SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2016

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

Three months ended June 30, 2016

Total revenues (2)	$	295,880	$	138,034	$	21,468	$	(16,341)	$	439,041
Segment Adjusted EBITDA Expense (3)	154,175		89,426		16,165		(13,428)		246,338
Segment Adjusted EBITDA (4)	137,716		47,110		5,271		(2,913)		187,184
Capital expenditures	12,357		4,348		164		-		16,869

Three months ended June 30, 2015 (recast)

Total revenues (2)	$	425,580	$	167,165	$	51,590	$	(39,716)	$	604,619
Segment Adjusted EBITDA Expense (3)	248,569		118,744		44,137		(36,560)		374,890
Segment Adjusted EBITDA (4)(5)	150,259		45,547		7,158		(3,157)		199,807
Capital expenditures	34,429		21,701		1,298		-		57,428

Six months ended June 30, 2016

Total revenues (2)	$	583,756	$	256,360	$	46,534	$	(34,884)	$	851,766
Segment Adjusted EBITDA Expense (3)	325,254		166,442		36,911		(29,057)		499,550
Segment Adjusted EBITDA (4)	250,052		86,492		9,395		(5,827)		340,112
Total assets (6)	1,658,518		516,584		363,448		(165,815)		2,372,735
Capital expenditures	30,371		17,011		1,220		-		48,602

Six months ended June 30, 2015 (recast)

Total revenues (2)	$	817,302	$	323,413	$	106,598	$	(82,394)	$	1,164,919
Segment Adjusted EBITDA Expense (3)	478,433		216,559		90,620		(76,156)		709,456
Segment Adjusted EBITDA (4)(5)	298,297		101,380		15,269		(6,239)		408,707
Total assets (6)	1,590,029		580,059		318,363		(156,402)		2,332,049
Capital expenditures (7)	68,186		37,439		2,133		-		107,758

(1)

The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group and MAC 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, MAC 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):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
	(in thousands)

Segment Adjusted EBITDA Expense	$	246,338	$	374,890	$	499,550	$	709,456
Outside coal purchases	-		(2)		-		(324)
Other income	161		177		252		295

Operating expenses (excluding depreciation, depletion and amortization)	$	246,499	$	375,065	$	499,802	$	709,427

(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:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
	(in thousands)

Consolidated Segment Adjusted EBITDA	$	187,184	$	199,807	$	340,112	$	408,707
General and administrative	(18,635)		(18,040)		(36,188)		(35,303)
Depreciation, depletion and amortization	(79,145)		(79,801)		(160,028)		(158,069)
Interest expense, net	(7,766)		(7,701)		(15,377)		(15,138)
Income tax expense (benefit)	(6)		(8)		2		(6)

Net income	$	81,632	$	94,257	$	128,521	$	200,191

(5)

Includes equity in loss of affiliates for the three and six months ended June 30, 2015 of $22.0 million and $31.4 million, respectively, in the Illinois Basin segment.

(6)

Total assets for Other and Corporate include investments in affiliate of $96.7 million at June 30, 2016. Total assets at June 30, 2015 for the Illinois Basin segment and Other and Corporate include investments in affiliates of $190.5 million and $31.3 million, respectively.

(7)

Capital expenditures shown above exclude the Patriot acquisition on February 3, 2015 and the MAC acquisition on January 1, 2015.

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
	(in thousands)

Segment Adjusted EBITDA Expense	$	246,338	$	374,890	$	499,550	$	709,456
Outside coal purchases	-		(2)		-		(324)
Other income	161		177		252		295

Operating expenses (excluding depreciation, depletion and amortization)	$	246,499	$	375,065	$	499,802	$	709,427

Reconciliation of consolidated Segment Adjusted EBITDA to net income

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
	(in thousands)

Consolidated Segment Adjusted EBITDA	$	187,184	$	199,807	$	340,112	$	408,707
General and administrative	(18,635)		(18,040)		(36,188)		(35,303)
Depreciation, depletion and amortization	(79,145)		(79,801)		(160,028)		(158,069)
Interest expense, net	(7,766)		(7,701)		(15,377)		(15,138)
Income tax expense (benefit)	(6)		(8)		2		(6)

Net income	$	81,632	$	94,257	$	128,521	$	200,191