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Natural Resource Partners Announces Pro Forma Third Quarter Results

11/25/2002

HOUSTON, Nov. 25 /PRNewswire-FirstCall/ -- Natural Resource Partners L.P. (NYSE: NRP) announced today pro forma third quarter revenues of $14.3 million and excess of revenues over direct costs and expenses of $7.3 million. Pro Forma nine month revenues were $39.7 million with excess revenues over direct costs and expenses of $21.0 million.

Pro Forma Third Quarter

Pro forma coal royalty revenue increased 17% to $12.8 million for the third quarter 2002 from $10.9 million for the third quarter 2001. The revenue increase was attributable to a 6.5% increase in the average royalty revenue per ton to $1.64 and an 11% increase in production to 7.8 million tons for the same period. The production increase was primarily due to the opening of a new mine, a long wall mine moving onto the property and general increases in production at other mines.

Pro Forma Year to Date Results

For the nine months ended September 30, 2002, coal royalty revenues increased 15% to $35.6 million and production increased 6.7% to 21.6 million tons. The production increase is primarily due to two long wall mines moving onto properties in West Virginia. The increase in coal royalty revenue was due to the increased production and a 7.1% increase in the average royalty revenue to $1.65 per ton.

Natural Resource Partners L.P. is a newly formed master limited partnership. The partnership was formed from the contribution of properties from four separate entities. The properties were contributed by Western Pocahontas Properties Limited Partnership, Great Northern Properties Limited Partnership, New Gauley Coal Corporation and Arch Coal, Inc. (NYSE: ACI). The partnership completed its initial public offering in October and has shown the pro forma numbers included in this release in an effort to provide a more meaningful presentation of what the partnership results of operations would have been had it been in the existence during the periods shown. This is not intended to represent a comprehensive set of statements as certain costs and expenses such as general and administrative expenses are not shown.

Fourth Quarter 2002 Guidance

The partnership is issuing guidance for the fourth quarter 2002 as follows:

    Production: (millions of tons)
        Appalachia                                       5.7 -   5.9
        Illinois Basin                                    .5 -    .6
        Northern Powder River Basin                      1.1 -   1.2
        Total Partnership                                7.3 -   7.7

    Average Revenue per ton: ($ per ton)
        Appalachia                                      1.77 -  1.80
        Illinois Basin                                  1.23 -  1.26
        Northern Powder River Basin                     1.03 -  1.06
        Total Partnership                               1.62 -  1.64

    Revenues: ($ millions)
    Royalty Revenues                                    11.8 -  12.6
    Minimums Recognized                                   .1 -    .2
    Property Taxes                                        .2 -    .3
    Other Revenues                                       1.2 -   1.3
    Total Revenues                                      13.3 -  14.4

    Direct Costs and Expenses: ($ millions)
    Depreciation, Depletion and Amortization Expense     4.8 -   6.2
    General and Administrative Expenses                  1.1 -   1.2
    Taxes Other than Income                               .2 -    .3
    Other Expenses                                        .2 -    .3
    Commitment Fees                                       .1 -    .1

                                Distributions

Natural Resource Partners intends to pay its first quarterly distribution to unitholders for the fourth quarter of 2002 in February 2003. This distribution will be pro-rated to cover the period from the date of completion of the partnership's initial public offering on October 17, 2002 through December 31, 2002.

Natural Resource Partners L.P. is headquartered in Houston, TX, with its operations headquarters in Huntington, WV. NRP is principally engaged in the business of owning and managing coal properties in the three major coal producing regions of the United States: Appalachia, the Illinois Basin and the Powder River Basin.

For additional information, please contact Kathy Hager at 713-751-7555 or khager@nrplp.com . Further information about NRP is available on the partnership's website at http://www.nrplp.com .

This press release may include "forward-looking statements" as defined by the Securities and Exchange Commission. Such statements are those concerning the fourth quarter guidance and the distributions. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the partnership. These risks include, but are not limited to, decreases in demand for coal; changes in operating conditions and costs; production cuts by our lessees; commodity prices; unanticipated geologic problems; changes in the legislative or regulatory environment and other factors detailed in Natural Resource Partners' Securities and Exchange Commission filings.

-Financials Follow-

The financial statements that follow were compiled by combining the operations of Western Pocahontas Properties Limited Partnership, Great Northern Properties Limited Partnership, New Gauley Coal Corporation and the Arch Coal Contributed Properties and then making pro forma adjustments. Adjustments were made for the properties retained by certain of the entities. Offering adjustments relate to the additional depletion due to the step-up in basis for the Arch Coal Contributed properties.

                        NATURAL RESOURCE PARTNERS L.P.
                   SELECTED PRO FORMA RESULTS OF OPERATIONS


                                    Three Months            Nine Months
                                 Ended September 30,    Ended September 30,
                                  2002       2001         2002        2001
                                     (Unaudited)            (Unaudited)




    Coal Royalties (in thousands)

      Western Pocahontas
       Properties                 $5,907    $4,246      $16,220     $11,192
      Great Northern               1,928     1,833        5,370       5,052
      New Gauley                     398       376        1,336       1,152
      Arch Coal Contributed
       Properties                  4,971     4,471       13,851      13,802
        Total Combined            13,204    10,926       36,777      31,198
      Adjustments for Properties
       Retained                     (373)       (1)      (1,156)       (131)
      Pro forma Natural Resource
       Partners                  $12,831   $10,925      $35,621     $31,067


    Production (in thousands  of tons)

      Western Pocahontas
       Properties                  3,280     2,731        9,008       7,653
      Great Northern               1,832     1,437        5,422       4,782
      New Gauley                     134       180          445         552
      Arch Coal Contributed
       Properties                  2,961     2,747        8,278       8,493
        Total Combined             8,207     7,095       23,153      21,480
      Adjustments for Properties
       Retained                     (377)       (9)      (1,586)     (1,263)
      Pro forma Natural Resource
       Partners                    7,830     7,086       21,567      20,217


    Average Royalty Revenue
     ($ per ton)

      Pro forma Natural Resource
       Partners                    $1.64     $1.54        $1.65       $1.54


                        NATURAL RESOURCE PARTNERS L.P.
        PRO FORMA STATEMENT OF REVENUES AND DIRECT COSTS AND EXPENSES
                FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002
                                 (Unaudited)
                                (In Thousands)





                                                Historical
                                                                    Arch Coal
                              Western       Great     New Gauley  Contributed
                             Pocahontas   Northern       Coal      Properties

    Revenues
      Coal royalties          $5,907        $1,928       $398        $4,971
      Timber royalties         1,002             6        ---           ---
      Gain on sale of
       property                    7           ---        ---           ---
      Lease and easement income  106            86        ---           ---
      Property taxes             548            30         20           268
      Other                      277           ---        ---           369
    Total revenues             7,847         2,050        418         5,608
    Direct cost and expenses
      Taxes other than income    610            24         27           268
      Depreciation, depletion
       and amortization        1,324           662         48         1,634

      Other expenses             ---           ---        ---           101

    Total direct costs and
     expenses                  1,934           686         75         2,003

    Excess of revenues over
     direct costs and
     expenses                 $5,913        $1,364       $343        $3,605


                            Adjustments
                                for
                             Properties    Pro Forma   Offering     Pro Forma
                              Retained     Combined  Adjustments  as Adjusted

    Revenues
      Coal royalties           $(373)     $ 12,831        ---       $12,831
      Timber royalties        (1,008)          ---        ---           ---
      Gain on sale of
       property                   (7)          ---        ---           ---
      Lease and easement
       income                   (137)           55        ---            55
      Property taxes             ---           866        ---           866
      Other                     (132)          514        ---           514
    Total revenues            (1,657)       14,266        ---        14,266
    Direct cost and expenses
      Taxes other than income    (63)          866        ---           866
      Depreciation,
       depletion and
       amortization             (184)        3,484      2,502         5,986
      Other expenses             ---           101        ---           101
      Total direct costs
       and expenses             (247)        4,451      2,502         6,953
    Excess of revenues over
     direct costs and
     expenses                $(1,410)       $9,815    $(2,502)       $7,313


                        NATURAL RESOURCE PARTNERS L.P.
        PRO FORMA STATEMENT OF REVENUES AND DIRECT COSTS AND EXPENSES
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
                                 (Unaudited)
                                (In Thousands)





                                               Historical
                                                                    Arch Coal
                             Western        Great     New Gauley  Contributed
                            Pocahontas    Northern       Coal      Properties
    Revenues
      Coal royalties         $16,220        $5,370     $1,336       $13,851
      Timber royalties         2,620            51        ---           ---
      Gain on sale of
       property                   92           ---        ---           ---
      Lease and easement
       income                    318           468          2           ---
      Property taxes           1,186            61         20           806
      Other                      810           ---         50         1,294
    Total revenues            21,246         5,950      1,408        15,951
    Direct cost and expenses
      Taxes other than
       income                  1,392            68         38           806
      Depreciation, depletion
       and amortization        3,337         1,865        127         4,603
      Other expenses             ---           ---        ---           512
    Total direct costs and
     expenses                  4,729         1,933        165         5,921
    Excess of revenues over
     direct costs and
     expenses                $16,517        $4,017     $1,243       $10,030


                           Adjustments
                               for
                            Properties    Pro Forma    Offering    Pro Forma
                             Retained     Combined   Adjustments  as Adjusted

    Revenues
      Coal royalties         $(1,156)      $35,621        ---       $35,621
      Timber royalties        (2,671)          ---        ---           ---
      Gain on sale of
       property                  (92)          ---        ---           ---
      Lease and easement
       income                   (585)          203        ---           203
      Property taxes             ---         2,073        ---         2,073
      Other                     (377)        2,111        ---         2,111
    Total revenues            (4,881)       39,674        ---        39,674
    Direct cost and expenses
      Taxes other than income   (231)        2,073        ---         2,073
      Depreciation, depletion
       and amortization         (423)        9,509      6,575        16,084
    Other expenses               ---           512        ---           512
    Total direct costs and
     expenses                   (654)       12,094      6,575        18,669
    Excess of revenues over
     direct costs and
     expenses                $(4,227)      $27,580     $(6,575)     $21,005


SOURCE Natural Resource Partners L.P.

/CONTACT: Kathy Hager of Natural Resource Partners L.P., +1-713-751-7555, or khager@nrplp.com /

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