Ciner Resources LP (NYSE: CINR) today reported its financial and
operating results for the second quarter ended June 30,
2018.
Second Quarter 2018 Financial Highlights:
- Net sales of $109.9 million decreased
8.2% over the prior-year second quarter; year-to-date net sales of
$231.1 million decreased 6.2% over the prior-year.
- Net income of $34.5 million, including
a $25.9 million net litigation settlement, increased 97.1% over the
prior-year second quarter; year-to-date net income of $55.4 million
increased 38.8% over the prior-year.
- Adjusted EBITDA of $42.9 million,
including a $25.9 million net litigation settlement, increased
67.6% over the prior-year second quarter; year-to-date adjusted
EBITDA of $71.7 million increased 28.0% over the prior-year.
- Earnings per unit of $0.830 for the
quarter increased 102.4% over the prior-year second quarter of
$0.410; year-to-date of $1.340 increased 41.1% over the
prior-year
- Quarterly distribution declared per
unit of $0.567 remained flat compared to the prior-year second
quarter as well as first quarter of 2018.
- Net cash provided by operating
activities of $19.9 million increased 33.6% over prior-year second
quarter; year-to-date net cash provided by operating activities of
$57.2 million increased by 122.6% over the prior-year.
- Distributable cash flow of $19.6
million was up 81.5% compared to the prior-year second quarter. The
distribution coverage ratio was 1.70: 1.00 and 0.94: 1.00 for the
three months ended June 30, 2018 and 2017, respectively; and 1.43:
1.00 and 1.06: 1.00 for the six months ended June 30, 2018 and
2017.
Kirk Milling, CEO, commented: “Distributable cash flow was up
over 80% in the quarter primarily driven from the settlement of our
royalty rate litigation. Stripping out the impact of the
settlement, production levels and operating results were both
adversely impacted by unexpected repairs to one of our calcining
furnaces encountered during a regularly scheduled outage in May.
The negative impact to our operating results from this lost
production more than offset the positive benefit we experienced
from international prices rising 5.5% above 2017 levels.
“For the rest of 2018, we maintain a positive outlook for soda
ash prices as supply and demand balances remain tight around the
world. Combined with higher production levels and continued
strength in our domestic business, we are poised to see positive
improvement in our operating results over the 2nd half of the
year.”
2018 Outlook:
- We expect our total volume sold to be
down 1% to 3% compared to the previous estimate of flat to up
2%.
- We expect domestic volume to increase
by 125,000 to 150,000 short tons.
- We expect domestic pricing to be down
1% to 3%.
- We expect international prices to be up
2% to 4% compared to the previous estimate of up 1% to 3%.**
- Maintenance of business capital
expenditures are planned to be in the range of $15 to $17 million
compared to the previous estimate of $13 to $15 million.
- Expansion capital expenditures are
planned to be in the range of $55 to $65 million.
** Excluding the change related to freight from CIDT sales in
2017.
Financial Highlights Three Months Ended
June 30, Six Months Ended June 30,
(Dollars in millions, except per unit amounts)
2018 2017 % Change 2018
2017 % Change Soda ash volume
produced (millions of short tons) 0.579 0.643 (10.0 )% 1.248 1.295
(3.6 )% Soda ash volume sold (millions of short tons) 0.585 0.651
(10.2 )% 1.252 1.322 (5.3 )% Net sales $ 109.9 $ 119.7 (8.2 )% $
231.1 $ 246.3 (6.2 )% Net income $ 34.5 $ 17.5 97.1 % $ 55.4 $ 39.9
38.8 %
Net income attributable to Ciner Resources LP $ 16.8
$ 8.2 104.9 % $ 26.9 $ 19.1 40.8 % Earnings per Limited Partner
Unit $ 0.83 $ 0.41 102.4 % $ 1.34 $ 0.95 41.1 % Adjusted EBITDA (1)
$ 42.9 $ 25.6 67.6 % $ 71.7 $ 56.0 28.0 % Adjusted EBITDA
attributable to Ciner Resources LP(1) $ 21.5 $ 12.6 70.6 % $ 35.8 $
27.7 29.2 % Net cash provided by operating activities $ 19.9 $ 14.9
33.6 % $ 57.2 $ 25.7 122.6 % Distributable cash flow attributable
to Ciner Resources LP(1) $ 19.6 $ 10.8 81.5 % $ 32.7 $ 24.2 35.1 %
Distribution coverage ratio (1) 1.70 0.94 80.9 % 1.43 1.06 34.9 %
(1)See non-GAAP reconciliations
Three Months Ended June 30, 2018 compared to Three Months
Ended June 30, 2017
The following table sets forth a summary of net sales, sales
volumes and average sales price, and the percentage change between
the periods.
Three Months Ended June 30,
PercentIncrease/(Decrease)
Net sales (Dollars in millions): 2018
2017 Domestic $ 60.3 $ 48.1 25.4% International $
49.6 $ 71.6 (30.7)% Total net sales $ 109.9 $
119.7 (8.2)%
Sales volumes (thousands of short tons):
Domestic 271.9 216.5 25.6% International 312.7 434.8
(28.1)% Total soda ash volume sold 584.6 651.3
(10.2)%
Average sales price (per short ton): Domestic $
221.77 $ 222.17 (0.2)% International $ 158.62 $ 164.67 (3.7)%
Average $ 187.99 $ 183.79 2.3%
Percent of net sales:
Domestic sales 54.9 % 40.2 % 36.6% International sales 45.1 % 59.8
% (24.6)% Total percent of net sales 100.0 % 100.0 %
Percent of
sales volumes: Domestic volume 46.5 % 33.2 % 40.1%
International volume 53.5 % 66.8 % (19.9)% Total percent of volume
sold 100.0 % 100.0 %
Consolidated Results
Net sales. Net sales decreased by 8.2% to $109.9 million for the
three months ended June 30, 2018 from $119.7 million for the three
months ended June 30, 2017, driven by a decrease in soda ash
volumes sold of 10.2% primarily as a result of unexpected repairs
to one of our calcining furnaces encountered during a regularly
scheduled outage in May. The unit was successfully repaired and
returned to operation. The decrease in volumes sold was partially
offset by an increase in average sales prices of 2.3%. The increase
in averages sales prices is primarily driven by a shift in our
sales mix between domestic and international sales volumes compared
to the prior year second quarter.
Cost of products sold. Cost of products sold, including
depreciation, depletion and amortization expense remained
relatively flat at $96.0 million for the three months ended June
30, 2018 compared to $95.5 million for the three months ended June
30, 2017. Our cost of products sold was primarily driven by a
decrease in freight costs of 11.4% to $32.0 million for three
months ended June 30, 2018, compared to $36.1 million for the three
months ended June 30, 2017 due to a decrease in volumes sold,
partially offset by an increase in employee compensation, medical
claims, as well as higher professional fees, for the three months
ended June 30, 2018 compared to the prior year second quarter.
Selling, general and administrative expenses. Our selling,
general and administrative expenses increased 10.3% to $6.4 million
for the three months ended June 30, 2018, compared to $5.8 million
for the three months ended June 30, 2017. The increase was
primarily driven by a higher expenses related to our Enterprise
Resource Planning (“ERP”) implementation project.
Litigation settlement. During the three months ended June 30,
2018, we recognized $27.5 million ($25.9 million net of associated
expenses) related to the settlement of an action initially filed
against Rock Springs Royalty Company LLC (“RSRC”) in 2016, related
to royalty overpayment under Ciner Wyoming’s mineral exploration
license with RSRC. The case was settled on June 28, 2018.
Operating income. As a result of the foregoing and primarily the
litigation settlement, operating income increased by 90.2% to $35.0
million for the three months ended June 30, 2018, compared to $18.4
million for the three months ended June 30, 2017.
Net income. As a result of the foregoing, net income increased
by 97.1% to $34.5 million for the three months ended June 30, 2018,
compared to $17.5 million for the three months ended June 30,
2017.
Six Months Ended June 30, 2018 compared to Six Months Ended
June 30, 2017
The following table sets forth a summary of net sales, sales
volumes and average sales price, and the percentage change between
the periods.
Six Months Ended June 30,
PercentIncrease/(Decrease)
Net sales (Dollars in millions): 2018
2017 Domestic $ 115.6 $ 97.2 18.9% International
115.5 149.1 (22.5)% Total net sales $ 231.1 $
246.3 (6.2)%
Sales volumes (thousands of short tons):
Domestic 528.9 442.2 19.6% International 723.3 879.9
(17.8)% Total soda ash volume sold 1,252.2 1,322.1
(5.3)%
Average sales price (per short ton): Domestic $
218.57 $ 219.81 (0.6)% International $ 159.68 $ 169.45 (5.8)%
Average $ 184.56 $ 186.29 (0.9)%
Percent of net sales:
Domestic sales 50.0 % 39.5 % 26.6% International sales 50.0 % 60.5
% (17.4)% Total percent of net sales 100.0 % 100.0 %
Percent of
sales volumes: Domestic volume 42.2 % 33.4 % 26.3%
International volume 57.8 % 66.6 % (13.2)% Total percent of volume
sold 100.0 % 100.0 %
Consolidated Results
Net sales. Net sales decreased by 6.2% to $231.1 million for the
six months ended June 30, 2018 from $246.3 million for the six
months ended June 30, 2017, driven by a decrease in soda ash
volumes sold of 5.3% primarily as a result of unexpected repairs to
one of our calcining furnaces encountered during a regularly
scheduled outage in May. The unit was successfully repaired and
returned to operation. The decrease in international sales prices
was primarily driven by the absence of international sales to CIDT
in 2018. During 2017, international average sales prices reflected
the increase in freight costs driven by export sales volume to
CIDT.
Cost of products sold. Cost of products sold, including
depreciation, depletion and amortization expense and freight costs,
decreased by 2.3% to $189.2 million for the six months ended
June 30, 2018 from $193.6 million for the six months ended
June 30, 2017, primarily due to a decrease in freight costs of
12.5% to $66.4 million for the six months ended June 30, 2018,
compared to $75.9 million for the six months ended June 30,
2017. The decrease in freight costs was driven by no export sales
volumes to CIDT during the six months ended June 30, 2018
compared to the prior year. The decrease in freight costs were
partially offset by an increase in employee compensation, medical
claims, as well as higher professional fees, for the six months
ended June 30, 2018 compared to the prior year.
Selling, general and administrative expenses. Our selling,
general and administrative expenses increased 17.4% to $12.8
million for the six months ended June 30, 2018, compared to
$10.9 million for the six months ended June 30, 2017. The two
primary drivers for the increase were higher selling and
administrative fees relating to our affiliate, ANSAC, which
directly correlates with the volume we sell to ANSAC, and higher
expenses from our ERP implementation project.
Litigation settlement. During the six months ended June 30,
2018 we recognized $27.5 million ($25.9 million net of associated
expenses) related to the settlement of an action initially filed
against Rock Springs Royalty Company LLC (“RSRC”) in 2016, related
to royalty overpayment under Ciner Wyoming’s mineral exploration
license with RSRC. The case was settled on June 28, 2018.
Operating income. As a result of the foregoing and primarily the
litigation settlement, operating income increased by 35.4% to $56.6
million for the six months ended June 30, 2018, compared to
$41.8 million for the six months ended June 30, 2017.
Net income. As a result of the foregoing, net income increased
by 38.8% to $55.4 million for the six months ended June 30,
2018, compared to $39.9 million primarily for the six months ended
June 30, 2017.
CAPEX AND ORE TO ASH RATIO
The following table below summarizes our capital expenditures,
on an accrual basis, and ore to ash ratio:
Three Months Ended June 30,
Six Months Ended June 30, (Dollars in
millions) 2018 2017 2018
2017 Capital Expenditures Maintenance $ 2.1 $
2.3 $ 4.9 $ 5.0 Expansion 10.7 4.7 15.4 6.4 Total $ 12.8 $ 7.0 $
20.3 $ 11.4
Operating and Other Data: Ore to ash ratio(1)
1.55: 1.0 1.45: 1.0 1.55: 1.0 1.48: 1.0 (1)Ore to ash ratio
expresses the number of short tons of trona ore needed to produce
one short ton of soda ash and includes our deca rehydration
recovery process. In general, a lower ore to ash ratio results in
lower costs and improved efficiency.
FINANCIAL POSITION AND LIQUIDITY
As of June 30, 2018, we had cash and cash equivalents of
$20.9 million. In addition, we have approximately $79.4 million
($225.0 million, less $134.0 million outstanding and less standby
letters of credit of $11.6 million) of remaining capacity under our
revolving credit facilities. As of June 30, 2018, our leverage
and interest coverage ratios, as calculated per the Ciner Wyoming
Credit Facility, were 1.03: 1.0 and 27.87: 1.0, respectively.
CASH FLOWS AND QUARTERLY CASH DISTRIBUTION
Cash Flows
Cash provided by operating activities increased to $57.2 million
during the six months ended June 30, 2018 compared to $25.7
million of cash provided during six months ended June 30,
2017, primarily driven by $13.9 million of working capital provided
by operating activities during the six months ended June 30,
2018, compared to $28.3 million of working capital used in
operating activities during the six months ended June 30,
2017. The $42.2 million increase in working capital provided by
operating activities was primarily due to the $49.5 million
decrease in due-from affiliates.
Cash provided by operating activities during the six months
ended June 30, 2018 were offset by cash used in investing
activities of $14.9 million for capital expenditures and cash used
in financing activities during the six month period of $51.6
million. The cash used in financing activities during the six
months ended June 30, 2018 was due to distributions paid of
$47.3 million and net repayments of long-term debt of $4.0 million
during the six months ended June 30, 2018 compared to the $31
million in net borrowings during the six months ended June 30,
2017.
Quarterly Distribution
On July 26, 2018, the Partnership declared its second
quarter 2018 quarterly distribution of $0.567 per unit. This is
consistent with the distribution declared during the second quarter
of 2017. The quarterly cash distribution is payable on
August 20, 2018 to unitholders of record on August 6,
2018.
RELATED COMMUNICATIONS
Ciner Resources LP will host a conference call tomorrow,
August 7, 2018 at 8:30 a.m. ET. Participants can listen in by
dialing 1-866-550-6980 (Domestic) or 1-804-977-2644 (International)
and referencing confirmation 5889599. Please log in or dial in at
least 10 minutes prior to the start time to ensure a connection. A
telephonic replay of the call will be available approximately two
hours after the call’s completion by calling 1-800-585-8367 or
404-537-3406 and referencing confirmation 5889599, and will remain
available for the following seven days. This conference call will
be webcast live and archived for replay on Ciner Resources’ website
at www.ciner.us.com.
ABOUT CINER RESOURCES LP
Ciner Resources LP, a master limited partnership, operates the
trona ore mining and soda ash production business of Ciner Wyoming
LLC (“Ciner Wyoming”), one of the largest and lowest cost producers
of natural soda ash in the world, serving a global market from its
facility in the Green River Basin of Wyoming. The facility has been
in operation for more than 50 years.
NATURE OF OPERATIONS
Ciner Resources LP owns a controlling interest comprised of a
51% membership interest in Ciner Wyoming. Natural Resource Partners
L.P. (“NRP”) owns a non-controlling interest consisting of a 49%
membership interest in Ciner Wyoming.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements.
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 contain words such as “possible,” “believe,” “should,”
“could,” “would,” “predict,” “plan,” “estimate,” “intend,” “may,”
“anticipate,” “will,” “if,” “expect” or similar expressions. Such
statements are based only on the Partnership’s current beliefs,
expectations and assumptions regarding the future of the
Partnership’s business, projections, anticipated events and trends,
the economy and other future conditions. Because forward-looking
statements relate to the future, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict and many of which are outside of the
Partnership’s control. The Partnership’s actual results and
financial condition may differ materially from those implied or
expressed by these forward-looking statements. Consequently, you
are cautioned not to place undue reliance on any forward-looking
statement because no forward-looking statement can be guaranteed.
Factors that could cause the Partnership’s actual results to differ
materially from the results contemplated by such forward-looking
statements include: changes in general economic conditions, the
Partnership’s ability to meet its expected quarterly distributions,
changes in the Partnership’s relationships with its customers,
including American Natural Soda Ash Corporation (“ANSAC”) and Ciner
Ic ve Dis Ticaret Anonim Sirket (“CIDT”), the demand for soda ash
and the opportunities for the Partnership to increase its volume
sold, the development of glass and glass making product
alternatives, changes in soda ash prices, operating hazards,
unplanned maintenance outages at the Partnership’s production
facilities, construction costs or capital expenditures exceeding
estimated or budgeted costs or expenditures, the effects of
government regulation, tax position, and other risks incidental to
the mining, processing, and shipment of trona ore and soda ash, as
well as the other factors discussed in the Partnership’s Annual
Report on Form 10-K for the year ended December 31, 2017, and
subsequent reports filed with the Securities and Exchange
Commission. All forward-looking statements included in this press
release are expressly qualified in their entirety by such
cautionary statements. Unless required by law, the Partnership
undertakes no duty and does not intend to update the
forward-looking statements made herein to reflect new information
or events or circumstances occurring after this press release. All
forward-looking statements speak only as of the date made.
Supplemental Information
CINER RESOURCES LP
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, Six Months
Ended June 30,
(In millions,
except per unit data)
2018 2017 2018 2017
Net sales: Sales—affiliates $ 49.6 $ 71.6 $ 115.5 $ 149.1
Sales—others 60.3 48.1 115.6 97.2
Net sales $ 109.9 $ 119.7 $ 231.1 $
246.3
Operating costs and expenses: Cost of products
sold, including freight costs 88.7 89.0 175.1 180.4 Depreciation,
depletion and amortization expense 7.3 6.5 14.1 13.2 Selling,
general and administrative expenses—affiliates 4.3 4.1 9.2 8.1
Selling, general and administrative expenses—others 2.1 1.7 3.6 2.8
Litigation settlement (27.5 ) — (27.5 ) — Total
operating costs and expenses 74.9 101.3 174.5
204.5
Operating income 35.0 18.4 56.6 41.8
Other
income/(expenses): Interest income 0.8 — 1.4 — Interest
expense, net (1.2 ) (0.8 ) (2.5 ) (1.7 ) Other, net (0.1 ) (0.1 )
(0.1 ) (0.2 ) Total other expense, net (0.5 ) (0.9 ) (1.2 ) (1.9 )
Net income $ 34.5 $ 17.5 $ 55.4 $ 39.9
Net income attributable to non-controlling interest 17.7
9.3 28.5 20.8
Net income
attributable to Ciner Resources LP $ 16.8 $ 8.2 $
26.9 $ 19.1
Other comprehensive loss: Loss on
derivative financial instruments (1.0 ) (0.1 ) (3.2 ) (2.4 )
Comprehensive income 33.5 17.4 52.2 37.5 Comprehensive income
attributable to non-controlling interest 17.2 9.2
26.9 19.6
Comprehensive income attributable to
Ciner Resources LP $ 16.3 $ 8.2 $ 25.3 $
17.9
Net income per limited partner unit: Net
income per limited partner units (basic and diluted) $ 0.83 $ 0.41
$ 1.34 $ 0.95
Weighted average limited partner units
outstanding: Weighted average limited partner units outstanding
(basic and diluted) 19.7 19.7 19.7 19.7 Cash distribution declared
per unit $ 0.567 $ 0.567 $ 1.134 $ 1.134
CINER RESOURCES LP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
As of
(In
millions)
June 30, 2018 December 31, 2017
ASSETS Current assets: Cash and cash
equivalents $ 20.9 $ 30.2 Accounts receivable—affiliates 75.5 98.3
Accounts receivable, net 42.1 34.2 Litigation settlement receivable
27.5 — Inventory 20.8 19.8 Other current assets 2.0 1.8
Total current assets 188.8 184.3 Property, plant and
equipment, net 255.4 249.3 Other non-current assets 20.0
19.6 Total assets $ 464.2 $ 453.2
LIABILITIES AND EQUITY Current liabilities: Current
portion of long-term debt $ 11.4 $ 11.4 Accounts payable 19.0 14.5
Due to affiliates 4.1 3.0 Accrued expenses 29.1 27.7
Total current liabilities 63.6 56.6 Long-term debt 134.0 138.0
Other non-current liabilities 13.0 10.4 Total
liabilities 210.6 205.0 Commitments and Contingencies
Equity: Common unitholders - Public and Ciner Holdings (19.8
and 19.7 units issued and outstanding at June 30, 2018 and December
31, 2017) 152.9 148.3 General partner unitholders - Ciner Resource
Partners LLC (0.4 units issued and outstanding at June 30, 2018 and
December 31, 2017) 3.8 3.8 Accumulated other comprehensive loss
(5.3 ) (3.7 ) Partners’ capital attributable to Ciner Resources LP
151.4 148.4 Non-controlling interest 102.2 99.8 Total
equity 253.6 248.2 Total liabilities and partners’
equity $ 464.2 $ 453.2
CINER RESOURCES LP
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Six Months Ended June 30, (In
millions) 2018 2017 Cash
flows from operating activities: Net income $ 55.4 $ 39.9
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation, depletion and amortization
expense 14.3 13.4 Litigation settlement (27.5 ) — Equity-based
compensation expense 1.0 0.5 Other non-cash items 0.1 0.2 Changes
in operating assets and liabilities: (Increase)/decrease in:
Accounts receivable - affiliates 22.8 (26.7 ) Accounts receivable,
net (7.9 ) (1.3 ) Inventory (1.5 ) 0.8 Other current and other
non-current assets (0.1 ) (0.3 ) Increase/(decrease) in: Accounts
payable (0.6 ) 1.7 Due to affiliates 1.0 — Accrued expenses and
other liabilities 0.2 (2.5 ) Net cash provided by operating
activities 57.2 25.7
Cash flows from investing
activities: Capital expenditures (14.9 ) (13.3 ) Net cash used
in investing activities (14.9 ) (13.3 )
Cash flows from
financing activities: Borrowings on Ciner Wyoming credit
facility 55.0 45.0 Repayments on Ciner Wyoming credit facility
(59.0 ) (14.0 ) Common units surrendered for taxes (0.3 ) —
Distributions to common unitholders (22.3 ) (22.3 ) Distributions
to general partner (0.5 ) (0.5 ) Distributions to non-controlling
interest (24.5 ) (24.5 ) Net cash used in financing activities
(51.6 ) (16.3 ) Net decrease in cash and cash equivalents (9.3 )
(3.9 ) Cash and cash equivalents at beginning of period 30.2
19.7 Cash and cash equivalents at end of period $ 20.9
$ 15.8
Non-GAAP Financial Measures
We report our financial results in accordance with generally
accepted accounting principles in the United States (“GAAP”). We
also present the non-GAAP financial measures of:
- Adjusted EBITDA;
- Distributable cash flow; and
- Distribution coverage ratio.
We define Adjusted EBITDA as net income (loss) plus net interest
expense, income tax, depreciation, depletion and amortization,
equity-based compensation expense and certain other expenses that
are non-cash charges or that we consider not to be indicative of
ongoing operations. Distributable cash flow is defined as Adjusted
EBITDA less net cash paid for interest, maintenance capital
expenditures and income taxes, each as attributable to Ciner
Resources LP. The Partnership may fund expansion-related capital
expenditures with borrowings under existing credit facilities such
that expansion-related capital expenditures will have no impact on
cash on hand or the calculation of cash available for distribution.
In certain instances, the timing of the Partnership’s borrowings
and/or its cash management practices will result in a mismatch
between the period of the borrowing and the period of the capital
expenditure. In those instances, the Partnership adjusts designated
reserves (as provided in the partnership agreement) to take account
of the timing difference. Accordingly, expansion-related capital
expenditures have been excluded from the presentation of cash
available for distribution. Distributable cash flow will not
reflect changes in working capital balances. We define distribution
coverage ratio as the ratio of distributable cash flow as of the
end of the period to cash distributions payable with respect to
such period.
Adjusted EBITDA, distributable cash flow and distribution
coverage ratio are non-GAAP supplemental financial measures that
management and external users of our consolidated financial
statements, such as industry analysts, investors, lenders and
rating agencies, may use to assess:
- our operating performance as compared
to other publicly traded partnerships in our industry, without
regard to historical cost basis or, in the case of Adjusted EBITDA,
financing methods;
- the ability of our assets to generate
sufficient cash flow to make distributions to our unitholders;
- our ability to incur and service debt
and fund capital expenditures; and
- the viability of capital expenditure
projects and the returns on investment of various investment
opportunities.
We believe that the presentation of Adjusted EBITDA,
distributable cash flow and distribution coverage ratio provide
useful information to investors in assessing our financial
condition and results of operations. The GAAP measures most
directly comparable to Adjusted EBITDA and distributable cash flow
are net income and net cash provided by operating activities. Our
non-GAAP financial measures of Adjusted EBITDA, distributable cash
flow and distribution coverage ratio should not be considered as
alternatives to GAAP net income, operating income, net cash
provided by operating activities, or any other measure of financial
performance or liquidity presented in accordance with GAAP.
Adjusted EBITDA and distributable cash flow have important
limitations as analytical tools because they exclude some, but not
all items that affect net income and net cash provided by operating
activities. Investors should not consider Adjusted EBITDA,
distributable cash flow and distribution coverage ratio in
isolation or as a substitute for analysis of our results as
reported under GAAP. Because Adjusted EBITDA, distributable cash
flow and distribution coverage ratio may be defined differently by
other companies, including those in our industry, our definition of
Adjusted EBITDA, distributable cash flow and distribution coverage
ratio may not be comparable to similarly titled measures of other
companies, thereby diminishing its utility.
The table below presents a reconciliation of the non-GAAP
financial measures of Adjusted EBITDA and distributable cash flow
to the GAAP financial measures of net income and net cash provided
by operating activities:
Three Months Ended June 30, Six
Months Ended June 30,
(Dollars in
millions, except per unit data)
2018 2017 2018 2017
Reconciliation of Adjusted EBITDA to net income: Net
income $ 34.5 $ 17.5 $ 55.4 $ 39.9
Add backs:
Depreciation, depletion and amortization expense 7.3 6.5 14.1 13.2
Interest expense, net 0.4 0.8 1.1 1.7 Restructuring charges and
other, net (included in selling, general and administrative
expenses) 0.1 0.3 0.1 0.7 Equity-based compensation expense 0.6
0.5 1.0 0.5
Adjusted EBITDA $
42.9 $ 25.6 $ 71.7 $ 56.0 Less: Adjusted EBITDA attributable to
non-controlling interest 21.4 13.0 35.9 28.3
Adjusted EBITDA attributable to Ciner Resources LP $
21.5 $ 12.6 $ 35.8 $ 27.7
Reconciliation of distributable cash flow to Adjusted EBITDA
attributable to Ciner Resources LP: Adjusted EBITDA
attributable to Ciner Resources LP $ 21.5 $ 12.6 $ 35.8 $ 27.7
Less: Cash interest expense, net attributable to Ciner Resources LP
0.5 0.5 0.8 0.9 Less: Maintenance capital expenditures attributable
to Ciner Resources LP 1.4 1.3 2.3 2.6
Distributable cash flow attributable to Ciner Resources LP $
19.6 $ 10.8 $ 32.7 $ 24.2 Cash
distribution declared per unit $ 0.567 $ 0.567 $ 1.134 $ 1.134
Total distributions to unitholders and general partner $ 11.5 $
11.4 $ 22.9 $ 22.8 Distribution coverage ratio 1.70 0.94 1.43 1.06
Reconciliation of Adjusted EBITDA to net cash from
operating activities: Net cash provided by operating activities
$ 19.9 $ 14.9 $ 57.2 $ 25.7 Add/(less): Amortization of long-term
loan financing (0.1 ) (0.1 ) (0.2 ) (0.2 ) Net change in working
capital (4.8 ) 9.8 (13.9 ) 28.3 Litigation settlement 27.5 — 27.5 —
Interest expense, net 0.4 0.8 1.1 1.7 Restructuring charges and
other, net (included in selling, general and administrative
expenses) 0.1 0.3 0.1 0.7 Other non-cash items (0.1 ) (0.1 ) (0.1 )
(0.2 )
Adjusted EBITDA $ 42.9 $ 25.6 $ 71.7 $ 56.0 Less:
Adjusted EBITDA attributable to non-controlling interest 21.4
13.0 35.9 28.3
Adjusted EBITDA
attributable to Ciner Resources LP $ 21.5 $ 12.6 $ 35.8 $ 27.7
Less: Cash interest expense, net attributable to Ciner Resources LP
0.5 0.5 0.8 0.9 Less: Maintenance capital expenditures attributable
to Ciner Resources LP 1.4 1.3 2.3 2.6
Distributable cash flow attributable to Ciner Resources LP $
19.6 $ 10.8 $ 32.7 $ 24.2
The following table presents a reconciliation of the non-GAAP
financial measures of Adjusted EBITDA to GAAP financial measure of
net income for the periods presented:
(Dollars in
millions, except per unit data)
CumulativeFourQuartersendedQ2-2018
Q2-2018 Q1-2018 Q4-2017 Q3-2017
Q2-2017 Reconciliation of Adjusted EBITDA to net
income: Net income $ 101.9 $ 34.5 $ 20.9 $ 27.2 $ 19.3 $
17.5
Add backs: Depreciation, depletion and amortization
expense 28.0 7.3 6.8 6.9 7.0 6.5 Asset impairment charges 1.6 — — —
1.6 — Interest expense, net 2.3 0.4 0.7 0.3 0.9 0.8 Restructuring
charges and other, net (included in selling, general and
administrative expenses) 0.2 0.1 — 0.1 — 0.3 Equity-based
compensation expense 1.8 0.6 0.4 0.4
0.4 0.5
Adjusted EBITDA 135.8 42.9 28.8 34.9 29.2
25.6 Less: Adjusted EBITDA attributable to non-controlling interest
67.8 21.4 14.4 17.3 14.7 13.0
Adjusted EBITDA attributable to Ciner Resources LP $ 68.0
$ 21.5 $ 14.4 $ 17.6 $ 14.5 $
12.6 Adjusted EBITDA attributable to Ciner Resources LP $
68.0 $ 21.5 $ 14.4 $ 17.6 $ 14.5 $ 12.6 Less: Cash interest
expense, net attributable to Ciner Resources LP 1.9 0.5 0.3 0.5 0.6
0.5 Less: Maintenance capital expenditures attributable to Ciner
Resources LP 5.6 1.4 0.9 2.5 0.8
1.3
Distributable cash flow attributable to Ciner Resources
LP $ 60.5 $ 19.6 $ 13.2 $ 14.6 $
13.1 $ 10.8 Cash distribution declared per unit $
2.268 $ 0.567 $ 0.567 $ 0.567 $ 0.567 $ 0.567 Total distributions
to unitholders and general partner $ 45.7 $ 11.5 $ 11.4 $ 11.4 $
11.4 $ 11.4 Distribution coverage ratio 1.32 1.70 1.16 1.28 1.15
0.94
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version on businesswire.com: https://www.businesswire.com/news/home/20180806005585/en/
Ciner Resources LPInvestor RelationsScott Humphrey,
770-375-2387Chief Financial OfficerSHumphrey@ciner.us.com
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