SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2015

	Illinois Basin		Appalachia		White Oak			Other and Corporate		Elimination (1)			Consolidated
	(in thousands)

Reportable segment results for the three months ended June 30, 2015 were as follows:

Total revenues (2)	$	406,862	$	167,165	$	18,718		$	51,590	$	(39,716	)	$	604,619
Segment Adjusted EBITDA Expense (3)	244,843		118,744		3,726			44,137		(36,560		)	374,890
Segment Adjusted EBITDA (4)(5)	157,248		45,547		(6,989		)	7,158		(3,157		)	199,807
Capital expenditures (7)	34,466		21,701		(37		)	1,298		-			57,428

Reportable segment results for the three months ended June 30, 2014 were as follows:

Total revenues (2)	$	424,523	$	164,096	$	4,170		$	8,090	$	(2,415	)	$	598,464
Segment Adjusted EBITDA Expense (3)	255,942		93,917		1,625			3,503		(2,415		)	352,572
Segment Adjusted EBITDA (4)(5)	165,859		67,089		(4,915		)	4,676		-			232,709
Capital expenditures (7)	62,166		18,541		220			4,188		-			85,115

Reportable segment results as of and for the six months ended June 30, 2015 were as follows:

Total revenues (2)	$	780,216	$	323,413	$	37,086		$	106,598	$	(82,394	)	$	1,164,919
Segment Adjusted EBITDA Expense (3)	471,055		216,559		7,378			90,620		(76,156		)	709,456
Segment Adjusted EBITDA (4)(5)	299,967		101,380		(1,670		)	15,269		(6,239		)	408,707
Total assets (6)	1,192,634		580,059		397,395			320,353		(156,402		)	2,334,039
Capital expenditures (7)	68,208		37,439		(22		)	2,133		-			107,758

Reportable segment results as of and for the six months ended June 30, 2014 were as follows:

Total revenues (2)	$	821,025	$	301,280	$	7,868		$	15,728	$	(5,503	)	$	1,140,398
Segment Adjusted EBITDA Expense (3)	485,533		179,490		3,016			11,974		(5,503		)	674,510
Segment Adjusted EBITDA (4)(5)	329,508		115,959		(8,912		)	3,904		-			440,459
Total assets (6)	1,102,550		608,714		365,380			65,884		(1,549		)	2,140,979
Capital expenditures (7)	117,875		28,669		2,179			7,256		-			155,979

(1)

The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to the ARLP Partnership’s mining operations, coal sales and purchases between operations within different segments, sales of receivables to AROP Funding and insurance premiums paid to Wildcat Insurance.

(2)

Revenues included in the Other and Corporate column are primarily attributable to the Matrix Group revenues, Mt. Vernon transloading revenues, Wildcat Insurance revenues and brokerage coal sales.

(3)

Segment Adjusted EBITDA Expense includes operating expenses, outside coal purchases and other income. Transportation expenses are excluded as these expenses are passed through to the ARLP Partnership’s customers and consequently it does not realize any gain or loss on transportation revenues. We review Segment Adjusted EBITDA Expense per ton for cost trends.

The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014

Segment Adjusted EBITDA Expense	$	374,890		$	352,572		$	709,456		$	674,510
Outside coal purchases	(2		)	(2		)	(324		)	(4		)
Other income	177			323			295			629

Operating expenses (excluding depreciation, depletion and amortization)	$	375,065		$	352,893		$	709,427		$	675,135

(4)

Segment Adjusted EBITDA is defined as net income (prior to the allocation of noncontrolling interest) before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to the ARLP Partnership’s revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014

Consolidated Segment Adjusted EBITDA	$	199,807		$	232,709		$	408,707		$	440,459
General and administrative	(18,040		)	(20,268		)	(35,303		)	(38,167		)
Depreciation, depletion and amortization	(79,801		)	(67,052		)	(158,069		)	(133,893		)
Interest expense, net	(7,701		)	(8,331		)	(15,138		)	(16,005		)
Income tax expense	(8		)	-			(6		)	-

Net income	$	94,257		$	137,058		$	200,191		$	252,394

(5)

Includes equity in income (loss) of affiliates for the three and six months ended June 30, 2015 of $(22.0) and $(31.4) million, respectively, included in the White Oak segment and $(0.2) million and $(0.5) million, respectively, included in the Other and Corporate segment. Includes equity in income (loss) of affiliates for the three and six months ended June 30, 2014 of $(7.5) million and $(13.8) million, respectively, included in the White Oak segment and $0.1 million, for each period, included in the Other and Corporate segment.

(6)

Total assets for the White Oak and Other and Corporate segments include investments in affiliate of $190.5 million and $31.3 million, respectively, at June 30, 2015 and $174.9 million and $1.6 million, respectively, at June 30, 2014.

(7)

Capital expenditures shown above include funding to White Oak of $1.4 million for the six months ended June 30, 2014 and no funding for the three months ended June 30, 2015 and 2014 or for the six months ended June 30, 2015 for the acquisition and development of coal reserves (Note 8), which is described as “Payments to affiliate for acquisition and development of coal reserves” in our condensed consolidated statements of cash flow. Capital expenditures shown above exclude the Patriot acquisition on February 3, 2015 and MAC acquisition on January 1, 2015 (Note 4).

Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization)

The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014

Segment Adjusted EBITDA Expense	$	374,890		$	352,572		$	709,456		$	674,510
Outside coal purchases	(2		)	(2		)	(324		)	(4		)
Other income	177			323			295			629

Operating expenses (excluding depreciation, depletion and amortization)	$	375,065		$	352,893		$	709,427		$	675,135

Reconciliation of consolidated Segment Adjusted EBITDA to net income

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014

Consolidated Segment Adjusted EBITDA	$	199,807		$	232,709		$	408,707		$	440,459
General and administrative	(18,040		)	(20,268		)	(35,303		)	(38,167		)
Depreciation, depletion and amortization	(79,801		)	(67,052		)	(158,069		)	(133,893		)
Interest expense, net	(7,701		)	(8,331		)	(15,138		)	(16,005		)
Income tax expense	(8		)	-			(6		)	-

Net income	$	94,257		$	137,058		$	200,191		$	252,394