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Natural Resource Partners L.P. Reports Second Quarter 2009 Results and Updates Guidance

08/06/2009
    HOUSTON, Aug. 6 /PRNewswire-FirstCall/ --

    Second Quarter 2009 Highlights:
    --  Distributable cash flow of $49.1 million, down 14% from 2Q08
    --  Revenues of $59.5 million, down 21%
    --  Net income attributable to the limited partners of $0.07, down 85%
    --  Adjusted net income attributable to the limited partners of $0.19,
        down 59%
    --  Distribution of $0.54 per unit, a 4.9% increase
    --  Decreased guidance for 2009
        --  Distributable cash flow decreased approximately 33%

        --  Revenues decreased approximately 25%

Natural Resource Partners L.P. (NYSE: NRP) today reported that decreased demand for coal led to lower second quarter 2009 results. Distributable cash flow, a non-GAAP measure, decreased 14% to $49.1 million, from the $57.4 million reported for the second quarter of 2008. Primarily due to lower coal demand and a non-cash expense discussed in more detail below, net income attributable to the limited partners decreased $25.1 million to $4.8 million for the second quarter of 2009, compared to $29.9 million for the second quarter last year. Similarly, net income per unit decreased to $0.07 per unit in the second quarter of 2009 from $0.46 for the second quarter of 2008. Net income attributable to the limited partners included an $8.0 million or $0.12 per unit write-off, which was the limited partners' share of an $8.2 million write-off for a terminated lease on a property due to a mine closure. Excluding this non-cash expense, net income attributable to the limited partners would have been $12.8 million or $0.19 per unit. Reconciliations of distributable cash flow and adjusted net income attributable to the limited partners are provided in the tables attached.

    Highlights
    ----------
                                       2Q09        1Q09        2Q08
                                       ----        ----        ----
                                    (in thousands except per ton and
                                                per unit)
                                    --------------------------------
    Coal production:                  11,784      12,482      16,093
    Coal royalty revenues:           $46,379     $52,607     $60,026
    Average coal royalty revenue
     per ton:                          $3.94       $4.21       $3.73
    Total revenues:                  $59,487     $66,733     $75,592
    Net income to limited
      partners:                       $4,804     $21,598     $29,920
    Average units outstanding
     in quarter:                      66,946      64,891      64,891
    Net income per unit:               $0.07       $0.33       $0.46
    Distributable cash flow:         $49,068     $35,493     $57,359

"Coal fired electric generation is down about 14% year over year because of the recession and low natural gas prices. Similarly metallurgical coal consumption is depressed due to worldwide steel production being at about 50% of capacity. In addition, while some of our lessees have received new mining permits, costs, delays and uncertainties in the permit process persist. These factors have led to production cutbacks and price declines that caused our revenue to drop below our forecast. We expect these conditions to persist through the remainder of 2009. Compared to the first quarter of 2009, we saw both steam and metallurgical production in Central Appalachia decline, while Illinois Basin production increased after a longwall move in the first quarter depressed production. However, we hear from some of our lessees that metallurgical coal has bottomed and if that proves to be true and demand and prices improve, so should our performance," said Nick Carter, President and Chief Operating Officer. "Throughout this period we continue to manage the company for the long term, not the short term. We continue to work to grow NRP and see attractive acquisition opportunities and we remain optimistic about our long-range prospects."

Current Market

One year ago, the worldwide economies were booming and coal prices, particularly metallurgical coal prices, were growing rapidly as well. Over the last six years, global coal consumption has increased 37%, with China increasing its consumption by 97%. In 2008, global coal consumption continued to increase, but at a much slower rate of 3.8%. While coal has been the fastest growing major fuel consumed in the world, weakening economies have temporarily created lower demand for steel and electricity and hence coal. Some improvements in the worldwide economies are beginning to be recognized; however, it will take some time for a full recovery to occur. China has increased imports of metallurgical coal over the last couple of months and for the first time in several months, U.S. furnaces are beginning to come back on line and producing steel.

Guidance

"When we issued guidance earlier this year, neither we nor our lessees could have predicted the drastic impact that the downturn in the economy would have on the coal industry and NRP. While we lack the desired clarity, we believe the new guidance reflects today's market conditions," said Nick Carter.

Due to the continued weak coal market, NRP is lowering its annual guidance for 2009. The updated guidance includes:

    --  Distributable cash flow decreased approximately 33% to a range of
        approximately $139 million to $165 million.
    --  Net income per unit decreased to a range of $0.58 to $0.90 per unit.
        Excluding the item written off in the second quarter, which accounts
        for a $0.12 per unit reduction, the net income per unit for 2009 would
        be $0.70 to $1.02.
    --  Coal royalty revenues reduced approximately 27% to a range between
        $176 million and $196 million.

    --  Total revenues decreased approximately 25% to a range between $221
        million and $254 million.

Metallurgical coal accounts for 26% of total coal royalty revenues and 20% of production for the revised forecast.

    A complete table of all guidance metrics is attached to this release.

    Acquisitions and Liquidity

As previously announced, in the second quarter 2009 NRP issued 4,560,000 units for the acquisition of a new property located in Meigs County, Ohio. This property, while currently producing, has not reached full productive capacity and therefore had a negative impact on earnings per unit in the second quarter.

Following the end of the quarter, NRP also acquired an aggregate property located in Texas for a total of $24 million, $9 million of which was paid at closing. Taking into account the full $24 million purchase price, NRP has $276 million available on its credit facility and at quarter-end had $81 million of cash.

"While NRP experienced lower than expected operating results, with the current cash and credit capacity available to NRP, we are well-positioned to weather the current market and also to continue to look at various acquisition opportunities," said Dwight Dunlap, Chief Financial Officer.

Second Quarter 2009 versus First Quarter 2009

Total revenues in the second quarter decreased $7.2 million, or 11% from the first quarter of 2009, primarily due to decreased coal production and coal royalty revenues. Coal production decreased 700 thousand tons, or 6%, while average coal royalty revenue per ton decreased $0.27 per ton, or approximately 6% this quarter.

Distributable cash flow increased 38% from the first quarter 2009 to $49.1 million due to improvements in working capital that offset declines in both production and revenues.

    Second Quarter and Six Month Results

    Revenues
    Second Quarter

Total revenues for the second quarter of 2009 decreased $16.1 million, or 21%, to $59.5 million compared to the same period last year due primarily to decreases in coal royalty revenues. Coal royalty revenues accounted for $13.6 million, or approximately 85% of the decline in total revenues. Coal royalty revenues decreased 23% from the second quarter of 2008 to $46.4 million due to a 27% decrease in coal royalty production, offset modestly by a 6% increase in the combined average royalty revenue per ton.

Production decreased 4.3 million tons from the second quarter last year to 11.8 million tons for the second quarter of 2009 due to decreased production in all regions, particularly in Appalachia. Weak economies worldwide have caused decreased demand for metallurgical coal and with the 14% decline in domestic demand for coal fired electricity and increasing stockpiles at utilities, many of NRP's lessees have reduced production to better meet current demand.

Combined average royalty revenue per ton increased $0.21 to $3.94 from the $3.73 reported for the second quarter last year. Increases occurred in all regions except Central Appalachia and the Northern Powder River Basin. The most dramatic increase occurred in the Illinois Basin, where the partnership experienced a 30% increase to $3.36 per ton due to a higher royalty rate per ton on current production.

Six Months

Total revenues decreased 10% from the first six months of last year to $126.2 million mainly due to a $10.2 million decrease in coal royalty revenues. Coal royalty revenues decreased 9% from the same period last year due to a 6.3 million, or 21%, decrease in production, which was offset somewhat by an increase of $0.51, or 14%, in the combined average royalty revenue per ton to $4.08 in the first half of 2009.

Metallurgical coal accounted for 28% of NRP's coal royalty revenues and 21% of its production for the first half of 2009.

Expenses

Second Quarter

Total expenses increased $3.3 million in the second quarter of 2009 when compared to the same period last year, due to increased depreciation, depletion and amortization offset by lower general and administrative expenses and lower property, franchise and other taxes. Depreciation, depletion and amortization expense increased due to an $8.2 million non-cash write-off of a terminated lease due to a mine closure in the second quarter of 2009.

Six Months

Total expenses for the six month period ending June 30, 2009 increased $5.4 million to $57.1 million over the same period last year. This increase was due to an increase in depreciation, depletion and amortization expense of $3.3 million and an increase of approximately $2.3 million in general and administrative expenses from the six month period last year. While production volumes decreased, NRP's depreciation, depletion and amortization increased due to the $8.2 million write-off described above. The general and administrative expense increased due to additional long-term incentive awards granted.

Net Income Attributable to the Limited Partners

Second Quarter

Second quarter 2009 net income attributable to the limited partners declined $25.1 million to $4.8 million, from the second quarter last year. This amount included the $8.0 million, or $0.12 per unit, limited partners' share of the non-cash write-off of a terminated lease due to a mine closure. Net income per unit decreased to $0.07 versus $0.46 for the same quarter last year. Excluding the write-off described above, the partnership would have reported $0.19 per unit for this quarter. Net income for the second quarter 2009 was also impacted by the 4,560,000 units issued in conjunction with the acquisition discussed earlier.

Six Months

Net income attributable to the limited partners for the six month period ended June 30, 2009 decreased $28.3 million over the same period last year, accounting for a $0.44 decline in net income per unit to $0.40 for the six month period. Excluding the effects of the write-off discussed above, net income per unit would be increased by $0.12 per unit to $0.52 per unit for the six month period. Net income was also impacted by the additional units issued in the second quarter 2009 discussed above.

Distributable Cash Flow

Second Quarter

Distributable cash flow decreased 14% to $49.1 million when compared to the same quarter last year, due to decreases in total revenues and increases in NRP's reserves for scheduled debt payments. The reserve for debt payments increased $3.7 million over second quarter of 2008 due to additional scheduled principal payments on NRP's senior notes coming due in 2010.

Six Months

For the six months ended June 30, 2009 distributable cash flow decreased $7.7 million, or 8%, to $84.6 million due to increased reserves of $7.5 million for scheduled debt payments due in the next twelve months.

Distributions

As reported on July 21, the Board of Directors of NRP's general partner declared a quarterly distribution of $0.54 per unit. This represents a 4.9% increase over the second quarter 2008 and is unchanged from the first quarter 2009.

"In light of the current economy, the NRP Board of Directors opted to maintain the distribution rather than increasing the distribution as we had for the last 23 straight quarters. While NRP has a sufficient cash balance to offset any near term shortfalls in distributable cash flow, this prudent approach will give NRP more options regarding potential acquisitions that may present themselves during these economic times," said Corbin J. Robertson, Chairman and Chief Executive Officer.

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 mineral reserve properties. NRP owns coal reserves 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 owns and manages aggregate reserves in Texas, West Virginia and Washington.

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.

    -Financial statements follow-



                         Natural Resource Partners L.P.
                             Operating Statistics
                      (In thousands except per ton data)


                                         Three Months     For the Six Months
                                             Ended               Ended
                                           June 30,             June 30,
                                           --------             --------
                                       2009        2008     2009        2008
                                       ----        ----     ----        ----
                                          (unaudited)          (unaudited)
    Coal Royalties:
    Coal royalty revenues:
      Appalachia
        Northern                      $2,890      $4,902   $5,933      $8,405
        Central                       30,308      42,974   68,186      77,271
        Southern                       4,809       3,802    9,906       9,300
                                       -----       -----    -----       -----
           Total Appalachia          $38,007     $51,678  $84,025     $94,976
        Illinois Basin                 6,570       5,923   10,821       8,556
        Northern Powder River Basin    1,803       2,425    4,141       5,646
                                       -----       -----    -----       -----

    Total                            $46,380     $60,026  $98,987    $109,178
                                     =======     =======  =======    ========

    Coal royalty production (tons):
      Appalachia
        Northern                         967       1,927    2,066       3,264
        Central                        6,989       9,629   14,978      18,571
        Southern                         798         930    1,639       2,224
                                         ---         ---    -----       -----
           Total Appalachia            8,754      12,486   18,683      24,059
        Illinois Basin                 1,956       2,293    3,282       3,458
        Northern Powder River Basin    1,074       1,314    2,301       3,045
                                       -----       -----    -----       -----

    Total                             11,784      16,093   24,266      30,562
                                      ======      ======   ======      ======

    Average royalty revenue per ton:
      Appalachia
        Northern                       $2.99       $2.54    $2.87       $2.58
        Central                         4.34        4.46     4.55        4.16
        Southern                        6.03        4.09     6.04        4.18
           Total Appalachia             4.34        4.14     4.50        3.95
        Illinois Basin                  3.36        2.58     3.30        2.47
        Northern Powder River Basin     1.68        1.85     1.80        1.85

          Combined average royalty
           revenue per ton             $3.94       $3.73    $4.08       $3.57

    Aggregates:
    Royalty revenues                  $1,047      $1,633   $1,977      $3,051
    Aggregate royalty bonus             $300        $300   $1,020      $2,244
    Production:                          791       1,238    1,481       2,392
    Average base royalty per ton:      $1.32       $1.32    $1.33       $1.28



                        Natural Resource Partners L.P.
                       Consolidated Statements of Income
                      (In thousands, except per unit data)


                                         Three Months   For the Six Months
                                           Ended              Ended
                                          June 30,           June 30,
                                          --------           --------
                                        2009     2008     2009       2008
                                        ----     ----     ----       ----
                                        (Unaudited)        (Unaudited)
    Revenues:
      Coal royalties                  $46,380  $60,026  $98,987  $109,178
      Aggregate royalties               1,347    1,933    2,997     5,295
      Coal processing fees              2,400    1,757    4,300     3,654
      Transportation fees               3,489    3,361    5,585     5,010
      Oil and gas royalties               953    1,933    2,446     3,378
      Property taxes                    2,514    3,105    5,725     5,497
      Minimums recognized as
       revenue                             67      149      290       456
      Override royalties                1,336    2,006    3,884     4,505
      Other                             1,001    1,322    2,006     2,674
                                        -----    -----    -----     -----
         Total revenues                59,487   75,592  126,220   139,647
    Operating costs and expenses:
      Depreciation, depletion and
       amortization                    21,996   16,748   35,074    31,807
      General and administrative        5,834    6,890   13,340    11,039
      Property, franchise and other
       taxes                            3,151    4,098    7,126     7,747
      Transportation costs                473      408      741       529
      Coal royalty and override
       payments                           372      343      861       652
                                          ---      ---      ---       ---
         Total operating costs and
          expenses                     31,826   28,487   57,142    51,774
                                       ------   ------   ------    ------
    Income from operations             27,661   47,105   69,078    87,873
    Other income (expense)
      Interest expense                (10,675)  (7,064) (18,754)  (14,424)
      Interest income                      96      312      178       756
                                           --      ---      ---       ---
    Net income                        $17,082  $40,353  $50,502   $74,205
                                      =======  =======  =======   =======
    Net income attributable to:
      General partner                     $98     $611     $539    $1,116
                                          ===     ====     ====    ======
      Holders of incentive
       distribution rights            $12,180   $9,822  $23,561   $18,399
                                      =======   ======  =======   =======
      Limited partners                 $4,804  $29,920  $26,402   $54,690
                                       ======  =======  =======   =======

    Basic and diluted net income
     per limited partner unit:          $0.07    $0.46    $0.40     $0.84
                                        =====    =====    =====     =====

    Weighted average number of
     units outstanding:                66,946   64,891   65,924    64,891
                                       ======   ======   ======    ======



                          Natural Resource Partners L.P.
                             Statements of Cash Flows
                                 (In thousands)

                                      Three Months        For the Six Months
                                           Ended                Ended
                                          June 30,             June 30,
                                      ------------------   ----------------
                                      2009       2008     2009       2008
                                      ----       ----     ----       ----
                                        (Unaudited)        (Unaudited)
    Cash flows from operating
     activities:
      Net income                     $17,082   $40,353   $50,502   $74,205
      Adjustments to reconcile
       net income to net cash
       provided by operating
       activities:
        Depreciation, depletion
         and amortization             21,996    16,748    35,074    31,807
        Non-cash interest charge         128       117     1,010       235
        Loss from disposition of
         assets                            -        32         -        32
      Change in operating assets
       and liabilities:
        Accounts receivable            5,328    (5,252)    1,865    (8,971)
        Other assets                       -       323       267       584
        Accounts payable and
         accrued liabilities             148       680      (247)      429
        Accrued interest               7,054     2,655     3,909      (265)
        Deferred revenue               2,798       313     8,310     2,726
        Accrued incentive plan
         expenses                      2,034     4,226     1,568     1,078
        Property, franchise and
         other taxes payable             559     1,472    (1,579)     (990)
                                         ---     -----   -------     -----
          Net cash provided by
           operating activities       57,127    61,667   100,679   100,870
                                      ------    ------   -------   -------

    Cash flows from investing
     activities:
        Acquisition of land, coal
         and other mineral rights          -         -   (95,641)        -
        Acquisition or construction
         of plant and equipment            -    (4,654)   (1,157)   (7,454)
                                         ---   -------   -------   -------
          Net cash used in
           investing activities            -    (4,654)  (96,798)   (7,454)
                                         ---   -------  --------   -------

    Cash flows from financing
     activities:
        Proceeds from loans                -         -   303,000         -
        Deferred financing costs           -         -      (661)        -
        Repayments of loans           (9,350)   (9,350) (160,542)   (9,543)
        Retirement of purchase
         obligation related to
         reserve and infrastructure  (20,000)        -   (60,000)        -
        Costs associated with
         issuance of units               (21)        -       (21)        -
        Distributions to partners    (47,370)  (41,529)  (94,090)  (81,760)
                                    --------  --------  --------  --------
          Net cash used in
           financing activities      (76,741)  (50,879)  (12,314)  (91,303)
                                    --------  --------  --------  --------
     Net increase or (decrease)
      in cash and cash equivalents   (19,614)    6,134    (8,433)    2,113
     Cash and cash equivalents
      at beginning of period         101,109    54,320    89,928    58,341
                                     -------    ------    ------    ------
     Cash and cash equivalents
      at end of period               $81,495   $60,454   $81,495   $60,454
                                     =======   =======   =======   =======

     SUPPLEMENTAL INFORMATION:
       Cash paid during the
        period for interest           $3,480    $4,292   $13,760   $14,450
                                      ======    ======   =======   =======

     Non-cash investing activities:
       Equity issued for
        acquisitions                 $95,910        $-   $95,910        $-
       Liability assumed in
        acquisition                    1,170        $-     1,170        $-

    Non-cash financing activities:
       Purchase obligation
        related to reserve and
        infrastructure acquisition        $-        $-   $59,220        $-



                          Natural Resource Partners L.P.
                           Consolidated Balance Sheets
                   (In thousands, except for unit information)


                                 ASSETS
                                                        June 30,  December 31,
                                                          2009        2008
                                                          ----        ----
                                                        (unaudited)

    Current assets:
       Cash and cash equivalents                        $81,495     $89,928
       Accounts receivable, net of allowance for
        doubtful accounts                                26,293      31,883
       Accounts receivable - affiliate                    3,906       1,351
       Other                                                704         934
                                                            ---         ---
         Total current assets                           112,398     124,096
    Land                                                 24,343      24,343
    Plant and equipment, net                             71,130      67,204
    Coal and other mineral rights, net                1,133,023     979,692
    Intangible assets                                   163,610     102,828
    Loan financing costs, net                             3,120       2,679
    Other assets, net                                       461         498
                                                            ---         ---
         Total assets                                $1,508,085  $1,301,340
                                                     ==========  ==========

                      LIABILITIES AND PARTNERS' CAPITAL

    Current liabilities:
       Accounts payable and accrued liabilities            $804        $861
       Accounts payable - affiliate                         175         365
       Current portion of long-term debt                 32,235      17,235
       Accrued incentive plan expenses - current
        portion                                           3,982       3,179
       Property, franchise and other taxes payable        4,543       6,122
       Accrued interest                                  10,328       6,419
                                                         ------       -----
         Total current liabilities                       52,067      34,181
    Deferred revenue                                     49,064      40,754
    Accrued incentive plan expenses                       5,007       4,242
    Long-term debt                                      606,280     478,822
    Partners' capital:
       Common units (69,451,136 in 2009,
        64,891,136 in 2008)                             769,892     719,341
       General partner's interest                        14,218      13,579
       Holders of incentive distribution rights          12,180      11,069
       Accumulated other comprehensive loss                (623)       (648)
                                                          -----       -----
         Total partners' capital                        795,667     743,341
                                                        -------     -------
         Total liabilities and partners'
          Capital                                    $1,508,085  $1,301,340
                                                     ==========  ==========



                        Natural Resource Partners L.P.
                  Reconciliation of GAAP Financial Measurements
                       to Non-GAAP Financial Measurements
                                (In thousands)

              Reconciliation of GAAP "Net cash provided by
           operating activities" To Non-GAAP "Distributable cash flow"

                                    Three Months         For the Six Months
                                        Ended                  Ended
                                       June 30,               June 30,
                                       --------               --------
                                   2009        2008      2009          2008
                                   ----        ----      ----          ----
                                      (unaudited)             (unaudited)
    Net cash provided by
     operating activities         $57,127     $61,667  $100,679      $100,870
    Less scheduled principal
     payments                      (9,350)     (9,350)   (9,542)       (9,543)
    Less reserves for future
     principal payments            (8,059)     (4,308)  (16,118)       (8,616)
    Add reserves used for
     scheduled principal
     payments                       9,350       9,350     9,542         9,543
                                    -----       -----     -----         -----
    Distributable cash flow       $49,068     $57,359   $84,561       $92,254
                                  =======     =======   =======       =======



    Reconciliation of GAAP "Net income attributable to the limited partners"
    To Non-GAAP "Adjusted net income attributable to the limited partners"

                                  Three Months         For the Six Months
                                     Ended                   Ended
                                    June 30,                June 30,
                                   --------                 --------
                               2009        2008        2009          2008
                               ----        ----        ----          ----
                                  (unaudited)              (unaudited)
    Non-GAAP
    GAAP Net income          $17,082      $40,353    $50,502        $74,205
    Add write-off of
     property due to mine
     closure                  $8,195            -     $8,195              -
                              ------          ---     ------            ---
    Adjusted net income      $25,277      $40,353    $58,697        $74,205
                             =======      =======    =======        =======
    Adjusted net income
     attributable to:
      General partner           $262         $611       $703         $1,116
                                ====         ====       ====         ======
      Holders of incentive
       distribution rights:  $12,180       $9,822    $23,561        $18,399
                             =======       ======    =======        =======
      Limited partners       $12,835      $29,920    $34,433        $54,690
                             =======      =======    =======        =======

    Adjusted Basic and
     diluted net income
     per limited partner
     unit                      $0.19        $0.46      $0.52          $0.84
                               =====        =====      =====          =====

    Weighted average
     number of units
     outstanding:             66,946       64,891     65,924         64,891
                              ======       ======     ======         ======



                           Natural Resource Partners L.P.
                                     Guidance
              (dollars and tons in millions except per unit amounts)

                                        Revised               Original
                                     2009 Guidance          2009 Guidance
                                        (Range)                (Range)
                                         ------                 ------
    Revenues
       Coal royalty revenues       $176.0   -  $195.5     $240.0   -  $270.0
       Aggregate revenues             5.0   -     7.0        6.5   -     8.5
       Override royalties             6.0   -     9.0       10.0   -    13.0
       Oil and gas royalties          3.5   -     4.5        4.0   -     5.5
       Coal processing fees           7.0   -     9.0        8.5   -    11.0
       Coal transportation fees      10.0   -    13.5       13.0   -    16.5
       Property taxes                10.0   -    11.0        9.0   -    10.0
       Other revenues (1)             3.5   -     4.5        3.0   -     3.5
           Total revenues          $221.0   -  $254.0     $294.0   -  $338.0

    Expenses
       Depreciation, depletion,
        and amortization            $57.0   -   $60.0      $62.0   -   $67.0
       General and administrative    24.0   -    25.5       21.5   -    23.5
       Property, franchise and
        other taxes                  13.5   -    14.5       13.0   -    15.0
       Coal transportation
        expenses                      0.5   -     1.0        1.5   -     2.0
       Coal royalty and override
        payments                      2.0   -     3.0        1.0   -     1.5
          Total operating expenses  $97.0   -  $104.0      $99.0   -  $109.0

       Interest expense (net)       $37.0   -   $40.0      $25.0   -   $27.0

    Net income                      $87.0   -  $110.0     $170.0   -  $202.0

    Net income per unit             $0.58   -   $0.90      $1.67   -   $2.12

    Principal payments              $32.2   -   $32.2      $24.7   -   $24.7

    Distributable cash flow (2)    $139.0   -  $165.0     $207.3   -  $244.3

    Average units outstanding for
     2009                            67.7

    (1) Other revenues consist of minimums recognized as revenue, wheelage,
        rentals and timber.

    (2) Distributable cash flow represents net income plus depletion and
        amortization plus minimums of $27 million expected in 2009, minus
        principal payments to be paid within the next twelve months
        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.


                                Guidance continued

                                         Revised              Original
                                       2009 Guidance        2009 Guidance
                                         (Range)               (Range)
                                          ------                ------
     Regional Statistics
     Coal royalty production (tons)
           Northern Appalachia        3.5   -     5.0        4.0   -     6.0
           Central Appalachia        26.0   -    30.0       32.5   -    37.5
           Southern Appalachia        2.5   -     3.5        3.5   -     4.5
       Appalachia                    32.0   -    38.5       40.0   -    48.0
       Illinois Basin                 6.0   -     7.0        7.0   -     8.0
       Northern Powder River Basin    3.0   -     4.5        4.0   -     5.0
         Total                       41.0   -    50.0       51.0   -    61.0

     Coal royalty revenues
           Northern Appalachia      $12.0   -   $14.0      $16.0   -   $18.5
           Central Appalachia       121.0   -   131.0      166.0   -   188.0
           Southern Appalachia       16.0   -    19.0       24.0   -    27.0
       Appalachia                  $149.0   -  $164.0     $206.0   -  $233.5
       Illinois Basin                20.0   -    23.0       26.0   -    27.0
       Northern Powder River Basin    7.0   -     8.5        8.0   -     9.5
         Total                     $176.0   -  $195.5     $240.0   -  $270.0

     Average coal royalty revenue
      per ton
           Northern Appalachia      $2.80   -   $3.43      $3.08   -   $4.00
           Central Appalachia        4.37   -    4.65       5.01   -    5.11
           Southern Appalachia       5.43   -    6.40       6.00   -    6.86
       Appalachia                   $4.26   -   $4.66      $4.86   -   $5.15
       Illinois Basin                3.29   -    3.33       3.38   -    3.71
       Northern Powder River Basin   1.89   -    2.33       1.90   -    2.00
         Total                      $3.91   -   $4.29      $4.43   -   $4.71

     Aggregates
     Royalty revenues                $4.0   -    $5.0       $5.5   -    $6.5
     Aggregate bonus royalty         $1.0   -    $2.0       $1.0   -    $2.0
     Production (tons)                3.0   -     3.5        4.5   -     5.0
     Average royalty revenue per
      ton                           $1.33   -   $1.43      $1.22   -   $1.30

SOURCE  Natural Resource Partners L.P.

    -0-                           08/06/2009
    /CONTACT:  Kathy H. Roberts of Natural Resource Partners L.P.,
+1-713-751-7555, kroberts@nrplp.com/
    /Photo:  http://www.newscom.com/cgi-bin/prnh/20060109/NRPLOGO
             http://photoarchive.ap.org
             PRN Photo Desk, photodesk@prnewswire.com/
    /Web Site:  http://www.nrplp.com /
    (NRP)

CO:  Natural Resource Partners L.P.

ST:  Texas
IN:  UTI OIL GAS
SU:  ERN CCA DIV ERP

PR
-- DA57486 --
4586 08/06/200908:00 EDThttp://www.prnewswire.com

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