Fourth Quarter Highlights: * Net income increases 54% over 4Q03 to $13.3 million or $0.50 per unit * Coal royalty revenues increase 48% to $27.1 million * Distributable cash flow increases 42% to $21.2 million * Distribution per unit increases 18% to $0.6625 per unit Annual Highlights: * Net income for 2004 rises 60% over 2003 to $59.0 million or $2.29 per unit * Coal royalty revenues increase 44% to $106.5 million * Distributable cash flow increases 36% to $81.5 millionHOUSTON, Feb 15, 2005 /PRNewswire-FirstCall via COMTEX/ -- Natural Resource Partners L.P.
(NYSE: NRP) today reported net income for the fourth quarter of 2004 rose 54%
to $13.3 million, or $0.50 per unit, compared to $8.6 million for the same
period last year. Distributable cash flow for the fourth quarter increased
42% to $21.2 million from $14.9 million last year.
For the year ended December 31, 2004, NRP reported net income increased
60% to $59.0 million compared to $36.9 million last year, while distributable
cash flow rose 36% to $81.5 million from $59.8 million in 2003. Net income
per unit increased 44% to $2.29 per unit from $1.59 per unit.
Fourth Quarter Financial Results
Total revenues for the fourth quarter of 2004 increased 43% to
$31.4 million from $22.0 million for the same period last year. In addition,
coal royalty revenues increased 48% to $27.1 million compared to $18.4 million
last year, primarily as a result of improved coal prices. Average coal
royalty revenues per ton increased 39% to $2.33 from $1.68. Production by our
lessees also increased 6% to 11.6 million tons over the 11.0 million tons for
the same period last year.
Total expenses increased to $14.7 million, or 38% over the same period
last year. Depletion and amortization increased 27% to $8.0 million resulting
from increased production and higher depletion on properties acquired.
General and administrative expenses increased to $3.8 million for the fourth
quarter from $2.4 million for the same period last year due to increased
incentive compensation expense related to the increased market value of NRP
units at year end 2004 and additional personnel. Taxes other than income
increased due to the addition of franchise taxes in another state and property
taxes on unleased acreage related to acquisitions in 2004.
Fourth quarter financial results included a previously announced charge of
$1.1 million for unamortized financing costs associated with NRP's previous
credit facility. NRP entered into a new five-year, $175 million credit
facility in October.
"We have seen a significant increase in our results compared to 2003. The
acquisitions we have completed to date, coupled with a very strong sales
environment for the coal industry, are paying real dividends for our
unitholders. However, our fourth quarter production and revenues were lower
than we anticipated due to the simultaneous occurrence of events experienced
by several of our lessees late in the fourth quarter. These included a
shortage of personnel, geologic problems, moving of longwall panels,
transportation delays and greater than usual downtime during the holidays
experienced at some mines," said Nick Carter, President and Chief Operating
Officer. "Our lessees are working diligently to resolve these issues."
Full Year Financial Results
NRP's total revenues increased 42% to $121.4 million in 2004 from
$85.5 million for the same period last year. Coal royalty revenues for 2004
rose 44% to $106.5 million compared to $73.8 million for 2003. This
significant increase results from both a 33% increase in average per ton
royalty revenue to $2.20 and a 9% increase in production to 48.4 million tons.
The increase in production is due to a 17% increase in Appalachia as a result
of acquisitions offset by a 41% decrease in the Northern Powder River Basin
due to our lessee's mining on the federal government's adjacent property as a
result of our checkerboard ownership in the region. Overriding royalty income
nearly tripled to $3.2 million due to overrides associated with recent
acquisitions. Other revenue rose 30% to $4.6 million primarily due to
additional wheelage on acquisitions and increases in oil and gas income
resulting from price increases.
Total expenses for 2004 increased 24% to $51.3 million over 2003.
Depletion and amortization increased 22% as a result of increased production
and higher depletion rates on new acquisitions. General and administrative
expenses increased $2.6 million over last year due primarily to a $1.3 million
increase in the incentive compensation accrual as a result of a 31% increase
in the unit price in the last year and $1.3 million increase in salaries and
benefits primarily associated with additional personnel. Taxes other than
income increased $1.0 million due to increased property taxes and franchise
tax in a new state as a result of acquisitions. Coal royalty and override
payments increased $0.7 million due to increased prices on existing overrides
and additional override commitments assumed through acquisitions in the last
year.
Interest expense increased $3.5 million to $10.3 million due to our senior
debt being outstanding for a full year in 2004 versus a partial year in 2003.
The full year results also included a $1.1 million charge associated with
unamortized financing costs discussed above under the fourth quarter.
Distributions
On January 21, 2005, NRP announced an increase in its quarterly
distribution to $0.6625 per unit, or $2.65 per unit on an annualized basis.
This represents an 18% increase in Natural Resource Partners' distributions
compared to the fourth quarter of 2003.
2005 Outlook
NRP is not modifying the guidance for 2005 issued in a press release on
January 21, 2005. It currently anticipates generating between $91 million and
$101 million in distributable cash flow and net income between $68 million and
$78 million.
Disclosure of Non-GAAP Financial Measures
Distributable cash flow represents cash flow from operations less actual
principal payments and cash reserves set aside for scheduled principal
payments on the senior notes. Distributable cash flow is a "non-GAAP
financial measure" that is presented because management believes it is a
useful adjunct to net cash provided by operating activities under GAAP.
Distributable cash flow is a significant liquidity metric that is an indicator
of NRP's ability to generate cash flows at a level that can sustain or support
an increase in quarterly cash distributions paid to its partners.
Distributable cash flow is also the quantitative standard used throughout the
investment community with respect to publicly traded partnerships.
Distributable cash flow is not a measure of financial performance under GAAP
and should not be considered as an alternative to cash flows from operating,
investing or financing activities. A reconciliation of distributable cash
flow to net cash provided by operating activities is included in the tables
attached to this release. Distributable cash flow may not be calculated the
same for NRP as other companies.
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 2005
guidance. 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. Natural Resource Partners L.P. has no obligation to
publicly update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.
- financials follow -
NATURAL RESOURCE PARTNERS L.P.
OPERATING STATISTICS
(In thousands except per ton data)
(Unaudited)
Three months ended Year ended
December 31, December 31,
2004 2003 2004 2003
Coal royalty revenues:
Appalachia $24,931 $16,009 $98,541 $63,855
Illinois Basin 1,240 793 3,852 3,566
Northern Powder River Basin 943 1,575 4,063 6,349
Total $27,114 $18,377 $106,456 $73,770
Coal Royalty Production (tons):
Appalachia 9,861 8,957 42,089 35,998
Illinois Basin 898 666 3,138 3,034
Northern Powder River Basin 881 1,336 3,130 5,312
Total 11,640 10,959 48,357 44,344
Average royalty revenue
per ton:
Appalachia $2.53 $1.79 $2.34 $1.77
Illinois Basin 1.38 1.19 1.23 1.18
Northern Powder River Basin 1.07 1.18 1.30 1.20
Total $2.33 $1.68 $2.20 $1.66
NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per unit data)
Three months ended Year ended
December 31, December 31,
2004 2003 2004 2003
(Unaudited)(Unaudited)(Unaudited)
Revenues:
Coal royalties $27,114 $18,377 $106,456 $73,770
Property taxes 1,388 1,550 5,349 5,069
Minimums recognized as revenue 483 427 1,763 2,033
Override royalties 832 209 3,222 1,022
Other 1,535 1,455 4,642 3,572
Total revenues 31,352 22,018 121,432 85,466
Operating costs and expenses:
Depletion and amortization 8,039 6,344 30,957 25,365
General and administrative 3,847 2,419 11,503 8,923
Taxes other than income 2,002 1,553 6,835 5,810
Coal royalty payments 809 337 2,045 1,299
Total operating costs
and expenses 14,697 10,653 51,340 41,397
Income from operations 16,655 11,365 70,092 44,069
Other income (expense)
Interest expense (2,355) (2,718) (10,312) (6,814)
Interest income 159 47 349 206
Loss from early extinguishment
of debt (1,135) --- (1,135) ---
Loss on sale of oil and gas
properties --- (55) --- (55)
Loss from interest rate hedge --- --- --- (499)
Net income $13,324 $8,639 $58,994 $36,907
Net income attributable to:
General partner(A) $458 $173 $1,705 $738
Other holders of incentive
distribution rights(A) $103 $--- $281 $---
Limited partners $12,763 $8,466 $57,008 $36,169
Basic and diluted net income per
limited partner unit:
Common $.50 $.37 $2.29 $1.59
Subordinated $.50 $.37 $2.29 $1.59
Weighted average number of units
outstanding:
Common 13,987 11,354 13,447 11,354
Subordinated 11,354 11,354 11,354 11,354
(A) Other holders of the incentive distribution rights (IDRs) include the
WPP Group (25%) and NRP Investment LP (10%). The net income allocated
to the general partner includes the general partner's portion of the
IDRs (65%).
NATURAL RESOURCE PARTNERS L.P.
STATEMENTS OF CASH FLOWS
(In thousands)
Three months ended Year ended
December 31, December 31,
2004 2003 2004 2003
(Unaudited) (Unaudited)(Unaudited)
Cash flows from operating
activities:
Net income $13,324 $8,639 $58,994 $36,907
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depletion and amortization 8,039 6,344 30,957 25,365
Non-cash interest charge 11 12 52 26
Loss on early extinguishment
of debt 1,135 --- 1,135 ---
Loss on sale of oil and gas -
properties --- 55 --- 55
Change in operating assets and
liabilities:
Accounts receivable (611) (842) (4,093) (1,947)
Other assets (847) 1,257 236 (811)
Accounts payable and accrued
liabilities 253 323 (47) (674)
Accrued interest (2,181) (1,369) (415) 481
Deferred revenue 2,703 2,043 793 1,802
Accrued incentive plan expenses 1,229 330 2,574 2,256
Property and franchise taxes
payable 510 488 661 1,068
Net cash provided by
operating activities 23,565 17,280 90,847 64,528
Cash flows from investing
activities:
Acquisition of coal and other
mineral rights --- (18,832) (77,733) (142,541)
Proceeds from sale of oil and
gas properties --- 30 --- 30
Net cash used in investing
activities --- (18,802) (77,733) (142,511)
Cash flows from financing
activities:
Proceeds from loans --- 19,000 75,500 317,100
Deferred financing costs (969) (2,541) (969) (2,541)
Repayment of loans --- --- (111,850) (172,600)
Distributions to partners (16,779) (12,454) (60,393) (46,478)
Contributions by general
partner --- --- 2,147 ---
Proceeds from sale of 5,250,000
common units, net of
transaction costs --- --- 200,355 ---
Redemption of 2,616,752 common
units, net --- --- (100,121) ---
Settlement of hedge included in
accumulated other comprehensive
loss --- --- --- (931)
Net cash provided by
(used in) financing
activities (17,748) 4,005 4,669 94,550
Net increase in cash 5,817 2,483 17,783 16,567
Cash at beginning of period 36,286 21,837 24,320 7,753
Cash at end of period $42,103 $24,320 $42,103 $24,320
SUPPLEMENTAL INFORMATION:
Cash paid during the period for
interest $4,452 $4,025 $10,603 $5,778
NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
Dec. 31, Dec. 31,
2004 2003
(Unaudited)
Current assets:
Cash and cash equivalents $42,103 $24,320
Accounts receivable 15,058 9,553
Accounts receivable - affiliate 25 1,437
Other 786 1,086
Total current assets 57,972 36,396
Land 13,721 13,532
Coal and other mineral rights, net 523,844 475,393
Loan financing costs, net 1,837 2,884
Other assets, net 2,552 3,471
Total assets $599,926 $531,676
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $576 $423
Accounts payable - affiliate 105 305
Current portion of long-term debt 9,350 9,350
Accrued incentive plan expenses - current portion 1,559 1,186
Property and franchise taxes payable 3,460 2,799
Accrued interest 266 681
Total current liabilities 15,316 14,744
Deferred revenue 15,847 15,054
Accrued incentive plan expenses 3,271 1,070
Long-term debt 156,300 192,650
Partners' capital:
Common units (outstanding: 13,986,906 in 2004,
11,353,658 in 2003) 243,814 143,956
Subordinated units (outstanding: 11,353,658) 157,324 158,633
General partners' interest 8,802 6,474
Holders of incentive distribution rights 105 ---
Accumulated other comprehensive loss (853) (905)
Total partners' capital 409,192 308,158
Total liabilities and partners' capital $599,926 $531,676
NATURAL RESOURCE PARTNERS L.P.
RECONCILIATION OF GAAP FINANCIAL MEASURES
TO NON-GAAP FINANCIAL MEASURES
(in thousands)
Three months ended Year ended
December 31, December 31,
2004 2003 2004 2003
(Unaudited)
Reconciliation of GAAP "Net cash
provided by operating
activities" to Non-GAAP
"Distributable cash flow"
Cash flow from operations $23,565 $17,280 $90,847 $64,528
Less scheduled principal payments --- --- (9,350) ---
Less reserves for future principal
payments (2,350) (2,350) (9,400) (4,700)
Add reserves used for scheduled
principal payments --- --- 9,400 ---
Distributable cash flow $21,215 $14,930 $81,497 $59,828
SOURCE Natural Resource Partners L.P.
Kathy Hager of Natural Resource Partners L.P., +1-713-751-7555, or khager@nrplp.com
http://www.prnewswire.com