SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2017


	Illinois				Other and		Elimination
	Basin		Appalachia		Corporate		(1)		Consolidated
	(in thousands)
Three Months Ended June 30, 2017

Revenues - Outside	$	232,484	$	135,706	$	30,429	$	—	$	398,619
Revenues - Intercompany		17,089		—		3,895		(20,984)		—
Total revenues (2)		249,573		135,706		34,324		(20,984)		398,619

Segment Adjusted EBITDA Expense (3)		150,299		83,619		23,123		(18,762)		238,279
Segment Adjusted EBITDA (4)(5)		93,288		50,744		14,117		(2,221)		155,928
Capital expenditures		22,927		13,261		983		—		37,171

Three Months Ended June 30, 2016

Revenues - Outside	$	285,557	$	136,409	$	17,075	$	—	$	439,041
Revenues - Intercompany		10,323		1,625		4,393		(16,341)		—
Total revenues (2)		295,880		138,034		21,468		(16,341)		439,041

Segment Adjusted EBITDA Expense (3)		161,045		88,003		16,165		(13,427)		251,786
Segment Adjusted EBITDA (4)		130,846		48,532		5,271		(2,913)		181,736
Capital expenditures		12,357		4,348		164		—		16,869

Six Months Ended June 30, 2017

Revenues - Outside	$	496,834	$	305,950	$	56,840	$	—	$	859,624
Revenues - Intercompany		28,294		—		8,008		(36,302)		—
Total revenues (2)		525,128		305,950		64,848		(36,302)		859,624

Segment Adjusted EBITDA Expense (3)		311,736		178,936		40,961		(31,860)		499,773
Segment Adjusted EBITDA (4)(5)		199,551		123,931		30,503		(4,442)		349,543
Total assets (6)		1,445,624		473,699		373,566		(111,090)		2,181,799
Capital expenditures		40,116		26,041		1,360		—		67,517

Six Months Ended June 30, 2016

Revenues - Outside	$	561,575	$	252,554	$	37,637	$	—	$	851,766
Revenues - Intercompany		22,181		3,806		8,897		(34,884)		—
Total revenues (2)		583,756		256,360		46,534		(34,884)		851,766

Segment Adjusted EBITDA Expense (3)		339,688		167,732		36,911		(29,057)		515,274
Segment Adjusted EBITDA (4)		235,618		85,202		9,395		(5,827)		324,388
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

(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 and six months ended June 30, 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				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(in thousands)
Segment Adjusted EBITDA Expense	$	238,279	$	251,786	$	499,773	$	515,274
Other income		389		161		1,687		252
Operating expenses (excluding depreciation, depletion and amortization)	$	238,668	$	251,947	$	501,460	$	515,526

(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, general and administrative expenses and debt extinguishment loss. 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 and six months ended June 30, 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				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(in thousands)
Consolidated Segment Adjusted EBITDA	$	155,928	$	181,736	$	349,543	$	324,388
General and administrative		(15,324)		(18,635)		(31,771)		(36,188)
Depreciation, depletion and amortization		(59,020)		(73,697)		(124,147)		(144,304)
Interest expense, net		(10,559)		(7,766)		(18,050)		(15,377)
Debt extinguishment loss		(8,148)		—		(8,148)		—
Income tax (expense) benefit		(5)		(6)		7		2
Net income	$	62,872	$	81,632	$	167,434	$	128,521

(5)

Includes equity in income of affiliates for the three and six months ended June 30, 2017 of $2.9 million and $6.6 million, respectively, in Other and Corporate.

(6)

Total assets for Other and Corporate include investments in affiliates of $149.6 million and $96.7 million at June 30, 2017 and 2016, respectively.

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,
	2017		2016		2017		2016
	(in thousands)
Segment Adjusted EBITDA Expense	$	238,279	$	251,786	$	499,773	$	515,274
Other income		389		161		1,687		252
Operating expenses (excluding depreciation, depletion and amortization)	$	238,668	$	251,947	$	501,460	$	515,526

Reconciliation of consolidated Segment Adjusted EBITDA to net income


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(in thousands)
Consolidated Segment Adjusted EBITDA	$	155,928	$	181,736	$	349,543	$	324,388
General and administrative		(15,324)		(18,635)		(31,771)		(36,188)
Depreciation, depletion and amortization		(59,020)		(73,697)		(124,147)		(144,304)
Interest expense, net		(10,559)		(7,766)		(18,050)		(15,377)
Debt extinguishment loss		(8,148)		—		(8,148)		—
Income tax (expense) benefit		(5)		(6)		7		2
Net income	$	62,872	$	81,632	$	167,434	$	128,521