Full Year Highlights:
- Reports record results for 2008 in every metric
- Distributable cash flow increased 37% from 2007 to $212.7 million
- Revenues increased 36% to $291.7 million
- Net income attributable to limited partners rose 58% to $127.9 million
- Net income per unit rose 56% to $1.97 per unit
- Distributions attributable to 2008 increased 10% over 2007 to $2.07
Fourth Quarter Highlights:
- Distributable cash flow increased 36% from 4Q07 to $66.5 million
- Revenues increased 32% to $75.8 million
- Net income attributable to limited partners rose 63% to $36.0 million
- Net income per unit improved 57% to $0.55
- Distribution increased for twenty-second consecutive quarter to $0.535
per unit
HOUSTON, Feb. 12 /PRNewswire-FirstCall/ -- Natural Resource Partners L.P.
(NYSE: NRP) today reported record results in all metrics for 2008.
Distributable cash flow, a non-GAAP measure, rose 37% in 2008 to $212.7
million from the $154.8 million reported for 2007. A reconciliation of
distributable cash flow to net cash provided by operating activities is
provided in the tables attached. Net income attributable to the limited
partners increased 58% to $127.9 million for 2008, compared to $81.0 million
for 2007. Net income per unit increased 56% to $1.97 per unit in 2008
compared to 2007.
For the fourth quarter 2008, the partnership reported $66.5 million of
distributable cash flow, an increase of 36% over the fourth quarter 2007. Net
income attributable to the limited partners increased 63% to $36.0 million
over the fourth quarter 2007. Net income per unit for the fourth quarter
increased to $0.55 per unit from $0.35 per unit in the fourth quarter of 2007.
"Our lessees performed well for us in 2008, leading to record results for
NRP," said Nick Carter, President and Chief Operating Officer of Natural
Resource Partners L.P. "Although the industry has seen drops in demand and
pricing for metallurgical coal over the last few months, our lessees have
approximately 90% of their steam coal under contract for 2009, in most cases
at prices higher than 2008. As reported in our 2009 guidance released last
month, in spite of the downturn in the economy, NRP anticipates that 2009
revenues will exceed our 2008 revenues."
Capital Markets and Liquidity
NRP had approximately $90 million of cash available at the end of the year
and has nominal capital expenditures other than acquisitions. In the guidance
issued in late January, NRP forecasted generating excess cash in 2009 over its
current distribution rate, which cash can be used for increasing the
distribution, for additional acquisitions or for principal reduction of its
credit facility. NRP currently does not have any need to raise capital
through the equity markets and following the acquisition announced in late
January, the partnership has approximately $109 million available under its
existing credit facility, which does not expire until 2012.
"With our year-end cash balance, our currently forecasted 2009
distribution coverage ratio, credit ratios well within our debt covenants, and
amortizing debt with no immediate need to refinance, NRP has the financial
flexibility to take advantage of opportunities that may arise in this
difficult economic climate," said Dwight Dunlap, Chief Financial Officer.
Distributions
As announced on January 21, the Board of Directors of NRP's general
partner declared a quarterly distribution of $0.535 per unit, an increase of
$0.01 per unit. This increase represented a 10% increase over the same period
last year and a 2% increase over the third quarter 2008 distribution. This
was the twenty-second consecutive quarterly increase in the distribution.
Quarterly Highlights
--------------------
4Q08 3Q08 4Q07
---- ---- ----
(in thousands except per ton and per unit)
Coal production: 15,073 14,935 15,442
Coal royalty revenues: $58,749 $58,323 $45,259
Average coal royalty
revenue per ton: $3.90 $3.91 $2.93
Total revenues: $75,822 $76,196 $57,315
Net income to limited
partners: $36,012 $35,505 $22,142
Average units outstanding
in quarter: 64,891 64,891 64,891
Net income per unit: $0.55 $0.55 $0.35
Distributable cash flow: $66,502 $53,965 $48,916
Fourth Quarter 2008 versus Third Quarter 2008
While there were modest fluctuations both up and down in several
categories, overall the fourth quarter results were in line with the third
quarter. The partnership reported net income per limited partner unit of
$0.55, equal to the third quarter. Total expenses declined by approximately
$1.7 million mainly due to depletion on lower cost properties and a decrease
in the accrual for the partnership's long-term incentive plan.
Full Year and Fourth Quarter Results
Revenues
Full Year
Total revenues for the full year 2008 rose 36% over 2007 to a record
$291.7 million with significant increases in coal royalty revenues, coal
processing and transportation fees and override royalties as well as increases
in oil and gas royalties and aggregates.
Coal royalty revenues increased $54.9 million, or 32%, over a year ago due
to a 6% increase in production and a 25% increase in average royalty revenue
per ton. Coal processing and transportation fees more than doubled over the
full year last year, increasing to $20.4 million from $8.8 million in 2007 as
additional throughput occurred at several properties as well as higher prices
for coal processing. Overriding royalties nearly tripled to $11.3 million
from $3.8 million due to both increased production and higher prices on
override properties. In addition, oil and gas royalties increased by 61% to
$7.9 million while aggregate royalties increased 23% to $9.1 million.
Metallurgical coal accounted for 30% of NRP coal royalty revenues and 22%
of its production for the full year 2008.
Fourth Quarter
Total revenues increased to $75.8 million or 32% over the fourth quarter
2007 due primarily to increases in coal royalty revenues. Coal royalty
revenues increased 30% over the fourth quarter of 2007 to $58.7 million
primarily due to a 33% increase in the average royalty revenue per ton.
Average coal royalty revenue per ton increased $0.97 to $3.90. The most
dramatic increase occurred in Appalachia, where NRP experienced a $1.27
increase per ton, or 40% due to improvements in realizations for both steam
coal and met coal. The Illinois Basin also experienced a 29% increase to
$2.78 over the fourth quarter of 2007.
Coal processing and transportation fees more than doubled to $6.5 million,
up from $3.1 million in the fourth quarter of 2007, mainly due to additional
transportation fees in the Illinois Basin, as well as a 6% increase in
throughput and higher prices for production processed through the preparation
plants in the fourth quarter 2008 versus the fourth quarter 2007. In
addition, override royalties more than quadrupled to $3.7 million due to
additional production as well as increases in realizations per ton, while oil
and gas royalties more than doubled largely due to price increases but also
from small production increases.
Expenses
Full Year
Total expenses for 2008 increased $8.0 million over the same period last
year to $94.7 million. This rise was due to an increase in depreciation,
depletion and amortization expense of $12.9 million due to a increased
production coming primarily from properties with higher depletion rates per
ton. Offsetting these increases was a reduction of approximately $6.1 million
in general and administrative expenses due to declines in the long-term
incentive plan accruals as a result of the drop in NRP's unit price this year.
Fourth Quarter
Total expenses decreased $1.2 million in the fourth quarter of 2008 when
compared to the same period last year, due to modestly higher depreciation,
depletion and amortization offset by a $3.0 million decrease in general and
administrative expenses due to reductions in accruals under the partnership's
incentive compensation plan.
Company Profile
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, and coal handling and transportation infrastructure in the
three major coal producing regions of the United States: Appalachia, the
Illinois Basin and the Powder River Basin. In addition, the partnership also
manages aggregate reserves, oil and gas properties and timber assets across
the United States.
For additional information, please contact Kathy H. Roberts at
713-751-7555 or kroberts@nrplp.com. Further information about NRP is
available on the partnership's website at http://www.nrplp.com.
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.
Forward-Looking Statements
This press release may include "forward-looking statements" as defined by
the Securities and Exchange Commission. Such statements include the current
coal market conditions and borrowing capacity. 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.
09-03-Financial statements follow-
Natural Resource Partners L.P.
Operating Statistics
(In thousands except per ton data)
Three Months Ended For the Year Ended
December 31, December 31,
2008 2007 2008 2007
(unaudited) (unaudited)
Coal Royalties:
Coal royalty
revenues:
Appalachia
Northern $5,236 $5,600 $17,074 $16,664
Central 38,467 29,571 156,109 117,820
Southern 5,142 4,156 19,839 17,832
Total Appalachia $48,845 $39,327 $193,022 $152,316
Illinois Basin 6,701 3,022 21,695 7,963
Northern Powder River
Basin 3,203 2,910 11,533 11,064
Total $58,749 $45,259 $226,250 $171,343
Coal royalty
production (tons):
Appalachia
Northern 1,363 2,395 5,799 7,270
Central 8,537 8,813 35,967 35,835
Southern 1,034 1,089 4,273 4,603
Total Appalachia 10,934 12,297 46,039 47,708
Illinois Basin 2,414 1,402 8,313 3,709
Northern Powder River
Basin 1,725 1,743 6,218 5,815
Total 15,073 15,442 60,570 57,232
Average royalty
revenue per ton:
Appalachia
Northern $3.84 $2.34 $2.94 $2.29
Central 4.51 3.36 4.34 3.29
Southern 4.97 3.82 4.64 3.87
Total Appalachia 4.47 3.20 4.19 3.19
Illinois Basin 2.78 2.16 2.61 2.15
Northern Powder River
Basin 1.86 1.67 1.85 1.90
Combined average
royalty revenue per
ton $3.90 $2.93 $3.74 $2.99
Aggregates:
Royalty revenues $1,243 $1,485 $6,275 $6,778
Aggregate royalty bonus $300 $164 $2,844 $656
Production 915 1,242 4,791 5,698
Average base royalty
per ton $1.36 $1.20 $1.31 $1.19
Natural Resource Partners L.P.
Consolidated Statements of Income
(In thousands, except per unit data)
Three Months Ended For the Year Ended
December 31, December 31,
2008 2007 2008 2007
(unaudited) (unaudited)
Revenues:
Coal royalties $58,749 $45,259 $226,250 $171,343
Aggregate royalties 1,544 1,649 9,119 7,434
Coal processing fees 3,083 1,420 8,781 4,824
Transportation fees 3,463 1,678 11,656 3,984
Oil and gas royalties 2,323 1,006 7,902 4,930
Property taxes 2,040 2,449 9,800 10,285
Minimums recognized
as revenue 64 253 1,257 1,951
Override royalties 3,689 800 11,327 3,794
Other 867 2,801 5,573 6,440
--- ----- ----- -----
Total revenues 75,822 57,315 291,665 214,985
Operating costs and
expenses:
Depreciation,
depletion and
amortization 15,405 14,067 64,254 51,391
General and
administrative 1,151 4,168 13,922 20,048
Property, franchise
and other taxes 2,989 2,995 13,558 13,613
Transportation costs 456 149 1,416 298
Coal royalty and
override payments 569 422 1,508 1,336
--- --- ----- -----
Total operating
costs and expenses 20,570 21,801 94,658 86,686
------ ------ ------ ------
Income from
operations 55,252 35,514 197,007 128,299
Other income
(expense)
Interest expense (7,020) (7,106) (28,356) (28,690)
Interest income 231 651 1,355 2,890
--- --- ----- -----
Net income $48,463 $29,059 $170,006 $102,499
======= ======= ======== ========
Net income
attributable to:( )
General partner $8,433 $4,303 $28,318 $14,315
====== ====== ======= =======
Holders of incentive
distribution rights $4,018 $2,614 $13,756 $7,216
====== ====== ======= ======
Limited partners $36,012 $22,142 $127,932 $80,968
======= ======= ======== =======
Basic and diluted
net income per
limited partner
unit: $0.55 $0.35 $1.97 $1.26
===== ===== ===== =====
Weighted average
number of units
outstanding: 64,891 64,891 64,891 64,505
====== ====== ====== ======
Natural Resource Partners L.P.
Statements of Cash Flows
(In thousands)
Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
---- ---- ---- ----
(unaudited) (unaudited)
Cash flows from operating
activities:
Net income $48,463 $29,059 $170,006 $102,499
Adjustments to reconcile
net income to net
cash provided by
operating activities:
Depreciation, depletion
and amortization 15,405 14,067 64,254 51,391
Non-cash interest charge 12 117 278 443
Loss from disposition of
assets 1 (1,236) 33 (1,236)
Change in operating
assets and liabilities:
Accounts receivable 6,708 2,364 (4,586) (5,270)
Other assets (714) (705) 178 178
Accounts payable and
accrued liabilities (1,931) (247) (1,484) (464)
Accrued interest 3,342 2,596 143 2,430
Deferred revenue 479 4,825 4,468 15,632
Accrued incentive plan
expenses (2,535) 603 (3,041) 465
Property, franchise and
other taxes payable 1,583 1,781 (293) 2,085
----- ----- ----- -----
Net cash provided by
operating activities 70,813 53,224 229,956 168,153
------ ------ ------- -------
Cash flows from investing
activities:
Acquisition of land, coal
and other mineral rights (5,500) (33,891) (5,500) (58,124)
Acquisition or
construction of plant
and equipment (616) (860) (10,568) (16,695)
Proceeds from sale of
assets - 1,425 - 1,425
Cash placed in restricted
account 6,240 - 6,240 (6,240)
----- ------ ----- -------
Net cash used in
investing activities 124 (33,326) (9,828) (79,634)
--- -------- ------- --------
Cash flows from financing
activities:
Proceeds from loans - 23,000 - 285,400
Deferred financing costs - - - (1,292)
Repayments of loans 1 - (17,234) (235,942)
Distributions to partners (45,422) (38,934) (171,307) (147,033)
Contributions by general
partner - - - 2,645
-------- ------- -------- -----
Net cash used in
financing activities (45,421) (15,934) (188,541) (96,222)
-------- -------- --------- --------
Net increase or
(decrease) in cash and
cash equivalents 25,516 3,964 31,587 (7,703)
Cash and cash equivalents
at beginning of period 64,412 54,377 58,341 66,044
------ ------ ------ ------
Cash and cash equivalents
at end of period $89,928 $58,341 $89,928 $58,341
======= ======= ======= =======
SUPPLEMENTAL INFORMATION:
Cash paid during the
period for interest $3,556 $4,392 $27,735 $25,771
====== ====== ======= =======
Non-cash investing
activities:
Equity issued in business
combinations $- $- $- $330,064
Assets contributed by
general partner in a
business combination - - - 4,422
Liability assumed in
business combination - - - 1,989
Natural Resource Partners L.P.
Consolidated Balance Sheets
(In thousands, except for unit information)
ASSETS
December 31, December 31,
2008 2007
---- ----
(unaudited)
Current assets:
Cash and cash equivalents $89,928 $58,341
Restricted cash - 6,240
Accounts receivable, net of allowance for
doubtful accounts 31,883 27,643
Accounts receivable - affiliate 1,351 1,005
Other 934 1,009
--- -----
Total current assets 124,096 94,238
Land 24,343 24,343
Plant and equipment, net 67,204 61,441
Coal and other mineral rights, net 979,692 1,030,088
Intangible assets 102,828 106,222
Loan financing costs, net 2,679 3,098
Other assets, net 498 601
--- ---
Total assets $1,301,340 $1,320,031
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued liabilities $861 $2,606
Accounts payable - affiliate 365 104
Current portion of long-term debt 17,235 17,234
Accrued incentive plan expenses - current
portion 3,179 3,993
Property, franchise and other taxes payable 6,122 6,415
Accrued interest 6,419 6,276
----- -----
Total current liabilities 34,181 36,628
Deferred revenue 40,754 36,286
Accrued incentive plan expenses 4,242 6,469
Long-term debt 478,822 496,057
Partners' capital:
Common units 727,965 731,113
General partner's interest 15,148 14,177
Holders of incentive distribution rights 878 -
Accumulated other comprehensive loss (648) (699)
----- -----
Total partners' capital 743,341 744,591
------- -------
Total liabilities and partners' capital $1,301,340 $1,320,031
========== ==========
Natural Resource Partners L.P.
Reconciliation of GAAP "Net cash provided by operating activities"
To Non-GAAP "Distributable cash flow"
(In thousands)
Three Months Ended For the Year Ended
December 31, December 31,
------------- -------------
2008 2007 2008 2007
---- ---- ---- ----
(unaudited) (unaudited)
Net cash provided by operating
activities $70,813 $53,244 $229,956 $168,153
Less scheduled principal payments - - (17,234) (9,350)
Less reserves for future principal
payments (4,311) (4,308) (17,235) (13,388)
Add reserves used for scheduled
principal payments - - 17,234 9,400
- - ------ -----
Distributable cash flow $66,502 $48,916 $212,721 $154,815
======= ======= ======== ========
SOURCE
Natural Resource Partners L.P.
CONTACT:
Kathy H. Roberts of Natural Resource Partners L.P.,
+1-713-751-7555, kroberts@nrplp.com