7. NONCONTROLLING INTERESTS

Our noncontrolling ownership interest in consolidated subsidiaries is presented in the condensed consolidated balance sheet within partners' capital as a separate component from the limited partners' equity. In addition, consolidated net income includes earnings attributable to both the limited partners' and the noncontrolling interests.

The noncontrolling interests balance is comprised of non-affiliate and affiliate ownership interests in the net assets of the ARLP Partnership that we consolidate (See Note 1 – Organization and Presentation) and an affiliate ownership interest in Cavalier Minerals (See Note 8 – Variable Interest Entities).

The following table summarizes the components of noncontrolling interests recorded in Partners' Capital for the periods indicated:


	September 30,		December 31,
	2017		2016
	(in thousands)
Noncontrolling interests reflected in Partners' Capital:
Affiliate (SGP)	$	(303,818)	$	(303,818)
Non-Affiliates (ARLP's non-affiliate limited partners)		871,432		836,380
Affiliate (Cavalier Minerals) (See Note 8 - Variable Interest Entities)		5,371		5,550
Accumulated other comprehensive loss attributable to noncontrolling interests		(12,424)		(21,990)
Total noncontrolling interests	$	560,561	$	516,122

The noncontrolling interest designated as Affiliate (SGP) represents SGP's limited partner interest in ARLP and, prior to the Exchange Transaction, SGP's 0.01% general partner interest in ARLP and 0.01% general partner interest in the Intermediate Partnership (See Note 1 – Organization and Presentation).

The noncontrolling interest designated as Non-Affiliates represents the limited partners' interest in ARLP controlled through the common unit ownership, excluding the 87,188,338 common units of ARLP held directly and indirectly by us (See Note 1 – Organization and Presentation). The total obligation associated with ARLP's Long-Term Incentive Plan ("ARLP LTIP"), MGP Amended and Restated Deferred Compensation Plan for Directors ("MGP Deferred Compensation Plan") and the Supplemental Executive Retirement Plan ("SERP") are also included in the Non-Affiliates component of noncontrolling interest (See Note 11 – Compensation Plans).

The following table summarizes net income attributable to each component of the noncontrolling interests for the periods indicated:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	(in thousands)
Net income attributable to noncontrolling interest:
Affiliate (SGP)	$	3	$	14	$	23	$	32
Non-Affiliates (ARLP's non-affiliate limited partners)		21,663		40,279		91,213		92,571
Affiliates (Cavalier Minerals)		155		44		425		40
	$	21,821	$	40,337	$	91,661	$	92,643

The following table summarizes cash distributions paid by ARLP to each component of the noncontrolling interests for the periods indicated:


	Nine Months Ended
	September 30,
	2017		2016
	(in thousands)
Distributions paid to noncontrolling interests:
Affiliate (SGP) (1)	$	23	$	38
Non-Affiliates (ARLP's non-affiliate limited partners) (1)		62,120		69,642
	$	62,143	$	69,680

(1)

Distributions paid to noncontrolling interests, in the table above, represent ARLP's quarterly distributions in accordance with the ARLP partnership agreement.

The Affiliate (SGP) component of noncontrolling interests represents SGP's cumulative investment basis in the net assets of the ARLP Partnership. SGP's investment basis as of September 30, 2017 and December 31, 2016 reflects various transactions associated with the ARLP Partnership's formation and initial public offering in 1999, the cumulative amount of nominal ARLP Partnership income allocations and distributions to SGP, nominal contributions by SGP to ARLP and the Intermediate Partnership to maintain its previous general partner interests in the ARLP Partnership and nominal net income allocations related to SGP's new limited partner interests obtained in the recent Exchange Transaction (See Note 1 – Organization and Presentation).

The following tables present the change in Partners' Capital for the nine months ended September 30, 2017 and 2016:


	Alliance Holdings GP, L.P.
			Accumulated Other
	Limited Partners'		Comprehensive		Noncontrolling		Total Partners'
	Capital		Income (Loss)		Interest		Capital
	(in thousands)

Balance at January 1, 2017	$	598,077	$	(16,550)	$	516,122	$	1,097,649
Net income		136,716		—		91,661		228,377
Other comprehensive income		—		468		378		846
Other comprehensive income reclassification resulting from the Exchange Transaction		—		(9,188)		9,188		—
Settlement of directors deferred compensation		(26)		—		—		(26)
Vesting of ARLP Long-Term Incentive Plan		—		—		(2,988)		(2,988)
Exchange Transaction fees		(2,342)		—		—		(2,342)
Common unit-based compensation		(63)		—		8,947		8,884
Distributions on ARLP common unit-based compensation		—		—		(2,392)		(2,392)
Contributions to consolidated company from affiliate noncontrolling interest		—		—		251		251
Distributions paid by consolidated company		—		—		(855)		(855)
Contributions by limited partner - affiliate		800		—		—		800
Distributions to AHGP Partners		(109,548)		—		—		(109,548)
Distributions paid by consolidated partnership to noncontrolling interest		—		—		(59,751)		(59,751)
Balance at September 30, 2017	$	623,614	$	(25,270)	$	560,561	$	1,158,905


	Alliance Holdings GP, L.P.
			Accumulated Other
	Limited Partners'		Comprehensive		Noncontrolling		Total Partners'
	Capital		Income (Loss)		Interest		Capital
	(in thousands)

Balance at January 1, 2016	$	567,259	$	(14,875)	$	441,748	$	994,132
Net income		124,722		—		92,643		217,365
Other comprehensive income		—		199		184		383
Settlement of directors deferred compensation		(164)		—		(335)		(499)
Vesting of ARLP Long-Term Incentive Plan		—		—		(1,001)		(1,001)
Common unit-based compensation		237		—		9,802		10,039
Distributions on ARLP common unit-based compensation		—		—		(2,673)		(2,673)
Contributions to consolidated company from affiliate noncontrolling interest		—		—		2,557		2,557
Distributions paid by consolidated company		—		—		(60)		(60)
Distributions to AHGP Partners		(123,318)		—		—		(123,318)
Distributions paid by consolidated partnership to noncontrolling interest		—		—		(67,007)		(67,007)
Balance at September 30, 2016	$	568,736	$	(14,676)	$	475,858	$	1,029,918