SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2017


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

Revenues - Outside	$	266,931	$	152,865	$	33,291	$	—	$	453,087
Revenues - Intercompany		18,446		1,390		3,977		(23,813)		—
Total revenues (2)		285,377		154,255		37,268		(23,813)		453,087

Segment Adjusted EBITDA Expense (3)		192,465		97,316		26,421		(21,591)		294,611
Segment Adjusted EBITDA (4)		86,377		55,465		17,445		(2,222)		157,065
Capital expenditures		26,328		11,126		484		—		37,938

Three Months Ended September 30, 2016

Revenues - Outside	$	360,221	$	154,852	$	36,893	$	—	$	551,966
Revenues - Intercompany		18,267		—		4,826		(23,093)		—
Total revenues (2)		378,488		154,852		41,719		(23,093)		551,966

Segment Adjusted EBITDA Expense (3)		227,526		94,201		26,664		(20,279)		328,112
Segment Adjusted EBITDA (4)		145,424		58,497		16,160		(2,814)		217,267
Capital expenditures		10,893		10,306		466		—		21,665

Nine Months Ended September 30, 2017

Revenues - Outside	$	763,765	$	458,815	$	90,131	$	—	$	1,312,711
Revenues - Intercompany		46,740		1,390		11,985		(60,115)		—
Total revenues (2)		810,505		460,205		102,116		(60,115)		1,312,711

Segment Adjusted EBITDA Expense (3)		504,201		276,252		67,382		(53,451)		794,384
Segment Adjusted EBITDA (4)		285,928		179,396		47,948		(6,664)		506,608
Total assets		1,406,831		468,580		458,421		(123,073)		2,210,759
Capital expenditures		66,444		37,167		1,844		—		105,455

Nine Months Ended September 30, 2016

Revenues - Outside	$	921,796	$	407,406	$	74,530	$	—	$	1,403,732
Revenues - Intercompany		40,448		3,806		13,723		(57,977)		—
Total revenues (2)		962,244		411,212		88,253		(57,977)		1,403,732

Segment Adjusted EBITDA Expense (3)		567,214		261,933		63,575		(49,336)		843,386
Segment Adjusted EBITDA (4)		381,042		143,699		25,555		(8,641)		541,655
Total assets		1,541,513		480,920		374,810		(148,438)		2,248,805
Capital expenditures		41,264		27,317		1,686		—		70,267

(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 nine months ended September 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				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	(in thousands)
Segment Adjusted EBITDA Expense	$	294,611	$	328,112	$	794,384	$	843,386
Outside coal purchases		—		(1,514)		—		(1,514)
Other income		774		293		2,461		545
Operating expenses (excluding depreciation, depletion and amortization)	$	295,385	$	326,891	$	796,845	$	842,417

(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 nine months ended September 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				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	(in thousands)
Consolidated Segment Adjusted EBITDA	$	157,065	$	217,267	$	506,608	$	541,655
General and administrative		(15,389)		(18,987)		(47,160)		(55,175)
Depreciation, depletion and amortization		(69,962)		(101,432)		(194,109)		(245,736)
Interest expense, net		(10,767)		(7,998)		(28,817)		(23,375)
Debt extinguishment loss		—		—		(8,148)		—
Income tax (expense) benefit		(4)		(6)		3		(4)
Net income	$	60,943	$	88,844	$	228,377	$	217,365

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	(in thousands)
Segment Adjusted EBITDA Expense	$	294,611	$	328,112	$	794,384	$	843,386
Outside coal purchases		—		(1,514)		—		(1,514)
Other income		774		293		2,461		545
Operating expenses (excluding depreciation, depletion and amortization)	$	295,385	$	326,891	$	796,845	$	842,417

Reconciliation of consolidated Segment Adjusted EBITDA to net income


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	(in thousands)
Consolidated Segment Adjusted EBITDA	$	157,065	$	217,267	$	506,608	$	541,655
General and administrative		(15,389)		(18,987)		(47,160)		(55,175)
Depreciation, depletion and amortization		(69,962)		(101,432)		(194,109)		(245,736)
Interest expense, net		(10,767)		(7,998)		(28,817)		(23,375)
Debt extinguishment loss		—		—		(8,148)		—
Income tax (expense) benefit		(4)		(6)		3		(4)
Net income	$	60,943	$	88,844	$	228,377	$	217,365