Change: As Cary said earlier, at the time we completed our updated guidance forecast, recent bids for our high sulfur Illinois basing coal did not meet our minimum pricing thresholds, explaining our reduced sales volume guidance this quarter.

Joseph Craft: However, since then, API 2 index pricing jumped higher last Friday, up around $8 per ton from the beginning of the week. If this upward trend continues, we can respond quickly by adding back volumes to meet market demand.

Speaker Change: However, since then...

Speaker Change: API 2 index pricing jumped higher last Friday, up around $8 per ton from the beginning of the week.

Speaker Change: If this upward trend continues, we can respond quickly by adding back volumes to meet market demand.

Joseph Craft: Beyond this year, we remain covenant in the core fundamentals that are expected to drive rapid growth in electricity demand for many years to come, led by massive power requirements from AI, data centers, and the ensuring of US manufacturing. In many cases, this pace of low growth is multiples greater than what was anticipated in our customer's resource plan. and grid reliability is now at the forefront of discussions. As parties recognize the forced early retirement of co-plans, if implemented, will increase risk to the grid, particularly during times of peak demand.

Joseph W. Craft: Beyond this year, we remain confident in the core fundamentals that are expected to drive rapid growth in electricity demand for many years to come, led by massive power requirements from AI, data centers, and the onshoring of U.S. manufacturing. However, in many cases, this pace of low growth is multiples greater than what was anticipated in our customer's resource plan, and Grid Reliability is now at the forefront of discussion. As parties recognize, the forced early retirement of coal plants, if implemented, will increase risk to the grid, particularly during times of peak demand.

Speaker Change: Beyond this year, we remain confident in the core fundamentals that are expected to drive rapid growth in electricity demand for many years to come.

Speaker Change: led by massive power requirements from AI, data centers, and the onshoring of US manufacturing.

Speaker Change: In many cases, this pace of low growth is multiples greater than what was anticipated in our customer's resource plans.

Speaker Change: and Grid Reliability is now at the forefront of discussions.

Speaker Change: As parties recognize, the forced early retirement of coal plants, if implemented, will increase risk to the grid, particularly during times of peak demand.

Joseph Craft: Earlier this month, the Wall Street Journal published an article about how the owners of roughly one-third of the nation's nuclear generating capacity. Our indirect talks with tech companies looking for base load, reliable energy supply for their existing and planned data centers. If true, removing these base loads from the grid will be another reason the existing base load co-plates must stay on longer than the Biden Harris administration may prefer. Fortunately, resource planners in the Eastern U.S. and Biden Harris policies have created. More importantly, our customers are also acknowledging the acceleration of demand is reason to reconsider their previous plans to prematurely close cold generation.

Joseph W. Craft: Earlier this month, the Wall Street Journal published an article about how the owners of roughly one-third of the nation's nuclear generating capacity are in direct talks with tech companies looking for baseload, reliable energy supply for their existing and planned data centers. If true, removing these baseloads from the grid will be another reason the existing baseload co-fleet must stay on longer than the Biden-Harris administration may prefer. Fortunately, resource planners in the Eastern U.S. and state regulators are waking up to the risks that the Biden-Harris policies have created.

Speaker Change: Earlier this month, the Wall Street Journal published an article about how the owners of roughly one-third of the nation's nuclear generating capacity.

Speaker Change: are in direct talks with tech companies looking for baseload reliable energy supply for their existing and planned data centers.

Speaker Change: If true, removing these baseloads from the grid will be another reason the existing baseload co-pleat must stay on longer than the Biden-Harris administration may prefer.

Speaker Change: Fortunately, resource planners in the eastern U.S. and state regulators are waking up to the risks that the Biden-Harris policies have created.

Joseph W. Craft: More importantly, our customers are also acknowledging the acceleration of demand is a reason to reconsider their previous plans to prematurely close coal generation. In May, the interim CEO of American Electric Power testified before the Senate Committee on Energy and Natural Resources.

Speaker Change: More importantly, our customers are also acknowledging the acceleration of demand is reason to reconsider their previous plans to prematurely close coal generation.

Joseph Craft: In May, the interim CEO of American Electric Power testified before the Senate Committee on Energy and Natural Resources. In his bio-testimony, he acknowledged that after two decades of demand for electricity, we are now beginning to see this trend reverse, driven by customers who require significant amounts of power. He said he cited how just a few years ago, a large-scale industrial manufacturing facility might require a hundred megawatts of electricity. A facility that size would typically be a one-of-a-kind in a region and would be a major source of economic activity for the area. Now, he says it is common for a single data center to require anywhere from three to over ten times this amount of power for a single site.

Speaker Change: In May, the Interim CEO of American Electric Power testified before the Senate Committee on Energy and Natural Resources.

Joseph W. Craft: In his final testimony, he acknowledged that after two decades of flat demand for electricity, we are now beginning to see this trend reverse, driven by customers who require significant amounts of power. He said, He cited how just a few years ago, a large-scale industrial manufacturing facility might require 100 megawatts of electricity. A facility that size would typically be one of a kind in a region and would be a major source of economic activity for the area. Now, he says, It is common for a single data center to require anywhere from three to over 10 times this amount of power for a single site.

Speaker Change: In his final testimony, he acknowledged that after two decades of flat demand for electricity, we are now beginning to see this trend reverse.

Speaker Change: Driven by customers who require significant amounts of power.

Speaker Change: He said, he cited how just a few years ago a large scale industrial manufacturing facility might require 100 megawatts of electricity.

Speaker Change: A facility that size would typically be a one-of-a-kind in a region and would be a major source of economic activity for the area. Now, he says,

Speaker Change: It is common for a single data center to require anywhere from 3 to over 10 times this amount of power for a single site.

Joseph Craft: Another important example of the shift in reliability comes from ISO. Last month, they released a report which emphasized the immediate need to add generating capacity. Specifically, they said that resource adequacy risk could grow over time across all seasons, absent new capacity additions and actions to delay capacity retirements. They added significant economic development activities are spurring new large spot-load additions and increasing pressures on resource adequacy. All of this underscores what we have been saying for several years. That the forced early retirement of critical base load capacity will jeopardize grid reliability across the Eastern United States. We believe the market will continue to see deferral of previously planned early retirements, allowing the plans to do what they have done for decades: keep the lights on safely, reliably, and affordably.

Joseph W. Craft: Another important example of the shift in reliability comes from MISO. Last month, they released a report that emphasized the immediate need to add generating capacity. Specifically, they said that resource adequacy risk could grow over time across all seasons absent new capacity additions and actions to delay capacity retirement. They added that significant economic development activities are spurring new large spot load additions and increasing pressures on resource availability. All of this underscores what we have been saying for several years, that the forced early retirement of critical baseload capacity will jeopardize grid reliability across the eastern United States. We believe the market will continue to see deferral of previously planned early retirements, allowing the plants to do what they have done for decades, keeping the lights on safely, reliably, and affordably.

Speaker Change: Another important example of the shift in reliability comes from MISO.

Speaker Change: Last month, they released a report which emphasized the immediate need to add generating capacity.

Speaker Change: Specifically, they said that resource adequacy risk could grow over time across all seasons absent new capacity additions and actions to delay capacity retirements.

Speaker Change: They added, significant economic development activities are spurring new large spot load additions and increasing pressures on resource adequacy.

Speaker Change: All of this underscores what we have been saying for several years.

Speaker Change: That the forced early retirement of critical base load capacity will jeopardize grid reliability across the eastern United States.

Speaker Change: We believe the market will continue to see deferral of previously planned early retirements, allowing the plants to do what they have done for decades, keep the lights on safely, reliably, and affordably.

Joseph Craft: Before I wrap up, I would like to highlight the momentum we are seeing in our oil and gas royalties business. We realized another solid quarter of year-over-year growth, and when combined with the exceptionally strong first quarter's results, we are on track to deliver another record year. Our growth in oil and gas royalties is predominantly self-funded from cash flows generated by the segment, providing hedge-free exposure to commodity prices and perhaps more importantly, organic growth without operating risk. Our net royalty acres and remaining locations are heavily weighted towards the Permian, which is the fastest growing basin in the lower 48.

Joseph W. Craft: Before I wrap up, I would like to highlight the momentum we are seeing in our oil and gas royalties business. We realized another solid quarter of year over year growth, and when combined with the exceptionally strong first quarter results, we are on track to deliver another record year. Our growth in oil and gas royalties is predominantly self-funded from cash flows generated by it, providing hedge-free exposure to commodity prices, and perhaps more importantly, organic growth without operating risk. Our net royalty acres and remaining locations are heavily weighted towards the Permian, which is the fastest growing basin in the lower 48.

Speaker Change: Before I wrap up I would like to highlight the momentum we are seeing in our oil and gas royalties business.

Speaker Change: We realized another solid quarter of year-over-year growth, and when combined with the exceptionally strong first quarter results, we are on track to deliver another record year.

Speaker Change: Our growth in oil and gas royalties is predominantly self-funded from cash flows generated by the segment.

Speaker Change: providing hedge-free exposure to commodity prices, and perhaps more importantly, organic growth without operating risk.

Speaker Change: Our net royalty acres and remaining locations are heavily weighted towards the Permian, which is the fastest growing basin in the lower 48.

Joseph Craft: Going forward, we are committed to continue to grow this segment, and we are encouraged investors have started to recognize the value proposition of this growth.

Joseph W. Craft: Going forward, we are committed to continuing to grow this segment, and we are encouraged investors have started to recognize the value proposition of this growth. In closing, the fundamentals for electricity demand over the next five years are poised for rapid growth, and we are well positioned to benefit from that growth. We anticipate this growth in demand will give us the opportunity to continue to be a generator of strong cash flows, enabling us to grow unit holder value.

Speaker Change: Going forward, we are committed to continue to grow this segment, and we are encouraged investors have started to recognize the value proposition of this growth.

Joseph Craft: In closing, the fundamentals for electricity demand over the next five years are poised for rapid growth, and we are well-positioned to benefit from that increased demand. We anticipate this growth and demand will give us the opportunity to continue to be a generator strong cash flows, enabling us to grow units or unit holder value. I am encouraged by the opportunities in front of us and look forward to delivering what should be another successful year in 2024.

Speaker Change: In closing, the fundamentals for electricity demand over the next five years are poised for rapid growth, and we are well positioned to benefit from that increased demand.

Speaker Change: We anticipate this growth in demand will give us the opportunity to continue to be a generator of strong cash flows, enabling us to grow unit holder value.

Joseph W. Craft: I am encouraged by the opportunities in front of us and look forward to delivering what should be another successful year in 2024. That concludes our prepared comments, and I will now ask the operator to open the call for questions.

Speaker Change: I am encouraged by the opportunities in front of us and look forward to delivering what should be another successful year in 2024.

Operator: That concludes our prepared comments, and I will now ask the operator to open the call for questions.

Speaker Change: That concludes our prepared comments and I will now ask the operator to open the call for questions.

Operator: Operator? Thank you.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your questions from the queue. For participants using your equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, will we pull for questions.

Speaker Change: Operator.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Operator: For participants using secure equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we pull for questions. Our first question comes from Nathan Martin with The Benchmark Company. Please proceed with your question. Yeah, thanks, operator. Good morning, Joe. Good morning, Cary.

Speaker Change: For participants using secure equipment, it may be necessary to pick up your handset before pressing the star keys.

Nathan Martin: Our first question comes from Nathan Martin with the Benchmark Company.

Speaker Change: One moment, please, while we poll for questions.

Nathan Martin: Please proceed with your question. Thanks Operator.

Speaker Change: Our first question comes from Nathan Martin with the Benchmark Company. Please proceed with your question.

Nathan Martin: Good morning, Joe. Good morning, Terry. Wanted to start out on the export side. You mentioned in the release that part of the reason you are decreasing fully or 24 sales guidance is because netbacks aren't supportive.

Nathan Pierson Martin: I wanted to start out on the export side, you mentioned in the release that part of the reason you're decreasing full year 24 sales guidance is because netbacks aren't supportive. Excuse me, then Joe, in your prepared remarks, you said that you think the recent increase in prices we saw last week could cause that to change. So we just get a little more color there, you know, maybe, you know, if we look at today's about $115, what do ARLP's netbacks look like?

Speaker Change: Thanks, operator. Good morning, Joe. Morning, Cary. Hello. Morning, Nate.

Nathan Pierson Martin: I wanted to start out on the export side. You mentioned in the release that part of the reason you're decreasing four-year 24 sales guidance is because netbacks aren't supportive. Excuse me, Ben, Joe?

Joseph Craft: Excuse me, Ben Joe. You prepared remarks. I think the recent increase in prices we saw last week could cause that to change. So could we just get a little more color there? If you look at today's price of about $115, what do aerial piece netbacks look like, and what is the price that you would review favorable enough to bring back that production or a shift times back to the export market? Thanks. As I mentioned, when we were planning for the guidance, that were more in the range of $105 instead of the if like last Monday, I think it was 106. So we've been seeing it about $105 to $110, and we've transacted at that level in our high sulfur market. But for whatever reason, most recently, the high sulfur discounts have been higher than what they typically have been, and we feel like that's a temporary situation, but we don't know.

Speaker Change: And your prepared remarks, you said, I think the recent increase in prices we saw last week could cause that to change. So

Speaker Change: We just get a little more color there, you know, maybe if we look at today's API 2 price is about $115 What do ARLP's netbacks look like? And what is the price that you would view favorable enough to bring back that production or shift tunnels back to the export market? Thanks

Nathan Pierson Martin: And what is the price that you would view favorably enough to bring back that production or shift back to the export market? Yeah, so, as I mentioned, when we were planning for the guidance, they were more in the range of $105 instead of $1,000. And like last Monday, I think it was 106.

Speaker Change: Yeah, so

Speaker Change: As I mentioned, when we were planning for the guidance, they were more in the range of $105 instead of the $1,000.

Joseph W. Craft: So we've been seeing it around 105 to 110. And we've transacted at that level in our high sulfur market. But for whatever reason, most recently, the high sulfur discounts have been higher than what they typically have been. And we feel like that's a temporary situation, but we don't know.

Speaker Change: Like last Monday, I think it was 106. So we've been seeing it about 105 to 110, and we've transacted at that level in our high sulfur market, but for whatever reason, most recently, the high sulfur discounts have been higher than what they typically have been.

Joseph W. Craft: So we are encouraged by what the market did this past week. And we have historically told you that 120 is our targeted level. But like I said a few minutes ago, we can transact at the 110 to 120 level and feel comfortable with that range, but we prefer not to go to a lower level and wait for the markets to improve before we enter those markets. Last week was encouraging. We all know API 2 can be volatile.

Joseph Craft: So we are encouraged by what the market did this past week, and we have historically told you that 120 is our targeted level. But, like I said a few minutes ago, we can transact at a 110 to 120 level and feel comfortable with that range. But we prefer not to go to a lower level and wait for the markets to improve before we enter those markets. So last week was encouraging. We all know API 2 can be volatile, so the good news is we're ready to respond. We've got the people, we've got the equipment, we've got the capacity, so it's just a matter of what the market will bring us as to whether we win or that market or not.

Speaker Change: And we feel like that's a temporary situation, but we don't know. So we are encouraged by what the market did this past week. We have historically told you that 120 is our targeted level, but like I said a few minutes ago, we can.

Speaker Change: Transact at a 110 to 120 level and feel comfortable with that range, but we prefer not to go to a lower level and wait for the markets to improve before we enter those markets.

Joseph W. Craft: So the good news is we're ready to respond. We've got the people, we've got the equipment, we've got the capacity. It's just a matter of what the market will bring us as to whether we win in that market or not. Okay, got it. And just so we have an idea, where is the sulfur discount versus historical levels? Well, it's probably.

Speaker Change: Last week was encouraging.

Speaker Change: We all know API 2 can be volatile.

Speaker Change: So the good news is we're ready to respond. We've got the people, we've got the equipment, we've got the capacity. So it's just a matter of what the market will bring us as to whether we win or that market or not.

Nathan Martin: Okay, got it. And just so we have an idea, where is this over discount versus historical kind of levels. Well, it's probably, you know, 50% higher than what it typically would be is what the most recent bids were when we made this decision. So, as far as what a percent of the total, you know, you can range anywhere from 10 to, you know, 5 to 15% say what you would see on API 2. Okay, got it. Thanks, sir. That's helpful.

Speaker Change: Okay, got it. And just so we have an idea, where is the sulfur discount versus historical kind of levels?

Joseph W. Craft: I don't know, 50% higher than what it typically would be is what the most recent bids were when we made this decision. So, as far as what a percent of the total, it can range anywhere from 10 to, you know, 5 to 15% of what you would see on ABA. Okay. Got it.

Speaker Change: Well, it's probably, you know.

Speaker Change: I don't know, 50% higher than what it typically would be, is what the most recent bids were when we made this decision.

Speaker Change: so

Speaker Change: As far as what a percent of the total, you know, it can range anywhere from 10 to

Speaker Change: You know, 5 to 15 percent, say.

Joseph W. Craft: Thanks, Joe. That's very helpful. And then I also want to get some additional thoughts on the cost per ton increases on the coal side. You know, this quarter, at least, application costs were above the high end of the four-year guidance. I know you guys had multiple long-haul moves, and I'm guessing the lower shipment denominator didn't help with, you know, the 800,000 tons being billed in inventory. But anything else to think about that could impact those costs per tons, or anything sticky, you know, heading into the second half? And how should we really think about cost per ton for 2025? I mean, do you guys still expect that to improve as you wrap up some of your current projects? Yeah, the other impact.

Nathan Martin: And then also want to get some additional thoughts on the cost for time increases on the cold side. You know, this quarter, at least at cost, well above the high end of the four year guidance. And then you guys had multiple long, long moves and guessing in the lower ship and denominator didn't help with the, you know, the 800,000 times being built in the poor. But anything else to think about that could impact those costs for time very sticky, you know, heading into the second half. And how should we really think about cost for time for 25?

Speaker Change: at what you would see on API Day.

Speaker Change: Okay, got it. Thanks, Joe. That's helpful. And then I also want to get some additional thoughts on the cost per ton increases on the coal side.

Speaker Change: This quarter, at least, the app costs were above the high end of the four-year guidance. I know you guys had.

Speaker Change: Multiple long-haul moves, I'm guessing.

Speaker Change: The Lower Shipment Denominator didn't help with the 800,000 tons being billed in the port.

Speaker Change: But anything else to think about that could impact those costs per tons, or anything sticky heading into the second half? And how should we really think about cost per ton for 2025? I mean, do you guys still expect that to improve as you wrap up some of your current projects?

Joseph Craft: I mean, you guys still expect that to improve as you wrap up some of your current projects. Yeah, the other impact, other than the ones you just mentioned, is just that we ended up not operating at full capacity. So we took some vacation days at the end of June that weren't anticipated previously. And that was driven basically by the inventory as we had at Metiki and at MC Mining. So we did, we were impacted behind the bridge collapse in the sense that the rail cars got reallocated, and we didn't get some of the cars that we thought we would get for some of our shipments, and that created just less production, less days operating; that impacted the quarter results.

Joseph W. Craft: Other than the ones you just mentioned, it was just that we ended up not operating at full capacity. So we took some vacation days at the end of June that weren't anticipated previously. And that was driven basically by the inventories we had at Metiki and at MC Mining. So we were impacted by the bridge collapse in the sense that the rail cars got reallocated, and we didn't get some of the cars that we thought we would get for some of our shipments.

Speaker Change: Yeah, the other impact.

Speaker Change: Other than the ones you just mentioned, it's just that we ended up not operating at full capacity. So we took

Speaker Change: Some vacation days at the end of the June that weren't anticipated previously, and that was driven basically by the inventories we had at Metiki and at MC Mining.

Speaker Change: So we did, we were impacted by the bridge collapse in the sense that

Speaker Change: The railcars got reallocated and we didn't get some of the cars that we thought we would get for some of our shipments.

Joseph W. Craft: And that created just less production, fewer days of operation that impacted the quarter result. As we look forward into next year, we do believe that we'll get back to more normal cost levels for us, in the sense of productivity, because of the projects that we've invested in, so both at Tunnel Ridge and Warrior. You know, we were completing man and material shafts that will allow us to reduce our travel time and actually get into better. Co reserve, Geology.

Speaker Change: That created just less production, less days operating that impacted the quarter results.

Joseph Craft: As we look forward into next year, we do believe that we'll get back to more normal cost levels for us in the sense of productivity because of the projects that we've invested in. So both that tunnel ridge and warrior, you know, we're completing man material shafts that will allow us to reduce our travel time and actually get into better cold reserve geology. The warrior project is scheduled to be available at the beginning of next year, and the tunnel ridge project actually is moving up faster than we anticipated. We expect to get into that portal sometime in November of this year.

Speaker Change: As we look forward into next year, we do believe that we'll get back to more normal

Speaker Change: Cost levels for us.

Speaker Change: In the sense of productivity, because of the projects that we've invested in, so both at Tunnel Ridge.

Speaker Change: and Warrior. We are completing manned material shafts that will allow us to reduce our travel time.

Joseph W. Craft: The Warrior Project is scheduled to be available at the beginning of next year, and The Tunnel Ridge Project is actually moving faster than we anticipated. We expect to get into that portal sometime in November of this year. At Riverview, you know, we've had the Henderson County mine that we've been constructing as part of that operation. You know, we entered into the 11 seam, and we are now sloping down into the nine; we've completed the construction part or the mining part of going through the 11.

Speaker Change: and actually get into better coal reserve activities.

Speaker Change: Geology. The Warrior Project is...

Speaker Change: scheduled to be available at the beginning of next year and the Tunnel Ridge project actually is moving up faster than we had anticipated. We expect to get into that portal sometime in November of this year.

Joseph Craft: at Riverview. You know, we've had Henderson County mine that we've been constructing as part of that operation. You know, we entered into the 11 same, and we are now sloping down into the 9. We've completed the construction part or the mining part of going through the 11. It was a higher reject Colesay, the entry point that we went through. Compared to what our other Riverview product is, we believe when we get into the 9, we're going to continue. We will have better recoveries at Riverview, higher Colesames. And so we do believe we're going to have better cost going into 2025 from our Riverview mine.

Speaker Change: At Riverview, you know, we've had the Henderson County mine that we've been constructing as part of that operation.

Speaker Change: We entered into the 11 seam and we are now sloping down into the 9. We've completed the construction part or the mining part of going through the 11. It was a higher reject coal seam, the entry point that we went through.

Joseph W. Craft: It was a higher reject coal seam, the entry point that we went through. Compared to what our other Riverview product is, we believe when we get into the nine, we're going to continue, we will have better recoveries at Riverview, higher coal seams. And so we do believe we're going to have better costs going into 2025 from our Riverview mine. So all three of those operations should benefit next year. We also believe that the adverse geology we've had at Metiki for basically the last year, we are encouraged by what we're seeing as far as the mining conditions for future panels, starting next year as well.

Speaker Change: Compared to what our other Riverview product is, we believe when we get into the nine, we're going to continue. We will have better recoveries.

Speaker Change: At Riverview, higher coal seams, and so we do believe we're going to have better cost going into 2025 from our Riverview mine. So all three of those operations should benefit.

Joseph Craft: So all three of those operations should benefit. Next year, we also believe that the adverse geology we've had at Matiki for basically the last year. We are encouraged by what we're seeing as far as the mining conditions for future panels, starting next year as well. Also, we feel that our cost will improve next year compared to what we've been experiencing and what we're projecting for this year.

Speaker Change: Next year, we also believe that the adverse geology we've had at Metiki for basically the last year, we are encouraged by what we're seeing as far as the mining conditions for future panels.

Cary P. Marshall: So, we feel that our costs will improve next year compared to what we've been experiencing and what we're projecting for this year. Yeah, Nate, the only thing I would add to what Joe said is, yeah, the projects do look good right now. And, you know, in addition to that, we're also investing in new long wall shields at our Metiki or at our Hamilton operation for next year. And so as a result of that, as we go into next year, we'll look for, you know, lower maintenance costs going forward out of that operation as well.

Speaker Change: starting next year as well.

Speaker Change: We feel that our costs will improve next year compared to what we've been experiencing and what we're projecting for this year.

Cary Marshall: Yeah, and Nate, the only thing I think I would add to what Joe said, yeah, the project you look good right now. And, you know, in addition to that, we are also investing in New Long Long Shields at our Matiki operation or at our Hamilton operation for next year. And so, as a result of that, you know, as we go into next year, we'll look for, you know, lower maintenance costs, you know, going forward out of that operation as well. So everything that we've communicated in the past in terms of costs, you know, as we go into next year still holds true.

Speaker Change: Yeah, Nate, the only thing I think I would add to what what Joe said, yeah, the the projects do look good right now. And, you know, in addition to that, we're also investing in new long wall shields.

Speaker Change: at our Hamilton operation.

Speaker Change: for next year. And so as a result of that, you know, as we go into next year, we'll look for, you know, lower maintenance costs, you know, going forward out of that operation as well. So everything that we've communicated in the past in terms of costs, you know, as we go into next year,

Cary P. Marshall: So everything that we've communicated in the past, in terms of costs, you know, as we go into next year, still holds true. You know, the minds are in a period of transition right now, but the projects look good. I think the only other thing I would add, just in terms of the volumes over in Appalachia for the quarter Joe mentioned, and you know, some of the impact of the outages on the Baltimore collapse area. If you look at the overall quarter, in addition to that, we did experience high water levels in the Ohio River during the quarter as well.

Cary Marshall: You know, the mines are in a period of transition right now, but the projects look good.

Speaker Change: still holds true. The mines are in a period of transition right now, but the projects look good.

Cary Marshall: I think the only other thing I would add just in terms of the volumes over in Appalachia for the quarter, Joe mentioned, you know, some of the impact of the outages for the Baltimore collapse area. If you look at the overall quarter, in addition to that, we did experience high water levels in the Ohio River during the quarter as well. So when we combine the two there, it worked out to be roughly half a million tons of impact that we had in terms of the quarter. So it's not that those tons are lost; they're just deferred, and we'll be making those up here in the third quarter as well as the fourth quarter.

Speaker Change: I think the only other thing I would add, just in terms of the volumes over in Appalachia for the quarter, Joe mentioned some of the impact of the outages for the Baltimore collapse area.

Speaker Change: If you look at the overall quarter, in addition to that, we did experience high water levels in the

Cary P. Marshall: So when we combine the two there, it worked out to be roughly half a million tons of impact that we had in terms of the quarter. So it's not that those tons are lost, they're just deferred, and we'll be making those up here in the third quarter as well as the fourth quarter. So it was about a half a million ton impact, you know, in relation to the volume associated with the high water level, as well as the port issues that Joe mentioned a little bit earlier, the bridge collapse. The other thing looking into next year, our capital should be lower as we complete these numerous capital projects we had this year. Okay, great, guys. And then just one more, finally, just sticking with 2025.

Speaker Change: on the Ohio River.

Speaker Change: during the quarter as well. So when we combine the two there.

Joseph W. Craft: It worked out to be roughly half a million tons of impact that we had in terms of the corridor.

Joseph W. Craft: So it's not that those tons are lost, they're just deferred, and we'll be making those up here in the third quarter as well as the fourth quarter. So it was about a half million ton impact, you know, in relationship to the volumes.

Cary Marshall: So it was about a half million ton impact, you know, in relationship to the volumes associated with the high water level as well as the port issues that Joe mentioned, you know, a little bit earlier over on the bridge collapse. Perfect. Thanks for that.

Speaker Change: associated with the high water level as well as the the port issues that Joe mentioned you know a little bit earlier over on the the bridge collapse.

Nathan Martin: Yeah, the other thing looking into next year, our capital should be lower as we complete these numerous capital projects we had this year. Okay, great guys.

Speaker Change: Okay, perfect. Thanks for that.

Speaker Change: Yeah, the other thing looking into next year, our capital should be lower as we complete these numerous capital projects we had this year.

Nathan Pierson Martin: You added about 300,000 tons of committed and priced tons since last quarter, it looks like, based on my current shipment assumption, that puts you, you know, maybe slightly below 50% at the midpoint there, which seems much lower than usual. And I know, Cary, you said in your prepared remarks that you expect to add some additional commitments, you know, relatively soon. But, you know, is that true?

Nathan Martin: And then just one more, finally, just sticking with 2025. You know, you added about 300,000 tons of I just come in and price puns this last quarter. It looks like, based on my current shipment assumption, that puts you, you know, maybe slightly below 50% at the midpoint. There seems much lower than usual.

Speaker Change: Okay, great guys. And then just one more finally, just sticking with 2025, you know, you added about 300,000 tons of

Speaker Change: I just committed and priced tons this last quarter, it looks like. Based on my current shipment assumption, that puts you, you know...

Joseph Craft: And I don't care you send you compare remarks that you expect to add some additional commitments relatively soon, but you know, is that true? Are you kind of well below where you guys usually are? You're still confident that you can sell roughly 30 million times domestically next year and supplement that with exports. We'd be great to get your thoughts. Yes, essentially all of our customers are in conversations looking for completing their book for 2025. So there has been some deferral in prior years, primarily low natural gas prices. It made it difficult to secure, you know, the proper coverage.

Speaker Change: Maybe slightly below 50% at the midpoint there.

Speaker Change: It seems much lower than usual, and I know, Cary, you said in your prepared remarks that you expect to add some additional commitments relatively soon.

Cary P. Marshall: Are you kind of well below where you guys usually are? Are you still confident that you can sell roughly, you know, 30 million tons domestically next year and supplement that with exports? It'd be great to get your thoughts.

Speaker Change: Is that true? Are you kind of well below where you guys usually are? Are you still confident that you can sell roughly 30 million tons domestically next year and supplement that with exports? It would be great to get your thoughts.

Joseph W. Craft: Yes, essentially, all of our customers are in conversations looking for, completing their book for 2025. So there has been some deferral in previous years, primarily low natural gas prices, made it difficult to secure. You know, the proper coverage.

Cary P. Marshall: Yes, essentially all of our customers are in conversations looking for

Speaker Change: completing their book for 2025. So there has been some deferral in prior years, primarily low natural gas prices.

Joseph W. Craft: People don't want to price off today's price for next year in anticipation that gas prices will be higher next year because of Curves Higher. LNG should be stronger. So we believe, and there have been some pullbacks on production. So, I think that we're getting to the point where the utilities and the producers are willing to be realistic about what the needs are next year, and active conversations are ongoing. We are in a significantly better position to talk about at our next earnings. Any comments, Joe, on pricing for 2025, at least directionally, maybe?

Speaker Change: have made it difficult to secure.

Joseph Craft: People don't want to price off the day's price for next year and anticipation that gas prices will be higher next year. You know, for curves higher, LNG should be stronger. So we bully, and there have been some pullback on production. So I think that we're getting to the point to where the utilities and the producers are willing to be realistic about what the needs are next year. And active conversations are ongoing.

Speaker Change: You know, the proper coverage, people don't want to price off today's price for next year in anticipation that gas prices will be higher next year, forward curves higher.

Speaker Change: LNG should be stronger. So we believe and there have been some pullback on production so.

Speaker Change: I think that we're getting to the point to where the utilities and the producers are willing to be realistic about what the needs are next year and active conversations are ongoing.

Nathan Martin: So we should have a significantly better position to talk about at our next starting school. Any comments, Joe, on pricing for 2025 to be directionally maybe? I can't give you any guidance at this time because, we're like I said, we're in active negotiations. So, you know, we feel that we feel good about our future. And we are hopeful that we can get back to a three million ton of year or three million ton of month run rate for co sales is what we're targeting for next year if we're successful securing those markets. Okay, great. Very helpful guys.

Speaker Change: We should have a significantly better position to talk about at our next earnings call.

Joseph W. Craft: I can't give you any guidance at this time because, like I said, we're in active negotiation. You know, we built it, and we feel good about our future. And we are hopeful that we can get back to 3 million tons a year, or 3 million tons a month run rate for co-sales is what we're targeting for next year, if we're successful in securing. Okay, I got it. Great. Very helpful, guys. I appreciate your time, and best of luck in the second half.

Speaker Change: Any comments, Joe, on pricing for 2025, at least directionally, maybe?

Joseph W. Craft: I can't give you any guidance at this time because we're, like I said, we're in active negotiations.

Joseph W. Craft: You know, we build it.

Speaker Change: And we feel good about our future.

Speaker Change: And we are hopeful that we can get back to a three million ton a year or three million ton a month run rate for co-sales is what we're targeting for next year.

Speaker Change: if we're successful securing those markets.

Nathan Martin: I appreciate your time, and best of luck in the second half.

Speaker Change: Okay, got it, great. Very helpful, guys. I appreciate your time and best of luck in the second half.

Mark Reichman: Our next question comes from Mark Reichman with Noble Capital Market. Please proceed with your question. Thank you. Just in the Illinois Basin, how much production, I guess, and our sales were lost at Riverview and Hamilton because I know that in April, there was the 420,000 that was going to get deferred at Riverview due to the, I guess, the barge traffic, but that was kind of offset by Gibson. So if you could just kind of I just want to understand a little better that what was going on in the Illinois Basin and, you know, and then how much it sounds like most of all of the lost production is going to get made up in future quarters.

Nathan Pierson Martin: Thanks, Hank. Our next question comes from Mark Reichman with Noble Capital Markets. Please proceed with your question. Thank you.

Hank: Thanks, Hank.

Speaker Change: Our next question comes from Mark Reichman with Noble Capital Markets. Please proceed with your question.

Mark La France Reichman: Just in the Illinois Basin, how much production, I guess, and or sales? are lost at Riverview and Hamilton because I know that in April there was 420,000 going to get deferred at Riverview due to the, I guess, barge traffic that was kind of offset by GIPS. So if you could just kind of, I just want to understand a little better what was going on in the Illinois Basin and, you know, and then how much it sounds like most of all of the lost production is going to get made up in future quarters.

Mark La France Reichman: Thank you. Just in the Illinois Basin, how much production, I guess, and or sales

Mark La France Reichman: or lost at Riverview and Hamilton, because I know that in April there was the $420,000 that was going to get deferred at Riverview due to the

Speaker Change: I guess the barge traffic.

Speaker Change: But that was kind of offset by Gibson. So if you could just kind of, I just want to understand a little better what was going on in the Illinois basin. And you know.

Speaker Change: And then how much it sounds like most of all of the lost production is going to get made up in future quarters

Joseph Craft: Yeah, I think Mark just in terms of the 420,000 that we had previously communicated, and we're talking about most of that was more tunnel ridred related versus Riverview related. Maybe a small amount was Riverview related, but most of that was tunnel ridred related. So whatever impact was offset by Gibson.

Mark La France Reichman: Yeah, I think, Mark, just in terms of the 420,000 that we had previously communicated and we're talking about, most of that was more Tunnel Ridge related versus Riverview related. Maybe a small amount was Riverview related, but most of that was Tunnel Ridge related. So whatever impact we had at Riverview was offset by Gibson.

Speaker Change: Yeah, I think, Mark, just in terms of the 420,000 that we had previously communicated and we're talking about, most of that was more Tunnel Ridge related versus Riverview related.

Speaker Change: Maybe a small amount was Riverview related, but most of that was Tunnel Ridge related. So whatever impact we had at Riverview was offset by Gibson. So it was a very small number in terms of the quarter where Riverview was impacted.

Cary P. Marshall: So it was a very small number in terms of the quarter where Riverview... Okay, Keith, there was that disclosure in your financing, and that kind of made it sound like it was $420,000 at Riverview and $77,000 at Tunnel Ridge. So maybe I just misunderstood that a little bit.

Joseph Craft: So it was a very small number in terms of the quarter where Riverview was impacted. Okay, Keisha, there was a disclosure in your financing, and that kind of that sound like it was 420,000 at Riverview and 77,000 that kind of read. page. So maybe I just misunderstood that a little bit. So, in terms of river view, then how much of a loss production was due to the slowing bar traffic versus the lower recoveries at the, because the initial mining at the number 11 scene? Well, most of it was recoveries in that 11 same, you know, most of the recoveries. I mean, we just didn't get the production.

Speaker Change: Okay, Keith, you know there was that disclosure in your financing and that kind of sound like it was it was $420,000 at Riverview and $77,000 at Tunnel Ridge. So maybe I just misunderstood that a little bit. So in terms of

Mark La France Reichman: So in terms of... Riverview, then how much of the lost production was due to the slowing bar traffic versus the lower recoveries at the because the initial mining at number 11, most of it was recoveries in that 11 same, you know, most of the recoveries, I mean, we just didn't get the production. And the other challenge we've got there is that coal seam that we produced had higher sulfur. So we're having, so it's part of our inventory issue at Riverview, relates to having to move that coal and blend that coal into the rest of our Riverview operation at a slower pace than what we anticipated.

Speaker Change: Riverview then, how much of the loss production was due to the slowing barge traffic versus the lower recoveries at the because the initial mining at the number 11 scene?

Speaker Change: Most of it was recoveries in that 11th scene. You know, most of the recoveries, I mean, we just didn't get the production.

Joseph Craft: And the other challenge we got there is that co-saying that we produced had a higher sulfur. So we're having, so it's part of our inventory issue at River View relates to having to move that coal, blend that coal into our rest of our River View operation on a slower pace than what we had anticipated.

Speaker Change: And the other challenge we've got there is that coal seam that we produced had a higher sulfur. So we're having, it's part of our inventory issue at Riverview.

Speaker Change: relates to having to move that coal and blend that coal into the rest of our Riverview operation on a slower pace than what we had anticipated so.

Joseph Craft: So again, we believe that by the end of the year, that will be behind us. I guess what I was getting at is, you know, sounds like all of these issues are almost like transitory. In other words, you know, Gibson, South kind of made up for River View. All of these deferred chimists would be made up over time. Even the export volumes with pricing improvements, you know, may, that may accelerate. So if you were just to look at your overall total sales guidance, well, what do you think is the biggest, what would be the number one reason attributed to the reduction in the guidance? Is it just pulling the historical forward?

Joseph W. Craft: Again, we believe by the end of the year that will be behind us. I guess what I was getting at is, you know, it sounds like all of these issues are almost transitory. In other words, Gibson South kind of made up for Riverview.

Speaker Change: Again, we believe by the end of the year that will be behind us.

Speaker Change: Yeah, so I guess what I was getting at is, you know, sounds like all of these issues are almost like transitory. In other words,

Mark La France Reichman: All of these deferred shipments would be made up over time; even the export volumes with pricing improvements, you know, may, that may accelerate. So if you were just to look at your overall total sales guidance, Well, what do you think is the biggest reason attributed to the reduction in the guidance? Is it just pulling the historical forward, or is it the long-wall moves, or is it the export market?

Speaker Change: Well, what do you think is the biggest

Speaker Change: What would be the the number one reason attributed to the reduction in the in the guidance? Is it just pulling the historical forward or is it is it the the long wall moves or is it the export market?

Joseph Craft: Or is it, is it the, the, the long wall moves, or is it the export market? Primarily the export market. So we, you know, we are pulling down our production the second half. We've got inventory on the ground that can take care of our contracted business. And we do believe, as Kerry said earlier, that there will actually be opportunities in the fourth quarter for some spot business because of the summer burned. But the volume in the export market is just lower, primarily based on pricing. Then we anticipated at the beginning of the year. And so I would say our reason of our, of our lower sales is primarily driven because of the, we were expecting a stronger export market in 2024 than what our current guidance projects.

Joseph W. Craft: primarily the export market. So we and we are pulling down our production for the second half. We've got inventory on the ground that can take care of our contracted business. And we do believe, as Cary said earlier, that there will actually be opportunities in the fourth quarter for some spot business because of the summer burn. But the volume in the export market is just lower, primarily based on prices, than we anticipated at the beginning of the year.

Speaker Change: It's primarily the export market, so we, you know, we are pulling down our production the second half. We've got inventory.

Speaker Change: on the ground that can take care of our contracted business. And we do believe, as Cary said earlier, that there will actually be opportunities in the fourth quarter for some spot business.

Cary P. Marshall: because of the summer burn, but the volume in the export market is just lower primarily based on pricing.

Joseph W. Craft: And so I would say our reason for our lower sales is primarily driven because we were expecting a stronger export market in 2024, based on our current guidance projects. And that was mainly due to Hamilton. Yeah, it's mainly due to the high sulfur, both Hamilton and River, because, yeah, I kind of overlooked Hamilton.

Cary P. Marshall: than we anticipated at the beginning of the year.

Speaker Change: And so I would say our reason our of our lower sales is primarily driven because of the we were expecting a stronger export market in 2024 than

Mark Reichman: And that was, that was mainly due to Hamilton, you know, mainly, mainly due to the high salt of both Hamilton and Riverview. Okay, because, yeah, that, I kind of overlooked Hamilton. That was, you know, I kind of looked at Riverview and the others, but I didn't really, didn't really recognize that during the quarter.

Speaker Change: What our current guide is.

Speaker Change: And that was mainly due to Hamilton. Yes, mainly due to the high sulfur, both Hamilton and Riverview.

Joseph W. Craft: That was, you know, I kind of looked at Riverview and the others, but I didn't really, didn't really recognize that during the quarter what was going on at Hamilton. So, well, you're reducing the coal sales guidance, but expected coal prices are higher. So it seems like, you know, if utilities are drawing down their inventories, that sets you up pretty nicely for 2025. Just looking at your maintenance capital guidance, what were the major drivers in the reductions there?

Speaker Change: Okay, yeah, I kind of overlooked Hamilton, I kind of looked at Riverview and the others.

Mark Reichman: What was going on at Hamilton? So, well, you're reducing the coal sales guidance, but expected coal prices are higher. So it seems like, you know, if utilities are drawing down their inventories, that sets you up pretty nicely for 2025. Just looking at your maintenance capital guidance, what were the major drivers in the reductions there? I think there's, I think there's a couple of things on that mark when you just kind of look at, you know, how we've been trending throughout the year. You know, as we're seeing our capital spend, it is a little bit behind what our original forecast was.

Speaker Change: But I didn't really recognize that during the quarter, what was going on at Hamilton.

Speaker Change: So while you're reducing the coal sales guidance, but expected coal prices are higher

Speaker Change: So it seems like, you know, if utilities are drawing down their inventories, that sets you up pretty nicely for 2025. Just looking at your maintenance capital guidance, what was the major drivers in the reductions there?

Cary P. Marshall: I think there's a couple of things about that, Mark. When you just kind of look at how we've been trending throughout the year, as we're seeing our capital spend, it is a little bit behind what our original forecast was, and the fact that you've reduced the guidance numbers with the Tunney levels leads to lower CapEx numbers as well. We also did spend a good deal of time in discussions with vendors in relation to payment terms, and so we were able to negotiate more favorable payment terms since the beginning of the year that allowed us to defer some of those expectations in terms of 2025 capital numbers where we had to make prepayments. [inaudible] in terms of securing the commitments for those. We were able to defer some of those payments into next year as well. So the combination of those led to the adjustment.

Speaker Change: I think there's I think there's a couple of things on that, Mark, when you just kind of look at, you know, how we've been trending throughout the year, you know, as we're seeing our capital spend, it is a little bit behind.

Mark Reichman: And, you know, the fact that you've reduced the guidance numbers with the Tunis levels, you know, leads to lower cap X numbers as well. We also did spend a good deal of time with, you know, in discussions with vendors in relationship to payment terms. And so we were able to negotiate more favorable payment terms since the beginning of the year that allowed us to defer some of those expectations in terms of 2025 capital numbers, where you had to make prepayments. in terms of securing the commitments for those. We were able to defer some of those payments into next year as well.

Speaker Change: What our original forecast was and you know the fact that you've reduced the guidance numbers with the Tunney's levels you know leads to leads to lower CAPEX numbers as well. We also did spend a good deal of time with with you know

Speaker Change: in discussions with vendors in relationship to payment terms. And so we were able to negotiate more favorable payment terms since the beginning of the year that that allowed us to

Speaker Change: defer some of those expectations in terms of 2025 capital numbers where you had to make prepayments.

Speaker Change: In terms of securing the commitments for those, we were able to defer some of those payments into next year as well. So all of the combination of those led to the adjusted guidance.

Mark Reichman: So all of the combinations of those led to the adjusted guidance.

Mark Reichman: Okay. Well, thank you very much.

Mark La France Reichman: Okay, well, thank you very much. That's very helpful. Thank you, Mark.

Mark Reichman: It's very helpful.

Speaker Change: Okay, well thank you very much, that's very helpful.

David Storms: Our next question comes from Dave Storms with Stonegate. Please proceed with your question. Good morning. Hello. Good morning. Can you hear me? Yes. Good morning. Awesome. Perfect.

Mark La France Reichman: Our next question comes from Dave Storms with Stonegate. Please proceed with your question. Yes. Yes. Good morning.

Mark La France Reichman: Thank you, Mark.

Speaker Change: Our next question comes from Dave Storms with Stonegate. Please proceed with your question.

David Storms: Good morning.

David Storms: Hello.

David Storms: Awesome. Perfect. I just noticed that the outside coal purchases took a jump in the quarter and was curious if this is a knock-on effect from some of the logistical delays, or if there is something else that's keeping this number slightly elevated. That number is related to some coal we are buying at our Metiki mine that allows for some additional Metco sales, so we have the ability to put some of that on our MET contract. So that's why it's related.

David Storms: Good morning. Can you hear me?

David Storms: Just noticed that the outside coal purchases took a jump in the quarter. And was curious if this is not going to affect from some logistical delays? Or if there is something else that's keeping this number slightly elevated? That number is related to some coal we're buying in our, at our Mettike mine, that allows for some additional met coal sales to where we have the ability to put some of that coal on our met contract. So that's what that's related to. Yeah, I think in addition to that, we did, in addition to what Joe was talking about, we did have another opportunity over on the purchase coal side to where we were able to buy a small amount of volume of purchase coal that did hit on that earn a small margin on that.

Speaker Change: Yep, yes. Good morning. Awesome. Perfect. Just noticed that the outside coal purchases took a jump in the quarter and was curious if this is a knock-on effect from some of the logistical delays or if there is something else that's keeping this number slightly elevated.

Speaker Change: That number is related to some coal we are buying at our Metiki mine that allows for some additional Metco sales.

Speaker Change: to where we have the ability to put some of that coal on our MET contracts.

Joseph W. Craft: Yeah, I think in addition to that, we did, in addition to what Joe was talking about, we did have another opportunity over on the purchase coal side, where we were able to buy a small amount of volume of purchase coal that did hit on that, and earn a small margin on that. So there is a part of that that is a little bit higher in the quarter than what you would typically see.

Speaker Change: So that's what that's related to.

Speaker Change: Yeah, I think in addition to that, we did, in addition to what Joe was talking about, we did have another opportunity over on the purchased coal side to where we were able to buy.

Speaker Change: a small amount of volume of purchased coal that did hit on that, earn a small margin on that. So there is a part of that that that is a little bit higher in the quarter than what you would typically, what you would typically see.

Joseph Craft: So there is a part of that that is a little bit higher in the quarter than what you would typically see.

Joseph W. Craft: Um, you know, I think, on a going forward basis, if you go back to where we were more in terms of, you know, a couple of million a month or so is a good number in terms of purchase coal forecast on a going forward basis, you know, as we look at, a couple of million a month or a couple of minutes. Correct. 6 million, versus the run rate of where we are, do the first half. Producing. Is there any opportunity that you're seeing to expand? And if there is not, you know, what opportunities would you keep an eye out for? Saying only one gas.

Cary Marshall: I think on a going forward basis, if you go back to where we were more in terms of a couple of million a month or so, is a good number in terms of purchase coal forecast on a going forward basis. You know, if we look at that, a couple million a month or a couple million a month, correct, six million a quarter versus the run rate of where we are through the first half of the year. Understood, very helpful.

Speaker Change: you know, I think, you know, on a going forward basis.

Speaker Change: If you go back to where we were more in terms of a couple million a month or so is a good number in terms of purchase coal forecast on a going forward basis as we look at that.

Speaker Change: A couple million, man.

Speaker Change: A couple million a month. Correct. Six million a quarter.

Speaker Change: versus the run rate of where we are.

Speaker Change: through the first half of the year.

Joseph Craft: And then oil and gas, the world decides, keeps producing. Is there any opportunities that you're seeing to expand, and what if there is not, you know, what opportunities would you keep an eye out for? Saying on the oil and gas, yeah, so we're continuing to make investments. So we, and we're looking to add volumes through acquisitions. So that is a continued growth area for us, you know, exactly how we can quantify that it just depends on a quarter-by-quarter basis as to what opportunities present themselves and what we're able to close. I can't give you a precise number on what that percentage would be.

Speaker Change #100: Understood. Very helpful. And then oil and gas, the royalty side, keeps producing. Is there any opportunities that you're seeing to expand? And if there is not, you know, what opportunities would you keep an eye out for?

David Storms: Yeah, so we're continuing to make investments. We're looking to add volumes through acquisitions. So that is a continued growth area for us. But exactly how we can quantify that, it just depends on a quarter by quarter basis as to what opportunities present themselves and what we're able to close. Can't give you a precise number on that percentage. Thank you for taking my questions and good luck in 3Q.

Speaker Change #101: Staying on the oil and gas.

Speaker Change #102: Yeah, yeah. So we're continuing to make investments. So we

Speaker Change #103: And we're looking to add volumes through acquisitions, so that is a continued growth area for us.

Speaker Change #104: You know, that's exactly how we can quantify that. It just depends on a quarter-by-quarter basis as to what opportunities present themselves and what we're able to close. So I can't give you a precise number on what that percentage would be.

Joseph Craft: Understood.

David Storms: Thank you for taking my questions, and good luck in 3Q. Thank you.

Speaker Change #105: Understood. Thank you for taking my questions and good luck in 3Q.

David Marsh: Our next question comes from David Marsh with Singular Research. Please proceed with your question. Good morning, guys, and thank you very much for taking the questions. Good morning. It's time to start. Hi, guys.

David Marsh: Our next question comes from David Marsh with Singular Research. Please proceed with your question. Hey, good morning, guys, and thank you very much for taking the questions. I just wanted to start, hi guys, I just wanted to ask a quick question on kind of a housekeeping item, Cary.

Speaker Change #106: Thank you.

Speaker Change #106: Our next question comes from David Marsh with Singular Research. Please proceed with your question.

David Marsh: Hey, good morning guys and thank you very much for taking the questions.

David Marsh: I'm just going to start a quick question on kind of the housekeeping item, Cary. The debt balance on the balance sheet is a little bit elevated relative to the voice recorder. Is that a little bit of a timing issue with the closing of the offering? Or is there something else there? It is higher than where it was in the first quarter, so if you look at the offering in total, it was a $400 million offering in total, and we used proceeds on that to pay off our existing balance of our senior notes of 284 or 284.6 million.

Speaker Change #108: I just wanted to start, quick question on kind of a housekeeping item, Cary, the debt balance on the balance sheet is a little bit elevated relative to the first quarter, is that a little bit of a timing issue with the closing of the offering, or?

David Marsh: The debt balance on the balance sheet is a little bit elevated relative to the first quarter. Is that a little bit of a timing issue with the closing of the offering, or is there something else there? Yes, it is higher than where it was in the first quarter.

Cary P. Marshall: So if you look at the offering in total, it was a $400 million offering in total, and we used the proceeds of that to pay off our existing balance of our senior notes of 284 or 284.6 million. So there was a small amount of leverage that was added to the balance sheet as a result of that offer. On a net basis, it's really very close to the same, but on a gross basis, it's a little bit higher as a result.

Speaker Change #109: Is there something else there?

Cary P. Marshall: It is it is higher than where it was in the first quarter. So

Cary P. Marshall: If you look at the offering in total, it was a $400 million offering in total, and we used proceeds on that to pay off our existing...

Cary Marshall: So there was a small amount of leverage that was added to the balance sheet as a result of that offering. On a net basis, it's really very close to the same, but on a gross basis, it's a little bit higher as a result of that.

Cary P. Marshall: balance of our senior notes of 284 or 284.6 million. So there was a small amount of leverage that was added to the balance sheet as a result of that offering.

Cary P. Marshall: On a net basis it's it's you know really very close to the same but on a gross basis it's a little bit higher as a result of that.

Cary Marshall: Okay. So is there anything that you guys can pay down in terms of what's left on the balance sheet? Without prepay, obviously, the 400 is not going anywhere. The 400 is not going anywhere. We do have a term loan associated with our credit facility, the current balance. Not sure exactly where it is, but it's somewhere in the 50 to 55 million range. So that could certainly be an option in the event that we wanted to do some prepayments in terms of a term loan. So that could be a potential in the event that we decide we'd like to repay that.

David Marsh: Okay, so is there anything that you guys can pay down in terms of, you know, the what's left on the balance sheet without prepay? Obviously, the 400 is not going anywhere, but Yeah, the 400, the 400 is not going anywhere. We do have a term loan associated with our credit facility.

Speaker Change #110: Okay, so is there anything that you guys can pay down in terms of, you know, what's left on the balance sheet without prepay? Obviously the $400 is not going anywhere, but...

Speaker Change #111: The 400 is not going anywhere. We do have a term loan associated with our credit facility. The current balance...

Cary P. Marshall: The current balance, not sure exactly where it is, but it's somewhere in the 50 to 55 million range. So that could certainly be an option in the event that we wanted to do some prepayments in terms of a term loan. So that could be a potential, you know, in the event that we decide we'd like to repay that. Ideally, we'd like to find opportunities to utilize that capital to invest it, but that's certainly an option going forward.

Speaker Change #112: I'm not sure exactly where it is, but it's somewhere in the 50 to 55 million range, so that could certainly be an option.

Speaker Change #112: in the event that we wanted to do some prepayments in terms of

Speaker Change #112: term loan. So that could be a potential in the event that we decide we'd like to repay that. Ideally, we'd like to find opportunities to utilize that capital to invest it, but that's certainly an option going forward.

Cary Marshall: Ideally, we'd like to find opportunities to utilize that capital to invest it, but that's certainly an option going forward.

Cary Marshall: Absolutely, understood. And then just kind of following along the previous question. This was regard to inventory. I mean, this is certainly your highest inventory and in quite some time. You know, I guess the question is, you know, what level of inventory would you be most comfortable with as you sit and think about that? Because obviously, that ties up working capital. And, you know, just looking back over the last few years. I mean, it's seen it as low as 77 million, but you know, typically it's, you know, kind of closer to 100. And, you know, now we're kind of pushing to, and then did you get any sense of, you know, what your kind of target level is if you have one internally for that?

Cary P. Marshall: And then, kind of following on from the previous question, just with regard to inventory, I mean, this is certainly your highest inventory in quite some time. You know, I guess the question is, you know, what level of inventory would you be most comfortable with as you sit and think about that? Because, obviously, that ties up working capital.

Speaker Change #113: Absolutely, understood.

Speaker Change #113: And then just kind of following on the question of the previous...

Speaker Change #114: question with regard to inventory and this is certainly your highest inventory.

Speaker Change #115: In quite some time, you know, I guess the question is, you know, what level of inventory would you be most comfortable with as you sit and think about that? Because obviously that ties up.

David Marsh: And, you know, just looking back over the last few years, I mean, I've seen it as low as 77 million. But, you know, typically, it's, you know, kind of closer to 100. And, you know, now we're kind of pushing to, I mean, just give me a sense of what your kind of target level is, if you have one internally for that. Generally speaking, on the inventory side, we like to be somewhere between a half million tons to a million tons of inventory, preferably on the lower end side of that.

Speaker Change #116: Working Capital. And, you know, just looking back over the last few years, I mean, I've seen it as low as $77 million. But, you know, typically it's, you know,

Speaker Change #117: Kind of closer to a hundred and you know now we're kind of pushing to I mean, could you give me a sense of you know? What your kind of target level is if you have one internally for that?

Cary Marshall: Generally speaking, on the inventory side, we'd like to be somewhere between a half million tons to a million tons inventory. You know, preferably on the lower end side of that. And, you know, if you look at where we were, you know, at the end of the year last year, I think that number was around 1.3 million tons. That's a little bit higher than what we would typically like to see, but anywhere from a half million to a million tons is generally what we'd like to see. So, based upon our current plans, we do anticipate getting down to that half million to a million tons of year level by the end of the year.

Speaker Change #118: Generally speaking on the inventory side we like to be somewhere between a half million tons to a million tons.

Cary P. Marshall: And if you look at where we were at the end of last year, I think that number was around 1.3 million tons. That's a little bit higher than what we would typically like to see, but anywhere from a half million to a million tons is generally what we like to see. So based upon our current plans, we do anticipate getting down to that half million to million ton a year level by the end of the year.

Speaker Change #118: inventory. You know, preferably on the lower end side of that. And, you know, if you look at where we were, you know, at the end of the year last year, I think

Speaker Change #118: That number was around 1.3 million tons. That's a little bit higher than what we would typically like to see, but anywhere from a half million to a million tons is generally what we like to see.

Speaker Change #119: So based upon our current plans, we do anticipate getting down to that half million to million ton a year level by the end of the year.

Cary Marshall: of the year.

David Marsh: Okay. And then just the last one for me, just with regard to the guidance and just some of the comments that, you know, you guys have made throughout the call. You know, it actually sounds like the new guidance is, it would be in kind of in your eyes. And you know, I'm not trying to put words in your mouth, but it seems as though the guidance, the new guidance, would be conservative with potential upside. Is that a fair statement? Just if you get some spot sales kind of in the back half of the year that maybe aren't currently planning for or thinking about, is there maybe potential upside to get back to where you were, or you just think that just the first half was, you know, just a little bit tougher than you thought it would be.

Cary P. Marshall: And then just the last one from me, just with regard to the guidance and just some of the comments that, you know, you guys have made throughout the call, it actually sounds like the new guidance is, would be in, kind of in your eyes. And I'm not trying to put words in your mouth, but it seems as though the new guidance would be conservative with potential upside. Is that a fair statement?

Speaker Change #120: Okay, that's helpful. And then just the last one for me, just with regard to the guidance and just some of the comments that, you know, you guys have made throughout the call.

Speaker Change #121: You know, it actually sounds like...

Speaker Change #122: The new guidance would be kind of in your eyes, I'm not trying to put words in your mouth, but it seems as though the new guidance would be conservative with potential upside. Is that a fair statement, just if you get some spot sales kind of in the back half of the year?

Cary P. Marshall: Just if you get some spot sales kind of in the back half of the year that maybe you aren't currently planning for or thinking about, is there maybe potential upside to get back to where you were? Or do you just think that... Just the first half was, you know, just a little bit tougher than you thought it would be?

Speaker Change #123: Maybe you aren't currently planning for or thinking about. Is there maybe potential upside to get back to where you were or do you just think that

David Marsh: And this was just kind of the right kind of neutral number here. Yeah, I think that it is definitely possible that this export pricing would maintain and grow, and we could have more vessels in the fourth quarter than what's planned in this guide. It won't get us back to where we were at the beginning of the year just because of time, as to, you know, getting in the queue, being able to sell the volume.

Joseph Craft: And this is just kind of the right kind of neutral number here. Yeah, I think that it is definitely possible with this export pricing with maintain and grow that we could have more vessels in the fourth quarter than what's planned in this guidance. It won't get us back to where we were at the beginning of the year, just because of timing. As to, you know, getting in the queue and being able to sell the volume, so we won't make up that all that volume, but we could actually have higher than the 34 million that Kerry talked about as our current target.

Speaker Change #124: Just the first half was, you know, just a little bit tougher than you thought it would be and this was just kind of the right kind of neutral number here.

Speaker Change #125: Yeah, I think that it is definitely possible if this export pricing would maintain and grow, that we could have more vessels in the fourth quarter than what's planned in this guidance. It won't get us back to where we were at the beginning of the year just because of timing.

Speaker Change #125: As to, you know, getting in the queue and being able to sell the volume, so we won't make up all that volume, but we could actually have higher than the $34 million that Cary talked about.

David Marsh: So we won't make up all that volume, but we could actually have more than the 34 million that Cary talked about, which is our current target. So it could be the higher end of the range if we can get two or three more vessels that we weren't otherwise anticipating when we gave the guidance. We'd like to believe it's going to be better, but

Joseph Craft: So it could be the higher end of the range if we can get two or three more vessels that we weren't otherwise anticipating when we gave the guidance. So we'd like to believe it's going to be better, but it is going to be market dependent on what that volume is. But right now we feel good about our guidance that we can't hit that 34 million dollar, a 34 million ton target. And hopefully we'll get three or four, maybe five vessels more in the fourth quarter if this pricing holds up.

Cary P. Marshall: It is our current target, so it could be the higher end of the range if we can get two or three more vessels that we weren't otherwise anticipating when we gave the guidance.

Joseph W. Craft: It is going to be market-dependent, that volume. Right now, we feel good about their guidance that we can hit that $34 million, a 34 million ton target. Hopefully, we'll get three or four, maybe five vessels more in the fourth quarter if this pricing holds up. That's really helpful.

Speaker Change #125: We'd like to believe it's going to be better, but it is going to be market dependent.

Speaker Change #126: I don't know what that volume is, but...

Speaker Change #126: Right now we feel good about their guidance that we can't hit that 34 million dollar, a 34 million ton target and hopefully we'll get three or four maybe five vessels more in the fourth quarter if this pricing holds up.

David Marsh: That's really helpful.

David Marsh: Hey, thanks, guys. I appreciate taking the questions. Thanks, David.

David Marsh: Hey, thanks, guys. I appreciate taking questions. Thanks, David.

Speaker Change #127: That's really helpful. Hey, thanks guys. I appreciate taking the questions.

Abraham Landa: Our next question comes from Abe Landau with Bank of America. Please proceed with your question. Good morning. Thanks for the opportunity to ask some questions.

Abe Landa: Our next question comes from Abe Landa with Bank of America. Please proceed with your question. Good morning. Thanks for the opportunity to ask some questions.

Speaker Change #128: Our next question comes from Abe Landa with Bank of America. Please proceed with your question.

Abraham Landa: First off, good morning. Congrats on the debt refi and the Volvo extension. And you've kind of touched on this, but based on your operations and kind of this new transactions led to significant increase in your liquidity to over 660 million plus, you know, about 200 million cash there. I guess what are your priorities for using that cash? Maybe anything on like the cadence of deploying that cash? And do you have any like minimum cash or minimum liquidity levels that you want to hold? Yeah, so our priorities, again, back to we do plan to redeploy in the only gas segment, so we would like to be able to grow some of that.

Abe Landa: First off, good morning. Congratulations on the debt refi and the Volvo extension. And he's kind of touched on this, but based on your operations and this new transactions led to a significant increase in your liquidate over 660 million plus, you know, 200 million cash there. I guess what are your priorities for using that cash? Maybe anything on the cadence of deploying that cash? And do you have any, like minimum cash or minimum liquidity levels that you want to hold?

Speaker Change #133: Good morning. Thanks for the opportunity to ask some questions.

Abe Landa: First off, good morning, congrats on the debt refi and the Volvo extension.

Speaker Change #129: And he's kind of touched on this.

Speaker Change #136: But based on your operations and kind of this new transaction, it's led to a significant increase in your liquidate over.

Speaker Change #130: 660 million plus, you know, about 200 million cash there.

Speaker Change #132: I guess what are your priorities for using that cash? Maybe anything on like the cadence of deploying that cash and do you have any like minimum cash or minimum liquidity levels that you want to hold?

Joseph W. Craft: Yeah, so our priorities, again, back to we do plan to redeploy in the oil and gas segment. So we'd like to be able to grow some of that. We're continuing to evaluate other opportunities for investments that are additive to where we are in the coal and oil and gas segments. So we've got multiple things we're looking at. So there are possibilities that we could deploy some capital in areas that would supplement our existing core segments. You know, we talked about opportunities related to infant item investment.

Speaker Change #135: Yeah, so our priorities again back to we do plan to redeploy in the oil and gas segment so we

Cary Marshall: You know, we're continuing to evaluate other opportunities for investments that are added to where we are in the coal and one gas segment. So we've got multiple things we're looking at. So there are possibilities that we could deploy some capital in areas that would supplement our existing core segments. We've talked about opportunities related to impenitom and investment. We've also talked about doing some other arrangements where we could be engaged in the data center world that we're considering. So there are things that we're looking at matrix, and we continue to believe provide some growth opportunities for us over the next 12 months or so that we're hopefully going to be able to capitalize on.

Speaker Change #134: We'd like to be able to grow some of that.

Speaker Change #134: We're continuing to evaluate other opportunities for investments that are additive to where we are in the coal and oil and gas segment.

Speaker Change #134: So we've got multiple things we're looking at, so there are possibilities that we could deploy some capital.

Speaker Change #134: in areas that would supplement our existing core segments. We've talked about.

Joseph W. Craft: We've also talked about doing some other arrangements where we could be engaged in the data center world, which we're considering. So there are things that we're looking at. Matrix, we continue to believe, provides some growth opportunities for us over the next 12 months or so that we're hopefully going to be able to capitalize on. So there are several things.

Speaker Change #134: opportunities related to infinite investment. We've also talked about doing some other arrangements where we could be

Speaker Change #134: engaged in the data center world that we're considering.

Speaker Change #137: So, there are things that we're looking at, Matrix, and we continue to believe provide some growth opportunities for us over the next 12 months or so that we're hopefully going to be able to capitalize on.

Cary Marshall: So there's several things. And as Cary said, you know, we're looking for ways to deploy that capital on good cash-on-cash returns and very active looking for opportunities. Nothing to announce today. But we are looking for ways to deploy that capital or that cash flow.

Joseph W. Craft: And as Cary said, you know, we're looking for ways to deploy that capital on good cash on cash returns. Very active, looking for opportunities, nothing to announce today, but we are looking for ways to deploy that capital or that cash. Could you maybe just talk about just the competitive landscape within the oil and gas royalties area? We've gotten more competitive over the last handful of years, and in recent months. It does seem like an area that you would want to go to.

Speaker Change #137: So there's several things, and as Cary said, we're looking for ways to deploy that capital on good cash-on-cash returns.

Speaker Change #138: We're very active, looking for opportunities, nothing to announce today.

Speaker Change #138: But we are looking for ways to deploy that capital or that cash flow.

Joseph Craft: Could you maybe just talk about just the competitive landscape within the oil and gas royalties area just has gotten more competitive over the last handful of years recent recent months and it doesn't seem like an area that you want. It has been competitive over really since we've gotten in it. It seems like it's competitive. I think it right now, you know, we're probably maintaining our underwriting standards that looks more of a long term pricing that might be a little lower than what the current pricing has been. Because prices have been elevated this year for potentially reasons are dealing with geopolitical issues going on in your Ukraine.

Speaker Change #139: Could you maybe just talk about just the competitive landscape within the oil and gas royalties area?

Cary P. Marshall: It has gotten more competitive over the last handful of years, recent months. It does seem like an area that you want to go. Yeah, it has been competitive.

Abe Landa: It has been competitive. Unknown Speaker, really, since we've gotten into it, it seems like it's competitive. I think right now.

Cary P. Marshall: Over.

Joseph W. Craft: You know, we're probably maintaining our underwriting standards, that looks more like a long-term pricing that might be a little lower than what the current pricing has been. Prices have been elevated this year for potentially reasons dealing with geopolitical issues going on in Europe, Ukraine, situations in the Middle East as to how oil flows can be impacted, and the wars that are going on. So it's hard for us to predict exactly how long the price of oil is going to stay where it is.

Speaker Change #140: Really, since we've gotten in it, it seems like it's competitive. I think right now...

Speaker Change #140: We're probably maintaining our underwriting standards.

Speaker Change #140: That looks more of a long-term pricing that might be a little lower than what the current pricing has been. Because prices have been elevated this year for potentially reasons that are...

Speaker Change #140: Dealing with geopolitical issues going on in Europe , Ukraine,

Joseph Craft: I mean, situations in the Middle East have to have oil flows that can be impacted by the wars that are going on. So it's hard for us to predict exactly how long the price of oil is going to stay where it is. And that might be a factor to where on things we've been on. We've been for a lot of different projects this year. We've come close, but we haven't reached to the level it took to win those auctions. But, so there's there has been adequate supply of opportunity. It's just that we've elected not to price or to bid at the level that has allowed us to acquire those, thinking that the pricing is a little high.

Speaker Change #140: Situations in the Middle East as to how oil flows can be impacted by

Speaker Change #140: the wars that are going on. So it's hard for us to predict exactly how long that price of oil is going to stay where it is. And that might be a factor to where on things we bid on, we bid for a lot of different projects this year. We

Joseph W. Craft: And that might be a factor in things we bid on. We bid for a lot of different projects this year, and come close to winning, but we haven't. This We haven't reached the level it took to win those auctions. But, So there has been an adequate supply of opportunity. It's just that we've elected not to price it at the level that has allowed us to acquire those things.

Speaker Change #140: Come close, but we haven't.

Speaker Change #140: We haven't reached the level it took to win those auctions, so there has been adequate supply of opportunity.

Speaker Change #140: It's just that we've elected not to price or to bid at the level that has allowed us to acquire those thinking that

Joseph W. Craft: The pricing is a little high, but we still believe that there's going to be adequate opportunities to make acquisitions. We're going to stick to our underwriting standards, and we feel confident that we will be able to deploy that, we will be able to deploy capital in that space, and what we do, what we are able to be successful with that, will yield returns consistent with what we've been able to achieve, to grow our company at, you know, with value, as Cary mentioned, when you look at the growth we've had from 20 20 to We mentioned we think we'll have another record year this year.

Joseph Craft: We still believe that there's going to be adequate opportunities to make acquisition. So we're going to stick to our underwriting standards, and you know, we feel confident that we will be able to deploy that, you know, we will be able to deploy capital in that space. And what we do, you know. What we are able to be successful with, it will yield returns consistent with what we've been able to achieve to grow our company at, you know, with value, as Cary mentioned, when he's looking at the growth we have from 2020 to 2023, it's continuing into 24.

Speaker Change #140: The pricing is a little high. We still believe that there's going to be adequate.

Speaker Change #140: opportunities to make acquisitions.

Speaker Change #140: We're going to stick to our underwriting standards and.

Speaker Change #140: We feel confident that we will be able to deploy capital in that space and what we do.

Speaker Change #140: what we are able to be successful with that it will yield returns consistent with what we've been able to achieve.

Speaker Change #140: to grow our company.

Speaker Change #140: With value, as Cary mentioned, when you look at the growth we've had from 2020 to 2023, it's continuing into 2024. We mentioned we think we'll have another record year this year or so.

Joseph Craft: We mentioned we think we'll have another record here this year or so. You know, sometimes you have to be patient, but whether it's competition or just some people being a little bit more optimistic about future pricing than we are, it's hard to answer exactly what's going on there. But we do believe that we'll be able to continue to deploy capital without compromising our underwriting standards.

Joseph W. Craft: So, you know, sometimes you have to be patient, whether it's competition or just some people being a little bit more optimistic about future pricing than we are. It's hard to answer exactly what's going on. But we do believe that we'll be able to continue to deploy capital without compromising our underwriting.

Speaker Change #141: You know, sometimes you have to be patient, but...

Speaker Change #142: Whether it's competition or just some people being a little bit more optimistic about future pricing than we are, it's hard to answer exactly what's going on there.

Speaker Change #143: We do believe that we'll be able to continue to deploy capital without compromising our underwriting standards.

Joseph Craft: That's very helpful. And last question for me, your bombs have performed pretty well since you price them. I think of both 105. You also mentioned that you can upsize your bonds by 200 million. You know, under what circumstances would you kind of consider upsizing your bonds? Thank you. I think when you think about that, you know, we were just talking about, you know, opportunities out there that, you know, may be larger scale than what we have, you know, done in the past. You know, an example could be say, you know, in the oil and gas mineral space. You know, in the event that you come across, you know, more of a sizable opportunity in that type of environment, that could, that could certainly be a potential to where you could go and do something on a bigger scale like that.

Joseph W. Craft: That's very helpful. And last question for me. Your bombs have performed pretty well since you priced them, I think, above 105.

Speaker Change #144: That's very helpful. And last question for me. Your bombs have performed pretty well since you priced them, I think, above $105,000.

Speaker Change #145: You also mentioned that you can upsize your bonds by $200 million. Under what circumstances would you consider?

Abe Landa: I've seen some last quotes. You also mentioned that you can upsize your bonds by 200 million, you know, under under what circumstances would you kind of consider, upsizing your pond. I think when you when you think about that, you know, we were just talking about, you know, opportunities out there that, you know, may be larger scale than what we have, you know, done in the past, you know, an example could be say, you know, in the oil and gas mineral space, you know, in the event that you come across, you know, more of a sizable opportunity in that that type of environment, that could that could certainly be a potential to where you could you could go and do something on a on a bigger scale like that.

Speaker Change #146: upsizing your ponds.

Speaker Change #147: Thank you.

Speaker Change #148: I think when you when you think about that, you know, we were just talking about, you know, opportunities out there that, you know, may be larger scale than what we have, you know, done in the past, you know, an example could be say, you know, in the oil and gas mineral space.

Speaker Change #148: You know, in the event that you come across, you know, more of a sizable opportunity.

Speaker Change #148: in that type of environment, that could certainly be a potential to where you could go and do something on a bigger scale like that. So it would primarily be opportunity related based upon what some of the investments are that we see out there.

Joseph Craft: So it would primarily be opportunity-related based upon what some of the investments are that we see out there. Joe, I don't know. Yeah, everything else to add to that. I think that's exactly right. Thank you very much. Really appreciate it. Thank you.

Cary P. Marshall: So it would primarily be opportunity-related, based upon what some of the investments are that we see out there. Joe, I don't know if you have anything else to add to that.

Joseph W. Craft: Thank you very much. I really appreciate it. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Mike Edwards with Boston Hill Advisors. Please proceed with your question. Hey, guys, good morning.

Operator: As a reminder, if you would like to ask a question, please press star one on your telephone keypad.

Michael Edwards: Our next question comes from Mike Edwards with Boston Hill Advisors. Please proceed with your question. Thank you, guys. Good morning. I was a little late attending the call. So I just had a quick question that may have been answered already, and I apologize for that.

Mike Edwards: I was a little late joining the call. So I just had a quick question that may have been answered already. And I apologize for that.

Mike Edwards: But when you talked about the disruptions, obviously, in the Ohio River flooding and the Baltimore Bridge, how much of that loss in deliveries do you think you're going to recoup? Can you break it out between this quarter and next quarter, or is it just lost sales? Yeah, it's not lost sales; it's definitely just deferred sales. And so out of that 500,000 or so, it will take, you know, the balance of the year to do that. We may be able to get a little bit more in the third quarter. As we think about our anticipated sales volumes, I think, and the guidance that we've provided for the Appalachian region, you know, I think it's probably So you'd see higher volumes in the third quarter versus the fourth quarter as a result of that. And so, but all the volumes will be made up.

Michael Edwards: But when you talked about the disruptions, obviously, in the Ohio River flooding and the Baltimore bridge, how much of that loss in deliveries do you think you're going to recoup? And can you break it out between this quarter, next quarter, or is it just lost sales? Yeah, it's not lost sales. It's definitely just deferred sales. And so, out of that, that 500,000 or so, it will take the balance of the year to do that. We may be able to get a little bit more in the third quarter, as we think about our anticipated sales volumes. I think, and the guidance that we've provided for the Appalachia region.

Cary Marshall: I think it's probably a little bit more to be made up in the third quarter. So you'd see higher volumes in the third quarter versus the fourth quarter as a result of that. But all the volumes will be made up.

Michael Edwards: So just a quick follow-up. So as I look at the revised guidance for the rest of the year, is that revised guidance for the rest of the year, which is a little bit lower here below the median forecast from earlier? Is that catch up in the revised guidance, or is that an addition to what's in the revised guidance? It is in the revised guidance. Okay, all right, thank you. Thank you.

Cary P. Marshall: So just a quick follow up. So as I look at the revised guidance for the rest of the year, which is a little bit lower than the median forecast from earlier? Is that caught up in the revised guidance? Or is that in addition to?

Speaker Change #148: So just a quick follow up so as I look at the revised guidance for the rest of the year is that revised guidance for the rest of the year, which is a little bit lower below the medium forecast from earlier is that catch up in the revised guidance or is that in addition to.

Mike Edwards: What's in the revised guidance? It is in the revised guidance. Okay, all right.

Scott: Hi, Scott.

Scott: It is in the revised guidance.

Mike Edwards: Thank you. Thank you. There are no further questions at this time. I would now like to turn the floor back over to Cary Marshall for closing comments. Thank you. And to everyone on the call, we appreciate your time this morning, as well as your continued support and interest in Alliance. Our next call to discuss our third quarter 2024 financial and operating results is currently expected to occur in late October, and we hope everyone will join us again at that time.

Speaker Change #150: Okay alright, thank you.

Speaker Change #151: Thank you.

Speaker Change #150: Yeah.

Cary Marshall: There are no further questions at this time.

Speaker Change #150: There are no further questions at this time I would now like to turn the floor back over to carry Marshall for closing comments.

Mike Edwards: This concludes our call for the day. Thank you. You may now disconnect your lines. Thank you for your participation. Unknown Executive, Cary Marshall, Alliance Resource Partners LP Unknown Executive, Cary Marshall, Alliance Resource Partners LP Unknown Executive, Cary Marshall, Alliance Resource Partners LP Unknown Executive, Cary Marshall, Alliance Resource Partners LP Unknown Executive, Cary Marshall, Alliance Resource Partners LP Unknown Executive, Cary Marshall, Alliance Resource Partners LP Unknown Executive, Cary Marshall, Alliance Resource Partners LP Unknown Executive, Cary Marshall, Alliance Resource Partners LP, [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? Unknown Executive, Cary Marshall, Alliance Resource Partners LP Unknown Executive, Cary Marshall, Alliance Resource Partners LP [inaudible] [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Unknown Executive, Cary Marshall, Alliance Resource Partners LP [inaudible] Session 2, Session 3, Session 4, Session 5, Session 6, Session 7, Session 8, Session 9, Session 10, Session 11, Session 12, Session 13, Session 14, Session 15, Session 16, Session

Cary Marshall: I would now like to turn the floor back over to Carrie Marshall for closing comments. Thank you. And to everyone on the call, we appreciate your time this morning, as well as your continued support and interest and alliance.

Cary P. Marshall: Thank you and to everyone on the call. We appreciate your time this morning as well as your continued support and interest in alliance.

Cary Marshall: Our next call to discuss our third quarter 2024 financial and operating results is currently expected to occur in late October. And we hope everyone will join us again at that time.

Our next call to discuss our third quarter 2024 financial and operating results is currently expected to occur in late October and we hope everyone will join US again at that time. This concludes our call for the day. Thank you.

Cary Marshall: This concludes our call for the day. Thank you. You may now disconnect your lines. Thank you for your participation. ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ � ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ I am I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I'm I ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ � ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ � ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ Mark Reichman, David Storms, Unknown Executive, Cary Marshall, Joseph Craft, David Storms, Mark Reichman, David Storms, Mark Reichman, David Storms, Mark Reichman, David Storms, Mark Reichman, David Storms,

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