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Natural Resource Partners L.P. Reports Third Quarter 2014 Results

11/04/2014
- Revenues of $91.6 million
- Net income per unit of $0.32
- Distributable cash flow of $57.8 million
- EBITDA of $78.3 million
- Distribution of $0.35 per unit

HOUSTON, Nov. 4, 2014 /PRNewswire/ -- Natural Resource Partners L.P. (NYSE: NRP) today reported revenues of $91.6 million for the third quarter of 2014 compared to $82.2 million for the third quarter of 2013, and distributable cash flow, a non-GAAP measure, of $57.8 million compared to $104.6 million for the third quarter of 2013.  Net income per unit was $0.32 for both the third quarter of 2014 and 2013.  NRP reported EBITDA, a non-GAAP measure, of $78.3 million in the third quarter of 2014 compared to $72.9 million for the third quarter of 2013.  Reconciliations of the non-GAAP measures of distributable cash flow and EBITDA are included in the tables at the end of this release.

Natural Resource Partners LP logo.

"We continued to benefit in the third quarter from our diverse portfolio of natural resource assets," said Wyatt Hogan, President.  "All of our commodities performed in line with our expectations for the quarter, and we remain on track to meet our guidance for the year.  Our acquisition of the VantaCore construction aggregates business and the recently announced acquisition of oil and gas interests in the Sanish Field in the Williston Basin will even further diversify NRP and contribute to our future growth.  In addition, we saw increased coal production from our properties in all of our regions in the third quarter as compared to the second quarter, which is especially impressive in light of the continuing difficult market conditions for the coal industry."

Third Quarter 2014 compared to Third Quarter 2013


Highlights

Quarter Ended


For the Nine Months Ended


September

September

%


September

September

%


2014

2013

Change


2014

2013

Change


(in thousands except per unit and per ton)



(in thousands except per unit and per ton)


Revenues








Total revenues and other income

$    91,609

$    82,237

11%


$  262,479

$  263,373

0%

Coal production (tons)

13,370

13,476

-1%


37,473

42,203

-11%

Average coal royalty revenue per ton

$        3.80

$        3.88

-2%


$        3.74

$        3.91

-4%

Coal royalty revenues

$    50,870

$    52,305

-3%


$  140,169

$  164,957

-15%

Other coal related revenue

$    14,323

$      9,699

48%


$    32,758

$    42,279

-23%

Total coal related revenues

$    65,193

$    62,004

5%


$  172,927

$  207,236

-17%

Aggregates and industrial minerals related revenue(1)

$    12,340

$    11,027

12%


$    38,479

$    31,830

21%

Oil and gas related revenue

$      9,601

$      3,886

147%


$    37,481

$      9,742

285%









Operating Expenses

$    36,582

$    30,613

19%


$  104,610

$    93,889

11%









Net income 








Net income to limited partners

$    35,450

$    35,403

0%


$    98,181

$  122,595

-20%

Net income per unit

$        0.32

$        0.32

0%


$        0.89

$        1.12

-21%

Average units outstanding

111,244

109,812

1%


110,504

109,507

1%









Net income before considering any impairments(2)








Net income to limited partners

35,450

35,403

0%


103,693

123,314

-16%

Net income per unit

$        0.32

$        0.32

0%


$        0.94

$        1.13

-17%









Distributable cash flow(2)

$    57,773

$  104,613

-45%


$  161,644

$  239,748

-33%









EBITDA(2)

$    78,284

$    72,860

7%


227,182

229,543

-1%

EBITDA margin(2)

85%

89%

-4%


87%

87%

0%

(1) Aggregates and industrial minerals include the equity and other unconsolidated investment income associated with the OCI Wyoming soda ash business.

(2) See "Non-GAAP Financial Measures" and reconciliation tables at the end of the release.

Revenues and other income
Third quarter 2014 total revenues and other income increased 11% from the same period of 2013 due largely from NRP's diversification into other asset classes.

Average coal royalty revenue per ton decreased 3% on unchanged production resulting in a 3% reduction in coal royalty revenues in 2014 versus 2013.  Gain on a reserve swap of $5.7 million more than offset reductions in total coal related revenues, resulting in an increase of $3.2 million over the third quarter 2013.  Metallurgical coal accounted for 32% of NRP's coal production and 39% of its coal royalty revenues for the third quarter of 2014 compared to 35% of production and 47% of coal royalty revenues in the third quarter of 2013.    

Revenues other than coal related revenues increased 31% from the third quarter of 2013 primarily due to increased oil and gas revenues and our investment in the soda ash business.

Oil and gas revenues more than doubled over the third quarter of 2013 to $9.6 million, primarily due to the revenues generated by NRP's Williston Basin properties acquired in the second half of 2013.  NRP also recognized a 34% increase in the equity income associated with NRP's investment in the soda ash business due to an increase in OCI Wyoming's net income.

Operating expenses
Total operating expenses for the third quarter 2014 rose $6.0 million to $36.6 million from the third quarter 2013.  The increase was mainly due to $1.7 million of additional operating expenses associated with NRP's Williston Basin oil and gas properties and a $2.5 million accrued liability relating to a payment due to a royalty owner on one of NRP's properties recorded in 2014.  

Net income attributable to the limited partners
Net income attributable to the limited partners for both periods was approximately $35 million.

Distributable cash flow
Distributable cash flow decreased to $57.8 million from $104.6 million mainly due to a one-time special distribution of $44.8 million received from OCI Wyoming in 2013. 

EBITDA
EBITDA for the third quarter 2014 grew $5.4 million to $78.3 million compared to EBITDA generated in the third quarter 2013 of $72.9 million

Third Quarter 2014 compared to Second Quarter 2014


Highlights

Quarter Ended


September 2014

June 2014

% Change


(in thousands, except per ton and per unit)


Revenues and other income




Total revenues and other income

$              91,609

$   90,561

1%

Coal production (tons)

13,370

11,851

13%

Average coal royalty revenue per ton

$                  3.80

$       3.86

-1%

Coal royalty revenues

$              50,870

$   45,763

11%

Other coal related revenue

$              14,323

$     9,598

49%

Total coal related revenue

$              65,193

$   55,361

18%

Aggregates and industrial minerals related revenue(1)

$              12,340

$   12,964

-5%

Oil and gas related revenue

$                9,601

$   17,822

-46%





Operating expenses

$              36,582

$   40,158

-9%





Net income




Net income to limited partners

$              35,450

$   30,779

15%

Net income to the limited partners, before considering any impairments(2)

$              35,450

$   36,290

-2%

Net income per unit

$                  0.32

$       0.28

14%

Net income per unit, before considering any impairments(2)

$                  0.32

$       0.33

-3%

Average units outstanding

111,244

110,403

1%





Distributable cash flow(2)

$              57,773

$   64,944

-11%





EBITDA(2)

$              78,284

$   77,178

1%

EBITDA margin(2)

85%

85%

0%

(1) Aggregates and industrial minerals include the equity and other unconsolidated investment income associated with the OCI Wyoming soda ash business.

(2) See "Non-GAAP Financial Measures" and reconciliation tables at the end of the release.

Revenues and other income
Total revenues and other income for the third quarter increased $1.0 million or 1% from the second quarter, predominantly due to a $9.8 million increase in coal related revenues, offset by an $8.2 million decrease in oil and gas revenues. In the third quarter, NRP realized increased coal royalty revenues due to increased tonnage of 1.6 million tons over the second quarter resulting in a $5.1 million increase in coal royalty revenues.  In addition, NRP realized a $5.7 million gain on a reserve swap related to coal properties.  Oil and gas declined $8.2 million due to higher volumes and revenues recorded in the second quarter.  These large fluctuations in oil and gas volumes and revenues are expected to moderate on a percentage basis following the acquisition of the additional Williston Basin assets that are scheduled to close in mid-November.

Operating expenses
Operating expenses decreased $3.6 million from the second quarter predominantly due to a $5.6 million asset impairment recognized in the second quarter, partially offset by a $2.5 million accrued liability associated with a payment due to a royalty owner on one of NRP's properties recorded in the third quarter.

Net income attributable to the limited partners
Net income attributable to the limited partners and net income per unit increased in the third quarter from the previous quarter by $4.7 million and $0.04 per unit, respectively.  Before considering the non-cash impairment charge taken in the second quarter, net income attributable to the limited partners would have decreased by $0.8 million to $35.5 million while net income per unit would have decreased by $0.01 to $0.32 per unit.

Distributable cash flow
Distributable cash flow decreased $7.2 million to $57.8 million, down from $64.9 million reported in the second quarter due in part to a non-recurring distribution of $3.6 million received from OCI Wyoming in the second quarter as part of the completion of a restructuring that began in 2013.

EBITDA
EBITDA for the third quarter 2014 increased modestly over the second quarter to $78.3 million due to increased revenues. 

Acquisitions and Liquidity

During the third quarter of 2014, NRP reduced its debt by $15.7 million bringing the total net reduction for the first nine months of the year to $69.2 million.  Following the end of the quarter, NRP closed the VantaCore acquisition, issuing 2,426,690 common units and borrowing $169 million on NRP Operating's revolving credit facility.  In addition, on October 6, NRP announced a definitive agreement to purchase certain non-operated working interests in the Williston Basin for $340 million.  This acquisition is expected to close mid-November.  In anticipation of this closing, NRP completed a common equity offering, issuing 8.5 million common units for net proceeds of $100.4 million and issued an additional $125 million of its 9.125% senior notes due 2018 in a private offering for net proceeds of $122.1 million. NRP anticipates funding the remainder of the purchase price using additional borrowings under the expected upsized NRP Oil and Gas revolving credit facility.  Following these transactions, the current units outstanding are 122,278,412.

"After closing the VantaCore acquisition in October, and upon completion of the acquisition of the non-operated working interests in the Williston Basin, we anticipate combined borrowing capacity of approximately $145 million," said Dwight Dunlap, Chief Financial Officer.  "That capacity along with our cash balance of $78 million as of September 30, 2014 will provide ample liquidity for NRP." 

Distributions

As reported on October 20, 2014, the Board of Directors of NRP's general partner declared a quarterly distribution of $0.35 per unit for the third quarter 2014.  

Company Profile

Natural Resource Partners L.P. is a master limited partnership headquartered in Houston, TX.  NRP is a diversified natural resource company that owns interests in oil and gas, coal, aggregates and industrial minerals across the United States.  A large percentage of NRP's revenues are generated from royalties and other passive income.  In addition, NRP owns an equity investment in OCI Wyoming, a trona/soda ash operation, owns non-operated working interests in oil and gas properties and owns VantaCore, making NRP one of the top 25 aggregates producers in 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.

Non-GAAP Financial Measures

"Distributable cash flow" represents cash flow from operations plus any proceeds from the sale of assets plus the return on direct financing lease and contractual overrides shown in the cash flows from investing activities section of the cash flow statement.  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 make quarterly cash distributions 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.

"EBITDA" is a non-GAAP financial measure that we define as earnings before interest, taxes, depreciation, depletion and amortization and asset impairment, including interest, taxes, depreciation, depletion and amortization relating to OCI Wyoming. "EBITDA," as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. EBITDA provides no information regarding a company's capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax positions. EBITDA does not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital and other commitments and obligations. Our management team believes EBITDA is useful in evaluating our financial performance because this measure is widely used by analysts and investors for comparative purposes. EBITDA is a financial measure widely used by investors in the high-yield bond market.  There are significant limitations to using EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect our net income or loss, the lack of comparability of results of operations of different companies and the different methods of calculating EBITDA reported by different companies.

"EBITDA margin" represents NRP's EBITDA as a percentage of total revenues and other income.

Forward-Looking Statements

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission.  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, oil and gas, and aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; commodity prices; unanticipated geologic problems; changes in the legislative or regulatory environment, risks relating to recent acquisitions 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 - Coal Related Revenue

(in thousands except per ton data)






Quarter Ended


For the Nine Months Ended






September


September


September


September






2014


2013


2014


2013






(unaudited)


(unaudited)













Regional Statistics









Coal royalty production (tons):










Appalachia











Northern


2,060


2,779


6,537


10,051



Central


5,432


5,116


15,096


16,062



Southern


1,017


921


2,950


3,188




Total Appalachia


8,509


8,816


24,583


29,301


Illinois Basin


3,526


3,635


10,064


9,541


Northern Powder River Basin


1,054


735


2,106


2,499


Gulf Coast 


281


290


720


862

Total




13,370


13,476


37,473


42,203

Average royalty revenue per ton:










Appalachia











Northern


$        0.90


$        1.04


$        0.91


$        1.19



Central


4.69


4.94


4.59


5.10



Southern


5.04


6.05


5.24


6.47




Total Appalachia


3.81


3.83


3.69


3.91


Illinois Basin


4.08


4.23


4.07


4.28


Northern Powder River Basin


2.91


3.10


2.87


2.68


Gulf Coast 


3.40


3.24


3.43


3.36

Combined average royalty revenue per ton


$        3.80


$        3.88


$        3.74


$        3.91

Coal royalty revenues:










Appalachia











Northern


$      1,844


$      2,882


$      5,941


$    12,008



Central


25,470


25,270


69,289


81,861



Southern


5,130


5,571


15,469


20,623




Total Appalachia


$    32,444


$    33,723


$    90,699


$  114,492


Illinois Basin


14,403


15,364


40,956


40,864


Northern Powder River Basin


3,069


2,279


6,041


6,703


Gulf Coast 


954


939


2,473


2,898

Total coal royalty revenues


$    50,870


$    52,305


$  140,169


$  164,957













Other coal related revenues:










Override revenue


771


2,269


3,516


8,713


Transportation and processing fees


5,589


6,005


16,682


17,010


Minimums recognized as revenue


1,396


626


4,204


5,613


Reserve swap


5,690


-


5,690


8,149


Wheelage


877


799


2,666


2,794



Total other coal related revenues


$    14,323


$      9,699


$    32,758


$    42,279













Total coal related revenues


$    65,193


$    62,004


$  172,927


$  207,236

  

Natural Resource Partners L.P.

Operating Statistics - Aggregates and Industrial Minerals

(in thousands except per ton data)


Quarter Ended


For the Nine Months Ended


September


September


September


September


2014


2013


2014


2013


(unaudited)


(unaudited)









Aggregate royalty revenues and production








Tonnage

702


1,767


2,844


4,513

Average royalty per ton

$     0.79


$   1.13


$     0.94


$    1.17

  Total aggregate royalty revenues

$      553


$ 1,996


$   2,678


$  5,299









Other aggregate related revenue








  Override revenue

$   1,708


$    658


$   3,908


$  2,298

  Bonus revenue

-


570


562


570

  Processing fees

142


114


448


375

  Minimums recognized as revenue

110


372


1,617


812

  Wheelage

142


79


401


308

Total other aggregate related revenue

$   2,102


$   1,793


$   6,936


$   4,363









Total aggregate related revenues

$   2,655


$   3,789


$   9,614


$   9,662









Equity and other unconsolidated investment earnings

$   9,685


$   7,238


$ 28,865


$ 22,168









Total aggregates and industrial minerals related revenue

$ 12,340


$ 11,027


$ 38,479


$ 31,830









Cash distributions received from OCI Wyoming

$ 10,290


$ 46,007


$ 35,858


$ 72,946

 

Natural Resource Partners L.P.

Operating Statistics - Oil and Gas

(in thousands except per unit data)


Quarter Ended


Nine Months Ended


September


September


September


September


2014


2013


2014


2013


(unaudited)


(unaudited)

Williston Basin non-operated working interests








Production volumes








Oil (MBbls)

77


N/A


284


N/A

Natural gas (Mcf)

90


N/A


202


N/A

NGL (MBoe)

8


N/A


20


N/A









Average sales price per unit








Oil ($/Bbl)

$ 84.65


N/A


$  92.82


N/A

Natural gas ($/Mcf)

$   5.11


N/A


$    6.45


N/A

NGL ($/Boe)

$ 41.00


N/A


$  45.55


N/A









Revenues








Oil

$ 6,518


N/A


$ 26,360


N/A

Natural gas

$    460


N/A


$   1,303


N/A

NGL

$    328


N/A


$      911


N/A

  Total

$ 7,306


N/A


$ 28,574


N/A









Other oil and gas related revenues








Royalty and overriding revenues

$ 2,295


$ 3,886


$   8,907


$  9,742









Total oil and gas revenues

$ 9,601


$ 3,886


$ 37,481


$  9,742

 

Natural Resource Partners L.P.

Consolidated Statements of Comprehensive Income

(in thousands, except per unit data)
















Quarter Ended


For the Nine Months Ended





September


September


September


September





2014


2013


2014


2013





(unaudited)


(unaudited)














Revenues and other income:










Coal related revenues


$ 65,193


$ 62,004


$ 172,927


$ 207,236


Aggregate related revenues


2,655


3,789


9,614


9,662


Oil and gas related revenues


9,601


3,886


37,481


9,742


Equity and other unconsolidated investment income


9,685


7,238


28,865


22,168


Property taxes


3,520


4,009


10,865


11,805


Other


955


1,311


2,727


2,760



Total revenues and other income


91,609


82,237


262,479


263,373

Operating expenses:










Depreciation, depletion and amortization


18,621


17,852


49,618


50,025


Asset impairments


-


-


5,624


734


General and administrative


7,664


7,305


22,550


27,769


Property, franchise and other taxes


4,767


4,234


15,836


12,810


Oil and gas lease operating expenses


2,147


483


6,359


483


Transportation costs


354


455


1,238


1,242


Royalty payments


3,029


284


3,385


826



Total operating expenses


36,582


30,613


104,610


93,889

Income from operations


55,027


51,624


157,869


169,484

Other income (expense)








-


Interest expense


(18,862)


(15,516)


(57,759)


(44,619)


Interest income


8


18


75


232

Income before non-controlling interest


$ 36,173


$ 36,126


$ 100,185


$ 125,097


Non-controlling interest


-


-


-


-

Net income


$ 36,173


$ 36,126


$ 100,185


$ 125,097

Net income attributable to:










General partner


$      723


$      723


$     2,004


$     2,502


Limited partners


$ 35,450


$ 35,403


$   98,181


$ 122,595












Basic and diluted net income per limited partner unit:


$     0.32


$     0.32


$       0.89


$       1.12












Weighted average number of units outstanding:


111,244


109,812


110,504


109,507












Comprehensive income


$ 36,543


$  36,167


$ 100,291


$ 125,243

 

Natural Resource Partners L.P.

Consolidated Statements of Cash Flow

(in thousands, except per unit data)






Quarter Ended


For the Nine Months Ended






September


September


September


September






2014


2013


2014


2013






(unaudited)


(unaudited)

Cash flows from operating activities:










Net income


$ 36,173


$ 36,126


$ 100,185


$ 125,097


Adjustments to reconcile net income to net cash provided by operating activities:











Depreciation, depletion and amortization


18,621


17,852


49,618


50,025



Gain on reserve swap


(5,690)


-


(5,690)


(8,149)



Equity and other unconsolidated investment income


(9,685)


(7,238)


(28,865)


(22,168)



Distributions of earnings from unconsolidated investments


10,290


7,951


32,225


24,113



Non-cash interest charge, net


677


899


2,145


1,454



Gain on sale of assets


(3)


(401)


(3)


(551)



Asset impairment


-


-


5,624


734


Change in operating assets and liabilities:











Accounts receivable


(3,857)


5,227


(7,542)


9,477



Other assets


432


3,849


750


864



Accounts payable and accrued liabilities


2,036


571


1,623


792



Accrued interest


4,964


(2,022)


3,192


(2,598)



Deferred revenue


4,246


3,380


11,345


13,331



Accrued incentive plan expenses


471


1,139


(5,445)


(80)



Property, franchise and other taxes payable


(1,217)


(1,467)


(2,066)


(2,826)




Net cash provided by operating activities:


57,458


65,866


157,096


189,515

Cash flows from investing activities:











Acquisition of plant and equipment


(72)


-


(207)


-



Acquisition of land, coal, other mineral rights, and related intangibles


-


(38,303)


(768)


(38,303)



Oil and gas capital expenditures


(5,144)


-


(13,267)


-



Acquisition of equity interests


-


(98)


-


(293,077)



Distributions from unconsolidated investments


-


38,056


3,633


48,833



Proceeds from sale of assets


5


405


5


559



Return on direct financing lease and contractual override


310


286


910


841




Net cash used in investing activities


(4,901)


346


(9,694)


(281,147)

Cash flows from financing activities:











Proceeds from loans


-


304,020


2,000


547,020



Repayment of loans


(15,692)


(306,692)


(69,175)


(386,230)



Deferred financing costs


-


(7,440)


-


(9,061)



Proceeds from issuance of common units


10,984


-


24,826


75,000



Capital contribution by general partner


160


-


507


1,531



Costs associated with equity transactions


(163)


-


(601)


(60)



Distributions to partners


(39,733)


(61,629)


(119,346)


(186,317)




Net cash provided by (used in) financing activities


(44,444)


(71,741)


(161,789)


41,883

Net increase (decrease) in cash and cash equivalents


8,113


(5,529)


(14,387)


(49,749)

Cash and cash equivalents at beginning of period


70,013


105,204


92,513


149,424

Cash and cash equivalents at end of period


$ 78,126


$ 99,675


$ 78,126


$ 99,675

Supplemental cash flow information:











Cash paid during the period for interest


$ 13,131


$ 16,631


$ 52,266


$ 45,716

    

Natural Resource Partners L.P.

Consolidated Balance Sheets

(in thousands, except for unit information)












ASSETS









September


December 31,









2014


2013









(unaudited)



Current assets:









Cash and cash equivalents





$      78,126


$         92,513


Accounts receivable, net of allowance for doubtful accounts


33,954


33,737


Accounts receivable - affiliates




10,547


7,666


Other






899


1,691



Total current assets





123,526


135,607

Land







24,338


24,340

Plant and equipment, net





22,839


26,435

Mineral rights, net





1,385,919


1,405,455

Intangible assets, net





58,696


66,950

Equity and other unconsolidated investments




262,414


269,338

Loan financing costs, net





9,841


11,502

Long-term contracts receivable - affiliate




50,411


51,732

Other assets





560


497



Total assets





$ 1,938,544


$    1,991,856












LIABILITIES AND PARTNERS' CAPITAL












Current liabilities:









Accounts payable and accrued liabilities




$      13,907


$           8,659


Accounts payable - affiliates





485


391


Current portion of long-term debt




80,983


80,983


Accrued incentive plan expenses - current portion



6,535


8,341


Property, franchise and other taxes payable



5,764


7,830


Accrued interest





20,376


17,184



Total current liabilities





128,050


123,388

Deferred revenue





153,931


142,586

Accrued incentive plan expenses





6,887


10,526

Other non-current liabilities





9,712


14,341

Long-term debt





1,017,498


1,084,226

Partners' capital:









Common units outstanding ( 111,351,722 and 109,812,408)


613,176


606,774


General partner's interest





10,212


10,069


Non-controlling interest





(650)


324


Accumulated other comprehensive loss




(272)


(378)



Total partners' capital





622,466


616,789



Total liabilities and partners' capital




$ 1,938,544


$    1,991,856

 

Natural Resource Partners L.P.

Reconciliation of GAAP Financial Measures

to Non-GAAP Financial Measures

(in thousands)

Reconciliation of GAAP "Net cash provided by operating activities"

to Non-GAAP "Distributable cash flow"



Quarter Ended


For the Nine Months Ended



September


September


September


September



2014


2013


2014


2013



(unaudited)


(unaudited)










Net cash provided by operating activities


$ 57,458


$ 65,866


$ 157,096


$ 189,515

Return on direct financing lease and contractual override


310


286


910


841

Distributions from unconsolidated investments


-


38,056


3,633


48,833

Proceeds from sale of assets


5


405


5


559

Distributable cash flow


$ 57,773


$ 104,613


$ 161,644


$ 239,748





































Reconciliation of GAAP "Net cash provided by operating activities"

to Non-GAAP "Distributable cash flow"












Quarter Ended





September


June







2014


2013







(unaudited)












Net cash provided by operating activities


$ 57,458


$ 61,008





Return on direct financing lease and contractual override


310


303





Distributions from unconsolidated investments


-


3,633





Proceeds from sale of assets


5


-





Distributable cash flow


$ 57,773


$ 64,944





  

Natural Resource Partners L.P.

Reconciliation of GAAP Financial Measures

to Non-GAAP Financial Measures

(in thousands)










Reconciliation of GAAP "Net income"

to Non-GAAP "EBITDA"












Quarter Ended


For the Nine Months Ended



September


September


September


September



2014


2013


2014


2013



(unaudited)


(unaudited)










Net income


$    36,173


$    36,126


$    100,185


$    125,097

Add depreciation, depletion and amortization


18,621


17,852


49,618


50,025

Add asset impairments


-


-


5,624


734

Add interest expense, gross


18,862


15,516


57,759


44,619

Add depreciation, depletion and amortization, taxes and interest relating to OCI Wyoming


4,628


3,366


13,996


9,068

EBITDA


$    78,284


$    72,860


$    227,182


$    229,543










EBITDA margin









EBITDA


$    78,284


$    72,860


$    227,182


$    229,543

Total revenues


$    91,609


$    82,237


$    262,479


$    263,373

EBITDA margin


85%


89%


87%


87%



















Reconciliation of GAAP "Net income"

to Non-GAAP "EBITDA"












Quarter Ended





September


June







2014


2014







(unaudited)












Net income


$    36,173


$    31,407





Add depreciation, depletion and amortization


18,621


16,350





Add asset impairments


-


5,624





Add interest expense, gross


18,862


19,037





Add depreciation, depletion and amortization, taxes and interest relating to OCI Wyoming


4,628


4,760





EBITDA


$    78,284


$    77,178














EBITDA margin









EBITDA


$    78,284


$    77,178





Total revenues


$    91,609


$    90,561





EBITDA margin


85%


85%





 

Reconciliation of GAAP "Total operating costs and expenses"

to Non-GAAP "Total operating expenses before considering any impairments"










Quarter Ended


For the Nine Months Ended


September


September


September


September


2014


2013


2014


2013


(unaudited)


(unaudited)

Operating expenses








Total operating expenses as reported

$ 36,582


$ 30,613


$ 104,610


$ 93,889

Impairments

$           -


$           -


$   (5,624)


$    (734)

Total operating costs before considering any impairments

$ 36,582


$ 30,613


$   98,986


$ 93,155









Reconciliation of GAAP "Net income attributable to the limited partners"

to Non-GAAP "Net income attributable to the limited partners before considering any impairments"










Quarter Ended


For the Nine Months Ended


September


September


September


September


2014


2013


2014


2013


(unaudited)


(unaudited)

Net income attributable to the limited partners








Net income as reported

$ 36,173


$ 36,126


$ 100,185


$ 125,097

Impairments

-


-


$     5,624


$        734

Net income before considering any impairments

$ 36,173


$ 36,126


$ 105,809


$ 125,831

Net income, before considering any impairments, attributable to:








  General partner

$      723


$      723


$     2,116


$     2,517

  Limited partners

$ 35,450


$ 35,403


$ 103,693


$ 123,314









Reconciliation of GAAP "Basic and diluted net income per unit"

to Non-GAAP "Net income per unit before considering any impairments"










Quarter Ended


For the Nine Months Ended


September


September


September


September


2014


2013


2014


2013


(unaudited)


(unaudited)

Net income per unit





*



Net income per unit as reported

$ 0.32


$ 0.32


$ 0.89


$ 1.12

Adjustment for impairments

-


-


$ 0.05


$ 0.01

Net income per limited partner unit, before considering any impairments

$ 0.32


$ 0.32


$ 0.94


$ 1.13









Weighted number of units outstanding

111,244


109,812


110,504


109,507









* Numbers may not add due to rounding







 

Reconciliation of GAAP "Total operating costs and expenses"

to Non-GAAP "Total operating expenses before considering any impairments"






Quarter Ended


September


June


2014


2014


(unaudited)

Operating expenses




Total operating expenses as reported

$    36,582


$ 40,158

Impairments

-


(5,624)

Total operating costs before considering any impairments

$    36,582


$ 34,534





Reconciliation of GAAP "Net income attributable to the limited partners"

to Non-GAAP "Net income attributable to the limited partners before considering any impairments"


Quarter Ended


September


June


2014


2014


(unaudited)

Net income attributable to the limited partners




Net income as reported

$    36,173


$ 31,407

Impairments

-


5,624

Net income before considering any impairments

$    36,173


$ 37,031

Net income, before considering any impairments, attributable to:




  General partner

$         723


$      741

  Limited partners

$    35,450


$ 36,290





Reconciliation of GAAP "Basic and diluted net income per unit"

to Non-GAAP "Net income per unit before considering any impairments"


Quarter Ended


September


June


2014


2014


(unaudited)

Net income per unit




Net income per unit as reported

$        0.32


$     0.28

Adjustment for impairments

-


0.05

Net income per limited partner unit, before considering any impairments

$        0.32


$     0.33





Weighted number of units outstanding

111,244


110,403





* Numbers may not add due to rounding




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SOURCE Natural Resource Partners L.P.

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