News Releases Details

View all news

Natural Resource Partners L.P. Announces Third Quarter 2017 Results

11/08/2017

Third Quarter 2017 Highlights

  • Net income of $26.1 million
  • Net income attributable to the common unitholders and general partner of $18.4 million
  • Adjusted EBITDA of $58.1 million (1)
  • Basic and diluted net income per common unit of $1.48 and $1.07, respectively

HOUSTON--(BUSINESS WIRE)--Nov. 8, 2017-- Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2017 net income of $26.1 million and net income attributable to the common unitholders and general partner of $18.4 million, which equated to $1.48 and $1.07 basic and diluted net income per common unit, respectively. NRP also generated Adjusted EBITDA of $58.1 million.

Craig Nunez, President and Chief Operating Officer, commented: "I am pleased with our recent performance. We continue to generate substantial amounts of cash from operations and our third quarter results have considerably improved compared to prior year levels. In addition, we continue to strengthen our balance sheet and have reduced debt $294.4 million during 2017. Compared to the prior quarter, our results were reflective of the steady performances from our Coal Royalty, Soda Ash and Construction Aggregates segments."

At the end of the third quarter, NRP had $121.2 million in cash and $111.0 million of borrowing capacity available under its credit facility. Subsequent to the end of the quarter, NRP redeemed the remaining $94.4 million of its outstanding 9.125% Senior Notes due 2018 at par and repaid $17.0 million on its credit facility. NRP's consolidated Debt-to-Adjusted EBITDA ratio now stands at 3.8x, down from 4.5x at year-end 2016 and 5.3x at year-end 2015.

NRP continues to focus on reducing its debt while maintaining sufficient liquidity to operate its businesses. NRP's goal is to achieve a leverage ratio, defined as Debt-to-EBITDA, of less than 3.0x, while maintaining minimum liquidity of $100 million, which may consist of a combination of cash and/or available borrowing capacity.

With respect to the third quarter of 2017, NRP’s Board of Directors declared a cash distribution of $0.45 per common unit and declared a distribution on NRP’s 12.0% Class A Convertible Preferred Units, one-half of which will be paid-in-kind through the issuance of additional preferred units.

____________________

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

Segment Information

Coal Royalty and Other

Operating income for the quarter was $38.0 million and Adjusted EBITDA was $43.3 million. For the quarter, net cash provided by operating, investing and financing activities were $44.1 million, $0.7 million and $0.5 million, respectively, and DCF was $44.8 million. NRP's Q3 2017 results represent a substantial improvement from Q3 of 2016 and are essentially flat compared to Q2 of 2017. Adjusted Coal Royalty and Other Operating Income compared to Q3 of 2016 increased 26% and excluding the impact of asset sales, DCF increased 26% and Adjusted EBITDA increased 6%. Further discussion of the key drivers for each major producing region follows:

  • Appalachia: Coal royalty revenue increased $6.6 million in this region primarily as a result of increased metallurgical coal prices and production in the third quarter of 2017 as compared to the third quarter of 2016.
  • Illinois Basin: Lower production in this region led to a $5.3 million decrease in coal royalty revenue, despite the increase in thermal coal prices and our royalty revenue per ton in the region. The decreased production in this region was primarily a result of the temporary relocation of certain production off of NRP's coal reserves. However, this decrease in coal royalty revenue was partially offset by a $2.4 million increase in overriding royalty revenue in this region.
  • Northern Powder River Basin: Lower production in this region led to the $1.4 million decrease in coal royalty revenue, despite the modest increase in prices. The lower production was a result of decreased mining on our acreage in this region, which has a checkerboard coal reserve ownership pattern.

Soda Ash

During the third quarter of 2017, international prices for soda ash, particularly in Asia, continued to be strong, and domestic prices have improved slightly over last year. NRP received $12.3 million of cash distributions from its 49% investment in Ciner Wyoming during the period, which was unchanged from the previous quarter and from Q3 of 2016. NRP's equity in earnings from Ciner Wyoming of $9.0 million declined 16% in Q3 2017, compared to the prior year period due to temporary production issues. However, NRP's earnings from Ciner Wyoming increased 7% compared to the previous quarter as a result of the progress made to improve production efficiency at the facility.

Construction Aggregates

Operating income for the quarter was $3.3 million and Adjusted EBITDA was $6.4 million. For the quarter, net cash provided by (used in) operating and investing activities were $2.2 million and $(1.2) million, respectively, and DCF was $1.3 million. While operating performance was in line with the previous quarter, performance improved compared to Q3 2016 as a result of increased production and sales volumes, higher margins on road construction and asphalt paving projects and increased marine terminal activity. DCF was lower in Q3 2017 due to temporary timing differences in cash receipts and payments that we expect to reverse during the remainder of the year.

Corporate and Finance

Total costs in Q3 2017 were $23.8 million, which includes $20.0 million of interest expense. While these amounts were in line with the previous quarter, total corporate and financing costs decreased 14% compared to the same period last year due to lower interest expense and lower legal and consulting fees compared to amounts incurred in Q3 of 2016 in connection with NRP's recapitalization transactions.

Conference Call

A conference call will be held today at 10:00 a.m. ET. To join the conference call, dial (844) 379-6938 and provide the conference code 55454886. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com.

Audio replays of the conference call will be available for approximately one week. To access the replay, dial (855) 859-2056 and provide the conference code 55454886 or visit the Investor Relations section of NRP’s website.

Company Profile

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns interests in 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 a construction aggregates company and an equity investment in CinerWyoming, a trona/soda ash operation.

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.

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, including statements regarding future cash distributions to our common unitholders. 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, aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; unanticipated geologic problems; our liquidity, leverage 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.

Non-GAAP Financial Measures

"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) from continuing operations less equity earnings from unconsolidated investment and income to non-controlling interest; plus distributions from unconsolidated investment, interest expense, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income (loss), the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

“Distributable Cash Flow” is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations, plus returns of equity from unconsolidated investment, proceeds from sales of assets, including those included in discontinued operations, and return on long-term contract receivables (including affiliate); less maintenance capital expenditures and distributions to non-controlling interest. DCF 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. DCF may not be calculated the same for us as for other companies. DCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the Partnership's ability to make cash distributions to our common and preferred unitholders and our general partner and repay debt.

“Adjusted Net Income” is a non-GAAP financial measure that we define as Net income attributable to common unitholders and general partner, plus asset impairments, loss from discontinued operations and write-off of bad debt expense; less gain on sale of assets and non-cash revenue from lease modifications. Adjusted net income should not be considered in isolation or as a substitute for operating income (loss), net income (loss), cash flows provided by operating, investing and financial activities, or other income or cash flow statement data prepared in accordance with GAAP. Our management team believes Adjusted net income is useful in evaluating our financial performance because restructuring transaction expenses are one time charges, gains on asset sales are not related to the operations of our business and asset impairments and fair value adjustments for warrant liabilities are non-cash charges and excluding these from net income allows us to better compare results period-over-period. Reconciliations of Net income attributable to common unitholders and general partner to Adjusted net income are included in the table on the first page of this release.

“Adjusted Coal Royalty and Other Operating Income” is a non-GAAP financial measure that we define as Coal royalty and other operating income plus asset impairments and write-off of bad debt expense; less gains on asset sales and non-cash revenue associated with lease modifications and terminations. Adjusted coal royalty and other operating income should not be considered in isolation or as a substitute for operating income (loss), net income (loss), cash flows provided by operating, investing and financial activities, or other income or cash flow statement data prepared in accordance with GAAP. Our management team believes Adjusted coal royalty and other operating income is useful in evaluating our financial performance because gains on asset sales are not related to the operations of our business and asset impairments and non-cash revenue associated with lease modifications and forfeitures are non-cash charges and excluding these from Coal royalty and other operating income allows us to better compare results period-over-period. Reconciliations of Coal royalty and other operating income to Adjusted coal royalty and other operating income are included in the tables attached to this release.

-Financial Tables, Reconciliation of Non-GAAP Measures and Recap of Metrics Follow-

 
Natural Resource Partners L.P.
Financial Tables
 
Consolidated Statements of Comprehensive Income
(Unaudited)
 
    Three Months Ended     Nine Months Ended
September 30,     June 30, September 30,

(In thousands, except per unit data)

2017     2016 2017 2017     2016
Revenues and other income:
Coal royalty and other $ 49,078 $ 27,504 $ 36,914 $ 120,986 $ 116,336
Coal royalty and other—affiliates 335 21,434 12,712 29,191 49,508
Construction aggregates 34,710 31,757 33,555 95,486 88,081
Equity in earnings of Ciner Wyoming 8,993 10,753 8,389 27,676 30,742
Gain (loss) on asset sales, net 171   6,426   3,361   3,576   27,280  
Total revenues and other income $ 93,287 $ 97,874 $ 94,931 $ 276,915 $ 311,947
 
Operating expenses:
Operating and maintenance expenses $ 32,441 $ 31,242 $ 31,020 $ 93,089 $ 87,824
Operating and maintenance expenses—affiliates, net 2,154 4,062 2,219 6,928 9,948
Depreciation, depletion and amortization 8,306 11,929 8,165 26,195 32,181
Amortization expense—affiliate 902 240 1,008 2,328
General and administrative 2,648 4,268 2,031 10,757 10,676
General and administrative—affiliates 1,207 867 852 3,183 2,670
Asset impairments   5,697     1,778   7,681  
Total operating expenses $ 46,756 $ 58,967 $ 44,527 $ 142,938 $ 153,308
 
Income from operations $ 46,531 $ 38,907 $ 50,404 $ 133,977 $ 158,639
 
Other income (expense)
Interest expense $ (20,080 ) $ (22,491 ) $ (20,377 ) $ (63,598 ) $ (66,742 )
Interest expense—affiliate (523 )
Debt modification expense (132 ) (7,939 )
Loss on extinguishment of debt (4,107 ) (4,107 )
Interest income 48   3   69   134   29  
Other expense, net $ (20,032 ) $ (22,488 ) $ (24,547 ) $ (75,510 ) $ (67,236 )
 
Net income from continuing operations $ 26,499 $ 16,419 $ 25,857 $ 58,467 $ 91,403
Income (loss) from discontinued operations (433 ) 7,112   133   (507 ) 2,001  
Net income $ 26,066 $ 23,531 $ 25,990 $ 57,960 $ 93,404
Less: income attributable to preferred unitholders (7,650 )   (7,538 ) (17,688 )  
Net income attributable to common unitholders and general partner $ 18,416 $ 23,531 $ 18,452 $ 40,272 $ 93,404
 
Income from continuing operations per common unit
Basic $ 1.51 $ 1.32 $ 1.46 $ 3.27 $ 7.34
Diluted $ 1.08 $ 1.32 $ 1.13 $ 2.67 $ 7.34
 
Net income per common unit
Basic $ 1.48 $ 1.89 $ 1.47 $ 3.23 $ 7.50
Diluted $ 1.07 $ 1.89 $ 1.13 $ 2.65 $ 7.50
 
Net income $ 26,066 $ 23,531 $ 25,990 $ 57,960 $ 93,404
Add: comprehensive loss from unconsolidated investment and other (268 ) (609 ) (13 ) (1,413 ) (692 )
Comprehensive income $ 25,798   $ 22,922   $ 25,977   $ 56,547   $ 92,712  
 
 
Natural Resource Partners L.P.
Financial Tables
 
Consolidated Statements of Cash Flows
(Unaudited)
 
    Three Months Ended     Nine Months Ended
September 30,     June 30, September 30,

(In thousands)

2017     2016 2017 2017     2016
Cash flows from operating activities:
Net income $ 26,066 $ 23,531 $ 25,990 $ 57,960 $ 93,404
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization 8,306 11,929 8,165 26,195 32,181
Amortization expense—affiliates 902 240 1,008 2,328
Return on earnings from unconsolidated investment 8,993 12,250 9,862 31,104 34,300
Equity earnings from unconsolidated investment (8,993 ) (10,753 ) (8,389 ) (27,676 ) (30,742 )
(Gain) loss on asset sales, net (171 ) (6,426 ) (3,361 ) (3,576 ) (27,280 )
Debt modification expense 132 7,939
Loss on extinguishment of debt 4,107 4,107
(Income) loss from discontinued operations 433 (7,112 ) (133 ) 507 (2,001 )
Asset impairments 5,697 1,778 7,681
Amortization of debt issuance costs and other 3,037 2,600 1,332 5,459 6,694
Other, net—affiliates 200 636 (999 ) 88 848
Change in operating assets and liabilities:
Accounts receivable 5,210 (4,263 ) (2,336 ) 1,607 (341 )
Accounts receivable—affiliates 49 1,559 121 (777 ) (712 )
Accounts payable 684 485 (940 ) 730 635
Accounts payable—affiliates (272 ) 54 (254 ) (270 ) 29
Accrued liabilities (8,554 ) 10,418 4,182 (12,452 ) 7,287
Accrued liabilities—affiliates (456 )
Deferred revenue (4,494 ) (2,558 ) 3,412 (5 ) (40,762 )
Deferred revenue—affiliates (4,130 ) (7,269 ) (10,166 ) (8,190 )
Other items, net (4,694 ) 1,689 1,243 (2,166 ) (356 )
Other items, net—affiliates   (607 )      
Net cash provided by operating activities of continuing operations $ 25,800 $ 35,901 $ 35,105 $ 81,394 $ 74,547
Net cash provided by (used in) operating activities of discontinued operations (76 ) 2,358   (247 ) (607 ) 8,173  
Net cash provided by operating activities $ 25,724 $ 38,259 $ 34,858 $ 80,787 $ 82,720
 
Cash flows from investing activities:
Return of equity from unconsolidated investment $ 3,258 $ $ 2,388 $ 5,646 $

Proceeds from sale of assets

151 10,372 1,655 1,419 55,364
Return of long-term contract receivables 600 1,207 1,807
Return of long-term contract receivables—affiliate 397 390 804 2,577
Acquisition of plant and equipment and other (1,238 ) (512 ) (2,903 ) (6,236 ) (4,431 )
Net cash provided by investing activities of continuing operations $ 2,771 $ 10,257 $ 2,737 $ 3,440 $ 53,510
Net cash provided by investing activities of discontinued operations 4   110,635   173   206   106,821  
Net cash provided by investing activities $ 2,775 $ 120,892 $ 2,910 $ 3,646 $ 160,331
 
Cash flows from financing activities:
Proceeds from issuance of Convertible Preferred Units and Warrants, net $ $ $ $ 242,100 $
Proceeds from issuance of 2022 Senior Notes, net 103,688
Proceeds from loans 69,000 69,000 20,000
Repayments of loans (8,000 ) (7,692 ) (97,282 ) (356,292 ) (106,174 )
Distributions to common unitholders and general partner (5,616 ) (5,617 ) (5,619 ) (16,850 ) (16,849 )
Distributions to preferred unitholders (3,769 ) (1,250 ) (5,019 )
Proceeds from (contributions to) discontinued operations (72 ) 40,226 (74 ) (401 ) 40,226
Debt issue costs and other 347   (2,074 )   (5,779 ) (40,187 ) (14,072 )
Net cash provided by (used in) financing activities of continuing operations

$

51,890

$

24,843

$

(110,004

)

$

(3,961

)

$

(76,869

)
Net cash provided by (used in) financing activities of discontinued operations 72   (114,994 )   74   401   (125,564 )
Net cash provided by (used in) financing activities $ 51,962 $ (90,151 ) $ (109,930 ) $ (3,560 ) $ (202,433 )
 
Net increase (decrease) in cash and cash equivalents $ 80,461 $ 69,000 $ (72,162 ) $ 80,873 $ 40,618
 
Cash and cash equivalents of continuing operations at beginning of period $ 40,783 $ 21,391 $ 112,945 $ 40,371 $ 41,204
Cash and cash equivalents of discontinued operations at beginning of period   2,000       10,569  
Cash and cash equivalents at beginning of period $ 40,783 $ 23,391 $ 112,945 $ 40,371 $ 51,773
 
Cash and cash equivalents at end of period $ 121,244 $ 92,391 $ 40,783 $ 121,244 $ 92,391
Less: cash and cash equivalents of discontinued operations at end of period          
Cash and cash equivalents of continuing operations at end of period $ 121,244 $ 92,391 $ 40,783 $ 121,244 $ 92,391
 
Supplemental cash flow information:
Cash paid during the period for interest from continuing operations $ 26,977 $ 12,078 $ 15,029 $ 61,857 $ 54,749
Cash paid during the period for interest from discontinued operations $ $ $ $ $ 1,906
Non-cash financing activities:
Issuance of 2022 Senior Notes in exchange for 2018 Senior Notes $ $ $ $ 240,638 $
 
 

Natural Resource Partners L.P.

Financial Tables

 
Consolidated Balance Sheets
(Unaudited)
    September 30,     December 31,

(In thousands, except unit data)

2017 2016
ASSETS
Current assets:
Cash and cash equivalents $ 121,244 $ 40,371
Accounts receivable, net 48,788 43,202
Accounts receivable—affiliates, net 243 6,658
Inventory 7,671 6,893
Prepaid expenses and other 7,525 7,271
Current assets of discontinued operations 991   991  
Total current assets $ 186,462 $ 105,386
Land 25,261 25,252
Plant and equipment, net 47,584 49,443
Mineral rights, net 890,610 908,192
Intangible assets, net 50,370 3,236
Intangible assets, net—affiliate 49,811
Equity in unconsolidated investment 245,382 255,901
Long-term contracts receivable 41,211
Long-term contracts receivable—affiliate 43,785
Other assets 7,741 6,625
Other assets—affiliate 892   1,018  
Total assets $ 1,495,513   $ 1,448,649  
LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable $ 5,812 $ 6,234
Accounts payable—affiliates 670 940
Accrued liabilities 28,659 41,587
Current portion of long-term debt, net 174,138 140,037
Current liabilities of discontinued operations 458   353  
Total current liabilities $ 209,737 $ 189,151
Deferred revenue 106,391 44,931
Deferred revenueaffiliates 71,632
Long-term debt, net 762,441 990,234
Other non-current liabilities 2,727   4,565  
Total liabilities $ 1,081,296 $ 1,300,513
Commitments and contingencies
Convertible Preferred Units (255,019 units issued and outstanding at $1,000 par value per unit; liquidation preference of $1,500 per unit) $ 169,606 $
Partners’ capital:
Common unitholders’ interest (12,232,006 units issued and outstanding) $ 182,760 $ 152,309
General partner’s interest 1,508 887
Warrant holders interest 66,816
Accumulated other comprehensive loss (3,079 ) (1,666 )
Total partners’ capital $ 248,005 $ 151,530
Non-controlling interest (3,394 ) (3,394 )
Total capital 244,611   148,136  
Total liabilities and capital $ 1,495,513   $ 1,448,649  
 

Natural Resource Partners L.P.

Financial Tables

The table below presents NRP's unaudited business results by segment for the three months ended September 30, 2017 and 2016 and June 30, 2017, respectively:

 
    Operating Business Segments    

Coal
Royalty
and Other

       

Construction
Aggregates

Corporate
and
Financing

   

($ In thousands)

Soda Ash Total
Three Months Ended September 30, 2017
Revenues and other income $ 49,413 $ 8,993 $ 34,710 $ $ 93,116
Gains on asset sales 154     17     171  
Total revenues and other income $ 49,567 $ 8,993 $ 34,727 $ $ 93,287
 
Net income (loss) from continuing operations $ 37,992 $ 8,993 $ 3,342 $ (23,828 ) $ 26,499
Adjusted EBITDA (1) $ 43,297 $ 12,250 $ 6,402 $ (3,807 ) $ 58,142
Net cash provided by (used in) operating activities of continuing operations $ 44,119 $ 8,992 $ 2,155 $ (29,466 ) $ 25,800
Net cash provided by (used in) investing activities of continuing operations $ 676 $ 3,258 $ (1,163 ) $ $ 2,771

Net cash provided by financing activities of continuing operations

$ 484 $ $ $ 51,406 $ 51,890
Distributable Cash Flow (1) $ 44,795 $ 12,250 $ 1,304 $ (29,466 ) $ 28,883
 
Three Months Ended September 30, 2016
Revenues and other income $ 48,938 $ 10,753 $ 31,757 $ $ 91,448

Gain on asset sales

6,425     1     6,426  
Total revenues and other income $ 55,363 $ 10,753 $ 31,758 $ $ 97,874
 
Asset impairments $ 5,697 $ $ $ $ 5,697
Net income (loss) from continuing operations $ 32,250 $ 10,753 $ 1,039 $ (27,623 ) $ 16,419
Adjusted EBITDA (1) $ 47,017 $ 12,250 $ 4,800 $ (5,132 ) $ 58,935
Net cash provided by (used in) operating activities of continuing operations $ 34,997 $ 12,250 $ 4,357 $ (15,703 ) $ 35,901
Net cash provided by (used in) investing activities of continuing operations $ 10,691 $ $ (434 ) $ $ 10,257

Net cash provided by financing activities of continuing operations

$ $ $ $ 24,843 $ 24,843
Distributable Cash Flow (1) $ 45,683 $ 12,250 $ 4,093 $ (15,703 ) $ 156,212
 
Three Months Ended June 30, 2017
Revenues and other income $ 49,626 $ 8,389 $ 33,555 $ $ 91,570
Gains on asset sales 3,184     177     3,361  
Total revenues and other income $ 52,810 $ 8,389 $ 33,732 $ $ 94,931
 
Net income (loss) from continuing operations $ 42,084 $ 8,389 $ 2,636 $ (27,252 ) $ 25,857
Adjusted EBITDA (1) $ 47,459 $ 12,250 $ 5,844 $ (2,814 ) $ 62,739
Net cash provided by (used in) operating activities of continuing operations $ 38,537 $ 9,862 $ 5,476 $ (18,770 ) $ 35,105
Net cash provided by (used in) investing activities of continuing operations $ 2,888 $ 2,388 $ (2,539 ) $ $ 2,737
Net cash provided by (used in) financing activities of continuing operations $ 17 $ $ (1,000 ) $ (109,021 ) $ (110,004 )
Distributable Cash Flow (1) $ 41,426 $ 12,250 $ 3,424 $ (18,770 ) $ 38,330
 

Natural Resource Partners L.P.

Financial Tables

The table below presents NRP's unaudited business results by segment for the nine months ended September 30, 2017 and 2016:

    Operating Business Segments    

Coal
Royalty
and Other

       

Construction
Aggregates

Corporate
and
Financing

   

(In thousands)

Soda Ash Total
Nine Months Ended September 30, 2017
Revenues and other income $ 150,177 $ 27,676 $ 95,486 $ $ 273,339
Gains on asset sales 3,367     209     3,576  
Total revenues and other income $ 153,544 $ 27,676 $ 95,695 $ $ 276,915
 
Asset impairments $ 1,778 $ $ $ $ 1,778
Net income (loss) from continuing operations $ 115,170 $ 27,676 $ 4,439 $ (88,818 ) $ 58,467
Adjusted EBITDA (1) $ 134,601 $ 36,750 $ 14,621 $ (13,806 ) $ 172,166
Net cash provided by (used in) operating activities of continuing operations $ 120,588 $ 31,104 $ 11,677 $ (81,975 ) $ 81,394
Net cash provided by (used in) investing activities of continuing operations $ 3,570 $ 5,646 $ (5,776 ) $ $ 3,440
Net cash provided by (used in) financing activities of continuing operations $ 517 $ $ (1,096 ) $ (3,382 ) $ (3,961 )
Distributable Cash Flow (1) $ 124,158 $ 36,750 $ 6,827 $ (81,975 ) $ 85,760
 
Nine Months Ended September 30, 2016
Revenues and other income $ 165,844 $ 30,742 $ 88,081 $ $ 284,667
Gains on asset sales 27,270     10     27,280  
Total revenues and other income $ 193,114 $ 30,742 $ 88,091 $ $ 311,947
 
Asset impairments $ 7,681 $ $ $ $ 7,681
Net income (loss) from continuing operations $ 137,802 $ 30,742 $ 3,441 $ (80,582 ) $ 91,403
Adjusted EBITDA (1) $ 168,979 $ 34,300 $ 14,454 $ (13,317 ) $ 204,416
Net cash provided by (used in) operating activities of continuing operations $ 91,372 $ 34,300 $ 16,680 $ (67,805 ) $ 74,547
Net cash provided by (used in) investing activities of continuing operations $ 57,834 $ $ (4,324 ) $ $ 53,510
Net cash used in financing activities of continuing operations $ $ (7,229 ) $ (1,593 ) $ (68,047 ) $ (76,869 )
Distributable Cash Flow (1) $ 149,206 $ 34,300 $ 13,111 $ (67,805 ) $ 238,701
 

____________________

(1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.
 
Natural Resource Partners L.P.
Financial Tables
 
Operating Statistics - Coal Royalty and Other (Unaudited)
 
    Three Months Ended     Nine Months Ended
September 30,     June 30, September 30,

($ in thousands, except tons and per tons amounts)

2017     2016 2017 2017     2016
Coal production (tons)
Appalachia
Northern (1) 226 (356 ) 247 1,672 479
Central 3,596 3,348 3,897 11,193 10,046
Southern 468   683   690   1,721   2,201
Total Appalachia 4,290 3,675 4,834 14,586 12,726
Illinois Basin 794 2,411 734 3,545 6,056
Northern Powder River Basin 849   1,318   910   2,708   2,734
Total coal production 5,933   7,404   6,478   20,839   21,516
 
Coal royalty revenue per ton
Appalachia
Northern (1) $ 3.26 $ 1.98 $ 3.78 $ 1.36 $ 4.19
Central $ 4.77 $ 3.28 $ 5.05 $ 5.09 $ 3.22
Southern $ 5.73 $ 3.83 $ 5.69 $ 5.95 $ 3.37
Illinois Basin $ 4.32 $ 3.63 $ 4.06 $ 3.68 $ 3.57
Northern Powder River Basin $ 3.47 $ 3.27 $ 2.62 $ 2.89 $ 3.04
 
Coal royalty revenues
Appalachia
Northern (1) $ 737 $ 370 $ 933 $ 2,279 $ 2,005
Central 17,154 10,994 19,691 57,027 32,331
Southern 2,683   2,618   3,927   10,242   7,419
Total Appalachia $ 20,574 $ 13,982 $ 24,551 $ 69,548 $ 41,755
Illinois Basin 3,431 8,745 2,978 13,055 21,611
Northern Powder River Basin 2,945   4,314   2,384   7,827   8,314
Total coal royalty revenue $ 26,950   $ 27,041   $ 29,913   $ 90,430   $ 71,680
Other revenues
Minimums recognized as revenue $ 9,812 $ 9,755 $ 7,547 $ 22,556 $ 60,455
Transportation and processing fees 5,570 6,127 5,520 15,729 15,663
Property tax revenue 513 2,567 1,100 4,311 8,899
Wheelage 1,219 919 1,025 3,510 1,797
Coal override revenue 3,059 615 1,885 5,769 1,482
Lease assignment fee 1,000 1,000
Hard mineral royalty revenues 817 700 1,452 3,513 2,194
Oil and gas royalty revenues 117 1,283 924 2,532 2,538
Other 356   (69 ) 260   827   1,136
Total other revenues $ 22,463   $ 21,897   $ 19,713   $ 59,747   $ 94,164
Coal royalty and other income 49,413 48,938 49,626 150,177 165,844
Gain on coal royalty and other segment asset sales 154   6,425   3,184   3,367   27,270
Total coal royalty and other segment revenues and other income $ 49,567   $ 55,363   $ 52,810   $ 153,544   $ 193,114
 

____________________

(1)     During the three months ended September 30, 2016, Northern Appalachia was impacted by a prior period adjustment of 0.5 million tons and less than $0.1 million in royalty revenue related to the Hibbs Run mine that temporarily ceased production during 2016. Absent this adjustment, production in the Northern Appalachia region was 0.2 million tons with revenue of $0.4 million. Coal royalty revenue per ton removes the impact of the Hibbs Run prior period adjustment.
 
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
 
Distributable Cash Flow
(Unaudited)
 
   

Coal
Royalty and
Other

       

Construction
Aggregates

   

Corporate
and
Financing

   

(In thousands)

Soda Ash Total
Three Months Ended September 30, 2017
Net cash provided by (used in) operating activities of continuing operations $ 44,119 $ 8,992 $ 2,155 $ (29,466 ) $ 25,800
Add: return of equity from unconsolidated investment 3,258 3,258
Add: proceeds from sale of assets 76 75 151
Add: return on long-term contract receivable 600 600
Less: maintenance capital expenditures     (926 )   (926 )
Distributable cash flow $ 44,795 $ 12,250 $ 1,304 $ (29,466 ) $ 28,883
Proceeds from sale of assets 76     75     151  
Distributable cash flow adjusted for proceeds from sale of assets $ 44,719   $ 12,250   $ 1,229   $ (29,466 ) $ 28,732  
 
Three Months Ended September 30, 2016
Net cash provided by (used in) operating activities of continuing operations $ 34,997 $ 12,250 $ 4,357 $ (15,703 ) $ 35,901
Add: proceeds from sale of assets 10,294 78 10,372
Add: proceeds from sale of assets from discontinued operations 109,889
Add: return on long-term contract receivables—affiliate 397 397
Less: maintenance capital expenditures (5 )   (342 )   (347 )
Distributable cash flow $ 45,683 $ 12,250 $ 4,093 $ (15,703 ) $ 156,212
Proceeds from sale of assets, including discontinued operations 10,294     78     120,261  
Distributable cash flow adjusted for proceeds from sale of assets $ 35,389   $ 12,250   $ 4,015   $ (15,703 ) $ 35,951  
 
Three Months Ended June 30, 2017
Net cash provided by (used in) operating activities of continuing operations $ 38,537 $ 9,862 $ 5,476 $ (18,770 ) $ 35,105
Add: return of equity from unconsolidated investment 2,388 2,388
Add: proceeds from sale of assets 1,292 363 1,655
Add: return on long-term contract receivables (including affiliate) 1,597 1,597
Less: maintenance capital expenditures     (2,415 )   (2,415 )

Distributable cash flow

$ 41,426 $ 12,250 $ 3,424 $ (18,770 ) $ 38,330
Proceeds from sale of assets 1,292     363     1,655  
Distributable cash flow adjusted for proceeds from sale of assets $ 40,134   $ 12,250   $ 3,061   $ (18,770 ) $ 36,675  
 
 

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

 
Distributable Cash Flow
(Unaudited)
   

Coal
Royalty and
Other

       

Construction
Aggregates

   

Corporate
and
Financing

   

(In thousands)

Soda Ash Total
Nine Months Ended September 30, 2017
Net cash provided by (used in) operating activities of continuing operations $ 120,588 $ 31,104 $ 11,677 $ (81,975 ) $ 81,394
Add: return of equity from unconsolidated investment 5,646 5,646
Add: proceeds from the sale of assets 959 460 1,419
Add: return on long-term contract receivables (including affiliate) 2,611 2,611
Less: maintenance capital expenditures     (5,310 )   (5,310 )
Distributable cash flow $ 124,158 $ 36,750 $ 6,827 $ (81,975 ) $ 85,760
Proceeds from sale of assets 959     460     1,419  
Distributable cash flow adjusted for proceeds from sale of assets $ 123,199   $ 36,750   $ 6,367   $ (81,975 ) $ 84,341  
 
Nine Months Ended September 30, 2016
Net cash provided by (used in) operating activities of continuing operations $ 91,372 $ 34,300 $ 16,680 $ (67,805 ) $ 74,547
Add: Proceeds from the sale of assets 55,262 102 55,364
Add: proceeds from sale of assets included in discontinued operations 109,889
Add: return on long-term contract receivables—affiliate 2,577 2,577
Less: maintenance capital expenditures (5 )   (3,671 )   (3,676 )
Distributable cash flow $ 149,206 $ 34,300 $ 13,111 $ (67,805 ) $ 238,701
Proceeds from sale of assets, including discontinued operations 55,262     102     165,253  
Distributable cash flow adjusted for proceeds from sale of assets $ 93,944   $ 34,300   $ 13,009   $ (67,805 ) $ 73,448  
 

 

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

 

Adjusted EBITDA

(Unaudited)

 

   

Coal
Royalty and
Other

       

Construction
Aggregates

   

Corporate
and
Financing

   

(In thousands)

Soda Ash Total
Three Months Ended September 30, 2017
Net income (loss) from continuing operations $ 37,992 $ 8,993 $ 3,342 $ (23,828 ) $ 26,499
Less: equity earnings from unconsolidated investment (8,993 ) (8,993 )
Add: distributions from unconsolidated investment 12,250 12,250
Add: interest expense 59 20,021 20,080
Add: depreciation, depletion and amortization 5,305 3,001 8,306
Add: asset impairments          
Adjusted EBITDA $ 43,297 $ 12,250 $ 6,402 $ (3,807 ) $ 58,142
Gains on sale of assets 154     17     171  
Adjusted EBITDA excluding gains on sale of assets $ 43,143   $ 12,250   $ 6,385   $ (3,807 ) $ 57,971  
 
Three Months Ended September 30, 2016
Net income (loss) from continuing operations $ 32,250 $ 10,753 $ 1,039 $ (27,623 ) $ 16,419
Less: equity earnings from unconsolidated investment (10,753 ) (10,753 )
Add: distributions from unconsolidated investment 12,250 12,250
Add: interest expense 22,491 22,491
Add: depreciation, depletion and amortization 9,070 3,761 12,831
Add: asset impairments 5,697         5,697  
Adjusted EBITDA $ 47,017 $ 12,250 $ 4,800 $ (5,132 ) $ 58,935
Gains on sale of assets 6,425     1     6,426  
Adjusted EBITDA excluding gains on sale of assets $ 40,592   $ 12,250   $ 4,799   $ (5,132 ) $ 52,509  
 
Three Months Ended June 30, 2017
Net income (loss) from continuing operations $ 42,084 $ 8,389 $ 2,636 $ (27,252 ) $ 25,857
Less: equity earnings from unconsolidated investment (8,389 ) (8,389 )
Add: distributions from unconsolidated investment 12,250 12,250
Add: interest expense 178 20,199 20,377
Add: debt modification expense 132 132
Add: loss on extinguishment of debt 4,107 4,107
Add: depreciation, depletion and amortization 5,375     3,030     8,405  
Adjusted EBITDA $ 47,459 $ 12,250 $ 5,844 $ (2,814 ) $ 62,739
Gains on sale of assets 3,184     177     3,361  
Adjusted EBITDA excluding gains on sale of assets $ 44,275   $ 12,250   $ 5,667   $ (2,814 ) $ 59,378  
 
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
 
Adjusted EBITDA
(Unaudited)
   

Coal
Royalty and
Other

       

Construction
Aggregates

   

Corporate
and
Financing

   

(In thousands)

Soda Ash Total
Nine Months Ended September 30, 2017
Net income (loss) from continuing operations $ 115,170 $ 27,676 $ 4,439 $ (88,818 ) $ 58,467
Less: equity earnings from unconsolidated investment (27,676 ) (27,676 )
Add: distributions from unconsolidated investment 36,750 36,750
Add: interest expense 632 62,966 63,598
Add: debt modification expense 7,939 7,939
Add: loss on extinguishment of debt 4,107 4,107
Add: depreciation, depletion and amortization 17,653 9,550 27,203
Add: asset impairments 1,778         1,778  
Adjusted EBITDA $ 134,601 $ 36,750 $ 14,621 $ (13,806 ) $ 172,166
Gains on sale of assets 3,367     209     3,576  
Adjusted EBITDA excluding gains on sale of assets $ 131,234   $ 36,750   $ 14,412   $ (13,806 ) $ 168,590  
 
Nine Months Ended September 30, 2016
Net income (loss) from continuing operations $ 137,802 $ 30,742 $ 3,441 $ (80,582 ) $ 91,403
Less: equity earnings from unconsolidated investment (30,742 ) (30,742 )
Add: distributions from unconsolidated investment 34,300 34,300
Add: interest expense 67,265 67,265
Add: depreciation, depletion and amortization 23,496 11,013 34,509
Add: asset impairments 7,681         7,681  
Adjusted EBITDA $ 168,979 $ 34,300 $ 14,454 $ (13,317 ) $ 204,416
Gains on sale of assets 27,270     10     27,280  
Adjusted EBITDA excluding gains on sale of assets $ 141,709   $ 34,300   $ 14,444   $ (13,317 ) $ 177,136  
 
 
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
 
Last Twelve Months Distributable Cash Flow
(Unaudited)
 
    Three Months Ended    
December     March 31,     June 30,     September Last 12

(In thousands, except ratios)

31, 2016 2017 2017 30, 2017 Months

Net cash provided by operating activities of continuing operations

$ 26,096 $ 20,489 $ 35,105 $ 25,800 $ 107,490
Add: return of equity from unconsolidated investment 2,388 3,258 5,646
Add: proceeds from the sale of assets 7,019 (387 ) 1,655 151 8,438
Add: proceeds from the sale of assets included in discontinued operations (17 ) (17 )
Add: return on long-term contract receivables (including affiliate) 391 414 1,597 600 3,002
Less: maintenance capital expenditures (775 ) (1,969 ) (2,415 ) (926 ) (6,085 )
Distributable cash flow $ 32,714 $ 18,547 $ 38,330 $ 28,883 $ 118,474
Proceeds from sale of assets, including discontinued operations 7,002   (387 ) 1,655   151   8,421  
Distributable cash flow adjusted for proceeds from sale of assets $ 25,712   $ 18,934   $ 36,675   $ 28,732   $ 110,053  
 
Unit Distribution Coverage Ratio (1) 5.3 x
 

____________________

(1)     Common unit distribution coverage ratio is calculated by dividing distributable cash flow by total distributions on the common units and to the general partner.
Last Twelve Months Adjusted EBITDA
(Unaudited)
 
    Three Months Ended    
December     March 31,     June 30,     September Last 12

(In thousands, except ratios)

31, 2016 2017 2017 30, 2017 Months

Net income from continuing operations

$ 3,811 $ 6,111 $ 25,857 $ 26,499 $ 62,278
Less: equity earnings from unconsolidated investment (9,319 ) (10,294 ) (8,389 ) (8,993 ) (36,995 )
Add: distributions from unconsolidated investment 12,250 12,250 12,250 12,250 49,000
Add: interest expense 23,305 23,141 20,377 20,080 86,903
Add: debt modification expense 7,807 132 7,939
Add: loss on extinguishment of debt 4,107 4,107
Add: depreciation, depletion and amortization 11,763 10,492 8,405 8,306 38,966
Add: asset impairments 9,245   1,778       11,023  
Adjusted EBITDA $ 51,055   $ 51,285   $ 62,739   $ 58,142   $ 223,221  
 
Debt-to-Adjusted EBITDA, September 30, 2017 4.3 x
Redemption of 9.125% senior notes, October 2017 $ 94,362
Payment on credit facility, October 2017 $ 17,000
Debt at November 7, 2017, face value (after redemption and payment noted above) $ 844,507
Debt-to-Adjusted EBITDA, November 7, 2017 3.8 x
 
 
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
 
Adjusted Net Income
(Unaudited)
 
    Three Months Ended
September 30,

(In thousands)

2017     2016
Net income $ 26,066 $ 23,531
Less: income attributable to preferred unitholders (7,650 )  
Net income attributable to common unitholders and general partner $ 18,416 $ 23,531
Add: asset impairments 5,697
Add: loss from discontinued operations 433 (7,112 )
Add: write-off of bad debt expense 1,534 1,679
Less: gain on asset sales (171 ) (6,426 )
Less: non-cash revenue associated with lease modifications and forfeitures (2,142 ) (3,627 )
Adjusted net income $ 18,070   $ 13,742  
 

Adjusted Coal Royalty and Other Operating Income (Unaudited)

 
    Three Months Ended
September 30,

(In thousands)

2017     2016
Coal royalty and other operating income $ 37,992 $ 32,250
Add: asset impairments 5,697
Add: write-off of bad debt expense 1,534 1,679
Less: gain on asset sales (154 ) (6,425 )
Less: non-cash revenue associated with lease modifications and forfeitures (2,142 ) (3,627 )
Adjusted coal royalty and other operating income $ 37,230   $ 29,574  
 
 
Natural Resource Partners L.P.
Recap of Metrics (Unaudited)
 

(In thousands, except units, prices, ratio and yields)

    November 7, 2017
Common Unit price $ 24.95
 
Enterprise value
Equity market cap $ 305,188
Debt 844,507
Preferred Units 250,000
Intrinsic Value of Warrants 3,745  
Total enterprise value $ 1,403,440  
 
DCF—last twelve months $ 118,474
DCF/Equity market cap 39 %
 
Adjusted EBITDA—last twelve months $ 223,221
Adjusted EBITDA/Total Enterprise value 16 %
 

Source: Natural Resource Partners L.P.

Natural Resource Partners L.P.
Kathy H. Roberts, 713-751-7555
kroberts@nrplp.com

Multimedia Files:

View all news