Natural Resource Partners L.P. (NYSE:NRP) today reported first quarter 2019 results as follows:

        Three Months Ended

Last TwelveMonths

March 31, March 31,

(In thousands, except per unit data) (Unaudited)

2019     2018 2019 Net income from continuing operations $ 35,765 $ 26,286 $ 131,839 Adjusted EBITDA (1) 52,449 52,207 230,483 Cash flow provided by (used in) continuing operations: Operating activities 22,832 17,414 183,700 Investing activities 697 3,240 5,064 Financing activities (99,852 ) (26,844 ) (79,847 ) Distributable cash flow (1) 23,139 20,654 386,465 Free cash flow (1) 23,273 19,998 186,715 Cash flow cushion (last twelve months) (1) 32,484

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(1)

 

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

 

“NRP started the year with a solid quarter of financial results, continued robust cash flow generation and paid off $86 million of debt,” commented NRP’s President and Chief Operating Officer, Craig Nunez. “Additionally, in April we successfully refinanced our $100 million revolving credit facility, extending the maturity from 2020 to 2023, and we issued $300 million of 9.125% unsecured bonds due 2025, which will be used along with cash on hand to redeem our existing $346 million of 10.5% bonds later this month, lowering our total debt by an additional $46 million. We are pleased with the results of these transactions and remain committed to continue strengthening our balance sheet to further de-lever and de-risk the Partnership.”

NRP’s liquidity was $229.7 million at March 31, 2019, consisting of $112.4 million of cash, $17.3 million of cash restricted for debt repayment and $100.0 million of borrowing capacity available under its credit facility. After giving effect to the refinancing transactions, NRP’s liquidity as of March 31, 2019 would have been approximately $154 million, consisting of approximately $54 million of cash and $100 million of borrowing capacity. NRP’s consolidated Debt-to-Adjusted EBITDA ratio at March 31, 2019, excluding the one-time, beneficial Hillsboro settlement, was 2.9x, and after giving effect to the refinancing transactions it will improve to 2.7x.

NRP’s cash flow cushion for the last twelve months ended March 31, 2019 was $32.5 million. Cash flow cushion represents the amount of free cash flow left over after payment of mandatory debt amortizations and preferred and common unit distributions.

NRP declared a cash distribution of $0.45 per common unit and a cash distribution of $7.5 million on NRP’s Preferred Units for the first quarter of 2019. In addition, NRP declared a one-time special cash distribution of $0.85 per common unit to cover the common unitholders’ tax liability resulting from the sale of NRP’s construction aggregates business in December 2018.

First Quarter Segment Results (Unaudited)

    Operating Business Segments         Coal Royalty     Corporate (In thousands) and Other Soda Ash and Financing Total Three Months Ended March 31, 2019 Net income (loss) from continuing operations $ 42,607 $ 11,682 $ (18,524 ) $ 35,765 Adjusted EBITDA (1) 46,999 9,800 (4,350 ) 52,449 Cash flow provided by (used in) continuing operations: Operating activities 42,916 9,800 (29,884 ) 22,832 Investing activities 697 — — 697 Financing activities — — (99,852 ) (99,852 ) Distributable cash flow (1) 43,613 9,800 (29,884 ) 23,139 Free cash flow (1) 43,357 9,800 (29,884 ) 23,273   Three Months Ended March 31, 2018 Net income (loss) from continuing operations $ 38,951 $ 9,621 $ (22,286 ) $ 26,286 Adjusted EBITDA (1) 44,293 12,250 (4,336 ) 52,207 Cash flow provided by (used in) continuing operations: Operating activities 38,793 10,153 (31,532 ) 17,414 Investing activities 1,143 2,097 — 3,240 Financing activities — — (26,844 ) (26,844 ) Distributable cash flow (1) 39,936 12,250 (31,532 ) 20,654 Free cash flow (1) 39,280 12,250 (31,532 ) 19,998

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(1)

 

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

 

Coal Royalty and Other

Solid first quarter 2019 results were driven by continued stable performance from NRP's metallurgical and thermal coal properties. First quarter 2019 revenues, net income and Adjusted EBITDA were positively impacted by higher average coal royalty revenue per ton and increased coal overriding royalty revenues from NRP's Williamson property in the Illinois Basin. In addition, NRP recorded $2.8 million of revenue from its Hillsboro property in the first quarter of 2019, compared to zero in the prior year quarter, following the settlement of the Foresight litigation in the fourth quarter of 2018. Consistent with the prior year quarter, approximately 65% of NRP's coal royalty revenues and approximately 55% of its coal royalty production was derived from metallurgical coal during the three months ended March 31, 2019.

Distributable cash flow and Free cash flow increased compared to the prior year quarter primarily as a result of the timing of cash collections and the collection of lease amendment fees in the first quarter of 2019.

Soda Ash

Soda Ash segment operating performance increased compared to the prior year quarter primarily as a result of an increase in production and sales volumes and higher domestic and international sales prices compared to the prior year quarter.

Adjusted EBITDA, Distributable cash flow and Free cash flow decreased $2.5 million compared to the prior year quarter as a result of a lower cash distribution received from Ciner Wyoming in the first quarter of 2019.

Corporate and Finance

Corporate and Finance segment results improved compared to the prior year quarter primarily due to lower interest expense as a result of NRP’s continued debt repayment.

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 55454892. 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.

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. A large percentage of NRP’s revenues are generated from royalties and other passive income. In addition, NRP owns an equity investment in Ciner Wyoming, a trona/soda ash operation.

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, 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, litigation risk, 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, 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, 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 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 sales of assets, including sales of discontinued operations, and return of 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. 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 receivables (including affiliate); less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as 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.

“Free cash flow excluding discontinued operations and one-time beneficial items” is a non-GAAP financial measure that we define as Free cash flow excluding discontinued operations and one-time beneficial items. Free cash flow excluding discontinued operations and one-time beneficial items 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 excluding discontinued operations and one-time beneficial items may not be calculated the same for us as for other companies. Free cash flow excluding discontinued operations and one-time beneficial items is a supplemental liquidity measure used by our management 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 excluding discontinued operations and one-time beneficial items less mandatory Opco debt amortization payments, 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 from continuing operations plus interest expense 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, 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.

“Return on capital employed excluding discontinued operations and one-time beneficial items” is a non-GAAP financial measure that we define as Return on capital employed excluding one-time beneficial items. Return on capital employed excluding discontinued operations and one-time beneficial items 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. Return on capital employed excluding discontinued operations and one-time beneficial items is a supplemental performance measure used by our management team that measures our profitability and efficiency with which our capital is employed excluding the impact of one-time beneficial items. The measure provides an indication of operating performance before the impact of leverage in the capital structure and excluding the impact of one-time beneficial items.

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

  Natural Resource Partners L.P. Financial Tables (Unaudited)   Consolidated Statements of Comprehensive Income       Three Months Ended March 31,     December 31,

(In thousands, except per unit data)

2019     2018 2018 Revenues and other income Coal royalty and other $ 49,502 $ 44,474 $ 43,966 Transportation and processing services 5,601 5,383 6,649 Equity in earnings of Ciner Wyoming 11,682 9,621 13,320 Gain on litigation settlement — — 25,000 Gain on asset sales 256   651   1,622   Total revenues and other income $ 67,041 $ 60,129 $ 90,557   Operating expenses Operating and maintenance expenses $ 8,360 $ 6,215 $ 8,387 Depreciation, depletion and amortization 4,392 5,100 6,325 General and administrative expenses 4,350 4,336 5,714 Asset impairments —   242   18,038   Total operating expenses $ 17,102 $ 15,893 $ 38,464   Income from operations $ 49,939 $ 44,236 $ 52,093   Interest expense, net $ (14,174 ) $ (17,950 ) $ (17,001 )   Net income from continuing operations $ 35,765 $ 26,286 $ 35,092 Income (loss) from discontinued operations (46 ) (1,948 ) 13,966   Net income $ 35,719 $ 24,338 $ 49,058 Less: income attributable to preferred unitholders (7,500 ) (7,500 ) (7,500 ) Net income attributable to common unitholders and general partner $ 28,219 $ 16,838 $ 41,558   Net income attributable to common unitholders $ 27,655 $ 16,501 $ 40,727 Net income attributable to the general partner $ 564 $ 337 $ 831   Income from continuing operations per common unit Basic $ 2.26 $ 1.50 $ 2.21 Diluted $ 1.75 $ 1.16 $ 1.69   Net income per common unit Basic $ 2.26 $ 1.35 $ 3.33 Diluted $ 1.75 $ 1.08 $ 2.36   Net income $ 35,719 $ 24,338 $ 49,058 Comprehensive income (loss) from unconsolidated investment and other 1,005   (1,125 ) 619   Comprehensive income $ 36,724   $ 23,213   $ 49,677       Natural Resource Partners L.P. Financial Tables (Unaudited)   Consolidated Statements of Cash Flows       Three Months Ended March 31,     December 31,

(In thousands)

2019     2018 2018 Cash flows from operating activities Net income $ 35,719 $ 24,338 $ 49,058 Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: Depreciation, depletion and amortization 4,392 5,100 6,325 Distributions from unconsolidated investment 9,800 10,153 9,800 Equity earnings from unconsolidated investment (11,682 ) (9,621 ) (13,320 ) Gain on asset sales (256 ) (651 ) (1,622 ) Income (loss) from discontinued operations 46 1,948 (13,966 ) Asset impairments — 242 18,038 Unit-based compensation expense 901 687 290 Amortization of debt issuance costs and other 1,796 1,154 3,112 Change in operating assets and liabilities: Accounts receivable (4,927 ) (10,027 ) 159 Accounts payable (616 ) 869 1,048 Accrued liabilities (6,164 ) (5,042 ) 3,212 Accrued interest (10,033 ) (9,777 ) 8,806 Deferred revenue 4,534 5,361 10,265 Other items, net (678 ) 2,680   (716 ) Net cash provided by operating activities of continuing operations $ 22,832 $ 17,414 $ 80,489 Net cash provided by operating activities of discontinued operations 121   2,385   886   Net cash provided by operating activities $ 22,953 $ 19,799 $ 81,375   Cash flows from investing activities Distributions from unconsolidated investment in excess of cumulative earnings $ — $ 2,097 $ — Proceeds from sale of assets 256 656 1,623 Return of long-term contract receivables 441   487   455   Net cash provided by investing activities of continuing operations $ 697 $ 3,240 $ 2,078 Net cash provided by (used in) investing activities of discontinued operations (390 ) (3,413 ) 192,364   Net cash provided by (used in) investing activities $ 307 $ (173 ) $ 194,442   Cash flows from financing activities Borrowings on revolving credit facility — 35,000 — Repayments of loans (86,468 ) (40,800 ) (119,986 ) Redemption of preferred units paid-in-kind — (8,844 ) — Distributions to common unitholders and general partner (5,625 ) (5,617 ) (5,623 ) Distributions to preferred unitholders (7,500 ) (7,765 ) (7,500 ) Contributions from (to) discontinued operations (269 ) 1,408 197,965 Debt issuance costs and other 10   (226 ) —   Net cash provided by (used in) financing activities of continuing operations $ (99,852 ) $ (26,844 ) $ 64,856 Net cash provided by (used in) financing activities of discontinued operations 269   (1,457 ) (198,030 ) Net cash used in financing activities $ (99,583 ) $ (28,301 ) $ (133,174 )   Net increase (decrease) in cash, cash equivalents and restricted cash $ (76,323 ) $ (8,675 ) $ 142,643   Cash, cash equivalents and restricted cash of continuing operations at beginning of period $ 206,030 $ 26,980 $ 58,607 Cash, cash equivalents and restricted cash of discontinued operations at beginning of period —   2,847   4,780   Cash, cash equivalents and restricted cash at beginning of period $ 206,030 $ 29,827 $ 63,387   Cash, cash equivalents and restricted cash at end of period $ 129,707 $ 21,152 $ 206,030 Less: cash, cash equivalents and restricted cash of discontinued operations at end of period —   (362 ) —   Cash, cash equivalents and restricted cash of continuing operations at end of period $ 129,707 $ 20,790 $ 206,030   Supplemental cash flow information: Cash paid during the period for interest of continuing operations $ 23,422 $ 26,023 $ 6,838     Natural Resource Partners L.P. Financial Tables (Unaudited)   Consolidated Balance Sheets       March 31,     December 31, 2019 2018

(In thousands, except unit data)

ASSETS Current assets Cash and cash equivalents $ 112,374 $ 101,839 Restricted cash 17,333 104,191 Accounts receivable, net 37,023 32,058 Prepaid expenses and other 4,141 3,462 Current assets of discontinued operations 998   993   Total current assets $ 171,869 $ 242,543 Land 24,008 24,008 Plant and equipment, net 893 984 Mineral rights, net 739,570 743,112 Intangible assets, net 41,754 42,513 Equity in unconsolidated investment 249,936 247,051 Long-term contracts receivable 38,464 38,945 Other assets 5,677   2,491   Total assets $ 1,272,171   $ 1,341,647   LIABILITIES AND CAPITAL Current liabilities Accounts payable $ 1,797 $ 2,414 Accrued liabilities 6,200 12,347 Accrued interest 4,312 14,345 Current portion of deferred revenue 4,614 3,509 Current portion of long-term debt, net 46,024 115,184 Current liabilities of discontinued operations 727   947   Total current liabilities $ 63,674 $ 148,746 Deferred revenue 52,473 49,044 Long-term debt, net 541,677 557,574 Other non-current liabilities 4,720   1,150   Total liabilities $ 662,544 $ 756,514 Commitments and contingencies Class A Convertible Preferred Units (250,000 units issued and outstanding at $1,000 par value per unit; liquidation preference of $1,500 per unit) $ 164,587 $ 164,587 Partners’ capital: Common unitholders’ interest (12,261,199 and 12,249,469 units issued and outstanding at March 31, 2019 and December 31, 2018, respectively) $ 378,140 $ 355,113 General partner’s interest 5,476 5,014 Warrant holders' interest 66,816 66,816 Accumulated other comprehensive loss (2,457 ) (3,462 ) Total partners’ capital 447,975 423,481 Non-controlling interest (2,935 ) (2,935 ) Total capital 445,040   420,546   Total liabilities and capital $ 1,272,171   $ 1,341,647       Natural Resource Partners L.P. Financial Tables (Unaudited)   Consolidated Statements of Partners' Capital      

 

   

 

   

 

   

 

   

Partners'

   

 

   

 

 

Capital

 

Accumulated

Excluding

Common Unitholders

Other

Non-

Non-

    General Warrant Comprehensive

Controlling

Controlling

Total (In thousands) Units Amounts Partner Holders Loss Interests

Interest

Capital Balance at December 31, 2018 12,249 $ 355,113 $ 5,014 $ 66,816 $ (3,462 ) $ 423,481 $ (2,935 ) $ 420,546 Net income (1) — 35,005 714 — — 35,719 — 35,719 Distributions to common unitholders and general partner — (5,513 ) (112 ) — — (5,625 ) — (5,625 ) Distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) — (7,500 ) Issuance of unit-based awards 12 486 — — — 486 — 486 Unit-based awards amortization and vesting — 399 — — — 399 — 399 Comprehensive income from unconsolidated investment and other —   —   10   —   1,005   1,015   —   1,015   Balance at March 31, 2019 12,261   $ 378,140   $ 5,476   $ 66,816   $ (2,457 ) $ 447,975   $ (2,935 ) $ 445,040  

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(1)   Net income includes $7.5 million attributable to Preferred Unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.      

 

   

 

   

 

   

 

   

 

   

 

   

 

 

Partners'

 

Capital

 

Accumulated

Excluding

Common Unitholders

Other

Non-

Non-

    General Warrant Comprehensive Controlling

Controlling

Total (In thousands) Units Amounts Partner Holders Loss

Interest

Interest

Capital Balance at December 31, 2017 12,232 $ 199,851 $ 1,857 $ 66,816 $ (3,313 ) $ 265,211 $ (3,394 ) $ 261,817 Cumulative effect of adoption of accounting standard — 69,057 1,409 — — 70,466 — 70,466 Net income (1) — 23,851 487 — — 24,338 — 24,338 Distributions to common unitholders and general partner — (5,505 ) (112 ) — — (5,617 ) — (5,617 ) Distributions to preferred unitholders — (7,610 ) (155 ) — — (7,765 ) — (7,765 ) Issuance of unit-based awards 14 410 — — — 410 — 410 Unit-based awards amortization and vesting — 197 — — — 197 — 197 Comprehensive income (loss) from unconsolidated investment and other —   —   8   —   (1,125 ) (1,117 ) —   (1,117 ) Balance at March 31, 2018 12,246   $ 280,251   $ 3,494   $ 66,816   $ (4,438 ) $ 346,123   $ (3,394 ) $ 342,729  

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(1)   Net income includes $7.5 million attributable to Preferred Unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 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 March 31, 2019 and 2018 and December 31, 2018:

      Operating Business Segments         Coal Royalty     Corporate and

(In thousands)

and Other Soda Ash Financing Total Three Months Ended March 31, 2019 Revenues $ 55,103 $ 11,682 $ — $ 66,785 Gains on asset sales, net 256 — —   256 Total revenues and other income $ 55,359 $ 11,682 $ — $ 67,041 Asset impairments $ — $ — $ — $ — Net income (loss) from continuing operations $ 42,607 $ 11,682 $ (18,524 ) $ 35,765 Adjusted EBITDA (1) $ 46,999 $ 9,800 $ (4,350 ) $ 52,449 Distributable cash flow (1) (2) $ 43,613 $ 9,800 $ (29,884 ) $ 23,139 Free cash flow (1) $ 43,357 $ 9,800 $ (29,884 ) $ 23,273   Three Months Ended March 31, 2018 Revenues $ 49,857 $ 9,621 $ — $ 59,478 Gains on asset sales, net 651 — —   651 Total revenues and other income $ 50,508 $ 9,621 $ — $ 60,129 Asset impairments $ 242 $ — $ — $ 242 Net income (loss) from continuing operations $ 38,951 $ 9,621 $ (22,286 ) $ 26,286 Adjusted EBITDA (1) $ 44,293 $ 12,250 $ (4,336 ) $ 52,207 Distributable cash flow (1) $ 39,936 $ 12,250 $ (31,532 ) $ 20,654 Free cash flow (1) $ 39,280 $ 12,250 $ (31,532 ) $ 19,998   Three Months Ended December 31, 2018 Revenues $ 50,615 $ 13,320 $ — $ 63,935 Gain on litigation settlement 25,000 — — 25,000 Gains on asset sales, net 1,622 — —   1,622 Total revenues and other income $ 77,237 $ 13,320 $ — $ 90,557 Asset impairments $ 18,038 $ — $ — $ 18,038 Net income (loss) from continuing operations $ 44,487 $ 13,320 $ (22,715 ) $ 35,092 Adjusted EBITDA (1) $ 68,850 $ 9,800 $ (5,714 ) $ 72,936 Net cash provided by (used in) operating activities of continuing operations $ 80,272 $ 9,800 $ (9,583 ) $ 80,489 Net cash provided by (used in) investing activities of continuing operations $ 2,078 $ — $ — $ 2,078 Net cash provided by (used in) financing activities of continuing operations $ — $ — $ 64,856 $ 64,856 Distributable cash flow (1) (2) $ 82,350 $ 9,800 $ (9,583 ) $ 280,658 Free cash flow (1) $ 80,727 $ 9,800 $ (9,583 ) $ 80,944

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          (1)   See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.   (2) Includes net proceeds from sale of 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       Three Months Ended March 31,     December 31,

(In thousands, except per ton data)

2019     2018 2018 Coal production (tons) Appalachia Northern 859 225 1,697 Central 3,422 3,545 3,415 Southern 348   546   422   Total Appalachia 4,629 4,316 5,534 Illinois Basin 560 743 648 Northern Powder River Basin 856   1,233   1,417   Total coal production 6,045   6,292   7,599   Coal royalty revenue per ton Appalachia Northern $ 4.71 $ 4.73 $ 1.78 Central 6.03 5.71 5.79 Southern 8.61 7.16 7.89 Illinois Basin 4.77 4.14 4.84 Northern Powder River Basin 2.61 2.24 2.56 Combined average coal royalty revenue per ton 5.39 4.93 4.33 Coal royalty revenues Appalachia Northern $ 4,045 $ 1,066 $ 3,021 Central 20,644 20,232 19,764 Southern 2,997   3,914   3,327   Total Appalachia 27,686 25,212 26,112 Illinois Basin 2,670 3,075 3,140 Northern Powder River Basin 2,231   2,765   3,628   Unadjusted coal royalty revenues $ 32,587 $ 31,052 $ 32,880 Coal royalty adjustment for minimum leases (456 ) (50 ) (12 ) Total coal royalty revenues $ 32,131   $ 31,002   $ 32,868   Other revenues Production lease minimum revenues $ 2,700 $ 2,535 $ 1,897 Minimum lease straight-line revenues 3,316 603 623 Property tax revenues 1,433 1,182 1,454 Wheelage revenues 1,415 1,974 1,329 Coal overriding royalty revenues 3,975 2,872 3,386 Lease amendment revenues 771 — — Aggregates royalty revenues 1,464 1,091 1,188 Oil and gas royalty revenues 1,719 2,898 929 Other 578   317   292   Total other revenues $ 17,371   $ 13,472   $ 11,098   Coal royalty and other $ 49,502 $ 44,474 $ 43,966 Transportation and processing services 5,601 5,383 6,649 Gain on litigation settlement — — 25,000 Gain on asset sales 256   651   1,622   Total Coal Royalty and Other segment revenues and other income $ 55,359   $ 50,508   $ 77,237      

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

  Adjusted EBITDA       Coal Royalty         Corporate and    

(In thousands)

and Other Soda Ash Financing Total Three Months Ended March 31, 2019 Net income (loss) from continuing operations $ 42,607 $ 11,682 $ (18,524 ) $ 35,765 Less: equity earnings from unconsolidated investment — (11,682 ) — (11,682 ) Add: total distributions from unconsolidated investment — 9,800 — 9,800 Add: interest expense, net — — 14,174 14,174 Add: depreciation, depletion and amortization 4,392 — — 4,392 Add: asset impairments —   —   —   —   Adjusted EBITDA $ 46,999   $ 9,800   $ (4,350 ) $ 52,449     Three Months Ended March 31, 2018 Net income (loss) from continuing operations $ 38,951 $ 9,621 $ (22,286 ) $ 26,286 Less: equity earnings from unconsolidated investment — (9,621 ) — (9,621 ) Add: total distributions from unconsolidated investment — 12,250 — 12,250 Add: interest expense, net — — 17,950 17,950 Add: depreciation, depletion and amortization 5,100 — — 5,100 Add: asset impairments 242   —   —   242   Adjusted EBITDA $ 44,293   $ 12,250   $ (4,336 ) $ 52,207     Three Months Ended December 31, 2018 Net income (loss) from continuing operations $ 44,487 $ 13,320 $ (22,715 ) $ 35,092 Less: equity earnings from unconsolidated investment — (13,320 ) — (13,320 ) Add: total distributions from unconsolidated investment — 9,800 — 9,800 Add: interest expense, net — — 17,001 17,001 Add: depreciation, depletion and amortization 6,325 — — 6,325 Add: asset impairments 18,038   —   —   18,038   Adjusted EBITDA $ 68,850   $ 9,800   $ (5,714 ) $ 72,936       Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited)   Leverage Ratio       Three Months Ended    

(In thousands)

June 30, 2018

   

September 30, 2018

   

December 31, 2018

   

March 31, 2019

Last 12 Months

Net income from continuing operations $ 35,129 $ 25,853 $ 35,092 $ 35,765 $ 131,839 Less: equity earnings from unconsolidated investment (16,529 ) (8,836 ) (13,320 ) (11,682 ) (50,367 ) Add (less): net loss (net income) attributable to non-controlling interest (869 ) 359 — — (510 ) Add: total distributions from unconsolidated investment 12,250 12,250 9,800 9,800 44,100 Add: interest expense, net 17,734 17,493 17,001 14,174 66,402 Add: depreciation, depletion and amortization 5,376 4,888 6,325 4,392 20,981 Add: asset impairments —   —   18,038   —   18,038   Adjusted EBITDA $ 53,091   $ 52,007   $ 72,936   $ 52,449   $ 230,483   Less: one-time Hillsboro litigation settlement (25,000 ) Adjusted EBITDA less one-time Hillsboro litigation settlement $ 205,483     Debt—at March 31, 2019 $ 600,670   Leverage Ratio (1) 2.6 x   Leverage Ratio less one-time Hillsboro litigation settlement (2) 2.9 x

_________________________

          (1)  

Leverage Ratio is calculated as last twelve months' Adjusted EBITDA divided by the outstanding principal of NRP's debt as of March 31, 2019.

  (2)

Leverage Ratio less one-time Hillsboro litigation settlement is calculated as last twelve months' Adjusted EBITDA less one-time Hillsboro litigation settlement divided by the outstanding principal of NRP's debt as of March 31, 2019.

    Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited)   Distributable Cash Flow and Free Cash Flow     Coal Royalty         Corporate and    

(In thousands)

and Other Soda Ash Financing Total Three Months Ended March 31, 2019 Net cash provided by (used in) operating activities of continuing operations $ 42,916 $ 9,800 $ (29,884 ) $ 22,832 Add: distributions from unconsolidated investment in excess of cumulative earnings — — — — Add: proceeds from sale of assets 256 — — 256 Add: proceeds from sale of discontinued operations — — — (390 ) Add: return of long-term contract receivables 441   —   —   441   Distributable cash flow $ 43,613   $ 9,800   $ (29,884 ) $ 23,139   Less: proceeds from sale of assets (256 ) — — (256 ) Less: proceeds from sale of discontinued operations —   —   —   390   Free cash flow $ 43,357   $ 9,800   $ (29,884 ) $ 23,273     Three Months Ended March 31, 2018 Net cash provided by (used in) operating activities of continuing operations $ 38,793 $ 10,153 $ (31,532 ) $ 17,414 Add: distributions from unconsolidated investment in excess of cumulative earnings — 2,097 — 2,097 Add: proceeds from sale of assets 656 — — 656 Add: return of long-term contract receivables 487   —   —   487   Distributable cash flow $ 39,936   $ 12,250   $ (31,532 ) $ 20,654   Less: proceeds from sale of assets (656 ) —   —   (656 ) Free cash flow $ 39,280   $ 12,250   $ (31,532 ) $ 19,998     Three Months Ended December 31, 2018 Net cash provided by (used in) operating activities of continuing operations $ 80,272 $ 9,800 $ (9,583 ) $ 80,489 Add: proceeds from sale of assets 1,623 — — 1,623 Add: proceeds from sale of discontinued operations — — — 198,091 Add: return of long-term contract receivables 455   —   —   455   Distributable cash flow $ 82,350   $ 9,800   $ (9,583 ) $ 280,658   Less: proceeds from sale of assets (1,623 ) — — (1,623 )

Less: proceeds from sale of discontinued operations

—   —   —   (198,091 ) Free cash flow $ 80,727   $ 9,800   $ (9,583 ) $ 80,944       Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited)   LTM Cash Flow Excluding Discontinued Operations and One-Time Beneficial Items and Cash Flow Cushion         Three Months Ended

(In thousands)

June 30,2018

   

September 30,2018

   

December 31,2018

   

March 31,2019

Last 12 Months

Net cash provided by (used in) operating activities of continuing operations $ 53,893 $ 26,486 $ 80,489 $ 22,832 $ 183,700 Add: distributions from unconsolidated investment in excess of cumulative earnings — — — — — Add: proceeds from sale of assets 170 — 1,623 256 2,049 Add: proceeds from sale of discontinued operations — — 198,091 (390 ) 197,701 Add: return of long-term contract receivables 529   1,590   455   441   3,015   Distributable cash flow $ 54,592 $ 28,076 $ 280,658 $ 23,139 $ 386,465 Less: proceeds from sale of assets (170 ) — (1,623 ) (256 ) (2,049 )

Less: proceeds from sale of discontinued operations

—   —   (198,091 ) 390   (197,701 ) Free cash flow $ 54,422 $ 28,076 $ 80,944 $ 23,273 $ 186,715 Add (less): free cash flow provided by (used by) discontinued operations (2,428 ) 2,871   125   121   689   Free cash flow including discontinued operations $ 51,994   $ 30,947   $ 81,069   $ 23,394   $ 187,404   Add (less): free cash flow used by (provided by) discontinued operations 2,428 (2,871 ) (125 ) (121 ) (689 ) Less: cash flow from one-time Hillsboro litigation settlement —   —   (25,000 ) —   (25,000 ) Free cash flow excluding discontinued operations and one-time beneficial items $ 54,422   $ 28,076   $ 55,944   $ 23,273   $ 161,715   Less: mandatory Opco debt amortizations (7,272 ) (7,648 ) (24,665 ) (37,152 ) (76,737 )

Less: Preferred Unit distributions

(7,500 ) (7,500 ) (7,500 ) (7,500 ) (30,000 ) Less: common unit distributions (5,623 ) (5,623 ) (5,623 ) (5,625 ) (22,494 ) Cash flow cushion $ 34,027   $ 7,305   $ 18,156   $ (27,004 ) $ 32,484       Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited)   Return on Capital Employed ("ROCE")      

Coal Royalty

       

Corporate

   

(In thousands)

and Other

Soda Ash

and Financing

Total LTM Ended March 31, 2019 Net income (loss) from continuing operations $ 164,384 $ 50,367 $ (82,912 ) $ 131,839 Interest expense —   —   67,691   67,691   Return $ 164,384   $ 50,367   $ (15,221 ) $ 199,530     As of March 31, 2018 Total assets of continuing operations $ 944,085 $ 241,679 $ 4,856 $ 1,190,620

Less: total current liabilities of continuing operations excluding current debt

(8,306 ) — (8,068 ) (16,374 )

Less: total long-term liabilities of continuing operations excluding long-term debt

(37,081 ) — (252 ) (37,333 ) Add: non-controlling interest 3,445   —   —   3,445   Capital employed excluding discontinued operations $ 902,143   $ 241,679   $ (3,464 ) $ 1,140,358     Total Partners' Capital (1) $ 902,143 $ 241,679 $ (972,628 ) $ 346,175 Less: Partners' Capital from discontinued operations —   —   —   (174,981 ) Total Partners' Capital excluding discontinued operations $ 902,143 $ 241,679 $ (972,628 ) $ 171,194 Class A Convertible Preferred Units — — 164,587 164,587 Debt —   —   804,577   804,577   Capital employed excluding discontinued operations $ 902,143   $ 241,679   $ (3,464 ) $ 1,140,358           ROCE excluding discontinued operations 18.2% 20.8% N/A 17.5%   Excluding one-time beneficial items: Return $ 164,384 $ 50,367 $ (15,221 ) $ 199,530 Less: income from Hillsboro litigation settlement (25,000 ) — (25,000 ) Less: income from Ciner Wyoming's royalty dispute settlement —   (12,678 )   (12,678 ) Return excluding discontinued operations and one-time beneficial items $ 139,384   $ 37,689   $ (15,221 ) $ 161,852           ROCE excluding discontinued operations and one-time beneficial items 15.5% 15.6% N/A 14.2%

_________________________

          (1)   Total Partners' Capital includes $175.0 million from discontinued operations.  

Tiffany Sammis713-751-7515tsammis@nrplp.com

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