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Natural Resource Partners Announces Long-Term Plan to Strengthen Balance Sheet, Reduce Debt and Enhance Liquidity

04/22/2015

HOUSTON, April 22, 2015 /PRNewswire/ -- Natural Resource Partners L.P. (NYSE: NRP) announced today a long-term plan to strengthen its balance sheet, reduce debt and enhance liquidity in order to reposition the partnership for future growth.  The plan consists of the following strategic goals and initiatives:

  • Improve consolidated Debt/Adjusted EBITDA from 4.9x at December 31, 2014 to 3.5x by the end of 2017;
  • Reduce NRP's quarterly distribution to $0.09/unit, a 75% decrease from the distribution paid with respect to the prior quarter that will (1) increase NRP's estimated distribution coverage ratio for 2015 to over 4.0x based on NRP's current guidance and (2) result in additional cash available for debt reduction of approximately $130 million annually;
  • Utilize excess cash to pay off approximately $500 million of debt by the end of 2017, including $41 million paid in the first quarter 2015;
  • Enhance and extend the partnership's liquidity profile with the establishment of a new NRP Operating $300 million revolving bank credit facility that will mature in October 2017 and replace NRP Operating's existing $300 million revolver that matures in August 2016; and
  • Increase focus on capital efficiency and pursue NRP's diversification strategy through organic growth of its aggregates, industrial minerals and oil and natural gas assets.

"After several years of accelerated growth and diversification through acquisitions, we need to focus our attention on reducing our debt and improving our balance sheet," said Corbin J. Robertson, Jr., Chairman and Chief Executive Officer.  "The Board's decision to decrease quarterly distributions to our unitholders was made after extensive consideration of NRP's liquidity and financial position, as well as the current market environment.  Ultimately, the Board concluded that it is in the best interest of NRP to use a substantial portion of its distributable cash flow to pay down debt, implement a plan to improve its credit metrics and liquidity, and position NRP for long-term growth."

The distribution of $0.09 per common unit with respect to the first quarter of 2015 will be paid on May 14, 2015 to unitholders of record on May 5, 2015.

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.

Non-GAAP Financial Measure

"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income less equity and other unconsolidated investment income; plus cash distributions received from unconsolidated affiliates, interest expense, taxes, depreciation, depletion and amortization, and asset impairments. "Adjusted 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. Adjusted 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. Adjusted EBITDA provides no information regarding a company's capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax positions. Adjusted 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 Adjusted EBITDA is useful in evaluating our financial performance because this measure is widely used by analysts, investors and rating agencies for comparative purposes.  There are significant limitations to using Adjusted 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 Adjusted EBITDA reported by different companies.  A reconciliation of the December 31, 2014 adjusted EBITDA to net income is included in the table attached to this release. 

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, commodity prices; decreases in demand for coal, oil, natural gas, and aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; the pace of development of our oil and natural gas properties; unanticipated geologic problems; our liquidity and access to capital and financing sources; 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.

Withholding Information for Foreign Investors

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of NRP's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, NRP's distributions to foreign investors are subject to federal income tax withholding at the highest applicable rate.

For additional information please contact Kathy 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.

Natural Resource Partners L.P.

Reconciliation of GAAP "Net Income"

to Non-GAAP "Adjusted EBITDA"

(in thousands)














For the Year Ended







December 31, 2014

Net Income





$               108,830

Less equity and other unconsolidated investment income

(41,416)

Add distributions from unconsolidated affiliates


46,638

Add depreciation, depletion and amortization


79,876

Add asset impairments




26,209

Add interest expense, gross




80,185

Adjusted EBITDA





$               300,322








Debt at December 31, 2014





Current portion of Long Term Debt



$                 80,983

Long Term Debt





1,394,240

Total Debt





$            1,475,223








Debt/Adjusted EBITDA




4.9

 

Natural Resource Partners LP logo.

Logo - http://photos.prnewswire.com/prnh/20060109/NRPLOGO

 

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SOURCE Natural Resource Partners L.P.

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