We utilize the two-class method in calculating basic and diluted earnings per limited partner unit ("EPU"). Subsequent to the Simplification Transactions, net income attributable to ARLP is only allocated to limited partners and participating securities under deferred compensation plans. Net losses attributable to ARLP are allocated to limited partners but not to participating securities. Prior to the Simplification Transactions, net income attributable to ARLP was allocated to our general partner, limited partners and participating securities under deferred compensation plans in accordance with their respective partnership ownership percentages. As a result of the Simplification Transactions, MGP no longer holds economic interests in the Intermediate Partnership or Alliance Coal. We currently do not make distributions or allocate income and losses to MGP in our calculation of EPU. Please see Note 1 – Organization and Presentation for more information on the Simplification Transactions.

Our participating securities under deferred compensation plans include rights to nonforfeitable distributions or distribution equivalents. Our participating securities are outstanding awards under our LTIP and phantom units in notional accounts under our SERP and the Directors' Deferred Compensation Plan.

The following is a reconciliation of net income (loss) attributable to ARLP used for calculating basic and diluted earnings per unit and the weighted-average units used in computing EPU.

(1)

Amounts presented for periods subsequent to the first quarter of 2018 reflect the impact of the Simplification Transactions, which ended net income allocations and quarterly cash distributions to MGP after May 31, 2018. Prior to the Simplification Transactions, MGP maintained a 1.0001% general partner interest in the Intermediate Partnership and a 0.001% managing member interest in Alliance Coal and thus received quarterly distributions and income and loss allocations during this time period.

(2)

Diluted EPU gives effect to all potentially dilutive common units outstanding during the period using the treasury stock method. Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive. For the years ended December 31, 2020, 2019 and 2018, the combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 773,664, 1,284,013 and 1,658,908, respectively, were considered anti-dilutive under the treasury stock method.