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
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 Ciner Wyoming, 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 revenue
—affiliates — 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
CoalRoyaltyand
Other
ConstructionAggregates
CorporateandFinancing
($ 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
CoalRoyaltyand
Other
ConstructionAggregates
CorporateandFinancing
(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)
CoalRoyalty
andOther
ConstructionAggregates
CorporateandFinancing
(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
andOther
ConstructionAggregates
CorporateandFinancing
(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)
CoalRoyalty
andOther
ConstructionAggregates
CorporateandFinancing
(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)
CoalRoyalty
andOther
ConstructionAggregates
CorporateandFinancing
(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 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171108005652/en/
Natural Resource Partners L.P.Kathy H. Roberts,
713-751-7555kroberts@nrplp.com
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