HOUSTON, Aug 7, 2003 /PRNewswire-FirstCall via COMTEX/ -- Natural Resource Partners L.P.
(NYSE: NRP) today reported net income of $10.2 million or $0.44 per unit for
the second quarter ended June 30, 2003. Earnings before interest, taxes,
depletion and amortization (EBITDA) were $17.6 million. For the six months
ended June 30, 2003, NRP reported net income of $18.2 million or $0.78 per
unit. For the same six month period, EBITDA was $31.8 million.
Second Quarter 2003
During the second quarter of 2003, NRP's lessees sold 11.4 million tons of
coal generating $19.2 million of coal royalty revenues for an average royalty
revenue per ton of $1.69. This is compared to 7.0 million tons of coal, coal
royalty revenues of $11.7 million and an average royalty revenue per ton of
$1.68 for the second quarter of 2002. The approximately 64% increase in both
revenues and production is predominantly due to increased production from
acquisitions in Appalachia and the resumption of production from several
previously idle mines.
Corbin J. Robertson, Jr., Chairman and Chief Executive Officer said, "NRP
had an excellent second quarter that included for the first time the benefit
of the Alpha Natural Resources reserves, our second major acquisition. The
increased production, in addition to slightly higher coal prices, combined to
generate better than anticipated results. In addition, on June 30, we entered
into an agreement to acquire the PinnOak reserves. That acquisition closed on
July 11 and will be included for the first time in our third quarter results.
We are very pleased with our growth to date and will continue to focus on
integrating these assets as well as seeking further acquisitions."
"We also arranged long-term financing at very attractive rates for all our
acquisitions to date, including $50 million of the PinnOak acquisition that
will be drawn in September," said Robertson. In anticipation of the issuance
of $125 million of senior notes, which closed on June 19, 2003, NRP entered
into a treasury rate hedge with respect to $50 million of the senior notes.
In conjunction with the closing of that transaction, NRP paid $1.4 million to
settle this treasury rate hedge. Of the $1.4 million paid for the settlement,
$0.9 million will be amortized into expense over 20 years and the balance of
$0.5 million has been expensed in the second quarter.
Year to Date
For the six months ended June 30, 2003, NRP's lessees sold 21.2 million
tons of coal generating $34.6 million of coal royalty revenues for an average
royalty revenue per ton of $1.63. This is compared to 13.7 million tons of
coal, coal royalty revenues of $22.5 million and an average royalty revenue
per ton of $1.64 for the comparable period in 2002. The approximately 54%
increase in both revenues and production is predominantly due to increased
production from acquisitions in Appalachia, the resumption of mining at
several previously idle mines and a new mine started in 2002 reaching full
production this year.
2003 Outlook
Natural Resource Partners expects its lessees to produce between
43 million tons and 46 million tons of coal in 2003. Production in Appalachia
is expected to account for approximately 84% to 87% of the coal produced, with
4% to 6% in the Illinois Basin and 9% to 10% from the Northern Powder River
Basin. This production should generate coal royalty revenues of approximately
$72 million to $77 million with total revenues of between $82 million to
$86 million based upon average selling prices provided by its lessees.
General and administrative costs are forecasted to range between $7.1 million
and $7.4 million with depletion and amortization of approximately $24 million
to $26 million. Interest expense should range between $6.6 million and
$6.8 million. NRP expects net income to be between $37 million and
$40 million.
Distributions
On August 14, 2003, Natural Resource Partners will make a distribution of
$12.1 million or $0.5225 per unit on all 22.7 million limited partner units
outstanding as well as the 2% distribution with respect to the general partner
interest. This distribution equates to an annualized distribution of
$2.09 per unit.
Disclosure of Non-GAAP Financial Measures
NRP calculates EBITDA by adding depletion, amortization and interest
expense to net income. EBITDA is not defined under generally accepted
accounting principles (GAAP) and is not intended to be used in lieu of GAAP
presentations of results of operations or cash provided by operating
activities. EBITDA is presented because management believes it provides
additional information with respect to both the performance of our fundamental
business activities as well as our ability to meet our future debt service,
working capital requirements and minimum distributions. Management also
believes that debt holders and investment analysts commonly use EBITDA to
analyze company performance. A reconciliation of EBITDA to net income is
included in the tables attached to this release.
Natural Resource Partners L.P. is headquartered in Houston, TX, with its
operations headquarters in Huntington, WV. NRP is a master limited
partnership that 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 include the
anticipated net income, coal royalty revenue, coal production, depletion,
general and administrative costs and all income or expense items associated
with the 2003 outlook. 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-
NATURAL RESOURCE PARTNERS L.P.
Operating Statistics
(In thousands, except per ton data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Coal royalty revenues:
Appalachia $16,886 $9,703 $29,599 $18,526
Illinois Basin 970 706 1,835 1,284
Northern Powder River Basin 1,332 1,294 3,163 2,659
Total $19,188 $11,703 $34,597 $22,469
Sales volumes (tons):
Appalachia 9,464 5,317 16,960 10,335
Illinois Basin 829 554 1,550 1,018
Northern Powder River Basin 1,083 1,114 2,684 2,382
Total 11,376 6,985 21,194 13,735
Average royalty revenue per ton:
Appalachia $1.78 $1.82 $1.75 $1.79
Illinois Basin 1.17 1.27 1.18 1.26
Northern Powder River Basin 1.23 1.16 1.18 1.12
Total $1.69 $1.68 $1.63 $1.64
NATURAL RESOURCE PARTNERS L.P.
Statement of Income
(In thousands, except per unit amounts)
(unaudited)
Three Months Six Months
Ended Ended
June 30, 2003 June 30, 2003
Revenues:
Coal royalties $19,188 $34,597
Property taxes 1,301 2,189
Minimums recognized as revenue 455 1,259
Override royalties 200 661
Other 695 1,203
Total revenues 21,839 39,909
Operating costs and expenses:
Depletion and amortization 6,369 12,173
General administrative and other 2,131 4,307
Taxes other than income 1,421 2,581
Override payments --- 388
Coal royalty payments 161 311
Total operating costs and expenses 10,082 19,760
Income from operations 11,757 20,149
Other income (expense)
Interest expense (1,131) (1,597)
Interest income 56 103
Loss from interest rate hedge (499) (499)
Net income $10,183 $18,156
General partner's net income $204 $363
Limited partner's net income $9,979 $17,793
Basic and diluted net income per
limited partner unit
Common $0.44 $0.78
Subordinated $0.44 $0.78
Weighted average number of units outstanding:
Common 11,354 11,354
Subordinated 11,354 11,354
NATURAL RESOURCE PARTNERS L.P.
Statement of Cash Flows
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, 2003 June 30, 2003
Cash flows from operating activities:
Net income $10,183 $18,156
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion and amortization 6,369 12,173
Change in operating assets and
liabilities:
Accounts receivable (2,650) (557)
Other assets (2,343) (2,180)
Accounts payable and accrued
liabilities 219 (642)
Deferred revenue (638) (217)
Accrued incentive plan expenses 702 798
Property and franchise taxes payable 229 (91)
Net cash provided by operating
activities 12,071 27,440
Cash flows from investing activities:
Acquisition of property (53,812) (65,664)
Cash held in escrow (58,000) (58,000)
Net cash used in investing
activities (111,812) (123,664)
Cash flows from financing activities:
Proceeds from loans 236,600 248,100
Repayment of loans (122,600) (122,600)
Distributions to partners (12,106) (21,917)
Settlement of hedge included in
other comprehensive loss (931) (931)
Net cash provided by financing
activities 100,963 102,652
Net increase in cash 1,222 6,428
Cash at beginning of period 12,959 7,753
Cash at end of period $14,181 $14,181
Supplemental cash flow information:
Cash paid for interest $1,025 $1,416
NATURAL RESOURCE PARTNERS L.P.
Condensed Balance Sheet
(In thousands)
June 30, December 31,
2003 2002
(unaudited)
Current assets $23,967 $17,307
Property and equipment, net 428,003 374,187
Other assets (A) 61,405 1,225
Total assets $513,375 $392,719
Current liabilities $11,950 $3,333
Deferred revenue 13,035 13,252
Accrued incentive plan expenses 798 ---
Long-term debt 173,650 57,500
Partner's capital 313,942 318,634
Total liabilities and partners'
capital $513,375 $392,719
Supplemental information:
Long term debt $173,650 $57,500
Partner's capital 313,942 318,634
Total capitalization $487,592 $376,134
Long term debt/Total capitalization 36% 15%
(A) Other assets at June 30, 2003 include $58 million of cash that was
placed in escrow on June 30, 2003 for the PinnOak acquisition that
closed on July 11. The acquisition was effective July 1, 2003.
NATURAL RESOURCE PARTNERS L.P.
Reconciliation of Unaudited GAAP Financial Measures
to Non-GAAP Financial Measures
(In thousands)
Three Months Six Months
Ended Ended
June 30, 2003 June 30, 2003
Net income $10,183 $18,156
Adjustments to reconcile to EBITDA
Interest income (56) (103)
Interest expense 1,131 1,597
Depletion and amortization 6,369 12,173
EBITDA $17,627 $31,823
SOURCE Natural Resource Partners L.P.
Kathy Hager of Natural Resource Partners L.P., +1-713-751-7555,
or khager@nrplp.com
http://www.nrplp.com