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Natural Resource Partners L.P. Reports Third Quarter 2021 Results and Declares Third Quarter 2021 Distributions

11/03/2021

HOUSTON--(BUSINESS WIRE)-- Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2021 results as follows:

 

 

For the Three
Months Ended

 

Last Twelve
Months Ended

(In thousands) (Unaudited)

 

September 30, 2021

Operating cash flow

 

$

30,059

 

 

$

79,798

 

Free cash flow (1)

 

30,599

 

 

81,080

 

Cash flow cushion (last twelve months) (1)

 

 

 

3,740

 

 

 

 

 

 

Net income

 

$

29,498

 

 

$

67,948

 

Adjusted EBITDA (1)

 

37,717

 

 

119,421

 

 

(1)

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

“Our strong performance in the third quarter reflects continued global economic recovery and strong demand for metallurgical coal, thermal coal and soda ash, and we expect conditions to remain favorable over the near and intermediate term,” said Craig Nunez, NRP’s President & Chief Operating Officer. “We remain committed to using our robust free cash flow to reduce debt and continue to believe our long-term strategy of de-risking the Partnership in this manner is the best means to maximize unitholder value. In addition, we returned $5.6 million of distributions to common unitholders in the third quarter and have paid out $22.2 million to common unitholders over the last twelve months.”

Mr. Nunez continued, “I am also pleased to report that we generated and sold $13.8 million in carbon offset credits in October by sequestering over 1 million tonnes of carbon dioxide in our forestlands. This transaction will be reflected in our fourth quarter results and is the first tangible result of our ongoing initiative to generate cash flow from alternative revenue sources we have told you about in previous quarters. We continue to pursue additional alternative revenue projects that have the potential to provide important benefits to the environment and add significant value to NRP over the coming years.”

NRP's liquidity was $219.0 million at September 30, 2021, consisting of $119.0 million of cash and $100.0 million of borrowing capacity available under its revolving credit facility.

NRP announced today that the Board of Directors of its general partner declared a third quarter 2021 cash distribution of $0.45 per common unit of NRP to be paid on November 23, 2021 to unitholders of record on November 16, 2021. In addition, the Board declared an $8.0 million distribution on the preferred units, which will be paid one-half in cash and one-half in kind through the issuance of additional preferred units. The preferred unit distribution includes interest on previously paid-in-kind units and will also be paid one-half in cash and one-half in kind through the issuance of additional preferred units.

Segment Performance

Coal Royalty and Other

In the third quarter of 2021 net income increased $17.4 million and free cash flow increased $5.6 million as compared to the prior year period primarily due to stronger metallurgical coal demand and pricing in the third quarter of 2021. Approximately 65% of coal royalty revenues and approximately 45% of coal royalty sales volumes were derived from metallurgical coal in the third quarter of 2021.

Metallurgical coal markets have rebounded significantly from the lows seen in 2020 to record highs and the outlook remains strong as steel demand driven by global economic recovery is more than offsetting challenges related to the COVID-19 pandemic. Domestic and export thermal coal markets have also significantly improved from the lows seen in 2020, however NRP does not have meaningful sensitivity to thermal coal price movements this year since the substantial majority of NRP's thermal cash flows are fixed through 2021 pursuant to a contract with Foresight Energy that went into effect as they emerged from bankruptcy in 2020. While there is potential for NRP to capture upside from improved thermal coal demand and pricing in 2022, thermal coal markets still face the long-term challenges of lower electricity demand, competition from natural gas and the secular shift to renewable energy.

In addition to actively managing its producing coal and hard mineral properties, NRP continues to identify alternative revenue sources across its large portfolio of land, mineral and timber assets. The types of opportunities include the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar and wind energy. In the fourth quarter of this year, NRP was able to execute on one such project through the issuance and subsequent sale of 1.1 million forest carbon offset credits for $13.8 million. The offset credits were issued to NRP by the California Air Resources Board under its cap-and-trade program and represent 1.1 million tonnes of carbon sequestered from approximately 39,000 acres of NRP's forest assets in West Virginia. This is an encouraging first step in NRP's ability to create value through alternative revenue sources. While the timing and likelihood of additional cash flows being realized from further activities is uncertain, NRP believes its large ownership footprint throughout the United States will provide additional opportunities to create value in this regard with minimal capital investment.

Soda Ash

Net income in the third quarter of 2021 increased $4.7 million as compared to the prior year period as demand for soda ash continues to improve globally from the lows caused by the COVID-19 pandemic. Free cash flow in the third quarter of 2021 was flat as compared to the prior year period as a result of Ciner Wyoming's decision in August of 2020 to suspend its quarterly distributions in an effort to achieve greater financial and liquidity flexibility as a result of the COVID-19 pandemic.

However, as a result of the continued improvement in global soda ash demand and pricing, Ciner Wyoming reinstated its quarterly cash distribution and NRP will receive $7.4 million in the fourth quarter of 2021.

Corporate and Financing

Corporate and financing costs in the third quarter of 2021 were relatively flat as compared to the prior year period. Free cash flow improved $0.3 million in the third quarter of 2021 as compared to the prior year period primarily due to lower cash paid for interest as a result of less debt outstanding in 2021.

As noted earlier, NRP declared a third quarter 2021 preferred unit distribution of $8.0 million which will be paid one-half in cash and one-half in kind. The indenture governing the 2025 parent company notes restricts NRP from paying more than one-half of the quarterly distribution on the preferred units in cash if NRP's consolidated leverage ratio exceeds 3.75x, and as of September 30, 2021, NRP's leverage ratio was 3.8x. However, as a result of the strong coal and soda ash pricing expected in the fourth quarter, and the forest carbon offset transaction described above, NRP expects its leverage ratio to fall below the 3.75x threshold by December 31, 2021. If this occurs, NRP plans to redeem its outstanding paid-in-kind preferred units and continue paying cash distributions to its common unitholders. If NRP’s consolidated leverage ratio were to remain above 3.75x and NRP remains unable to redeem its outstanding paid-in-kind preferred units, NRP would be required to temporarily suspend distributions on its common units until the leverage ratio drops below 3.75x and the outstanding paid-in-kind preferred units are redeemed. Additionally, NRP expects its leverage ratio to continue its long-term decline as NRP pays down debt.

Future distributions on NRP's common and preferred units and decisions regarding paid-in-kind preferred unit redemptions will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs.

Conference Call

A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link https://conferencingportals.com/event/kfJdSHYP. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website.

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.

Company Profile

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of mineral properties in the United States including interests in coal, industrial minerals and other natural resources. In addition, NRP owns an equity investment in Ciner Wyoming LLC, a trona ore mining and soda ash production business.

For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@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. 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, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees, including Foresight Energy; Ciner Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; 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) less equity earnings from unconsolidated investment, net income attributable to non-controlling interest and gain on reserve swap; plus total distributions from unconsolidated investment, interest expense, net, 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 or loss, 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, 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 or Consolidated EBITDDA as defined in Opco's debt agreements. 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” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; 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. In addition, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow 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 our ability to make cash distributions and repay debt.

“Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as investing or financing activities and distributions to non-controlling interest. FCF is calculated before mandatory debt repayments. Free 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. Free cash flow may not be calculated the same for us as for other companies. Free cash flow 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 our ability to make cash distributions and repay debt.

"Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions and common unit distributions. Cash flow cushion 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. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units.

"Return on capital employed" or "ROCE" is a non-GAAP financial measure that we define as net income (loss) operations plus financing costs (interest expense plus loss on extinguishment of debt) divided by the sum of equity excluding equity of discontinued operations, and debt. Return on capital employed should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, 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. Return on capital employed is a supplemental performance measure used by our management team that measures our profitability and efficiency with which our capital is employed. The measure provides an indication of operating performance before the impact of leverage in the capital structure.

-Financial Tables and Reconciliation of Non-GAAP Measures Follow-

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Consolidated Statements of Comprehensive Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

(In thousands, except per unit data)

2021

 

2020

 

2021

 

2021

 

2020

Revenues and other income

 

 

 

 

 

 

 

 

 

Coal royalty and other

$

47,884

 

 

$

25,740

 

 

$

33,611

 

 

$

114,422

 

 

$

88,839

 

Transportation and processing services

2,171

 

 

2,204

 

 

2,182

 

 

6,545

 

 

6,651

 

Equity in earnings of Ciner Wyoming

6,672

 

 

1,986

 

 

2,601

 

 

11,246

 

 

5,200

 

Gain on asset sales and disposals

68

 

 

 

 

116

 

 

243

 

 

465

 

Total revenues and other income

$

56,795

 

 

$

29,930

 

 

$

38,510

 

 

$

132,456

 

 

$

101,155

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Operating and maintenance expenses

$

8,354

 

 

$

5,781

 

 

$

5,170

 

 

$

19,076

 

 

$

19,200

 

Depreciation, depletion and amortization

5,182

 

 

2,111

 

 

4,871

 

 

15,145

 

 

6,185

 

General and administrative expenses

4,052

 

 

3,634

 

 

3,388

 

 

11,550

 

 

11,168

 

Asset impairments

57

 

 

934

 

 

16

 

 

4,116

 

 

133,217

 

Total operating expenses

$

17,645

 

 

$

12,460

 

 

$

13,445

 

 

$

49,887

 

 

$

169,770

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

$

39,150

 

 

$

17,470

 

 

$

25,065

 

 

$

82,569

 

 

$

(68,615

)

 

 

 

 

 

 

 

 

 

 

Interest expense, net

$

(9,652

)

 

$

(10,254

)

 

$

(9,683

)

 

$

(29,308

)

 

$

(30,891

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

29,498

 

 

$

7,216

 

 

$

15,382

 

 

$

53,261

 

 

$

(99,506

)

Less: income attributable to preferred unitholders

(7,961

)

 

(7,500

)

 

(7,842

)

 

(23,530

)

 

(22,613

)

Net income (loss) attributable to common unitholders and the general partner

$

21,537

 

 

$

(284

)

 

$

7,540

 

 

$

29,731

 

 

$

(122,119

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common unitholders

$

21,106

 

 

$

(279

)

 

$

7,389

 

 

$

29,136

 

 

$

(119,677

)

Net income (loss) attributable to the general partner

431

 

 

(5

)

 

151

 

 

595

 

 

(2,442

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common unit

 

 

 

 

 

 

 

 

 

Basic

$

1.71

 

 

$

(0.02

)

 

$

0.60

 

 

$

2.36

 

 

$

(9.76

)

Diluted

1.10

 

 

(0.02

)

 

0.56

 

 

1.98

 

 

(9.76

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

29,498

 

 

$

7,216

 

 

$

15,382

 

 

$

53,261

 

 

$

(99,506

)

Comprehensive income from unconsolidated investment and other

4,204

 

 

2,428

 

 

2,533

 

 

7,469

 

 

2,764

 

Comprehensive income (loss)

$

33,702

 

 

$

9,644

 

 

$

17,915

 

 

$

60,730

 

 

$

(96,742

)

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

(In thousands)

2021

 

2020

 

2021

 

2021

 

2020

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Net income (loss)

$

29,498

 

 

$

7,216

 

 

$

15,382

 

 

$

53,261

 

 

$

(99,506

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

5,182

 

 

2,111

 

 

4,871

 

 

15,145

 

 

6,185

 

Distributions from unconsolidated investment

 

 

 

 

 

 

3,920

 

 

14,210

 

Equity earnings from unconsolidated investment

(6,672

)

 

(1,986

)

 

(2,601

)

 

(11,246

)

 

(5,200

)

Gain on asset sales and disposals

(68

)

 

 

 

(116

)

 

(243

)

 

(465

)

Asset impairments

57

 

 

934

 

 

16

 

 

4,116

 

 

133,217

 

Bad debt expense

2,069

 

 

258

 

 

(737

)

 

1,715

 

 

3,915

 

Unit-based compensation expense

1,118

 

 

913

 

 

593

 

 

2,837

 

 

2,566

 

Amortization of debt issuance costs and other

653

 

 

1,577

 

 

977

 

 

1,899

 

 

491

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

(9,163

)

 

4,621

 

 

162

 

 

(12,332

)

 

7,994

 

Accounts payable

182

 

 

144

 

 

(83

)

 

89

 

 

193

 

Accrued liabilities

357

 

 

791

 

 

1,838

 

 

(839

)

 

(2,985

)

Accrued interest

7,262

 

 

7,248

 

 

(7,424

)

 

6,971

 

 

6,957

 

Deferred revenue

(2,652

)

 

(273

)

 

677

 

 

(2,121

)

 

10,194

 

Other items, net

2,236

 

 

769

 

 

(171

)

 

3,471

 

 

(3,353

)

Net cash provided by operating activities of continuing operations

$

30,059

 

 

$

24,323

 

 

$

13,384

 

 

$

66,643

 

 

$

74,413

 

Net cash provided by operating activities of discontinued operations

 

 

 

 

 

 

 

 

1,706

 

Net cash provided by operating activities

$

30,059

 

 

$

24,323

 

 

$

13,384

 

 

$

66,643

 

 

$

76,119

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Proceeds from asset sales and disposals

$

74

 

 

$

 

 

$

116

 

 

$

249

 

 

$

507

 

Return of long-term contract receivable

540

 

 

332

 

 

541

 

 

1,622

 

 

1,462

 

Acquisition of non-controlling interest in BRP

 

 

 

 

 

 

 

 

(1,000

)

Net cash provided by investing activities of continuing operations

$

614

 

 

$

332

 

 

$

657

 

 

$

1,871

 

 

$

969

 

Net cash used in investing activities of discontinued operations

 

 

 

 

 

 

 

 

(66

)

Net cash provided by investing activities

$

614

 

 

$

332

 

 

$

657

 

 

$

1,871

 

 

$

903

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Debt repayments

$

 

 

$

(6,780

)

 

$

(2,365

)

 

$

(19,061

)

 

$

(25,841

)

Distributions to common unitholders and the general partner

(5,671

)

 

(5,630

)

 

(5,672

)

 

(16,973

)

 

(11,260

)

Distributions to preferred unitholders

(3,921

)

 

(7,500

)

 

(3,864

)

 

(11,591

)

 

(22,613

)

Contributions from discontinued operations

 

 

 

 

 

 

 

 

1,640

 

Acquisition of non-controlling interest in BRP

 

 

 

 

(1,000

)

 

(1,000

)

 

 

Other items

 

 

 

 

1

 

 

(690

)

 

 

Net cash used in financing activities of continuing operations

$

(9,592

)

 

$

(19,910

)

 

$

(12,900

)

 

$

(49,315

)

 

$

(58,074

)

Net cash used in financing activities of discontinued operations

 

 

 

 

 

 

 

 

(1,640

)

Net cash used in financing activities

$

(9,592

)

 

$

(19,910

)

 

$

(12,900

)

 

$

(49,315

)

 

$

(59,714

)

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

$

21,081

 

 

$

4,745

 

 

$

1,141

 

 

$

19,199

 

 

$

17,308

 

Cash and cash equivalents at beginning of period

97,908

 

 

110,828

 

 

96,767

 

 

99,790

 

 

98,265

 

Cash and cash equivalents at end of period

$

118,989

 

 

$

115,573

 

 

$

97,908

 

 

$

118,989

 

 

$

115,573

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid for interest

$

1,898

 

 

$

2,490

 

 

$

16,611

 

 

$

20,829

 

 

$

22,712

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities

$

 

 

$

23

 

 

$

 

 

$

 

 

$

947

 

Preferred unit distributions paid-in-kind

3,921

 

 

 

 

3,863

 

 

11,591

 

 

 

Natural Resource Partners L.P.

Financial Tables

 

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

(In thousands, except unit data)

2021

 

2020

 

(Unaudited)

 

 

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

118,989

 

 

$

99,790

 

Accounts receivable, net

23,231

 

 

12,322

 

Other current assets, net

1,010

 

 

5,080

 

Total current assets

$

143,230

 

 

$

117,192

 

Land

24,008

 

 

24,008

 

Mineral rights, net

442,454

 

 

460,373

 

Intangible assets, net

16,243

 

 

17,459

 

Equity in unconsolidated investment

277,309

 

 

262,514

 

Long-term contract receivable, net

31,948

 

 

33,264

 

Other long-term assets, net

5,814

 

 

7,067

 

Total assets

$

941,006

 

 

$

921,877

 

LIABILITIES AND CAPITAL

 

 

 

Current liabilities

 

 

 

Accounts payable

$

1,474

 

 

$

1,385

 

Accrued liabilities

6,228

 

 

7,733

 

Accrued interest

8,685

 

 

1,714

 

Current portion of deferred revenue

11,201

 

 

11,485

 

Current portion of long-term debt, net

39,082

 

 

39,055

 

Total current liabilities

$

66,670

 

 

$

61,372

 

Deferred revenue

48,232

 

 

50,069

 

Long-term debt, net

414,437

 

 

432,444

 

Other non-current liabilities

4,920

 

 

5,131

 

Total liabilities

$

534,259

 

 

$

549,016

 

Commitments and contingencies

 

 

 

Class A Convertible Preferred Units (265,341 and 253,750 units issued and outstanding at September 30, 2021 and December 31, 2020, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at September 30, 2021 and $1,700 per unit at December 31, 2020)

$

179,927

 

 

$

168,337

 

Partners’ capital:

 

 

 

Common unitholders’ interest (12,351,306 and 12,261,199 units issued and outstanding at September 30, 2021 and December 31, 2020, respectively)

$

151,459

 

 

$

136,927

 

General partner’s interest

754

 

 

459

 

Warrant holders' interest

66,816

 

 

66,816

 

Accumulated other comprehensive income

7,791

 

 

322

 

Total partners’ capital

$

226,820

 

 

$

204,524

 

Total liabilities and capital

$

941,006

 

 

$

921,877

 

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Consolidated Statements of Partners' Capital

 

 

Common Unitholders

 

General
Partner

 

Warrant
Holders

 

Accumulated
Other
Comprehensive
Income

 

Partners'
Capital
Excluding
Non-Controlling
Interest

 

Non-Controlling
Interest

 

Total
Capital

 

(In thousands)

Units

 

Amounts

 

Balance at December 31, 2020

12,261

 

 

$

136,927

 

 

$

459

 

 

$

66,816

 

 

$

322

 

 

$

204,524

 

 

$

 

 

$

204,524

 

Net income (1)

 

 

8,213

 

 

168

 

 

 

 

 

 

8,381

 

 

 

 

8,381

 

Distributions to common unitholders and the general partner

 

 

(5,517

)

 

(113

)

 

 

 

 

 

(5,630

)

 

 

 

(5,630

)

Distributions to preferred unitholders

 

 

(7,461

)

 

(152

)

 

 

 

 

 

(7,613

)

 

 

 

(7,613

)

Issuance of unit-based awards

90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit-based awards amortization and vesting, net

 

 

215

 

 

 

 

 

 

 

 

215

 

 

 

 

215

 

Capital contribution

 

 

 

 

32

 

 

 

 

 

 

32

 

 

 

 

32

 

Comprehensive income from unconsolidated investment and other

 

 

 

 

 

 

 

 

732

 

 

732

 

 

 

 

732

 

Balance at March 31, 2021

12,351

 

 

$

132,377

 

 

$

394

 

 

$

66,816

 

 

$

1,054

 

 

$

200,641

 

 

$

 

 

$

200,641

 

Net income (2)

 

 

15,074

 

 

308

 

 

 

 

 

 

15,382

 

 

 

 

15,382

 

Distributions to common unitholders and general partner

 

 

(5,559

)

 

(113

)

 

 

 

 

 

(5,672

)

 

 

 

(5,672

)

Distributions to preferred unitholders

 

 

(7,571

)

 

(155

)

 

 

 

 

 

(7,726

)

 

 

 

(7,726

)

Unit-based awards amortization and vesting

 

 

515

 

 

 

 

 

 

 

 

515

 

 

 

 

515

 

Comprehensive income from unconsolidated investment and other

 

 

 

 

 

 

 

 

2,533

 

 

2,533

 

 

 

 

2,533

 

Balance at June 30, 2021

12,351

 

 

$

134,836

 

 

$

434

 

 

$

66,816

 

 

$

3,587

 

 

$

205,673

 

 

$

 

 

$

205,673

 

Net income (3)

 

 

28,909

 

 

589

 

 

 

 

 

 

29,498

 

 

 

 

29,498

 

Distributions to common unitholders and the general partner

 

 

(5,558

)

 

(113

)

 

 

 

 

 

(5,671

)

 

 

 

(5,671

)

Distributions to preferred unitholders

 

 

(7,687

)

 

(156

)

 

 

 

 

 

(7,843

)

 

 

 

(7,843

)

Issuance of unit-based awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit-based awards amortization and vesting

 

 

959

 

 

 

 

 

 

 

 

959

 

 

 

 

959

 

Comprehensive income from unconsolidated investment and other

 

 

 

 

 

 

 

 

4,204

 

 

4,204

 

 

 

 

4,204

 

Balance at September 30, 2021

12,351

 

 

$

151,459

 

 

$

754

 

 

$

66,816

 

 

$

7,791

 

 

$

226,820

 

 

$

 

 

$

226,820

 

 

(1)

Net income includes $7.7 million of income attributable to preferred unitholders that accumulated during the period, of which $7.6 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

(2)

Net income includes $7.8 million of income attributable to preferred unitholders that accumulated during the period, of which $7.7 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

(3)

Net income includes $8.0 million of income attributable to preferred unitholders that accumulated during the period, of which $7.8 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Consolidated Statement of Partners’ Capital

 

 

Common Unitholders

 

General
Partner

 

Warrant
Holders

 

Accumulated
Other
Comprehensive
Income (Loss)

 

Partners'
Capital
Excluding
Non-Controlling
Interest

 

Non-Controlling
Interest

 

Total
Capital

 

(In thousands)

Units

 

Amounts

 

Balance at December 31, 2019

12,261

 

 

$

271,471

 

 

$

3,270

 

 

$

66,816

 

 

$

(2,594

)

 

$

338,963

 

 

$

(2,935

)

 

$

336,028

 

Cumulative effect of adoption of accounting standard

 

 

(3,833

)

 

(78

)

 

 

 

 

 

(3,911

)

 

 

 

(3,911

)

Net income (1)

 

 

18,403

 

 

376

 

 

 

 

 

 

18,779

 

 

 

 

18,779

 

Distributions to common unitholders and the general partner

 

 

(5,517

)

 

(113

)

 

 

 

 

 

(5,630

)

 

 

 

(5,630

)

Distributions to preferred unitholders

 

 

(7,350

)

 

(150

)

 

 

 

 

 

(7,500

)

 

 

 

(7,500

)

Unit-based awards amortization and vesting

 

 

673

 

 

 

 

 

 

 

 

673

 

 

 

 

673

 

Comprehensive loss from unconsolidated investment and other

 

 

 

 

 

 

 

 

(1,023

)

 

(1,023

)

 

 

 

(1,023

)

Balance at March 31, 2020

12,261

 

 

$

273,847

 

 

$

3,305

 

 

$

66,816

 

 

$

(3,617

)

 

$

340,351

 

 

$

(2,935

)

 

$

337,416

 

Net loss (2)

 

 

(122,991

)

 

(2,510

)

 

 

 

 

 

(125,501

)

 

 

 

(125,501

)

Distributions to preferred unitholders

 

 

(7,461

)

 

(152

)

 

 

 

 

 

(7,613

)

 

 

 

(7,613

)

Acquisition of non-controlling interest in BRP

 

 

(4,747

)

 

(97

)

 

 

 

 

 

(4,844

)

 

2,935

 

 

(1,909

)

Unit-based awards amortization and vesting

 

 

869

 

 

 

 

 

 

 

 

869

 

 

 

 

869

 

Comprehensive income from unconsolidated investment and other

 

 

 

 

 

 

 

 

1,359

 

 

1,359

 

 

 

 

1,359

 

Balance at June 30, 2020

12,261

 

 

$

139,517

 

 

$

546

 

 

$

66,816

 

 

$

(2,258

)

 

$

204,621

 

 

$

 

 

$

204,621

 

Net income (1)

 

 

7,072

 

 

144

 

 

 

 

 

 

7,216

 

 

 

 

7,216

 

Distributions to common unitholders and the general partner

 

 

(5,518

)

 

(112

)

 

 

 

 

 

(5,630

)

 

 

 

(5,630

)

Distributions to preferred unitholders

 

 

(7,350

)

 

(150

)

 

 

 

 

 

(7,500

)

 

 

 

(7,500

)

Unit-based awards amortization and vesting

 

 

824

 

 

 

 

 

 

 

 

824

 

 

 

 

824

 

Comprehensive income from unconsolidated investment and other

 

 

 

 

 

 

 

 

2,428

 

 

2,428

 

 

 

 

2,428

 

Balance at September 30, 2020

12,261

 

 

$

134,545

 

 

$

428

 

 

$

66,816

 

 

$

170

 

 

$

201,959

 

 

 

 

$

201,959

 

 

(1)

Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

(2)

Net loss includes $7.6 million of income attributable to preferred unitholders that accumulated during the period, of which $7.5 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

The following tables present NRP's unaudited business results by segment for the three months ended September 30, 2021 and 2020 and June 30, 2021:

 

 

 

Operating Segments

 

 

 

 

(In thousands)

 

Coal Royalty
and Other

 

Soda Ash

 

Corporate and
Financing

 

Total

For the Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

Revenues

 

$

50,055

 

 

$

6,672

 

 

$

 

 

$

56,727

 

Gain on asset sales and disposals

 

68

 

 

 

 

 

 

68

 

Total revenues and other income

 

$

50,123

 

 

$

6,672

 

 

$

 

 

$

56,795

 

Asset impairments

 

$

57

 

 

$

 

 

$

 

 

$

57

 

Net income (loss)

 

$

36,606

 

 

$

6,596

 

 

$

(13,704

)

 

$

29,498

 

Adjusted EBITDA (1)

 

$

41,845

 

 

$

(76

)

 

$

(4,052

)

 

$

37,717

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

33,968

 

 

$

(36

)

 

$

(3,873

)

 

$

30,059

 

Investing activities

 

$

614

 

 

$

 

 

$

 

 

$

614

 

Financing activities

 

$

 

 

$

 

 

$

(9,592

)

 

$

(9,592

)

Distributable cash flow (1)

 

$

34,582

 

 

$

(36

)

 

$

(3,873

)

 

$

30,673

 

Free cash flow (1)

 

$

34,508

 

 

$

(36

)

 

$

(3,873

)

 

$

30,599

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Revenues

 

$

27,944

 

 

$

1,986

 

 

$

 

 

$

29,930

 

Gain on asset sales and disposals

 

 

 

 

 

 

 

 

Total revenues and other income

 

$

27,944

 

 

$

1,986

 

 

$

 

 

$

29,930

 

Asset impairments

 

$

934

 

 

$

 

 

$

 

 

$

934

 

Net income (loss)

 

$

19,173

 

 

$

1,890

 

 

$

(13,847

)

 

$

7,216

 

Adjusted EBITDA (1)

 

$

22,259

 

 

$

(96

)

 

$

(3,634

)

 

$

18,529

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

28,573

 

 

$

(75

)

 

$

(4,175

)

 

$

24,323

 

Investing activities

 

$

332

 

 

$

 

 

$

 

 

$

332

 

Financing activities

 

$

 

 

$

 

 

$

(19,910

)

 

$

(19,910

)

Distributable cash flow (1)

 

$

28,905

 

 

$

(75

)

 

$

(4,175

)

 

$

24,655

 

Free cash flow (1)

 

$

28,905

 

 

$

(75

)

 

$

(4,175

)

 

$

24,655

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

Revenues

 

$

35,793

 

 

$

2,601

 

 

$

 

 

$

38,394

 

Gain on asset sales and disposals

 

116

 

 

 

 

 

 

116

 

Total revenues and other income

 

$

35,909

 

 

$

2,601

 

 

$

 

 

$

38,510

 

Asset impairments

 

$

16

 

 

$

 

 

$

 

 

$

16

 

Net income (loss)

 

$

25,886

 

 

$

2,566

 

 

$

(13,070

)

 

$

15,382

 

Adjusted EBITDA (1)

 

$

30,774

 

 

$

(35

)

 

$

(3,388

)

 

$

27,351

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

32,028

 

 

$

(35

)

 

$

(18,609

)

 

$

13,384

 

Investing activities

 

$

657

 

 

$

 

 

$

 

 

$

657

 

Financing activities

 

$

(1,000

)

 

$

 

 

$

(11,900

)

 

$

(12,900

)

Distributable cash flow (1)

 

$

32,685

 

 

$

(35

)

 

$

(18,609

)

 

$

14,041

 

Free cash flow (1)

 

$

31,569

 

 

$

(35

)

 

$

(18,609

)

 

$

12,925

 

 

(1)

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

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

The following table presents NRP's unaudited business results by segment for the nine months ended September 30, 2021 and 2020:

 

 

 

Operating Segments

 

 

 

 

(In thousands)

 

Coal Royalty
and Other

 

Soda Ash

 

Corporate and
Financing

 

Total

For the Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

Revenues

 

$

120,967

 

 

$

11,246

 

 

$

 

 

$

132,213

 

Gain on asset sales and disposals

 

243

 

 

 

 

 

 

243

 

Total revenues and other income

 

$

121,210

 

 

$

11,246

 

 

$

 

 

$

132,456

 

Asset impairments

 

$

4,116

 

 

$

 

 

$

 

 

$

4,116

 

Net income (loss)

 

$

82,980

 

 

$

11,115

 

 

$

(40,834)

 

 

$

53,261

 

Adjusted EBITDA (1)

 

$

102,265

 

 

$

3,789

 

 

$

(11,550)

 

 

$

94,504

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

91,958

 

 

$

3,817

 

 

$

(29,132)

 

 

$

66,643

 

Investing activities

 

$

1,871

 

 

$

 

 

$

 

 

$

1,871

 

Financing activities

 

$

(1,132)

 

 

$

 

 

$

(48,183)

 

 

$

(49,315)

 

Distributable cash flow (1)

 

$

93,829

 

 

$

3,817

 

 

$

(29,132)

 

 

$

68,514

 

Free cash flow (1)

 

$

92,580

 

 

$

3,817

 

 

$

(29,132)

 

 

$

67,265

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Revenues

 

$

95,490

 

 

$

5,200

 

 

$

 

 

$

100,690

 

Gain on asset sales and disposals

 

465

 

 

 

 

 

 

465

 

Total revenues and other income

 

$

95,955

 

 

$

5,200

 

 

$

 

 

$

101,155

 

Asset impairments

 

$

133,217

 

 

$

 

 

$

 

 

$

133,217

 

Net income (loss)

 

$

(62,562)

 

 

$

5,059

 

 

$

(42,003)

 

 

$

(99,506)

 

Adjusted EBITDA (1)

 

$

76,896

 

 

$

14,069

 

 

$

(11,168)

 

 

$

79,797

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

91,082

 

 

$

14,091

 

 

$

(30,760)

 

 

$

74,413

 

Investing activities

 

$

969

 

 

$

 

 

$

 

 

$

969

 

Financing activities

 

$

 

 

$

 

 

$

(58,074)

 

 

$

(58,074)

 

Distributable cash flow (1) (2)

 

$

93,051

 

 

$

14,091

 

 

$

(30,760)

 

 

$

76,316

 

Free cash flow (1)

 

$

91,544

 

 

$

14,091

 

 

$

(30,760)

 

 

$

74,875

 

 

(1)

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

(2)

Includes net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Operating Statistics - Coal Royalty and Other

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

(In thousands, except per ton data)

2021

 

2020

 

2021

 

2021

 

2020

Coal sales volumes (tons)

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

Northern (1)

422

 

 

102

 

 

405

 

 

947

 

 

516

 

Central

3,199

 

 

2,247

 

 

2,975

 

 

8,824

 

 

7,643

 

Southern

642

 

 

172

 

 

316

 

 

1,058

 

 

820

 

Total Appalachia

4,263

 

 

2,521

 

 

3,696

 

 

10,829

 

 

8,979

 

Illinois Basin

2,689

 

 

758

 

 

2,640

 

 

7,987

 

 

1,841

 

Northern Powder River Basin

1,047

 

 

365

 

 

185

 

 

2,291

 

 

1,232

 

Gulf Coast

13

 

 

 

 

 

 

13

 

 

 

Total coal sales volumes

8,012

 

 

3,644

 

 

6,521

 

 

21,120

 

 

12,052

 

Coal royalty revenue per ton

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

Northern (1)

$

7.18

 

 

$

3.06

 

 

$

4.45

 

 

$

5.57

 

 

$

2.22

 

Central

5.74

 

 

3.83

 

 

4.62

 

 

4.91

 

 

4.28

 

Southern

11.61

 

 

4.78

 

 

7.63

 

 

9.82

 

 

4.70

 

Illinois Basin

2.33

 

 

1.63

 

 

2.01

 

 

2.13

 

 

2.48

 

Northern Powder River Basin

3.71

 

 

3.46

 

 

4.15

 

 

3.59

 

 

3.66

 

Gulf Coast

0.54

 

 

 

 

 

 

0.54

 

 

 

Combined average coal royalty revenue per ton

4.87

 

 

3.36

 

 

3.69

 

 

3.99

 

 

3.88

 

Coal royalty revenues

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

Northern (1)

$

3,031

 

 

$

312

 

 

$

1,804

 

 

$

5,272

 

 

$

1,143

 

Central

18,357

 

 

8,602

 

 

13,756

 

 

43,308

 

 

32,726

 

Southern

7,452

 

 

823

 

 

2,410

 

 

10,390

 

 

3,857

 

Total Appalachia

28,840

 

 

9,737

 

 

17,970

 

 

58,970

 

 

37,726

 

Illinois Basin

6,261

 

 

1,234

 

 

5,300

 

 

17,044

 

 

4,570

 

Northern Powder River Basin

3,881

 

 

1,262

 

 

768

 

 

8,222

 

 

4,510

 

Gulf Coast

7

 

 

 

 

 

 

7

 

 

 

Unadjusted coal royalty revenues

38,989

 

 

12,233

 

 

24,038

 

 

84,243

 

 

46,806

 

Coal royalty adjustment for minimum leases

(6,557

)

 

(1,623

)

 

(5,740

)

 

(18,148

)

 

(6,247

)

Total coal royalty revenues

$

32,432

 

 

$

10,610

 

 

$

18,298

 

 

$

66,095

 

 

$

40,559

 

Other revenues

 

 

 

 

 

 

 

 

 

Production lease minimum revenues

$

3,235

 

 

$

4,267

 

 

$

3,556

 

 

$

10,241

 

 

$

13,554

 

Minimum lease straight-line revenues

4,808

 

 

3,553

 

 

4,869

 

 

15,773

 

 

12,349

 

Property tax revenues

1,466

 

 

1,896

 

 

1,587

 

 

4,522

 

 

4,256

 

Wheelage revenues

1,964

 

 

1,680

 

 

1,844

 

 

5,589

 

 

5,468

 

Coal overriding royalty revenues

757

 

 

1,314

 

 

976

 

 

3,592

 

 

3,319

 

Lease amendment revenues

1,519

 

 

858

 

 

772

 

 

3,159

 

 

2,591

 

Aggregates royalty revenues

429

 

 

221

 

 

456

 

 

1,339

 

 

1,068

 

Oil and gas royalty revenues

1,154

 

 

1,078

 

 

900

 

 

3,420

 

 

4,923

 

Other revenues

120

 

 

263

 

 

353

 

 

692

 

 

752

 

Total other revenues

$

15,452

 

 

$

15,130

 

 

$

15,313

 

 

$

48,327

 

 

$

48,280

 

Coal royalty and other

$

47,884

 

 

$

25,740

 

 

$

33,611

 

 

$

114,422

 

 

$

88,839

 

Transportation and processing services revenues

2,171

 

 

2,204

 

 

2,182

 

 

6,545

 

 

6,651

 

Gain on asset sales and disposals

68

 

 

 

 

116

 

 

243

 

 

465

 

Total Coal Royalty and Other segment revenues and other income

$

50,123

 

 

$

27,944

 

 

$

35,909

 

 

$

121,210

 

 

$

95,955

 

 

(1)

Northern Appalachia includes NRP's Hibbs Run property that has significant sales volumes, but a low fixed rate per ton.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Adjusted EBITDA

 

 

 

(In thousands)

 

Coal Royalty
and Other

 

Soda Ash

 

Corporate and
Financing

 

Total

For the Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

Net income (loss)

 

$

36,606

 

 

$

6,596

 

 

$

(13,704

)

 

$

29,498

 

Less: equity earnings from unconsolidated investment

 

 

 

(6,672

)

 

 

 

(6,672

)

Add: total distributions from unconsolidated investment

 

 

 

 

 

 

 

 

Add: interest expense, net

 

 

 

 

 

9,652

 

 

9,652

 

Add: depreciation, depletion and amortization

 

5,182

 

 

 

 

 

 

5,182

 

Add: asset impairments

 

57

 

 

 

 

 

 

57

 

Adjusted EBITDA

 

$

41,845

 

 

$

(76

)

 

$

(4,052

)

 

$

37,717

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Net income (loss)

 

$

19,173

 

 

$

1,890

 

 

$

(13,847

)

 

$

7,216

 

Less: equity earnings from unconsolidated investment

 

 

 

(1,986

)

 

 

 

(1,986

)

Add: total distributions from unconsolidated investment

 

 

 

 

 

 

 

 

Add: interest expense, net

 

41

 

 

 

 

10,213

 

 

10,254

 

Add: depreciation, depletion and amortization

 

2,111

 

 

 

 

 

2,111

 

Add: asset impairments

 

934

 

 

 

 

 

 

934

 

Adjusted EBITDA

 

$

22,259

 

 

$

(96

)

 

$

(3,634

)

 

$

18,529

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

Net income (loss)

 

$

25,886

 

 

$

2,566

 

 

(13,070

)

 

$

15,382

 

Less: equity earnings from unconsolidated investment

 

 

 

(2,601

)

 

 

 

(2,601

)

Add: total distributions from unconsolidated investment

 

 

 

 

 

 

 

 

Add: interest expense, net

 

1

 

 

 

 

9,682

 

 

9,683

 

Add: depreciation, depletion and amortization

 

4,871

 

 

 

 

 

 

4,871

 

Add: asset impairments

 

16

 

 

 

 

 

 

16

 

Adjusted EBITDA

 

$

30,774

 

 

$

(35

)

 

$

(3,388

)

 

$

27,351

 

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Coal Royalty
and Other

 

Soda Ash

 

Corporate and
Financing

 

Total

For the Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

Net income (loss)

 

$

82,980

 

 

$

11,115

 

 

$

(40,834

)

 

$

53,261

 

Less: equity earnings from unconsolidated investment

 

 

 

(11,246

)

 

 

 

(11,246

)

Add: total distributions from unconsolidated investment

 

 

 

3,920

 

 

 

 

3,920

 

Add: interest expense, net

 

24

 

 

 

 

29,284

 

 

29,308

 

Add: depreciation, depletion and amortization

 

15,145

 

 

 

 

 

 

15,145

 

Add: asset impairments

 

4,116

 

 

 

 

 

 

4,116

 

Adjusted EBITDA

 

$

102,265

 

 

$

3,789

 

 

$

(11,550

)

 

$

94,504

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(62,562

)

 

$

5,059

 

 

$

(42,003

)

 

$

(99,506

)

Less: equity earnings from unconsolidated investment

 

 

 

(5,200

)

 

 

 

(5,200

)

Add: total distributions from unconsolidated investment

 

 

 

14,210

 

 

 

 

14,210

 

Add: interest expense, net

 

56

 

 

 

 

30,835

 

 

30,891

 

Add: depreciation, depletion and amortization

 

6,185

 

 

 

 

 

 

6,185

 

Add: asset impairments

 

133,217

 

 

 

 

 

 

133,217

 

Adjusted EBITDA

 

$

76,896

 

 

$

14,069

 

 

$

(11,168

)

 

$

79,797

 

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

Distributable Cash Flow and Free Cash Flow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Coal Royalty
and Other

 

Soda Ash

 

Corporate and
Financing

 

Total

For the Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

33,968

 

 

$

(36

)

 

$

(3,873

)

 

$

30,059

 

Add: proceeds from asset sales and disposals

 

74

 

 

 

 

 

 

74

 

Add: return of long-term contract receivable

 

540

 

 

 

 

 

 

540

 

Distributable cash flow

 

$

34,582

 

 

$

(36

)

 

$

(3,873

)

 

$

30,673

 

Less: proceeds from asset sales and disposals

 

(74

)

 

 

 

 

 

(74

)

Less: acquisition costs

 

 

 

 

 

 

 

 

Free cash flow

 

$

34,508

 

 

$

(36

)

 

$

(3,873

)

 

$

30,599

 

 

 

 

 

 

 

 

 

 

Net cash provided by investing activities

 

$

614

 

 

$

 

 

$

 

 

$

614

 

Net cash used in financing activities

 

 

 

 

 

(9,592

)

 

(9,592

)

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

28,573

 

 

$

(75

)

 

$

(4,175

)

 

$

24,323

 

Add: proceeds from asset sales and disposals

 

 

 

 

 

 

 

 

Add: return of long-term contract receivable

 

332

 

 

 

 

 

 

332

 

Distributable cash flow

 

$

28,905

 

 

$

(75

)

 

$

(4,175

)

 

$

24,655

 

Less: proceeds from asset sales and disposals

 

 

 

 

 

 

 

 

Less: acquisition costs

 

 

 

 

 

 

 

 

Free cash flow

 

$

28,905

 

 

$

(75

)

 

$

(4,175

)

 

$

24,655

 

 

 

 

 

 

 

 

 

 

Net cash provided by investing activities

 

$

332

 

 

$

 

 

$

 

 

$

332

 

Net cash used in financing activities

 

 

 

 

 

(19,910

)

 

(19,910

)

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

32,028

 

 

$

(35

)

 

$

(18,609

)

 

$

13,384

 

Add: proceeds from asset sales and disposals

 

116

 

 

 

 

 

 

116

 

Add: return of long-term contract receivable

 

541

 

 

 

 

 

 

541

 

Distributable cash flow

 

$

32,685

 

 

$

(35

)

 

$

(18,609

)

 

$

14,041

 

Less: proceeds from asset sales and disposals

 

(116

)

 

 

 

 

 

(116

)

Less: acquisition costs

 

(1,000

)

 

 

 

 

 

(1,000

)

Free cash flow

 

$

31,569

 

 

$

(35

)

 

$

(18,609

)

 

$

12,925

 

 

 

 

 

 

 

 

 

 

Net cash provided by investing activities

 

$

657

 

 

$

 

 

$

 

 

$

657

 

Net cash used in financing activities

 

(1,000

)

 

 

 

(11,900

)

 

(12,900

)

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

Distributable Cash Flow and Free Cash Flow

 

 

 

(In thousands)

 

Coal Royalty
and Other

 

Soda Ash

 

Corporate and
Financing

 

Total

For the Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

91,958

 

 

$

3,817

 

 

$

(29,132

)

 

$

66,643

 

Add: proceeds from asset sales and disposals

 

249

 

 

 

 

 

 

249

 

Add: proceeds from sale of discontinued operations

 

 

 

 

 

 

 

 

Add: return of long-term contract receivable

 

1,622

 

 

 

 

 

 

1,622

 

Distributable cash flow

 

$

93,829

 

 

$

3,817

 

 

$

(29,132

)

 

$

68,514

 

Less: proceeds from asset sales and disposals

 

(249

)

 

 

 

 

 

(249

)

Less: acquisition costs

 

(1,000

)

 

 

 

 

 

(1,000

)

Free cash flow

 

$

92,580

 

 

$

3,817

 

 

$

(29,132

)

 

$

67,265

 

 

 

 

 

 

 

 

 

 

Net cash provided by investing activities

 

$

1,871

 

 

$

 

 

$

 

 

$

1,871

 

Net cash used in financing activities

 

(1,132

)

 

 

 

(48,183

)

 

(49,315

)

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

91,082

 

 

$

14,091

 

 

$

(30,760

)

 

$

74,413

 

Add: proceeds from asset sales and disposals

 

507

 

 

 

 

 

 

507

 

Add: proceeds from sale of discontinued operations

 

 

 

 

 

 

 

(66

)

Add: return of long-term contract receivable

 

1,462

 

 

 

 

 

 

1,462

 

Distributable cash flow

 

$

93,051

 

 

$

14,091

 

 

$

(30,760

)

 

$

76,316

 

Less: proceeds from asset sales and disposals

 

(507

)

 

 

 

 

 

(507

)

Less: proceeds from sale of discontinued operations

 

 

 

 

 

 

 

66

 

Less: acquisition costs

 

(1,000

)

 

 

 

 

 

(1,000

)

Free cash flow

 

$

91,544

 

 

$

14,091

 

 

$

(30,760

)

 

$

74,875

 

 

 

 

 

 

 

 

 

 

Net cash provided by investing activities

 

$

969

 

 

$

 

 

$

 

 

$

969

 

Net cash used in financing activities

 

 

 

 

 

(58,074

)

 

(58,074

)

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

LTM Free Cash Flow and Cash Flow Cushion

 

 

 

 

 

 

 

For the Three Months Ended

 

 

(In thousands)

 

December 31,
2020

 

March 31,
2021

 

June 30,
2021

 

September 30,
2021

 

Last 12
Months

Net cash provided by operating activities of continuing operations

 

$

13,155

 

 

$

23,200

 

 

$

13,384

 

 

$

30,059

 

 

$

79,798

 

Add: proceeds from asset sales and disposals

 

116

 

 

59

 

 

116

 

 

74

 

 

365

 

Add: proceeds from sale of discontinued operations

 

1

 

 

 

 

 

 

 

 

1

 

Add: return of long-term contract receivable

 

660

 

 

541

 

 

541

 

 

540

 

 

2,282

 

Distributable cash flow

 

$

13,932

 

 

$

23,800

 

 

$

14,041

 

 

$

30,673

 

 

$

82,446

 

Less: proceeds from asset sales and disposals

 

(116

)

 

(59

)

 

(116

)

 

(74

)

 

(365

)

Less: proceeds from sale of discontinued operations

 

(1

)

 

 

 

 

 

 

 

(1

)

Less: acquisition costs

 

 

 

 

 

(1,000

)

 

 

 

(1,000

)

Free cash flow

 

$

13,815

 

 

$

23,741

 

 

$

12,925

 

 

$

30,599

 

 

$

81,080

 

Less: mandatory Opco debt repayments

 

(20,335

)

 

(16,696

)

 

(2,365

)

 

 

 

(39,396

)

Less: preferred unit distributions

 

(3,750

)

 

(3,806

)

 

(3,864

)

 

(3,921

)

 

(15,341

)

Less: common unit distributions

 

(5,630

)

 

(5,630

)

 

(5,672

)

 

(5,671

)

 

(22,603

)

Cash flow cushion

 

$

(15,900

)

 

$

(2,391

)

 

$

1,024

 

 

$

21,007

 

 

$

3,740

 

Leverage Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

(In thousands)

 

December 31,
2020

 

March 31,
2021

 

June 30,
2021

 

September 30,
2021

 

Last 12
Months

Net income

 

$

14,687

 

 

$

8,381

 

 

$

15,382

 

 

$

29,498

 

 

$

67,948

 

Less: equity earnings from unconsolidated investment

 

(5,528

)

 

(1,973

)

 

(2,601

)

 

(6,672

)

 

(16,774

)

Add: total distributions from unconsolidated investment

 

 

 

3,920

 

 

 

 

 

 

3,920

 

Add: interest expense, net

 

10,077

 

 

9,973

 

 

9,683

 

 

9,652

 

 

39,385

 

Add: depreciation, depletion and amortization

 

3,013

 

 

5,092

 

 

4,871

 

 

5,182

 

 

18,158

 

Add: asset impairments

 

2,668

 

 

4,043

 

 

16

 

 

57

 

 

6,784

 

Adjusted EBITDA

 

$

24,917

 

 

$

29,436

 

 

$

27,351

 

 

$

37,717

 

 

$

119,421

 

Debt—at September 30, 2021

 

 

 

 

 

 

 

 

 

$

458,819

 

Leverage Ratio (1)

 

 

 

 

 

 

 

 

 

3.8 x

 

(1)

Leverage Ratio is calculated as the outstanding principal of NRP's debt as of September 30, 2021 divided by the last twelve months' Adjusted EBITDA. Note that Adjusted EBITDA under the indenture governing NRP's 2025 parent company notes may be different than the amount shown above. However, NRP's last twelve months Leverage ratio as of September 30, 2021, was 3.8x as calculated under the indenture governing NRP's 2025 parent company notes.

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

Return on Capital Employed ("ROCE")

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Coal Royalty
and Other

 

Soda Ash

 

Corporate and
Financing

 

Total

LTM Ended September 30, 2021

 

 

 

 

 

 

 

 

Net income (loss)

 

$

105,362

 

 

$

16,599

 

 

$

(54,013

)

 

$

67,948

 

Financing costs

 

53

 

 

 

 

39,391

 

 

39,444

 

Return

 

$

105,415

 

 

$

16,599

 

 

$

(14,622

)

 

$

107,392

 

 

 

 

 

 

 

 

 

 

As of September 30, 2020

 

 

 

 

 

 

 

 

Total assets

 

$

683,821

 

 

$

256,834

 

 

$

1,903

 

 

$

942,558

 

Less: total current liabilities excluding current debt, net

 

(16,570

)

 

(22

)

 

(11,947

)

 

(28,539

)

Less: total long-term liabilities excluding long-term debt, net

 

(55,499

)

 

 

 

(501

)

 

(56,000

)

Capital employed

 

$

611,752

 

 

$

256,812

 

 

$

(10,545

)

 

$

858,019

 

 

 

 

 

 

 

 

 

 

Total partners' capital

 

$

611,752

 

 

$

256,812

 

 

$

(666,605

)

 

$

201,959

 

Class A convertible preferred units

 

 

 

 

 

164,587

 

 

164,587

 

Debt, net