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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2024

SEGMENT INFORMATION

Schedule of reportable segment results

Reportable segment results are presented below.


		Coal Operations						Royalties						Other,
		Illinois												Corporate and
		Basin			Appalachia			Oil & Gas			Coal			Elimination			Consolidated

		(in thousands)
Three Months Ended September 30, 2024

Revenues - Outside (1)		$	356,911		$	203,164		$	34,688		$	—		$	18,806		$	613,569
Revenues - Intercompany			—			—			—			16,647			(16,647)			—
Total revenues (1)			356,911			203,164			34,688			16,647			2,159			613,569

Segment Adjusted EBITDA Expense (2)			225,498			157,792			5,844			5,589			(1,006)			393,717
Segment Adjusted EBITDA (3)			114,649			37,518			28,706			11,058			342			192,273
Capital expenditures (4)			68,512			32,471			—			—			9,315			110,298

Three Months Ended September 30, 2023

Revenues - Outside (1)		$	371,633		$	215,800		$	36,311		$	—		$	12,777		$	636,521
Revenues - Intercompany			—			—			—			16,763			(16,763)			—
Total revenues (1)			371,633			215,800			36,311			16,763			(3,986)			636,521

Segment Adjusted EBITDA Expense (2)			213,209			131,997			3,873			6,851			(5,524)			350,406
Segment Adjusted EBITDA (3)			132,428			74,832			31,366			9,912			(881)			247,657
Capital expenditures (4)			59,833			30,304			—			—			20,202			110,339

Nine Months Ended September 30, 2024

Revenues - Outside (1)		$	1,109,513		$	589,390		$	108,470		$	10		$	51,233		$	1,858,616
Revenues - Intercompany			—			—			—			51,933			(51,933)			—
Total revenues (1)			1,109,513			589,390			108,470			51,943			(700)			1,858,616

Segment Adjusted EBITDA Expense (2)			674,753			412,056			15,419			18,485			(5,498)			1,115,215
Segment Adjusted EBITDA (3)			372,950			157,072			91,366			33,457			(14)			654,831
Total assets			1,029,389			534,449			806,332			313,044			348,959			3,032,173
Capital expenditures (4)			230,618			91,715			—			—			13,253			335,586

Nine Months Ended September 30, 2023

Revenues - Outside (1)		$	1,087,431		$	705,301		$	105,260		$	—		$	43,287		$	1,941,279
Revenues - Intercompany			—			—			—			48,843			(48,843)			—
Total revenues (1)			1,087,431			705,301			105,260			48,843			(5,556)			1,941,279

Segment Adjusted EBITDA Expense (2)			634,944			377,115			11,859			17,836			(13,618)			1,028,136
Segment Adjusted EBITDA (3)			383,987			300,955			90,461			31,007			2,560			808,970
Total assets			882,943			459,742			767,415			319,930			384,011			2,814,041
Capital expenditures (4)			179,284			94,119			—			400			21,553			295,356

(1)	Revenues included in the Other, Corporate and Elimination column are attributable to intercompany eliminations, which are primarily intercompany coal royalty eliminations, outside revenues at the Matrix Group and awarded digital assets received for our crypto-mining activities.

(2)

Segment Adjusted EBITDA Expense (a non-GAAP financial measure) includes operating expenses, coal purchases, if applicable, and other income or expense as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations. Transportation expenses are excluded as these expenses are passed through to our customers and, consequently, we do not realize any gain or loss on transportation revenues. Segment Adjusted EBITDA Expense is used as a supplemental financial measure by our management to assess the operating performance of our segments. Segment Adjusted EBITDA Expense is a key component of Segment Adjusted EBITDA in addition to coal sales, royalty revenues and other revenues. The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses.

The following is a reconciliation of Operating expenses (excluding depreciation, depletion and amortization), the most comparable GAAP financial measure, to consolidated Segment Adjusted EBITDA Expense:


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2024			2023			2024			2023

		(in thousands)
Operating expenses (excluding depreciation, depletion and amortization)		$	384,844		$	339,099		$	1,100,308		$	1,012,224
Litigation expense accrual			—			—			(15,250)			—
Outside coal purchases			8,192			11,530			27,912			15,739
Other expense (income)			681			(223)			2,245			173
Segment Adjusted EBITDA Expense		$	393,717		$	350,406		$	1,115,215		$	1,028,136

(3)

Segment Adjusted EBITDA (a non-GAAP financial measure) is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses adjusted for certain items that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA is a key component of consolidated EBITDA, which is used as a supplemental financial measure by management and by external users of our financial statements such as investors, commercial banks, research analysts and others. We believe that the presentation of EBITDA provides useful information to investors regarding our performance and results of operations because EBITDA, when used in conjunction with related GAAP financial measures, (i) provides additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provides investors with the financial analytical framework upon which we base financial, operational, compensation and planning decisions and (iii) presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations.

Segment Adjusted EBITDA is also used as a supplemental financial measure by our management for reasons similar to those stated in the previous explanation of EBITDA. In addition, the exclusion of corporate general and administrative expenses from consolidated Segment Adjusted EBITDA allows management 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.

The following is a reconciliation of Net income, the most comparable GAAP financial measure, to Consolidated Segment Adjusted EBITDA:


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2024			2023			2024			2023

		(in thousands)
Net income		$	86,916		$	155,351		$	347,992		$	519,334
Noncontrolling interest			(635)			(1,652)			(3,467)			(4,660)
Net income attributable to ARLP		$	86,281		$	153,699		$	344,525		$	514,674
General and administrative			21,878			20,097			64,569			61,312
Depreciation, depletion and amortization			72,971			65,393			204,974			199,582
Interest expense, net			7,352			5,067			21,018			21,761
Change in fair value of digital assets			(332)			—			(8,437)			—
Litigation expense accrual			—			—			15,250			—
Income tax expense			4,123			3,401			12,932			11,641
Consolidated Segment Adjusted EBITDA		$	192,273		$	247,657		$	654,831		$	808,970

(4)

Capital expenditures exclude $72.3 million paid for the JC Resources Acquisition for the nine months ended September 30, 2023, $10.5 million and $10.0 million paid towards oil & gas reserve acquisitions for the three months ended September 30, 2024 and 2023, respectively, and $15.2 million and $13.9 million paid towards oil & gas reserve acquisitions for the nine months ended September 30, 2024 and 2023, respectively (See Note 3 – Acquisitions).

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,
		2024			2023			2024			2023

		(in thousands)
Operating expenses (excluding depreciation, depletion and amortization)		$	384,844		$	339,099		$	1,100,308		$	1,012,224
Litigation expense accrual			—			—			(15,250)			—
Outside coal purchases			8,192			11,530			27,912			15,739
Other expense (income)			681			(223)			2,245			173
Segment Adjusted EBITDA Expense		$	393,717		$	350,406		$	1,115,215		$	1,028,136

Reconciliation of consolidated Segment Adjusted EBITDA to net income


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2024			2023			2024			2023

		(in thousands)
Net income		$	86,916		$	155,351		$	347,992		$	519,334
Noncontrolling interest			(635)			(1,652)			(3,467)			(4,660)
Net income attributable to ARLP		$	86,281		$	153,699		$	344,525		$	514,674
General and administrative			21,878			20,097			64,569			61,312
Depreciation, depletion and amortization			72,971			65,393			204,974			199,582
Interest expense, net			7,352			5,067			21,018			21,761
Change in fair value of digital assets			(332)			—			(8,437)			—
Litigation expense accrual			—			—			15,250			—
Income tax expense			4,123			3,401			12,932			11,641
Consolidated Segment Adjusted EBITDA		$	192,273		$	247,657		$	654,831		$	808,970