SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2017


	Illinois				Other and		Elimination
	Basin		Appalachia		Corporate		(1)		Consolidated
	(in thousands)
Three Months Ended March 31, 2017

Revenues - Outside	$	264,350	$	170,244	$	26,411	$	—	$	461,005
Revenues - Intercompany		11,205		—		4,113		(15,318)		—
Total revenues (2)		275,555		170,244		30,524		(15,318)		461,005

Segment Adjusted EBITDA Expense (3)		161,437		95,317		17,838		(13,098)		261,494
Segment Adjusted EBITDA (4)(5)		106,263		73,187		16,386		(2,221)		193,615
Total assets (6)		1,426,551		479,375		420,876		(117,989)		2,208,813
Capital expenditures		17,189		12,780		377		—		30,346

Three Months Ended March 31, 2016

Revenues - Outside	$	276,018	$	116,145	$	20,562	$	—	$	412,725
Revenues - Intercompany		11,858		2,181		4,504		(18,543)		—
Total revenues (2)		287,876		118,326		25,066		(18,543)		412,725

Segment Adjusted EBITDA Expense (3)		178,643		79,729		20,746		(15,630)		263,488
Segment Adjusted EBITDA (4)		104,772		36,669		4,125		(2,914)		142,652
Total assets (6)		1,685,134		519,223		302,575		(132,864)		2,374,068
Capital expenditures		18,014		12,663		1,056		—		31,733

(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, 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. Results presented for Segment Adjusted EBITDA Expense for the three months ended March 31, 2016 have been recast to reflect a reclassification of depreciation and depletion capitalized into coal inventory as adjustments to Depreciation, depletion and amortization rather than 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):


	Three Months Ended
	March 31,
	2017		2016
	(in thousands)
Segment Adjusted EBITDA Expense	$	261,494	$	263,488
Other income		1,298		91
Operating expenses (excluding depreciation, depletion and amortization)	$	262,792	$	263,579

(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. Results presented for Segment Adjusted EBITDA for the three months ended March 31, 2016 have been recast to reflect a reclassification of depreciation and depletion capitalized into coal inventory as adjustments to Depreciation, depletion and amortization rather than Operating expenses (excluding depreciation, depletion and amortization). Consolidated Segment Adjusted EBITDA is reconciled to net income as follows:


	Three Months Ended
	March 31,
	2017		2016
	(in thousands)
Consolidated Segment Adjusted EBITDA	$	193,615	$	142,652
General and administrative		(16,447)		(17,553)
Depreciation, depletion and amortization		(65,127)		(70,607)
Interest expense, net		(7,491)		(7,611)
Income tax benefit		12		8
Net income	$	104,562	$	46,889

(5)

Includes equity in income of affiliates for the three months ended March 31, 2017 of $3.7 million in Other and Corporate.

(6)

Total assets for Other and Corporate include investments in affiliates of $147.1 million and $84.2 million at March 31, 2017 and 2016, respectively.

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


	Three Months Ended
	March 31,
	2017		2016
	(in thousands)
Segment Adjusted EBITDA Expense	$	261,494	$	263,488
Other income		1,298		91
Operating expenses (excluding depreciation, depletion and amortization)	$	262,792	$	263,579

Reconciliation of consolidated Segment Adjusted EBITDA to net income


	Three Months Ended
	March 31,
	2017		2016
	(in thousands)
Consolidated Segment Adjusted EBITDA	$	193,615	$	142,652
General and administrative		(16,447)		(17,553)
Depreciation, depletion and amortization		(65,127)		(70,607)
Interest expense, net		(7,491)		(7,611)
Income tax benefit		12		8
Net income	$	104,562	$	46,889