Alliance Resource Partners LP (ARLP) 2021 Q2 法說會逐字稿

Greetings. Welcome to Alliance Resource Partners, L.P. Second Quarter 2021 Earnings Conference Call. (Operator Instructions) Please note, this conference is being recorded.

各位好。歡迎參加 Alliance Resource Partners, L.P. 2021 年第二季財報電話會議。（接線員指示）請注意，本次會議將被錄音。

I will now turn the conference over to Mr. Brian Cantrell, Senior Vice President and CFO. Thank you. You may begin.

我現在把會議交給資深副總裁暨財務長 Brian Cantrell 先生。謝謝。您可以開始了。

Thank you, Sherry, and welcome, everyone. Earlier this morning, Alliance Resource Partners released its second quarter 2021 financial and operating results, and we will now discuss these results as well as our perspective on market conditions and outlook. Following our prepared remarks, we'll open the call to your questions.

謝謝你，Sherry，也歡迎各位。今天稍早，Alliance Resource Partners 已公布其 2021 年第二季財務與營運結果；我們現在將討論這些結果，以及我們對市場狀況與展望的看法。在我們的準備發言之後，我們將開放各位提問。

Before we begin, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties and assumptions that are 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, our actual results may vary materially from those we projected or expected.

在開始之前提醒各位，我們今天的部分發言可能包含前瞻性陳述，該等陳述受多項風險、不確定性與假設影響，相關內容不時載於我們向美國證券交易委員會（SEC）提交的文件中，亦反映於今天早上的新聞稿。雖然這些前瞻性陳述係基於我們目前可得之資訊，但若一項或多項風險或不確定性發生，或我們的基本假設證明不正確，我們的實際結果可能與我們所預測或預期者存在重大差異。

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.

在提供上述發言時，除非法律要求，本合夥企業無義務因新資訊、未來事件或其他原因而公開更新或修訂任何前瞻性陳述。

Finally, we'll 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 ARLP's press release, which has been posted on our website and furnished to the SEC on Form 8-K.

最後，我們也將討論若干非 GAAP 財務衡量指標。這些非 GAAP 財務衡量指標與最直接可比之 GAAP 財務衡量指標之差異定義與調節表，載於 ARLP 新聞稿末尾；該新聞稿已張貼於我們網站，並以 Form 8-K 提供給 SEC。

With the required preliminaries out of the way, I'll begin with a review of our results for the quarter, and then I'll turn the call over to Joe Craft, our Chairman, President and Chief Executive Officer, for his comments.

在完成必要的開場說明後，我將先回顧本季的業績，接著把電話交給我們的董事長、總裁兼執行長 Joe Craft，請他發表評論。

As we reported earlier this morning, Alliance delivered strong results for the -- during the 2021 quarter, posting significant increases to our major operating and financial metrics compared to the sequential quarter, reflecting improved performance from both our Coal operations and our Royalty segments, total revenues increased 13.8% to $362.4 million, net income jumped 77.9% to $44 million or $0.34 per unit and EBITDA climbed 25.7% to $118.6 million. Contributing to these exceptional results was the shipment of tons delayed during the sequential quarter.

如同我們今天稍早所報告，Alliance 在 2021 年本季交出強勁成果，與前一季相比，我們主要營運與財務指標均大幅提升，反映煤炭營運與權利金部門的表現皆有所改善。總營收成長 13.8% 至 3.624 億美元，淨利大增 77.9% 至 4,400 萬美元（每單位 0.34 美元），EBITDA 上升 25.7% 至 1.186 億美元。促成這些卓越成果的因素之一，是前一季延遲出貨的噸數在本季完成出貨。

If you recall our release from last quarter, shipments for 950,000 tons were delayed by weather-related transportation disruptions and an unplanned customer outage, which impacted our cash flow and EBITDA by approximately $13 million. At that time, we anticipated customers would make up these tons over the balance of this year. With strong power demand and utilities calling on coal to meet this demand, the timing of delivering these delayed shipments was largely accelerated into the 2021 quarter. Absent these timing issues, results for the 2021 and sequential quarters would have been comparable.

如果各位還記得我們上季的新聞稿，因天候相關的運輸中斷以及客戶非計畫性停機，約 95 萬噸的出貨延遲，對我們的現金流與 EBITDA 造成約 1,300 萬美元的影響。當時我們預期客戶會在今年剩餘期間補回這些噸數。由於電力需求強勁，公用事業為滿足需求而調度煤炭，這些延遲出貨的交付時點大幅提前至 2021 年本季。若排除這些時點因素，2021 年本季與前一季的結果將大致相當。

With these increases and our continued focus on controlling costs, expenses and capital, ARLP generated $79.4 million of free cash flow in the 2021 Quarter. We utilized this cash flow to return $12.7 million to unitholders through our quarterly distribution and to reduce total debt and finance lease obligations by $59.5 million. We ended the quarter with liquidity of $500.5 million and reduced our total leverage to 1.08x, a 32.1% improvement since the beginning of this year.

在上述增長以及我們持續專注於成本、費用與資本控管之下，ARLP 於 2021 年本季產生 7,940 萬美元的自由現金流。我們運用該現金流透過季度配息向單位持有人返還 1,270 萬美元，並將總負債與融資租賃義務減少 5,950 萬美元。本季結束時，我們的流動性為 5.005 億美元，總槓桿降至 1.08 倍，較今年年初改善 32.1%。

ARLP's financial and operating results for the 2021 quarter and the first half of 2021 were significantly improved compared to the 2020 Quarter end period, which were negatively impacted by the pandemic. Compared to the 2020 quarter, total revenues increased 42% in the 2021 quarter, while net income jumped by $90.7 million and EBITDA climbed 145.9%.

ARLP 於 2021 年本季及 2021 年上半年之財務與營運結果，較 2020 年同期顯著改善；2020 年同期受到疫情不利影響。與 2020 年本季相比，2021 年本季總營收增加 42%，淨利增加 9,070 萬美元，EBITDA 上升 145.9%。

For the 2021 period, coal sales volumes increased 18% compared to the 2020 period, driving total revenues higher by 12.4% to $681.1 million. Reflecting ongoing cost control and efficiency initiatives at our mining operations, offset in part by increased selling expenses resulting from higher coal sales volumes, operating expenses declined to $409.6 million for the 2021 period compared to $421.5 million for the 2020 period.

就 2021 年上半年而言，煤炭銷售量較 2020 年同期增加 18%，帶動總營收成長 12.4% 至 6.811 億美元。反映我們礦場持續的成本控管與效率提升措施（部分被因煤炭銷售量增加而上升的銷售費用所抵銷），2021 年上半年營業費用降至 4.096 億美元，低於 2020 年同期的 4.215 億美元。

Net income increased $260.2 million to $68.8 million for the 2021 period, reflecting higher revenues, reduced operating expenses, lower depreciation and $157 million of noncash impairment charges incurred in the 2020 period. Excluding the impact of these impairment charges, net income of $68.8 million for the 2021 period compares to an adjusted net loss of $34.4 million for the 2020 period. EBITDA for the 2021 period increased 45.3% to $212.9 million compared to adjusted EBITDA of $146.5 million in the 2020 period.

2021 年上半年淨利增加 2.602 億美元至 6,880 萬美元，反映營收增加、營業費用降低、折舊減少，以及 2020 年同期認列 1.57 億美元的非現金減損費用。若排除該等減損費用影響，2021 年上半年淨利 6,880 萬美元，相較於 2020 年同期調整後淨損 3,440 萬美元。2021 年上半年 EBITDA 增加 45.3% 至 2.129 億美元，相較於 2020 年同期調整後 EBITDA 為 1.465 億美元。

Turning from our consolidated results, let's now take a closer look at the performance of the ARLP's business segments. At our Coal operations, sales tons increased 14.9% during the 2021 quarter, as strong coal demand allowed us to deliver approximately 1 million tons of coal shipments delayed from the sequential quarter, as I discussed earlier. Increased coal sales volumes more than offset lower price realizations, leading coal sales revenues higher by 13.4% to $326 million compared to the sequential quarter. Increased volumes and the continued benefits of ongoing cost control and efficiency initiatives at all ARLP coal mines drove segment adjusted EBITDA expense per ton sold lower to $27.90, a 6.1% reduction compared to the sequential quarter.

從合併結果轉到各事業部門表現，接下來我們更深入檢視 ARLP 各業務區塊的績效。在煤炭營運方面，2021 年本季銷售噸數增加 14.9%；由於煤炭需求強勁，我們得以交付約 100 萬噸前一季延遲的煤炭出貨，如我先前所述。煤炭銷售量增加足以抵銷實現價格較低的影響，使煤炭銷售營收較前一季增加 13.4% 至 3.26 億美元。銷量提升以及 ARLP 各煤礦持續受益於成本控管與效率提升措施，帶動部門調整後 EBITDA 每售出一噸的費用降至 27.90 美元，較前一季降低 6.1%。

Increased revenues and lower per ton operating expenses drove segment adjusted EBITDA for our coal operations higher by 25.7% to $113.9 million. ARLP's Royalty business has also performed well during the 2021 Quarter, delivering $22.2 million of segment adjusted EBITDA, an increase of 15.3% over the sequential quarter. Of this total, oil and gas royalties contributed $15.4 million to segment adjusted EBITDA during the 2021 Quarter, a sequential increase of 28.7% on the strength of significantly higher commodity prices. As expected, Coal Royalties delivered relatively stable results for the 2021 Quarter posting segment adjusted EBITDA of $6.8 million.

營收增加與每噸營運費用下降，帶動我們煤炭營運部門的調整後 EBITDA 增加 25.7% 至 1.139 億美元。ARLP 的權利金業務在 2021 年本季同樣表現良好，部門調整後 EBITDA 為 2,220 萬美元，較前一季增加 15.3%。其中，油氣權利金於 2021 年本季貢獻部門調整後 EBITDA 1,540 萬美元，受大宗商品價格顯著上漲帶動，較前一季增加 28.7%。如預期，煤炭權利金於 2021 年本季表現相對穩定，部門調整後 EBITDA 為 680 萬美元。

With that, I'll now turn the call over to Joe. Joe?

接下來，我把電話交給 Joe。Joe？

Thank you, Brian. As Brian mentioned, ARLP's operating and financial performance for the 2021 quarter improved significantly compared to both the sequential and 2020 quarters. Looking ahead, coal market fundamentals are extremely favorable both at home and abroad, prompting us to increase our full year 2021 guidance. We are increasing the midpoint of our targeted total coal sales volumes for 2021 by 1.8 million tons or approximately 6% to 32.9 million tons.

謝謝你，Brian。正如 Brian 提到的，ARLP 在 2021 年本季的營運與財務表現，相較於前一季以及 2020 年同期均顯著改善。展望未來，國內外煤炭市場基本面極為有利，促使我們上調 2021 年全年指引。我們將 2021 年目標總煤炭銷售量的中位數上調 180 萬噸（約 6%）至 3,290 萬噸。

Over the past 2 months commodity prices for each of our business segments have skyrocketed. In our primary U.S. markets, year-over-year power demand has surged 7.5% through the first half of 2021, rising natural gas prices have driven coal consumption higher for the 2021 period. According to Argus, June coal generation in the PJM hit a 3-year high, while MISO and SPP grids reported increased coal demand of 37% and 42%, respectively.

過去 2 個月，我們各業務部門所對應的大宗商品價格皆大幅飆升。在我們主要的美國市場，2021 年上半年累計的用電需求年增 7.5%；天然氣價格上漲也推升了 2021 年上半年的煤炭消耗量。根據 Argus，PJM 在 6 月的燃煤發電量達到 3 年新高；同時，MISO 與 SPP 電網分別回報煤炭需求增加 37% 與 42%。

For the full year, coal consumption in the U.S. is expected to rebound 16%. Increased domestic demand is coming amidst declining utility stockpiles, constrained supply response and a robust export market. International coal demand is rising as global economic expansion post COVID-19 has lifted power demand and higher LNG prices have favored coal generation. [IHS Markit] currently projects U.S. thermal coal exports will climb to a range of 41 million to 45 million short tons this year compared to 26.7 million short tons in 2020.

就全年而言，美國煤炭消耗量預期將反彈 16%。在公用事業庫存下降、供給回應受限以及出口市場強勁的背景下，國內需求正在增加。隨著 COVID-19 後全球經濟擴張推升用電需求，加上 LNG 價格走高有利於燃煤發電，國際煤炭需求亦在上升。[IHS Markit] 目前預估，美國動力煤出口今年將攀升至 4,100 萬至 4,500 萬短噸，較 2020 年的 2,670 萬短噸增加。

Alliance has responded to these favorable market conditions by significantly strengthening our contract position during the 2021 quarter. Booking new commitments to deliver 8.7 million tons through 2024, including 2.5 million tons into the export markets. For 2021, we are targeting export sales volumes at 4.4 million tons compared to a little less than 1 million tons last year. We are actively evaluating opportunities to further increase production and sales in response to expectations for continued strong coal demand and pricing through 2022. However, the current tight labor market may limit what we can accomplish in this regard.

Alliance 已因應這些有利的市場條件，在 2021 年本季期間大幅強化我們的合約部位。新增承諾於 2024 年前交付 870 萬噸，其中包含 250 萬噸供應出口市場。就 2021 年而言，我們的出口銷售量目標為 440 萬噸，相較去年不到 100 萬噸。我們正積極評估進一步提高產量與銷量的機會，以回應市場對 2022 年前煤炭需求與價格持續強勁的預期。然而，目前緊俏的勞動市場可能限制我們在這方面能達成的成果。

Market fundamentals for ARLP's royalty businesses are also favorable. Increased coal sales volumes from ARLP's mining operations should benefit our Coal Royalty segment, and we are raising the midpoint of estimated 2021 Royalty tons sold by 3.3%.

ARLP 權利金業務的市場基本面同樣有利。ARLP 採礦營運的煤炭銷售量增加，應可帶動我們的煤炭權利金（Coal Royalty）部門，我們也將 2021 年權利金銷售噸數估計值的中位數上調 3.3%。

For our oil and gas Royalty segment, drilling and completion activity continues on our acreage, with 103 new gross horizontal wells spud and 182 gross horizontal wells brought into production during the 2021 quarter. As a result, we are again increasing our 2021 full year oil and gas production expectations. ARLP's oil and gas price realizations have increased throughout the year and the current forward price curve remains strong.

就我們的油氣權利金部門而言，我們的礦權範圍內鑽井與完井活動持續進行，2021 年本季共開鑽 103 口新的水平井（總口數），並有 182 口水平井（總口數）投產。因此，我們再次上調 2021 年全年油氣產量預期。ARLP 的油氣實現價格今年以來持續上升，而目前的遠期價格曲線仍然強勁。

With expectations of increased oil, gas and coal production and strong commodity pricing, we believe the contribution of our Royalty segment to ARLP's consolidated results and will continue to grow.

在油、氣與煤產量增加以及大宗商品價格強勁的預期下，我們相信權利金部門對 ARLP 合併業績的貢獻將持續成長。

With our strong year-to-date performance and positive outlook, ARLP is well positioned to pursue our objectives of optimizing the cash flow and value of our existing assets and pursuing growth opportunities that we believe have the potential to generate attractive returns.

憑藉今年迄今的強勁表現與正向展望，ARLP 已具備良好條件推進我們的目標：最佳化既有資產的現金流與價值，並把握我們認為有潛力創造具吸引力報酬的成長機會。

That concludes our prepared comments, and I'll now ask the operator to open the call for questions.

以上為我們預先準備的發言內容，接下來我將請接線員開放提問。

(Operator Instructions) Our first question is from Nathan Martin with Benchmark.

（接線員指示）我們的第一個問題來自 Benchmark 的 Nathan Martin。

Congrats on the quarter. I guess first, just I'll start with a question on incremental pricing. It looks like you guys committed and priced an additional about 3 million tons in the domestic side, another 2 million tons on the export side for '21 since the last quarter. Can you give us a sense, maybe on pricing on those tons?

恭喜本季表現。我想先從增量定價的問題開始。看起來自上季以來，你們在 2021 年於國內市場額外承諾並定價了約 300 萬噸，出口市場則另外約 200 萬噸。能否請你們分享一下這些噸數的定價水準？

Some of that timing was before this recent price run-up, but we think we're able to get some of it on the back end. We have factored that into our increased pricing on -- in our guidance where we increased the bottom -- the lower end of the range on our average sales price. So when you look at the midpoint, I think that raises the price around $0.50 a ton for all tons, and that helps you in understanding the increase in revenue for the year on a sales price basis.

其中一部分的時點是在近期這波價格上漲之前，但我們認為有一部分能夠反映在後段。我們已將其納入指引中的價格上調——也就是我們把平均銷售價格區間的下緣提高。因此，若看中位數，我認為這會讓所有噸數的價格約提高每噸 0.50 美元，這也有助於你理解今年在銷售價格面帶來的營收增幅。

Okay. I mean I guess you mentioned pricing. We've had that recent increase. And then based on what I'm seeing out there, Illinois Basin prices seem to be up maybe $7 just this month. They're like the mid-40s or more now and that prices are $50-plus, and API 2 was $130 plus in the front month. So is that kind of similar to what you guys are seeing in the market as well?

了解。我想你提到定價，我們最近確實看到價格上升。依我在市場上看到的情況，伊利諾伊盆地（Illinois Basin）價格這個月似乎就上漲了大約 7 美元，現在大概在 40 多美元中段甚至更高，而部分價格已到 50 美元以上；API 2 近月也在 130 美元以上。所以你們在市場上看到的情況也差不多是這樣嗎？

It's really hard right now. I mean there are people that are interested in the volume -- trying to price some volumes for the back half. There's limited coal available. If you look at our open position at the quarter end, we were right at about 1.8 million -- or excuse me, 1.4 million tons, I believe. And we're -- right now, we're probably 1 million tons that we have to sell. So we are seeing pricing in that level in the current time frame. As you look out to the fourth quarter, some people who're suggesting that price would go lower, I don't really see that. I don't see how there can be inventory restocking, given the tight supply in the domestic market. So I think the pricing is going to remain very strong for the back half of this year and rolling into the first quarter. So we'll see exactly whether these utilities will, in fact, transact at these price levels or whether they'll just continue to draw down inventory, which also has been significantly reduced since our last call. So we're in interesting times.

現在真的很難說。我的意思是，有些人對量有興趣——想替下半年一些量定價。可用煤炭供給有限。若看我們在季末的未售部位，我們大約是 180 萬——抱歉，我記得是大約 140 萬噸。而目前我們大概還有 100 萬噸需要銷售。所以在目前這個時間框架下，我們確實看到那樣的定價水準。再往第四季看，有些人認為價格會走低，但我不太認同。我看不出在國內市場供給吃緊的情況下，庫存能如何回補。因此我認為今年下半年到延伸至第一季，價格都會維持非常強勁。我們將觀察這些公用事業是否真的會在這些價格水準成交，或是他們會繼續消耗庫存；而庫存自我們上次電話會議以來也已大幅下降。所以現在是很有意思的時期。

All Right. Got it. I appreciate that. And then I guess just, if pricing does kind of remain at these levels, Joe, as you point out, and hopefully, through the back half of the year into next year, maybe Brian or Joe, can you comment on potential priorities for your free cash flow?

好的，了解，謝謝你的說明。接著我想問，如果如你所說價格大致維持在這些水準，並希望能延續到今年下半年甚至明年，Brian 或 Joe 能否談談你們對自由現金流的潛在優先順序？

So as we are thinking about what those would be, we probably will -- we're not in a position to tell you exactly right now because there's so much uncertainty as to what the price is going to be next year. When you look at most of the curves, they are very heavily backward dated for next year. As I just mentioned, we think they're going to be higher than what the different indexes are showing. But it's -- until we see more certainty in that regard, it's hard to respond to exactly what our cash flow capital allocations are going to be going into next year. So we'll be prepared at our next call to have better clarity on that, and we'll be able to address that at that time.

我們在思考這些優先順序時，可能——目前還無法很明確地告訴你，因為明年的價格仍有很大的不確定性。你看大多數的曲線，對明年都呈現非常明顯的逆價差（backwardation）。如我剛才提到的，我們認為實際價格會高於各種指數所顯示的水準。但在我們對此有更高確定性之前，很難精準回應明年我們的現金流資本配置會如何安排。因此，我們會在下一次電話會議時準備更清楚的資訊，並在那時再行說明。

Okay. I appreciate that. I guess just real quickly, if you're looking at the cost side, fantastic cost quarter for you guys, especially in Appalachia. Obviously, you tightened your full year cost guidance to look like, but that does seem to imply some kind of cost creep in the second half. We're also combining that with -- it looks like the shipments should be up in the second half versus the first half based on your guidance. So maybe give some color on that potential increase in costs?

好的，謝謝。我再很快問一下成本端。你們這季成本表現非常出色，尤其是在阿帕拉契亞（Appalachia）。顯然你們也收斂了全年成本指引，但看起來這似乎暗示下半年成本會有些上升。同時，依你們的指引來看，下半年出貨量也應該會高於上半年。所以能否補充一下下半年成本可能上升的原因？

So we have experienced some pressure, inflationary pressures with steel, with oil, labor availability. So there is some pressure from an inflationary standpoint in the second half. And we also have a longwall move at our Mettiki operation in the next quarter, that is built into that. We've got some net shipments next quarter that are higher cost than what we experienced in the second quarter at Mettiki. So that's weighing on the cost side.

我們確實感受到一些壓力，包括鋼材、油品以及勞動力供給的通膨壓力。因此下半年在通膨面確實有些壓力。另外，我們在下一季於 Mettiki 礦區有一次長壁採煤（longwall）設備搬遷，這也已納入考量。我們下一季在 Mettiki 的部分淨出貨，成本會高於第二季的水準，這也對成本端造成影響。

But on the flip side, with the increased production, that production is primarily coming from our lowest cost mines. So you're seeing a blend to where we're still able to maintain our cost at levels consistent with what we projected at the beginning of the year, notwithstanding, some of the inflationary pressures that we're experiencing.

但另一方面，隨著產量增加，新增產量主要來自我們成本最低的礦場。因此你會看到一個組合效果，使我們即便面臨一些通膨壓力，仍能把成本維持在年初所預估的水準附近。

The main question, are those transitory or not? We've had some feedback on the steel side that was suggesting that the steel surcharge that we have been living with now for a month or so, and we'll follow through -- we'll continue through the end of the year, will more than likely be lifted sometime in the first quarter based on current projections of next year.

主要問題在於，這些因素是否屬於短暫性的。我們在鋼材方面收到一些回饋，指出我們近一個月左右一直承受的鋼材附加費（steel surcharge），並且將持續到今年底，依目前對明年的預測，很可能會在第一季某個時間點取消。

Great. And just to clarify, Joe, when you mentioned longwall move at the Mettiki next quarter, are you saying fourth quarter or are you saying here through...

很好。再確認一下，Joe，當你提到 Mettiki 下個季度的長壁面搬遷（longwall move）時，你是指第四季，還是指從現在到……

Third quarter. Yes. Third quarter.

第三季。是的。第三季。

Got it. Appreciate it, guys. And then just one last final question. I mean I noticed you raised your CapEx budget by rough $5 million close to like. Just elaborate maybe on what's driving that small increase. That's all.

了解。謝謝各位。然後最後一個問題。我注意到你們把資本支出（CapEx）預算大約上調了 500 萬美元左右，接近……能否再多說明一下是什麼因素推動了這個小幅增加？就這樣。

Yes. I think, Brian, do you have details on that.

是的。我想，Brian，你有這方面的細節嗎？

Yes. I think the fact that our production is increasing, maintenance capital will be a bit higher over the back half of the year than we originally anticipated. But to your point, Nate, it's a relatively minor increase, and we're just trying to reflect that increased production level.

有的。我想主要是因為我們的產量在增加，因此今年下半年後段的維持性資本支出會比我們原先預期略高一些。不過如你所說，Nate，這是相對小幅的增加，我們只是想反映產量提高後的水準。

Perfect. All right, guys, again, always appreciate the time and best of luck during the third quarter.

完美。好，各位，再次感謝你們撥冗，也祝第三季一切順利。

Our next question is from Matthew Fields with Bank of America.

下一個問題來自美國銀行（Bank of America）的 Matthew Fields。

I appreciate that you're still seeing a little bit of uncertainty in futures price to talk up to detailed about capital allocation. But you've historically kind of talked about 1x leverage as kind of a comfortable level for you all, and you hit it this quarter. So just wondering kind of where you think about leverage going forward. Are you comfortable kind of here, do you want to take that 1x leverage and maybe take it lower? Or are we going to see increased use for investment or shareholder returns now that you've hit that bogey?

我理解你們仍然看到期貨價格存在一些不確定性，因此在資本配置方面不便談得太細。不過你們過去一直提到 1 倍槓桿（1x leverage）是你們覺得舒適的水準，而你們本季已達到。想請教你們未來如何看待槓桿水準：你們對目前這個水準是否滿意，是否想把 1 倍槓桿再降得更低？或者既然已達到這個目標，接下來會看到更多資金用於投資或股東回報？

Yes. I mean we're continuing to focus significantly on growth. There are several opportunities we're pursuing as we speak. So I think growth continues to be in front of our mind. I think that paying down debt, we paid down more than we anticipated based on our strong performance in the first half, and we'll continue to do that. I think we will relook at the distributions as we think about what our cash flows will be in 2022, starting, probably in the next -- at our next meeting. So we'll add more clarity on that.

是的。我們仍然非常專注於成長；我們此刻正在追求幾個機會。所以我認為成長仍然是我們最優先考量的事情之一。至於償還債務，我們基於上半年強勁的表現，實際償還的金額超過原先預期，我們也會持續這麼做。我想我們會在思考 2022 年的現金流時，重新檢視配息／分配（distributions），大概會從下一次會議開始。因此我們會提供更清楚的說明。

But our target has always been at a onetime level, if we do these acquisitions, every one of them were looking at are accretive. However, it could pop up our coverage ratio for small time, but we would be focused on maintaining or getting back to a onetime level target. And -- so the key question again is back to what our commodity price is going to be and what kind of volume can we bring to the market in 2022 going forward. So we're -- again, labor is short and it's tight. I don't know when the better old additional benefit is removed in September, whether that's going to help this infrastructure bill, if that's passed, and then there's more stimulus, what that's going to do with the labor demand. It's -- I've never seen anything like it in my career to where you've got plenty of jobs and yet you still have people that are on the unemployment rolls, not wanting to work. So hopefully, we'll get back to encouraging people to make an economic contribution to our country and get back into the labor pool, so we can take advantage of these opportunities.

不過我們的目標一直都是維持在 1 倍左右的水準；如果我們進行這些收購，我們所看的每一個案子都是具增益性（accretive）的。然而，它可能會在短時間內推高我們的覆蓋比率（coverage ratio），但我們會專注於維持或回到 1 倍的目標水準。再者，關鍵問題仍回到我們的大宗商品價格會是多少，以及 2022 年及往後我們能把多少量帶到市場。再次強調，勞動力短缺而且非常吃緊。我不知道 9 月把額外的舊有補助取消後是否會有幫助；若基礎建設法案通過，接著又有更多刺激措施，會對勞動需求造成什麼影響。這是——我職涯中從未見過的情況：工作機會很多，但仍有人在失業名冊上、不想工作。所以希望我們能回到鼓勵大家為國家做出經濟貢獻、回到勞動市場，讓我們能把握這些機會。

Speaking of labor, we've seen kind of the pickup in kind of union activity in the steel sector. One of your fellow coal miners in Alabama is going over 100 days on the strike now. Can you just talk about kind of when you have collective bargaining agreements coming due? What are the -- how are the relations with your union workers and kind of what you expect to see for continuing to see the labor force in the mine?

說到勞動力，我們看到鋼鐵產業的工會活動似乎有所升溫。你們在阿拉巴馬州的一位同業煤礦工人現在罷工已超過 100 天。你能否談談你們的集體談判協議何時到期？你們與工會員工的關係如何？以及你們預期礦場勞動力後續會是什麼情況？

So we're a non-union operator. So we've been union-free since inception, 1971. So we do not have any labor contracts. We're very focused on having a culture of focused on trying to have great relationships with our employees. And we continue to do that by constant communication. And -- so as I mentioned, there is a shortage where we would like to be able to grow. And unfortunately, it just -- it's tough finding people who want to enter the coal business right now, in large part because of all the news, headlines, I believe.

我們是非工會（non-union）營運商。自 1971 年成立以來一直沒有工會，所以我們沒有任何勞動合約。我們非常重視建立一種文化，致力於與員工維持良好關係，並透過持續溝通來做到這一點。正如我提到的，我們確實面臨人力短缺，而我們希望能夠成長；但不幸的是——目前要找到願意進入煤炭產業的人很困難，很大一部分原因我認為是因為各種新聞與標題。

And we're trying to convince our customers to come forward and enter into longer-term contracts or at least give a shout out to our employees to let them know that they're needed for the next 2 decades. And we were able to have one of our customers do that last Friday. And it was very well received.

我們也在努力說服客戶更早出面、簽訂較長期的合約，或至少對我們的員工喊話，讓他們知道未來 20 年都需要他們。上週五我們成功讓其中一位客戶做到了這點，反應非常好。

So from a labor perspective, our key issue is just trying to ensure to our employees and any prospective employees that they've got a future in coal industry for the next 20 years. And I believe they do, but it would be nice, if we can get some further commitments from our customer base that reinforces that long-term view for our employees.

因此從勞動力角度來看，我們的關鍵議題就是要讓員工以及潛在員工相信，他們在未來 20 年的煤炭產業中仍有前景。我相信確實如此；但如果我們能從客戶群取得更多承諾，以強化員工對長期前景的看法，那會更好。

(Operator Instructions) Our next question is from Bill Gushard with Atlas Merchant Capital.

（接線員指示）下一個問題來自 Atlas Merchant Capital 的 Bill Gushard。

Congrats on a great quarter. Can you discuss a little bit about the investment you've made historically into the Royalty portfolio, specifically oil and gas. I think you added to that, you added to that exposure at the end of '19. And I don't think we've really seen the full EBITDA or free cash flow potential. And maybe discuss also what you think the stand-alone value of that might be just based on what you're seeing in the market for valuations.

恭喜本季表現亮眼。能否談談你們過去在權利金（Royalty）投資組合上的投資，特別是油氣方面？我記得你們在 2019 年底增加了那部分曝險。但我認為我們還沒有真正看到完整的 EBITDA 或自由現金流潛力。也請談談，基於你們在市場上看到的估值，你們認為那部分資產若獨立出來，其單獨價值可能是多少？

Yes. Stand-alone value, if you look at the other pure-play oil and gas royalty companies, you're seeing trading multiples in the high single digits, low double-digit type area. So if you look at our current expected cash flow out of our Royalty business, you can do the math and we're clearly not, in our view, getting the full value for the cash flow that those assets are bringing to the table that our current EBITDA this quarter of $22.2 million, run rate close to $80 million, $85 million. The math is pretty compelling in terms of what the overall value is. And you're correct, we have not made additional investments in that since late 2019. Obviously, with the market collapsed during the pandemic, cessation of drilling, shut-in of production, et cetera, availability of assets at that point in time really just dried up.

是的。若看單獨價值，參考其他純油氣權利金公司（pure-play oil and gas royalty companies），你會看到它們的交易倍數大約在高個位數到低雙位數區間。因此如果你看我們目前預期從權利金業務產生的現金流，你可以自行計算；在我們看來，市場顯然沒有充分反映這些資產所帶來的現金流價值——我們本季權利金業務的 EBITDA 為 2,220 萬美元，年化運行率（run rate）接近 8,000 萬到 8,500 萬美元。就整體價值而言，這個計算相當有說服力。你說得沒錯，自 2019 年底以來我們沒有再追加投資。顯然在疫情期間市場崩跌、鑽井活動停止、產量關井（shut-in）等等，使得當時可取得的資產基本上就枯竭了。

We are beginning to see increased activity as commodity prices have improved. As we mentioned in our prepared comments, drilling activity, while not back to pre-pandemic levels, has certainly picked up. And we're hopeful we are seeing opportunities come across our desk that may make some sense. And we're hopeful that market continues to reopen, that we'll be able to transact.

隨著商品價格改善，我們開始看到活動增加。如同我們在事先準備的發言中提到的，鑽井活動雖然尚未回到疫情前水準，但確實已經回升。我們也希望看到有一些機會送到我們桌上，可能是合理的。我們希望市場持續重新開放，讓我們能夠進行交易。

We have reached the end of our question-and-answer session. I would like to turn the conference back over to Brian Cantrell for closing comments.

我們的問答環節到此結束。接下來我想把電話交回給 Brian Cantrell 做結語。

Thank you, Sherry. We appreciate everyone's time this morning as well as your continued support of and interest in Alliance. Our next call to discuss our third quarter 2021 financial and operating results is currently expected to occur in late October, and we hope you'll join us again at that time. This concludes our call for today. Thanks to everyone for your participation.

謝謝你，Sherry。也感謝各位今天早上撥冗，以及持續支持並關注 Alliance。我們下一次電話會議、用以討論 2021 年第三季財務與營運結果，預計將在 10 月下旬舉行，希望屆時各位能再次參與。今天的電話會議到此結束。謝謝大家的參與。