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SEGMENT INFORMATION | 12 Months Ended
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Dec. 31, 2019
SEGMENT INFORMATION |
SEGMENT INFORMATION | 23.SEGMENT INFORMATION ​ We operate in the United States as a diversified natural resource company that generates income from the production and marketing of coal to major domestic and international utilities and industrial users as well as income from oil & gas mineral interests. We aggregate multiple operating segments into three reportable segments, Illinois Basin, Appalachia, and Minerals. We also have an "all other" category referred to as Other and Corporate. Our two coal reportable segments correspond to major coal producing regions in the eastern United States with similar economic characteristics including coal quality, geology, coal marketing opportunities, mining and transportation methods and regulatory issues. The two coal segments include seven mining complexes operating in Illinois, Indiana, Kentucky, Maryland and West Virginia and a coal loading terminal in Indiana on the Ohio River. The Minerals reportable segment aggregates our oil & gas mineral interests which are located primarily in the Permian (Delaware and Midland), Anadarko (SCOOP/STACK) and Williston (Bakken) Basins. As discussed in Note 1 – Organization and Presentation, as a result of the AllDale Acquisition discussed in Note 3 – Acquisitions, we realigned our reportable segments in 2019 to include our oil & gas mineral interests within a new Minerals reportable segment and have recast prior periods to reflect that realignment. ​ The Illinois Basin reportable segment includes our operating mining complexes (a) Gibson County Coal, LLC's mining complex, which includes the Gibson North and Gibson South mines, (b) Warrior Coal, LLC's mining complex, (c) River View's mining complex and (d) the Hamilton mining complex. The Illinois Basin reportable segment also includes our operating Mt. Vernon coal loading terminal in Indiana on the Ohio River. The Gibson North mine was idled in the fourth quarter of 2019 in response to market conditions. ​ The Illinois Basin reportable segment also includes MAC and other support services as well as non-operating mining complexes (a) Webster County Coal, LLC's Dotiki mining complex, which ceased production in August 2019, (b) White County Coal, LLC's Pattiki mining complex, (c) the Hopkins County Coal mining complex, and (d) Sebree Mining, LLC's mining complex. ​ The Appalachia reportable segment includes our operating mining complexes (a) the Mettiki mining complex, (b) the Tunnel Ridge mining complex and (c) the MC Mining mining complex. The Mettiki mining complex includes Mettiki Coal (WV), LLC's Mountain View mine and Mettiki Coal, LLC's preparation plant. The Appalachia reportable segment also includes the Penn Ridge reserves. ​ The Minerals reportable segment includes oil & gas mineral interests held by AR Midland and AllDale I & II and includes Alliance Minerals' equity interests in both AllDale III (Note 12 – Investments) and Cavalier Minerals. AR Midland acquired its mineral interest in the Wing Acquisition (Note 3 – Acquisitions). ​ Other and Corporate includes marketing and administrative activities, Matrix Design Group, LLC and its subsidiaries ("Matrix Design"), Alliance Design Group, LLC ("Alliance Design") (collectively, Matrix Design and Alliance Design referred to as the "Matrix Group"), Alliance Coal's coal brokerage activity and Alliance Minerals' prior equity investment in Kodiak. In February 2019, Kodiak redeemed our equity investment (see Note 12 – Investments). In addition, Other and Corporate includes certain Alliance Resource Properties' land and mineral interest activities, Pontiki Coal, LLC's workers' compensation and pneumoconiosis liabilities, Wildcat Insurance, which assists the ARLP Partnership with its insurance requirements, and AROP Funding and Alliance Finance (both discussed in Note 7 – Long-Term Debt). ​ Reportable segment results are presented below. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Illinois |  | ​ |  | ​ |  | Other and |  | Elimination |  | ​ | ​ |
​ |  | Basin |  | Appalachia |  | Minerals |  | Corporate |  | (1) |  | Consolidated |
​ | ​ | (in thousands) |
Year Ended December 31, 2019 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenues - Outside | ​ | $ | 1,219,618 | ​ | $ | 644,389 | ​ | $ | 53,036 | ​ | $ | 44,677 | ​ | $ | — | ​ | $ | 1,961,720 | ​
Revenues - Intercompany | ​ | ​ | 16,690 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 12,173 | ​ | ​ | (28,863) | ​ | ​ | — | ​
Total revenues (2) | ​ | ​ | 1,236,308 | ​ | ​ | 644,389 | ​ | ​ | 53,036 | ​ | ​ | 56,850 | ​ | ​ | (28,863) | ​ | ​ | 1,961,720 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Segment Adjusted EBITDA Expense (3) | ​ |  | 756,423 | ​ | ​ | 423,623 | ​ | ​ | 7,811 | ​ | ​ | 36,845 | ​ | ​ | (19,806) | ​ |  | 1,204,896 | ​
Segment Adjusted EBITDA (4) | ​ |  | 385,200 | ​ | ​ | 215,950 | ​ | ​ | 46,997 | ​ | ​ | 32,911 | ​ | ​ | (9,057) | ​ |  | 672,001 | ​
Total assets | ​ |  | 1,373,516 | ​ | ​ | 500,027 | ​ | ​ | 643,213 | ​ | ​ | 541,261 | ​ | ​ | (471,323) | ​ |  | 2,586,694 | ​
Capital expenditures (5) | ​ |  | 189,270 | ​ | ​ | 111,739 | ​ | ​ | — | ​ | ​ | 4,849 | ​ | ​ | — | ​ |  | 305,858 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year Ended December 31, 2018 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenues - Outside | ​ | $ | 1,289,898 | ​ | $ | 643,898 | ​ | $ | — | ​ | $ | 69,061 | ​ | $ | — | ​ | $ | 2,002,857 | ​
Revenues - Intercompany | ​ | ​ | 31,191 | ​ | ​ | 67 | ​ | ​ | — | ​ | ​ | 12,431 | ​ | ​ | (43,689) | ​ | ​ | — | ​
Total revenues (2) | ​ | ​ | 1,321,089 | ​ | ​ | 643,965 | ​ | ​ | — | ​ | ​ | 81,492 | ​ | ​ | (43,689) | ​ | ​ | 2,002,857 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Segment Adjusted EBITDA Expense (3) | ​ |  | 796,370 | ​ |  | 398,243 | ​ |  | — | ​ |  | 52,321 | ​ |  | (35,134) | ​ |  | 1,211,800 | ​
Segment Adjusted EBITDA (4) | ​ |  | 417,773 | ​ |  | 240,286 | ​ |  | 21,323 | ​ |  | 44,864 | ​ |  | (8,555) | ​ |  | 715,691 | ​
Total assets | ​ |  | 1,380,912 | ​ |  | 440,518 | ​ |  | 161,312 | ​ |  | 589,010 | ​ |  | (177,004) | ​ |  | 2,394,748 | ​
Capital expenditures | ​ |  | 166,468 | ​ |  | 64,037 | ​ |  | — | ​ |  | 2,975 | ​ |  | — | ​ |  | 233,480 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year Ended December 31, 2017 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenues - Outside | ​ | $ | 1,069,767 | ​ | $ | 623,720 | ​ | $ | — | ​ | $ | 102,733 | ​ | $ | — | ​ | $ | 1,796,220 | ​
Revenues - Intercompany | ​ | ​ | 56,097 | ​ | ​ | 2,321 | ​ | ​ | — | ​ | ​ | 12,016 | ​ | ​ | (70,434) | ​ | ​ | — | ​
Total revenues (2) | ​ | ​ | 1,125,864 | ​ | ​ | 626,041 | ​ | ​ | — | ​ | ​ | 114,749 | ​ | ​ | (70,434) | ​ | ​ | 1,796,220 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Segment Adjusted EBITDA Expense (3) | ​ |  | 692,199 | ​ |  | 385,802 | ​ |  | — | ​ | ​ | 75,851 | ​ | ​ | (61,665) | ​ |  | 1,092,187 | ​
Segment Adjusted EBITDA (4) | ​ |  | 398,080 | ​ |  | 234,124 | ​ |  | 13,297 | ​ | ​ | 45,296 | ​ | ​ | (8,769) | ​ |  | 682,028 | ​
Total assets | ​ |  | 1,437,627 | ​ |  | 470,892 | ​ |  | 147,970 | ​ | ​ | 349,918 | ​ | ​ | (187,036) | ​ |  | 2,219,371 | ​
Capital expenditures | ​ |  | 94,374 | ​ |  | 48,358 | ​ |  | — | ​ | ​ | 2,356 | ​ | ​ | — | ​ |  | 145,088 | ​
(1) | The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to our mining operations, coal sales and purchases between operations within different segments, sales of receivables to AROP Funding, financing between segments and insurance premiums paid to Wildcat Insurance.
​
(2) | Revenues included in the Other and Corporate column are primarily attributable to the outside and affiliate revenues at the Matrix Group and coal brokerage activities. In additions, Other and Corporate includes affiliate revenues for administrative and Wildcat Insurance services.
​
(3) | Segment Adjusted EBITDA Expense includes operating expenses, coal purchases and other income. Transportation expenses are excluded as transportation revenues are recognized in an amount equal to transportation expenses when title passes to the customer.
​ The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to Operating expenses (excluding depreciation, depletion and amortization): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31, |
​ |  | 2019 |  | 2018 |  | 2017 |
​ | ​ | (in thousands) | ​
Segment Adjusted EBITDA Expense | ​ | $ | 1,204,896 | ​ | $ | 1,211,800 | ​ | $ | 1,092,187 | ​
Outside coal purchases | ​ |  | (23,357) | ​ |  | (1,466) | ​ |  | — | ​
Other income (expense) | ​ |  | 561 | ​ |  | (2,621) | ​ |  | (332) | ​
Operating expenses (excluding depreciation, depletion and amortization) | ​ | $ | 1,182,100 | ​ | $ | 1,207,713 | ​ | $ | 1,091,855 | ​
​
(4) | Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization, general and administrative expense, settlement gain, debt extinguishment loss, asset impairment and acquisition gain. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows:
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31, |
​ |  | 2019 |  | 2018 |  | 2017 |
​ | ​ | (in thousands) | ​
Consolidated Segment Adjusted EBITDA | ​ | $ | 672,001 | ​ | $ | 715,691 |  | $ | 682,028 | ​
General and administrative | ​ |  | (72,997) | ​ |  | (68,298) | ​ |  | (61,760) | ​
Depreciation, depletion and amortization | ​ |  | (309,075) | ​ |  | (280,225) | ​ |  | (268,981) | ​
Settlement gain | ​ | ​ | — | ​ | ​ | 80,000 | ​ | ​ | — | ​
Asset impairment | ​ |  | (15,190) | ​ |  | (40,483) | ​ |  | — | ​
Interest expense, net | ​ |  | (45,496) | ​ |  | (40,059) | ​ |  | (39,291) | ​
Acquisition gain | ​ | ​ | 177,043 | ​ | ​ | — | ​ |  | — | ​
Debt extinguishment loss | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (8,148) | ​
Income tax (expense) benefit | ​ |  | 211 | ​ |  | (22) | ​ |  | (210) | ​
Acquisition gain attributable to noncontrolling interest | ​ | ​ | (7,083) | ​ | ​ | — | ​ | ​ | — | ​
Net income attributable to ARLP | ​ | $ | 399,414 | ​ | $ | 366,604 | ​ | $ | 303,638 | ​
Noncontrolling interest | ​ | ​ | 7,512 | ​ | ​ | 866 | ​ | ​ | 563 | ​
Net income | ​ | $ | 406,926 | ​ | $ | 367,470 | ​ | $ | 304,201 | ​
​ .
(5) | Capital Expenditures shown exclude the AllDale Acquisition on January 3, 2019 and the Wing Acquisition on August 2, 2019 (Note 3 – Acquisitions).

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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