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SEGMENT INFORMATION | 3 Months Ended
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Mar. 31, 2020
SEGMENT INFORMATION |
SEGMENT INFORMATION | 18.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. We have no operations within our Minerals reportable segment other than receiving royalties and lease bonuses for our oil & gas mineral interests. ​ The Illinois Basin reportable segment includes currently operating mining complexes (a) Gibson County Coal, LLC's ("Gibson") mining complex, which includes the Gibson South mine, (b) Warrior Coal, LLC's ("Warrior") mining complex, (c) River View Coal, LLC's ("River View") mining complex and (d) Hamilton's mining complex. The Illinois Basin reportable segment also includes our currently operating Mt. Vernon Transfer Terminal, LLC ("Mt. Vernon") coal loading terminal in Indiana on the Ohio River. ​ The Illinois Basin reportable segment also includes Mid-America Carbonates, LLC ("MAC") and other support services as well as non-operating mining complexes (a) Gibson North mine, which ceased production in the fourth quarter of 2019, (b) Webster County Coal, LLC's Dotiki mining complex, which ceased production in August 2019, (c) White County Coal, LLC's Pattiki mining complex, (d) Hopkins County Coal, LLC's mining complex, and (e) Sebree Mining, LLC's mining complex. ​ The Appalachia reportable segment includes currently operating mining complexes (a) Mettiki mining complex, (b) Tunnel Ridge, LLC mining complex and (c) MC Mining, LLC ("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 assets, which are primarily coal mineral interests. ​ 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 11 – Investments) and Cavalier Minerals. AR Midland acquired its mineral interest in the Wing Acquisition (Note 3 – Acquisition). ​ 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 11 – Investments). In addition, Other and Corporate includes certain Alliance Resource Properties' land and coal 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 9 – Long-Term Debt). ​ Reportable segment results are presented below. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Illinois |  | ​ |  | ​ |  | Other and |  | Elimination |  | ​ | ​ |
​ |  | Basin |  | Appalachia |  | Minerals |  | Corporate |  | (1) |  | Consolidated |
​ | ​ | (in thousands) |
Three Months Ended March 31, 2020 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenues - Outside | ​ | $ | 203,872 | ​ | $ | 128,103 | ​ | $ | 14,263 | ​ | $ | 4,525 | ​ | $ | — | ​ | $ | 350,763 | ​
Revenues - Intercompany | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,859 | ​ | ​ | (2,859) | ​ | ​ | — | ​
Total revenues (2) | ​ | ​ | 203,872 | ​ | ​ | 128,103 | ​ | ​ | 14,263 | ​ | ​ | 7,384 | ​ | ​ | (2,859) | ​ | ​ | 350,763 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Segment Adjusted EBITDA Expense (3) | ​ |  | 149,987 | ​ | ​ | 79,710 | ​ | ​ | 883 | ​ | ​ | 4,642 | ​ | ​ | (524) | ​ |  | 234,698 | ​
Segment Adjusted EBITDA (4) | ​ |  | 50,029 | ​ | ​ | 47,510 | ​ | ​ | 13,755 | ​ | ​ | 2,742 | ​ | ​ | (2,335) | ​ |  | 111,701 | ​
Total assets | ​ |  | 1,189,486 | ​ | ​ | 514,988 | ​ | ​ | 637,774 | ​ | ​ | 496,743 | ​ | ​ | (442,570) | ​ |  | 2,396,421 | ​
Capital expenditures | ​ |  | 26,229 | ​ | ​ | 23,571 | ​ | ​ | — | ​ | ​ | 564 | ​ | ​ | — | ​ |  | 50,364 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Three Months Ended March 31, 2019 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenues - Outside | ​ | $ | 345,399 | ​ | $ | 159,404 | ​ | $ | 10,728 | ​ | $ | 11,071 | ​ | $ | — | ​ | $ | 526,602 | ​
Revenues - Intercompany | ​ | ​ | 3,997 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,091 | ​ | ​ | (7,088) | ​ | ​ | — | ​
Total revenues (2) | ​ | ​ | 349,396 | ​ | ​ | 159,404 | ​ | ​ | 10,728 | ​ | ​ | 14,162 | ​ | ​ | (7,088) | ​ | ​ | 526,602 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Segment Adjusted EBITDA Expense (3) | ​ |  | 197,422 | ​ |  | 99,749 | ​ |  | 1,827 | ​ |  | 8,706 | ​ |  | (4,847) | ​ |  | 302,857 | ​
Segment Adjusted EBITDA (4) | ​ |  | 122,737 | ​ |  | 58,655 | ​ |  | 9,132 | ​ |  | 18,361 | ​ |  | (2,241) | ​ |  | 206,644 | ​
Total assets | ​ |  | 1,434,235 | ​ |  | 468,904 | ​ |  | 510,076 | ​ |  | 450,547 | ​ |  | (378,632) | ​ |  | 2,485,130 | ​
Capital expenditures (5) | ​ |  | 48,454 | ​ |  | 33,346 | ​ |  | — | ​ |  | 2,243 | ​ |  | — | ​ |  | 84,043 | ​
(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 Matrix Group revenues, administrative service revenues from affiliates, 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 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): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended | ​
​ | ​ | March 31, | ​
​ | ​ | 2020 |  | 2019 |
​ | ​ | (in thousands) | ​
Segment Adjusted EBITDA Expense | ​ | $ | 234,698 | ​ | $ | 302,857 | ​
Other expense | ​ |  | (356) | ​ |  | (129) | ​
Operating expenses (excluding depreciation, depletion and amortization) | ​ | $ | 234,342 | ​ | $ | 302,728 | ​
​
(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 expenses, settlement gain, asset and goodwill impairments 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:
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended | ​
​ | ​ | March 31, | ​
​ | ​ | 2020 |  | 2019 |
​ | ​ | (in thousands) | ​
Consolidated Segment Adjusted EBITDA | ​ | $ | 111,701 | ​ | $ | 206,644 | ​
General and administrative | ​ |  | (13,438) | ​ |  | (17,812) | ​
Depreciation, depletion and amortization | ​ |  | (73,921) | ​ |  | (71,139) | ​
Asset impairments | ​ |  | (24,977) | ​ |  | — | ​
Goodwill impairment | ​ | ​ | (132,026) | ​ | ​ | — | ​
Interest expense, net | ​ |  | (12,227) | ​ |  | (11,331) | ​
Acquisition gain | ​ | ​ | — | ​ | ​ | 177,043 | ​
Income tax benefit | ​ |  | 105 | ​ |  | 106 | ​
Acquisition gain attributable to noncontrolling interest | ​ | ​ | — | ​ | ​ | (7,083) | ​
Net (loss) income attributable to ARLP | ​ | $ | (144,783) | ​ | $ | 276,428 | ​
Noncontrolling interest | ​ | ​ | 76 | ​ | ​ | 7,176 | ​
Net (loss) income | ​ | $ | (144,707) | ​ | $ | 283,604 | ​
​
(5) | Capital Expenditures shown exclude the AllDale Acquisition which occurred in the first quarter of 2019.

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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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