HOUSTON, Jan. 18 /PRNewswire-FirstCall/ -- Natural Resource Partners L.P.
(NYSE: NRP) and (NYSE: NSP) today announced that the Board of Directors of its
general partner has declared a fourth quarter 2005 distribution of $0.7625 per
unit for both NRP and NSP, an increase of $0.025 in its quarterly
distribution. This equates to an annualized distribution of $3.05 per unit.
The distribution will be paid on February 14, 2006 to unitholders of record on
February 1, 2006. This makes the tenth consecutive quarter that NRP has
increased its distribution and represents a 15% increase over the same period
last year.
NRP also commented on its expected 2005 results. "Now that we have seen
two months of fourth quarter data from our lessees, we believe that Natural
Resource Partners will exceed its previously issued guidance for 2005," said
Dwight L. Dunlap, Chief Financial Officer.
NRP expects another great year in 2006 as coal prices are projected to
remain high throughout the year. The partnership expects to generate between
$100 million and $113 million in distributable cash flow, net of scheduled
principal payments of $9.4 million on NRP's senior notes. NRP anticipates
generating net income between $81 million and $91 million.
Production volumes are expected to range between 50.0 million tons and
53.5 million tons, of which approximately 20% are estimated to be
metallurgical coal. Coal royalty revenues are forecasted to be in a range
from $130 million to $140 million based on coal royalty revenue per ton of
between $2.60 and $2.62. NRP expects approximately 25% of coal royalty
revenues to be derived from metallurgical coal. Total revenues are anticipated
to be in a range between $147.5 million and $159.5 million.
"We expect 2006 will be a transition year for NRP," said Nick Carter,
President and Chief Operating Officer. "Several of our lessees' mines, in
accordance with their long range mine plans, will be moving off our properties
during 2006. The production declines caused by this movement will be only
partially offset by other lessees' mines moving onto our properties during the
year. We expect that many of the producers moving off our reserves will
return over the next several years. As previously announced, several of the
acquisitions we made in 2005 will not generate significant royalty revenue
until 2007. Additionally, we do not expect to benefit as much as in prior
years from increasing coal royalty realizations per ton since the majority of
our lessees' contracts have already rolled over at the higher coal prices."
The following table includes further details regarding guidance for 2006.
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. The common
units are traded on the New York Stock Exchange (NYSE) under the symbol NRP
and the subordinated units are traded on the NYSE under the symbol NSP.
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 coal royalty revenues, coal production, operating expenses, net
income and other items listed on the following table. All statements 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.
- table follows-
Natural Resource Partners L.P.
Guidance
(dollars and tons in millions except per unit amounts)
Full Year 2006
(Range)
Coal royalty production (tons)
Northern Appalachia 5.8 - 6.1
Central Appalachia 29.0 - 31.0
Southern Appalachia 6.2 - 6.6
Appalachia 41.0 - 43.7
Illinois Basin 2.6 - 3.0
Northern Powder River Basin 56.4 - 6.8
Total 50.0 - 53.5
Coal royalty revenues
Northern Appalachia $11.0 - $12.0
Central Appalachia 82.0 - 86.0
Southern Appalachia 24.0 - 27.0
Appalachia $117.0 - $125.0
Illinois Basin 4.4 - 5.4
Northern Powder River Basin 8.6 - 9.6
Total $130.0 - $140.0
Revenues
Coal royalty revenues $130.0 - 140.0
Other revenues (A) 17.5 - 19.5
Expenses
Depletion and amortization $28.0 - $31.0
General and administrative 13.9 - 15.9
Other expenses (B) 9.0 - 11.0
Other expenses
Interest expense (net) $13.1 - $14.1
Net income $81.0 - $91.0
Net income per unit $2.85 - $3.15
Scheduled principal payments $9.4 - $9.4
Distributable cash flow (C) $99.6 - $112.6
(A) Other revenues consist of property taxes, minimums, oil & gas,
timber, overrides, wheelage and rentals.
(B) Other expenses include taxes other than income, override payments,
coal royalty payments, and non-participating royalty interests.
(C) Distributable cash flow represents net income plus depletion and
amortization minus scheduled principal payments on NRP 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. We
believe that "net cash provided by operating activities" would be the
most comparable financial measure to distributable cash. However,
due to the substantial uncertainties associated with forecasting
future changes to operating assets and liabilities, we cannot provide
guidance on forward-looking net cash provided by operating activities
or provide reconciliations of distributable cash flow to that
measure.
SOURCE Natural Resource Partners L.P.
01/18/2006 R
CONTACT: Kathy Hager of Natural Resource Partners L.P.,
+1-713-751-7555, or khager@nrplp.com
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Web site: http://www.nrplp.com
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