Natural Resource Partners L.P. (NYSE:NRP) today reported
second quarter 2021 results as follows:
For the Three
Months Ended
Last Twelve
Months Ended
(In
thousands) (Unaudited)
June 30, 2021
Net income
$
15,382
$
45,666
Asset impairments
16
7,661
Net income excluding asset impairments
(1)
$
15,398
$
53,327
Adjusted EBITDA (1)
27,351
100,233
Cash flow provided by (used in) continuing
operations:
Operating activities
13,384
74,062
Investing activities
657
2,365
Financing activities
(12,900
)
(89,347
)
Free cash flow (1)
12,925
75,136
Cash flow cushion (last twelve months)
(1)
(12,522
)
___________________
(1)
See "Non-GAAP Financial Measures" and
reconciliation tables at the end of this release.
"NRP saw continued strength in demand for steel, glass and
electricity in the second quarter of 2021, resulting in stable free
cash flow generation and strong liquidity. We are continuing to
reduce debt, maintain robust liquidity and maximize unitholder
value as we navigate the ongoing effects of the COVID-19 pandemic,"
said Craig Nunez, NRP's President and Chief Operating Officer.
NRP's liquidity was $197.9 million at June 30, 2021, consisting
of $97.9 million of cash and $100.0 million of borrowing capacity
available under its revolving credit facility.
NRP announced today that the Board of Directors of its general
partner declared a second quarter 2021 cash distribution of $0.45
per common unit of NRP to be paid on August 26, 2021 to unitholders
of record on August 19, 2021. In addition, the Board declared a
$7.8 million distribution on the preferred units, which will be
paid one-half in cash and one-half in kind through the issuance of
additional preferred units. The preferred unit distribution
includes interest on previously paid-in-kind units and will be paid
one-half in cash and one-half in kind through the issuance of
additional preferred units.
Segment Performance
Coal Royalty and Other
In the second quarter of 2021 net income increased $134.4
million as compared to the prior year period primarily due to a
$132.3 million non-cash asset impairment expense recorded in the
second quarter of 2020 that was primarily related to weakened coal
markets compounded by the COVID-19 pandemic. Free cash flow was
relatively flat in the second quarter of 2021 as compared to the
prior year period as increased coal royalty cash flow due to
stronger coal demand in the second quarter of 2021 was offset by $5
million of increased cash flow in the second quarter of 2020
related to the emergence of a lessee from bankruptcy. Approximately
65% of coal royalty revenues and approximately 50% of coal royalty
sales volumes were derived from metallurgical coal in the second
quarter of 2021.
Metallurgical coal markets have rebounded from the lows seen in
2020 and the outlook remains strong as steel demand driven by
global economic recovery is more than offsetting challenges related
to the COVID-19 pandemic. Domestic and export thermal coal markets
have significantly improved from the lows seen in 2020, but still
face ongoing negative effects of the COVID-19 pandemic and the
long-term challenges of lower electricity demand, competition from
natural gas, and the secular shift to renewable energy. However,
NRP does not have significant sensitivity to thermal coal price
movements this year since the substantial majority of NRP's thermal
cash flows are fixed through 2021 pursuant to a contract with
Foresight Energy that went into effect as they emerged from
bankruptcy last year.
In addition to actively managing its currently producing coal
and hard mineral properties over the last year, NRP continues
working to identify alternative revenue sources across its large
portfolio of land, mineral and timber assets. The types of
opportunities NRP is exploring include the sequestration of carbon
dioxide underground and in standing forests, and the generation of
electricity using geothermal, solar and wind energy. While the
timing and likelihood of cash flows being realized from any of
these activities is highly uncertain, NRP believes its large
ownership footprint throughout the United States will provide
opportunities to create value in this regard with minimal capital
investment by NRP.
Soda Ash
Net income in the second quarter of 2021 increased $5.7 million
as compared to the prior year period primarily as a result of
increased sales volumes as demand for soda ash continued to rebound
from its lows in 2020 caused by the global COVID-19 pandemic. Free
cash flow was lower by $7.1 million as compared to the prior year
period as a result of Ciner Wyoming's decision in August of 2020 to
suspend its quarterly distributions in an effort to achieve greater
financial and liquidity flexibility as a result of the COVID-19
pandemic. NRP does not expect Ciner Wyoming to resume regular cash
distributions until they have greater visibility and confidence in
the sustainability of the continuing improvement in global soda ash
demand. Ciner Wyoming’s ability to pay future quarterly
distributions will be dependent in part on its cash reserves,
liquidity, total debt levels and anticipated capital
expenditures.
NRP continues to believe Ciner Wyoming's facility is
competitively positioned as one of the lowest cost producers of
soda ash in the world, however, NRP expects the market to remain
volatile as a result of ongoing uncertainties with COVID-19.
Corporate and Financing
Corporate and financing costs in the second quarter of 2021
improved $0.9 million as compared to the prior year period
primarily due to lower interest expense as a result of less debt
outstanding in 2021. Free cash flow improved $0.5 million in the
second quarter of 2021 as compared to the prior year period
primarily due to lower cash paid for interest as a result of less
debt outstanding in 2021.
As noted earlier, NRP declared a second quarter 2021 preferred
unit distribution of $7.8 million which will be paid one-half in
cash and one-half in kind. The indenture governing the 2025 parent
company notes restricts NRP from paying more than one-half of the
quarterly distribution on the preferred units in cash if NRP's
consolidated leverage ratio exceeds 3.75x, and as of June 30, 2021,
NRP's leverage ratio was 4.6x. NRP expects its leverage ratio to
begin a sustained long-term decline as NRP continues to pay down
debt. Under the terms of the partnership agreement, if NRP’s
consolidated leverage ratio remains above 3.75x into 2022 and NRP
remains unable to redeem any outstanding paid-in-kind preferred
units, NRP would be required to temporarily suspend distributions
on its common units until the leverage ratio drops below 3.75x and
the outstanding paid-in-kind preferred units are redeemed. Future
distributions on NRP's common and preferred units will be
determined on a quarterly basis by the Board of Directors. The
Board of Directors considers numerous factors each quarter in
determining cash distributions, including profitability, cash flow,
debt service obligations, market conditions and outlook, estimated
unitholder income tax liability and the level of cash reserves that
the Board determines is necessary for future operating and capital
needs.
Conference Call
A conference call will be held today at 9:00 a.m. ET. To
register for the conference call, please use this link
http://www.directeventreg.com/registration/event/2296424. After
registering a confirmation will be sent via email, including dial
in details and unique conference call codes for entry. Registration
is open through the live call, however, to ensure you are connected
for the full call we suggest registering at least 10 minutes prior
to the start of the call. Investors may also listen to the call via
the Investor Relations section of the NRP website at www.nrplp.com.
To access the replay, please visit the Investor Relations section
of NRP’s website.
Withholding Information for Foreign Investors
This release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Brokers and nominees should treat
one hundred percent (100.0%) of NRP's distributions to foreign
investors as being attributable to income that is effectively
connected with a United States trade or business. Accordingly,
NRP's distributions to foreign investors are subject to federal
income tax withholding at the highest applicable rate.
Company Profile
Natural Resource Partners L.P., a master limited partnership
headquartered in Houston, TX, is a diversified natural resource
company that owns, manages and leases a diversified portfolio of
mineral properties in the United States including interests in
coal, industrial minerals and other natural resources. In addition,
NRP owns an equity investment in Ciner Wyoming LLC, a trona ore
mining and soda ash production business.
For additional information, please contact Tiffany Sammis at
713-751-7515 or tsammis@nrplp.com. Further information about NRP is
available on the Partnership’s website at http://www.nrplp.com.
Forward-Looking Statements
This press release includes “forward-looking statements” as
defined by the Securities and Exchange Commission. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that the
Partnership expects, believes or anticipates will or may occur in
the future are forward-looking statements. These statements are
based on certain assumptions made by the Partnership based on its
experience and perception of historical trends, current conditions,
expected future developments and other factors it believes are
appropriate in the circumstances. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are
beyond the control of the Partnership. These risks include, among
other things, statements regarding: the effects of the global
COVID-19 pandemic; future distributions on the Partnership’s common
and preferred units; the Partnership's business strategy; its
liquidity and access to capital and financing sources; its
financial strategy; prices of and demand for coal, trona and soda
ash, and other natural resources; estimated revenues, expenses and
results of operations; projected future performance by the
Partnership's lessees, including Foresight Energy; Ciner Wyoming
LLC’s trona mining and soda ash refinery operations; distributions
from the soda ash joint venture; the impact of governmental
policies, laws and regulations, as well as regulatory and legal
proceedings involving the Partnership, and of scheduled or
potential regulatory or legal changes; global and U.S. economic
conditions; and other factors detailed in Natural Resource
Partners’ Securities and Exchange Commission filings. Natural
Resource Partners L.P. has no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
Non-GAAP Financial Measures
"Adjusted EBITDA" is a non-GAAP financial measure that we
define as net income (loss) less equity earnings from
unconsolidated investment, net income attributable to
non-controlling interest and gain on reserve swap; plus total
distributions from unconsolidated investment, interest expense,
net, debt modification expense, loss on extinguishment of debt,
depreciation, depletion and amortization and asset impairments.
Adjusted EBITDA should not be considered an alternative to, or more
meaningful than, net income or loss, net income or loss
attributable to partners, operating income or loss, cash flows from
operating activities or any other measure of financial performance
presented in accordance with GAAP as measures of operating
performance, liquidity or ability to service debt obligations.
There are significant limitations to using Adjusted EBITDA as a
measure of performance, including the inability to analyze the
effect of certain recurring items that materially affect our net
income, the lack of comparability of results of operations of
different companies and the different methods of calculating
Adjusted EBITDA reported by different companies. In addition,
Adjusted EBITDA presented below is not calculated or presented on
the same basis as Consolidated EBITDA as defined in our partnership
agreement or Consolidated EBITDDA as defined in Opco's debt
agreements. Adjusted EBITDA is a supplemental performance measure
used by our management and by external users of our financial
statements, such as investors, commercial banks, research analysts
and others to assess the financial performance of our assets
without regard to financing methods, capital structure or
historical cost basis.
“Distributable cash flow” or "DCF" is a non-GAAP
financial measure that we define as net cash provided by (used in)
operating activities of continuing operations plus distributions
from unconsolidated investment in excess of cumulative earnings,
proceeds from asset sales and disposals, including sales of
discontinued operations, and return of long-term contract
receivable; less maintenance capital expenditures and distributions
to non-controlling interest. DCF is not a measure of financial
performance under GAAP and should not be considered as an
alternative to cash flows from operating, investing or financing
activities. DCF may not be calculated the same for us as for other
companies. In addition, distributable cash flow is not calculated
or presented on the same basis as distributable cash flow as
defined in our partnership agreement, which is used as a metric to
determine whether we are able to increase quarterly distributions
to our common unitholders. Distributable cash flow is a
supplemental liquidity measure used by our management and by
external users of our financial statements, such as investors,
commercial banks, research analysts and others to assess our
ability to make cash distributions and repay debt.
“Free cash flow” or "FCF" is a non-GAAP financial measure
that we define as net cash provided by (used in) operating
activities of continuing operations plus distributions from
unconsolidated investment in excess of cumulative earnings and
return of long-term contract receivable; less maintenance and
expansion capital expenditures, cash flow used in acquisition costs
classified as investing or financing activities and distributions
to non-controlling interest. FCF is calculated before mandatory
debt repayments. Free cash flow is not a measure of financial
performance under GAAP and should not be considered as an
alternative to cash flows from operating, investing or financing
activities. Free cash flow may not be calculated the same for us as
for other companies. Free cash flow is a supplemental liquidity
measure used by our management and by external users of our
financial statements, such as investors, commercial banks, research
analysts and others to assess our ability to make cash
distributions and repay debt.
"Cash flow cushion" is a non-GAAP financial measure that
we define as free cash flow less one-time beneficial items,
mandatory Opco debt repayments, preferred unit distributions and
common unit distributions. Cash flow cushion is not a measure of
financial performance under GAAP and should not be considered as an
alternative to cash flows from operating, investing or financing
activities. Cash flow cushion is a supplemental liquidity measure
used by our management to assess the Partnership's ability to make
or raise cash distributions to our common and preferred unitholders
and our general partner and repay debt or redeem preferred
units.
"Return on capital employed" or "ROCE" is a non-GAAP
financial measure that we define as net income (loss) operations
plus financing costs (interest expense plus loss on extinguishment
of debt) divided by the sum of equity excluding equity of
discontinued operations, and debt. Return on capital employed
should not be considered an alternative to, or more meaningful
than, net income or loss, net income or loss attributable to
partners, operating income or loss, cash flows from operating
activities or any other measure of financial performance presented
in accordance with GAAP as measures of operating performance,
liquidity or ability to service debt obligations. Return on capital
employed is a supplemental performance measure used by our
management team that measures our profitability and efficiency with
which our capital is employed. The measure provides an indication
of operating performance before the impact of leverage in the
capital structure.
-Financial Tables and Reconciliation of
Non-GAAP Measures Follow-
Natural Resource Partners L.P.
Financial Tables (Unaudited)
Consolidated Statements of
Comprehensive Income (Loss)
For the Three Months
Ended
For the Six Months
Ended
June 30,
March 31,
June 30,
(In thousands,
except per unit data)
2021
2020
2021
2021
2020
Revenues and other income
Coal royalty and other
$
33,611
$
31,666
$
32,927
$
66,538
$
63,099
Transportation and processing services
2,182
1,938
2,192
4,374
4,447
Equity (loss) in earnings of Ciner
Wyoming
2,601
(3,058
)
1,973
4,574
3,214
Gain on asset sales and disposals
116
465
59
175
465
Total revenues and other income
$
38,510
$
31,011
$
37,151
$
75,661
$
71,225
Operating expenses
Operating and maintenance expenses
$
5,170
$
8,217
$
5,552
$
10,722
$
13,419
Depreciation, depletion and
amortization
4,871
2,062
5,092
9,963
4,074
General and administrative expenses
3,388
3,621
4,110
7,498
7,534
Asset impairments
16
132,283
4,043
4,059
132,283
Total operating expenses
$
13,445
$
146,183
$
18,797
$
32,242
$
157,310
Income (loss) from operations
$
25,065
$
(115,172
)
$
18,354
$
43,419
$
(86,085
)
Interest expense, net
$
(9,683
)
$
(10,329
)
$
(9,973
)
$
(19,656
)
$
(20,637
)
Net income (loss)
$
15,382
$
(125,501
)
$
8,381
$
23,763
$
(106,722
)
Less: income attributable to preferred
unitholders
(7,842
)
(7,613
)
(7,727
)
(15,569
)
(15,113
)
Net income (loss) attributable to common
unitholders and the general partner
$
7,540
$
(133,114
)
$
654
$
8,194
$
(121,835
)
Net income (loss) attributable to common
unitholders
$
7,389
$
(130,452
)
$
641
$
8,030
$
(119,398
)
Net income (loss) attributable to the
general partner
151
(2,662
)
13
164
(2,437
)
Net income (loss) per common unit
Basic
$
0.60
$
(10.64
)
$
0.05
$
0.65
$
(9.74
)
Diluted
0.56
(10.64
)
0.05
0.65
(9.74
)
Net income (loss)
$
15,382
$
(125,501
)
$
8,381
$
23,763
$
(106,722
)
Comprehensive income from unconsolidated
investment and other
2,533
1,359
732
3,265
336
Comprehensive income (loss)
$
17,915
$
(124,142
)
$
9,113
$
27,028
$
(106,386
)
Natural Resource Partners L.P.
Financial Tables (Unaudited)
Consolidated Statements of
Cash Flows
For the Three Months
Ended
For the Six Months
Ended
June 30,
March 31,
June 30,
(In
thousands)
2021
2020
2021
2021
2020
Cash flows from operating activities
Net income (loss)
$
15,382
$
(125,501
)
$
8,381
$
23,763
$
(106,722
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities of continuing
operations:
Depreciation, depletion and
amortization
4,871
2,062
5,092
9,963
4,074
Distributions from unconsolidated
investment
—
7,105
3,920
3,920
14,210
Equity earnings from unconsolidated
investment
(2,601
)
3,058
(1,973
)
(4,574
)
(3,214
)
Gain on asset sales and disposals
(116
)
(465
)
(59
)
(175
)
(465
)
Asset impairments
16
132,283
4,043
4,059
132,283
Bad debt expense
(737
)
3,847
383
(354
)
3,657
Unit-based compensation expense
593
924
1,126
1,719
1,653
Amortization of debt issuance costs and
other
977
(1,534
)
269
1,246
(1,086
)
Change in operating assets and
liabilities:
Accounts receivable
162
8,446
(3,331
)
(3,169
)
3,373
Accounts payable
(83
)
(44
)
(10
)
(93
)
49
Accrued liabilities
1,838
(915
)
(3,034
)
(1,196
)
(3,776
)
Accrued interest
(7,424
)
(7,351
)
7,133
(291
)
(291
)
Deferred revenue
677
2,202
(146
)
531
10,467
Other items, net
(171
)
(4,182
)
1,406
1,235
(4,122
)
Net cash provided by operating activities
of continuing operations
$
13,384
$
19,935
$
23,200
$
36,584
$
50,090
Net cash provided by operating activities
of discontinued operations
—
—
—
—
1,706
Net cash provided by operating
activities
$
13,384
$
19,935
$
23,200
$
36,584
$
51,796
Cash flows from investing activities
Proceeds from asset sales and
disposals
$
116
$
507
$
59
$
175
$
507
Return of long-term contract
receivable
541
858
541
1,082
1,130
Acquisition of non-controlling interest in
BRP
—
(1,000
)
—
—
(1,000
)
Net cash provided by investing activities
of continuing operations
$
657
$
365
$
600
$
1,257
$
637
Net cash used in investing activities of
discontinued operations
—
—
—
—
(66
)
Net cash provided by investing
activities
$
657
$
365
$
600
$
1,257
$
571
Cash flows from financing activities
Debt repayments
$
(2,365
)
$
(2,365
)
$
(16,696
)
$
(19,061
)
$
(19,061
)
Distributions to common unitholders and
the general partner
(5,672
)
—
(5,630
)
(11,302
)
(5,630
)
Distributions to preferred unitholders
(3,864
)
(7,613
)
(3,806
)
(7,670
)
(15,113
)
Contributions from discontinued
operations
—
—
—
—
1,640
Acquisition of non-controlling interest in
BRP
(1,000
)
—
—
(1,000
)
—
Other items
1
—
(691
)
(690
)
—
Net cash used in financing activities of
continuing operations
$
(12,900
)
$
(9,978
)
$
(26,823
)
$
(39,723
)
$
(38,164
)
Net cash used in financing activities of
discontinued operations
—
—
—
—
(1,640
)
Net cash used in financing activities
$
(12,900
)
$
(9,978
)
$
(26,823
)
$
(39,723
)
$
(39,804
)
Net increase (decrease) in cash and cash
equivalents
$
1,141
$
10,322
$
(3,023
)
$
(1,882
)
$
12,563
Cash and cash equivalents at beginning of
period
96,767
100,506
99,790
99,790
98,265
Cash and cash equivalents at end of
period
$
97,908
$
110,828
$
96,767
$
97,908
$
110,828
Supplemental cash flow information:
Cash paid for interest
$
16,611
$
17,183
$
2,320
$
18,931
$
20,222
Non-cash investing and financing
activities:
Plant, equipment, mineral rights and other
funded with accounts payable or accrued liabilities
$
—
$
924
$
992
$
—
$
924
Preferred unit distributions
paid-in-kind
3,863
—
3,806
7,669
—
Natural Resource Partners L.P.
Financial Tables
Consolidated Balance
Sheets
June 30,
December 31,
(In thousands,
except unit data)
2021
2020
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
97,908
$
99,790
Accounts receivable, net
15,322
12,322
Other current assets, net
4,038
5,080
Total current assets
$
117,268
$
117,192
Land
24,008
24,008
Mineral rights, net
447,155
460,373
Intangible assets, net
16,742
17,459
Equity in unconsolidated investment
266,433
262,514
Long-term contract receivable, net
32,514
33,264
Other long-term assets, net
6,085
7,067
Total assets
$
910,205
$
921,877
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable
$
1,293
$
1,385
Accrued liabilities
5,746
7,733
Accrued interest
1,423
1,714
Current portion of deferred revenue
10,293
11,485
Current portion of long-term debt, net
39,060
39,055
Total current liabilities
$
57,815
$
61,372
Deferred revenue
51,793
50,069
Long-term debt, net
414,099
432,444
Other non-current liabilities
4,819
5,131
Total liabilities
$
528,526
$
549,016
Commitments and contingencies
Class A Convertible Preferred Units
(261,420 and 253,750 units issued and outstanding at June 30, 2021
and December 31, 2020, respectively, at $1,000 par value per unit;
liquidation preference of $1,850 per unit at June 30, 2021 and
$1,700 per unit at December 31, 2020)
$
176,006
$
168,337
Partners’ capital:
Common unitholders’ interest (12,351,306
and 12,261,199 units issued and outstanding at June 30, 2021 and
December 31, 2020, respectively)
$
134,836
$
136,927
General partner’s interest
434
459
Warrant holders' interest
66,816
66,816
Accumulated other comprehensive income
3,587
322
Total partners’ capital
$
205,673
$
204,524
Total liabilities and capital
$
910,205
$
921,877
Natural Resource Partners L.P.
Financial Tables (Unaudited)
Consolidated Statements of
Partners' Capital
Common Unitholders
General
Partner
Warrant
Holders
Accumulated
Other
Comprehensive
Income
Partners'
Capital
Excluding
Non-
Controlling
Interest
Non-
Controlling
Interest
Total
Capital
(In
thousands)
Units
Amounts
Balance at December 31, 2020
12,261
$
136,927
$
459
$
66,816
$
322
$
204,524
$
—
$
204,524
Net income (1)
—
8,213
168
—
—
8,381
—
8,381
Distributions to common unitholders and
the general partner
—
(5,517
)
(113
)
—
—
(5,630
)
—
(5,630
)
Distributions to preferred unitholders
—
(7,461
)
(152
)
—
—
(7,613
)
—
(7,613
)
Issuance of unit-based awards
90
—
—
—
—
—
—
—
Unit-based awards amortization and
vesting, net
—
215
—
—
—
215
—
215
Capital contribution
—
—
32
—
—
32
—
32
Comprehensive income from unconsolidated
investment and other
—
—
—
—
732
732
—
732
Balance at March 31, 2021
12,351
$
132,377
$
394
$
66,816
$
1,054
$
200,641
$
—
$
200,641
Net income (2)
—
15,074
308
—
—
15,382
—
15,382
Distributions to common unitholders and
general partner
—
(5,559
)
(113
)
—
—
(5,672
)
—
(5,672
)
Distributions to preferred unitholders
—
(7,571
)
(155
)
—
—
(7,726
)
—
(7,726
)
Unit-based awards amortization and
vesting
—
515
—
—
—
515
—
515
Comprehensive income from unconsolidated
investment and other
—
—
—
—
2,533
2,533
—
2,533
Balance at June 30, 2021
12,351
$
134,836
$
434
$
66,816
$
3,587
$
205,673
$
—
$
205,673
___________________
(1)
Net income includes $7.7 million of income
attributable to preferred unitholders that accumulated during the
period, of which $7.6 million is allocated to the common
unitholders and $0.2 million is allocated to the general
partner.
(2)
Net income includes $7.8 million of income attributable to
preferred unitholders that accumulated during the period, of which
$7.7 million is allocated to the common unitholders and $0.2
million is allocated to the general partner.
Natural Resource Partners L.P.
Financial Tables (Unaudited)
Common Unitholders
General
Partner
Warrant
Holders
Accumulated
Other
Comprehensive
Loss
Partners'
Capital
Excluding
Non-
Controlling
Interest
Non-
Controlling
Interest
Total
Capital
(In
thousands)
Units
Amounts
Balance at December 31, 2019
12,261
$
271,471
$
3,270
$
66,816
$
(2,594
)
$
338,963
$
(2,935
)
$
336,028
Cumulative effect of adoption of
accounting standard
—
(3,833
)
(78
)
—
—
(3,911
)
—
(3,911
)
Net income (1)
—
18,403
376
—
—
18,779
—
18,779
Distributions to common unitholders and
the general partner
—
(5,517
)
(113
)
—
—
(5,630
)
—
(5,630
)
Distributions to preferred unitholders
—
(7,350
)
(150
)
—
—
(7,500
)
—
(7,500
)
Unit-based awards amortization and
vesting
—
673
—
—
—
673
—
673
Comprehensive loss from unconsolidated
investment and other
—
—
—
—
(1,023
)
(1,023
)
—
(1,023
)
Balance at March 31, 2020
12,261
$
273,847
$
3,305
$
66,816
$
(3,617
)
$
340,351
$
(2,935
)
$
337,416
Net loss (2)
—
(122,991
)
(2,510
)
—
—
(125,501
)
—
(125,501
)
Distributions to preferred unitholders
—
(7,461
)
(152
)
—
—
(7,613
)
—
(7,613
)
Acquisition of non-controlling interest in
BRP
—
(4,747
)
(97
)
—
—
(4,844
)
2,935
(1,909
)
Unit-based awards amortization and
vesting
—
869
—
—
—
869
—
869
Comprehensive income from unconsolidated
investment and other
—
—
—
—
1,359
1,359
—
1,359
Balance at June 30, 2020
12,261
$
139,517
$
546
$
66,816
$
(2,258
)
$
204,621
$
—
$
204,621
___________________
(1)
Net income includes $7.5 million of income
attributable to preferred unitholders that accumulated during the
period, of which $7.4 million is allocated to the common
unitholders and $0.2 million is allocated to the general
partner.
(2)
Net loss includes $7.6 million of income
attributable to preferred unitholders that accumulated during the
period, of which $7.5 million is allocated to the common
unitholders and $0.2 million is allocated to the general
partner.
Natural Resource Partners L.P.
Financial Tables (Unaudited)
The following tables present NRP's
unaudited business results by segment for the three months ended
June 30, 2021 and 2020 and March 31, 2021:
Operating Segments
Coal Royalty
and Other
Corporate and
Financing
(In
thousands)
Soda Ash
Total
For the Three Months Ended June 30,
2021
Revenues
$
35,793
$
2,601
$
—
$
38,394
Gain on asset sales and disposals
116
—
—
116
Total revenues and other income
$
35,909
$
2,601
$
—
$
38,510
Asset impairments
$
16
$
—
$
—
$
16
Net income (loss)
$
25,886
$
2,566
$
(13,070
)
$
15,382
Adjusted EBITDA (1)
$
30,774
$
(35
)
$
(3,388
)
$
27,351
Cash flow provided by (used in) continuing
operations:
Operating activities
$
32,028
$
(35
)
$
(18,609
)
$
13,384
Investing activities
$
657
$
—
$
—
$
657
Financing activities
$
(1,000
)
$
—
$
(11,900
)
$
(12,900
)
Distributable cash flow (1)
$
32,685
$
(35
)
$
(18,609
)
$
14,041
Free cash flow (1)
$
31,569
$
(35
)
$
(18,609
)
$
12,925
For the Three Months Ended June 30,
2020
Revenues
$
33,604
$
(3,058
)
$
—
$
30,546
Gain on asset sales and disposals
465
—
—
465
Total revenues and other income
$
34,069
$
(3,058
)
$
—
$
31,011
Asset impairments
$
132,283
$
—
$
—
$
132,283
Net loss
$
(108,479
)
$
(3,087
)
$
(13,935
)
$
(125,501
)
Adjusted EBITDA (1)
$
25,881
$
7,076
$
(3,621
)
$
29,336
Cash flow provided by (used in) continuing
operations:
Operating activities
$
31,953
$
7,077
$
(19,095
)
$
19,935
Investing activities
$
365
$
—
$
—
$
365
Financing activities
$
—
$
—
$
(9,978
)
$
(9,978
)
Distributable cash flow (1)
$
33,318
$
7,077
$
(19,095
)
$
21,300
Free cash flow (1)
$
31,811
$
7,077
$
(19,095
)
$
19,793
For the Three Months Ended March 31,
2021
Revenues
$
35,119
$
1,973
$
—
$
37,092
Gain on asset sales and disposals
59
—
—
59
Total revenues and other income
$
35,178
$
1,973
$
—
$
37,151
Asset impairments
$
4,043
$
—
$
—
$
4,043
Net income (loss)
$
20,488
$
1,953
$
(14,060
)
$
8,381
Adjusted EBITDA (1)
$
29,646
$
3,900
$
(4,110
)
$
29,436
Cash flow provided by (used in) continuing
operations:
Operating activities
$
25,962
$
3,888
$
(6,650
)
$
23,200
Investing activities
$
600
$
—
$
—
$
600
Financing activities
$
(132
)
$
—
$
(26,691
)
$
(26,823
)
Distributable cash flow (1)
$
26,562
$
3,888
$
(6,650
)
$
23,800
Free cash flow (1)
$
26,503
$
3,888
$
(6,650
)
$
23,741
___________________
(1)
See "Non-GAAP Financial Measures" and
reconciliation tables at the end of this release.
Natural Resource Partners L.P.
Financial Tables (Unaudited)
The following table presents NRP's
unaudited business results by segment for the six months ended June
30, 2021 and 2020:
Operating Business
Segments
Coal Royalty
and Other
Corporate and
Financing
(In
thousands)
Soda Ash
Total
For the Six Months Ended June 30, 2021
Revenues
$
70,912
$
4,574
$
—
$
75,486
Gain on asset sales and disposals
175
—
—
175
Total revenues and other income
$
71,087
$
4,574
$
—
$
75,661
Asset impairments
$
4,059
$
—
$
—
$
4,059
Net income (loss)
$
46,374
$
4,519
$
(27,130
)
$
23,763
Adjusted EBITDA (1)
$
60,420
$
3,865
$
(7,498
)
$
56,787
Cash flow provided by (used in) continuing
operations:
Operating activities
$
57,990
$
3,853
$
(25,259
)
$
36,584
Investing activities
$
1,257
$
—
$
—
$
1,257
Financing activities
$
(1,132
)
$
—
$
(38,591
)
$
(39,723
)
Distributable cash flow (1)
$
59,247
$
3,853
$
(25,259
)
$
37,841
Free cash flow (1)
$
58,072
$
3,853
$
(25,259
)
$
36,666
For the Six Months Ended June 30, 2020
Revenues
$
67,546
$
3,214
$
—
$
70,760
Gain on asset sales and disposals
465
—
—
465
Total revenues and other income
$
68,011
$
3,214
$
—
$
71,225
Asset impairments
$
132,283
$
—
$
—
$
132,283
Net income (loss)
$
(81,735
)
$
3,169
$
(28,156
)
$
(106,722
)
Adjusted EBITDA (1)
$
54,637
$
14,165
$
(7,534
)
$
61,268
Cash flow provided by (used in) continuing
operations:
Operating activities
$
62,509
$
14,166
$
(26,585
)
$
50,090
Investing activities
$
637
$
—
$
—
$
637
Financing activities
$
—
$
—
$
(38,164
)
$
(38,164
)
Distributable cash flow (1) (2)
$
64,146
$
14,166
$
(26,585
)
$
51,661
Free cash flow (1)
$
62,639
$
14,166
$
(26,585
)
$
50,220
___________________
(1)
See "Non-GAAP Financial Measures" and
reconciliation tables at the end of this release.
(2)
Includes net proceeds from the sale of the
construction aggregates business which are classified as investing
cash flow from discontinued operations.
Natural Resource Partners L.P.
Financial Tables (Unaudited)
Operating Statistics - Coal
Royalty and Other
For the Three Months
Ended
For the Six Months
Ended
June 30,
March 31,
June 30,
(In thousands,
except per ton data)
2021
2020
2021
2021
2020
Coal sales volumes (tons)
Appalachia
Northern (1)
405
87
120
525
414
Central
2,975
2,463
2,650
5,625
5,396
Southern
316
426
100
416
648
Total Appalachia
3,696
2,976
2,870
6,566
6,458
Illinois Basin
2,640
578
2,658
5,298
1,083
Northern Powder River Basin
185
340
1,059
1,244
867
Total coal sales volumes
6,521
3,894
6,587
13,108
8,408
Coal royalty revenue per ton
Appalachia
Northern (1)
$
4.45
$
2.74
$
3.64
$
4.27
$
2.01
Central
4.62
4.04
4.22
4.44
4.47
Southern
7.63
4.96
5.28
7.06
4.68
Illinois Basin
2.01
1.97
2.06
2.04
3.08
Northern Powder River Basin
4.15
3.15
3.37
3.49
3.75
Combined average coal royalty revenue per
ton
3.69
3.73
3.22
3.45
4.11
Coal royalty revenues
Appalachia
Northern (1)
$
1,804
$
238
$
437
$
2,241
$
831
Central
13,756
9,951
11,195
24,951
24,124
Southern
2,410
2,111
528
2,938
3,034
Total Appalachia
17,970
12,300
12,160
30,130
27,989
Illinois Basin
5,300
1,137
5,483
10,783
3,336
Northern Powder River Basin
768
1,071
3,573
4,341
3,248
Unadjusted coal royalty revenues
24,038
14,508
21,216
45,254
34,573
Coal royalty adjustment for minimum leases
(2)
(5,740
)
(3,661
)
(5,851
)
(11,591
)
(4,624
)
Total coal royalty revenues
$
18,298
$
10,847
$
15,365
$
33,663
$
29,949
Other revenues
Production lease minimum revenues (2)
$
3,556
$
8,485
$
3,450
$
7,006
$
9,287
Minimum lease straight-line revenues
(2)
4,869
4,987
6,096
10,965
8,796
Property tax revenues
1,587
761
1,469
3,056
2,360
Wheelage revenues
1,844
1,584
1,781
3,625
3,788
Coal overriding royalty revenues
976
683
1,859
2,835
2,005
Lease amendment revenues
772
890
868
1,640
1,733
Aggregates royalty revenues
456
271
454
910
847
Oil and gas royalty revenues
900
2,742
1,366
2,266
3,845
Other revenues
353
416
219
572
489
Total other revenues
$
15,313
$
20,819
$
17,562
$
32,875
$
33,150
Coal royalty and other
$
33,611
$
31,666
$
32,927
$
66,538
$
63,099
Transportation and processing services
revenues
2,182
1,938
2,192
4,374
4,447
Gain on asset sales and disposals
116
465
59
175
465
Total Coal Royalty and Other segment
revenues and other income
$
35,909
$
34,069
$
35,178
$
71,087
$
68,011
___________________
(1)
Northern Appalachia includes NRP's Hibbs
Run property that has significant sales volumes, but a low fixed
rate per ton.
(2)
Beginning April 1, 2020 and effective
January 1, 2020, certain revenues previously classified as coal
royalty revenues are classified as production lease minimum
revenues or minimum lease straight-line revenues due to contract
modifications with Foresight Energy Resources LLC that fixed
consideration paid to us over a two-year period.
Natural Resource Partners L.P.
Financial Tables (Unaudited)
Adjusted EBITDA
Coal Royalty
and Other
Corporate and
Financing
(In
thousands)
Soda Ash
Total
For the Three Months Ended June 30,
2021
Net income (loss)
$
25,886
$
2,566
$
(13,070
)
$
15,382
Less: equity earnings from unconsolidated
investment
—
(2,601
)
—
(2,601
)
Add: total distributions from
unconsolidated investment
—
—
—
—
Add: interest expense, net
1
—
9,682
9,683
Add: depreciation, depletion and
amortization
4,871
—
—
4,871
Add: asset impairments
16
—
—
16
Adjusted EBITDA
$
30,774
$
(35
)
$
(3,388
)
$
27,351
For the Three Months Ended June 30,
2020
Net loss
$
(108,479
)
$
(3,087
)
$
(13,935
)
$
(125,501
)
Less: equity earnings from unconsolidated
investment
—
3,058
—
3,058
Add: total distributions from
unconsolidated investment
—
7,105
—
7,105
Add: interest expense, net
15
—
10,314
10,329
Add: depreciation, depletion and
amortization
2,062
—
—
2,062
Add: asset impairments
132,283
—
—
132,283
Adjusted EBITDA
$
25,881
$
7,076
$
(3,621
)
$
29,336
For the Three Months Ended March 31,
2021
Net income (loss)
$
20,488
$
1,953
(14,060
)
$
8,381
Less: equity earnings from unconsolidated
investment
—
(1,973
)
—
(1,973
)
Add: total distributions from
unconsolidated investment
—
3,920
—
3,920
Add: interest expense, net
23
—
9,950
9,973
Add: depreciation, depletion and
amortization
5,092
—
—
5,092
Add: asset impairments
4,043
—
—
4,043
Adjusted EBITDA
$
29,646
$
3,900
$
(4,110
)
$
29,436
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures (Unaudited)
Adjusted EBITDA
Coal Royalty
and Other
Corporate and
Financing
(In
thousands)
Soda Ash
Total
For the Six Months Ended June 30,
2021
Net income (loss)
$
46,374
$
4,519
$
(27,130
)
$
23,763
Less: equity earnings from unconsolidated
investment
—
(4,574
)
—
(4,574
)
Add: total distributions from
unconsolidated investment
—
3,920
—
3,920
Add: interest expense, net
24
—
19,632
19,656
Add: depreciation, depletion and
amortization
9,963
—
—
9,963
Add: asset impairments
4,059
—
—
4,059
Adjusted EBITDA
$
60,420
$
3,865
$
(7,498
)
$
56,787
For the Six Months Ended June 30,
2020
Net income (loss)
$
(81,735
)
$
3,169
$
(28,156
)
$
(106,722
)
Less: equity earnings from unconsolidated
investment
—
(3,214
)
—
(3,214
)
Add: total distributions from
unconsolidated investment
—
14,210
—
14,210
Add: interest expense, net
15
—
20,622
20,637
Add: depreciation, depletion and
amortization
4,074
—
—
4,074
Add: asset impairments
132,283
—
—
132,283
Adjusted EBITDA
$
54,637
$
14,165
$
(7,534
)
$
61,268
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures (Unaudited)
Distributable Cash Flow and
Free Cash Flow
Coal Royalty
and Other
Corporate and
Financing
(In
thousands)
Soda Ash
Total
For the Three Months Ended June 30,
2021
Net cash provided by (used in) operating
activities of continuing operations
$
32,028
$
(35
)
$
(18,609
)
$
13,384
Add: proceeds from asset sales and
disposals
116
—
—
116
Add: return of long-term contract
receivable
541
—
—
541
Distributable cash flow
$
32,685
$
(35
)
$
(18,609
)
$
14,041
Less: proceeds from asset sales and
disposals
(116
)
—
—
(116
)
Less: acquisition costs
(1,000
)
—
—
(1,000
)
Free cash flow
$
31,569
$
(35
)
$
(18,609
)
$
12,925
For the Three Months Ended June 30,
2020
Net cash provided by (used in) operating
activities of continuing operations
$
31,953
$
7,077
$
(19,095
)
$
19,935
Add: proceeds from asset sales and
disposals
507
—
—
507
Add: return of long-term contract
receivable
858
—
—
858
Distributable cash flow
$
33,318
$
7,077
$
(19,095
)
$
21,300
Less: proceeds from asset sales and
disposals
(507
)
—
—
(507
)
Less: acquisition costs
(1,000
)
—
—
(1,000
)
Free cash flow
$
31,811
$
7,077
$
(19,095
)
$
19,793
For the Three Months Ended March 31,
2021
Net cash provided by (used in) operating
activities of continuing operations
$
25,962
$
3,888
$
(6,650
)
$
23,200
Add: proceeds from asset sales and
disposals
59
—
—
59
Add: return of long-term contract
receivable
541
—
—
541
Distributable cash flow
$
26,562
$
3,888
$
(6,650
)
$
23,800
Less: proceeds from asset sales and
disposals
(59
)
—
—
(59
)
Less: acquisition costs
—
—
—
—
Free cash flow
$
26,503
$
3,888
$
(6,650
)
$
23,741
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures (Unaudited)
Distributable Cash Flow and
Free Cash Flow
Coal Royalty
and Other
Corporate and
Financing
(In
thousands)
Soda Ash
Total
For the Six Months Ended June 30,
2021
Net cash provided by (used in) operating
activities of continuing operations
$
57,990
$
3,853
$
(25,259
)
$
36,584
Add: proceeds from asset sales and
disposals
175
—
—
175
Add: proceeds from sale of discontinued
operations
—
—
—
—
Add: return of long-term contract
receivable
1,082
—
—
1,082
Distributable cash flow
$
59,247
$
3,853
$
(25,259
)
$
37,841
Less: proceeds from asset sales and
disposals
(175
)
—
—
(175
)
Less: acquisition costs
(1,000
)
—
—
(1,000
)
Free cash flow
$
58,072
$
3,853
$
(25,259
)
$
36,666
For the Six Months Ended June 30,
2020
Net cash provided by (used in) operating
activities of continuing operations
$
62,509
$
14,166
$
(26,585
)
$
50,090
Add: proceeds from asset sales and
disposals
507
—
—
507
Add: proceeds from sale of discontinued
operations
—
—
—
(66
)
Add: return of long-term contract
receivable
1,130
—
—
1,130
Distributable cash flow
$
64,146
$
14,166
$
(26,585
)
$
51,661
Less: proceeds from asset sales and
disposals
(507
)
—
—
(507
)
Less: proceeds from sale of discontinued
operations
—
—
—
66
Less: acquisition costs
(1,000
)
—
—
(1,000
)
Free cash flow
$
62,639
$
14,166
$
(26,585
)
$
50,220
LTM Free Cash Flow and Cash
Flow Cushion
For the Three Months
Ended
(In
thousands)
September 30,
2020
December 31,
2020
March 31,
2021
June 30,
2021
Last 12
Months
Net cash provided by operating activities
of continuing operations
$
24,323
$
13,155
$
23,200
$
13,384
$
74,062
Add: proceeds from asset sales and
disposals
—
116
59
116
291
Add: proceeds from sale of discontinued
operations
—
1
—
—
1
Add: return of long-term contract
receivable
332
660
541
541
2,074
Distributable cash flow
$
24,655
$
13,932
$
23,800
$
14,041
$
76,428
Less: proceeds from asset sales and
disposals
—
(116
)
(59
)
(116
)
(291
)
Less: proceeds from sale of discontinued
operations
—
(1
)
—
—
(1
)
Less: acquisition costs
—
—
—
(1,000
)
(1,000
)
Free cash flow
$
24,655
$
13,815
$
23,741
$
12,925
$
75,136
Less: mandatory Opco debt repayments
(6,780
)
(20,335
)
(16,696
)
(2,365
)
(46,176
)
Less: preferred unit distributions
(7,500
)
(3,750
)
(3,806
)
(3,864
)
(18,920
)
Less: common unit distributions
(5,630
)
(5,630
)
(5,630
)
(5,672
)
(22,562
)
Cash flow cushion
$
4,745
$
(15,900
)
$
(2,391
)
$
1,024
$
(12,522
)
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures (Unaudited)
Leverage Ratio
For the Three Months
Ended
(In
thousands)
September 30,
2020
December 31,
2020
March 31,
2021
June 30,
2021
Last 12
Months
Net income
$
7,216
$
14,687
$
8,381
$
15,382
$
45,666
Less: equity earnings from unconsolidated
investment
(1,986
)
(5,528
)
(1,973
)
(2,601
)
(12,088
)
Add: total distributions from
unconsolidated investment
—
—
3,920
—
3,920
Add: interest expense, net
10,254
10,077
9,973
9,683
39,987
Add: depreciation, depletion and
amortization
2,111
3,013
5,092
4,871
15,087
Add: asset impairments
934
2,668
4,043
16
7,661
Adjusted EBITDA
$
18,529
$
24,917
$
29,436
$
27,351
$
100,233
Debt—at June 30, 2021
$
458,819
Leverage Ratio (1)
4.6x
___________________
(1)
Leverage Ratio is calculated as the
outstanding principal of NRP's debt as of June 30, 2021 divided by
the last twelve months' Adjusted EBITDA. Note that Adjusted EBITDA
under the indenture governing NRP's 2025 parent company notes may
be different than the amount shown above. However, NRP's last
twelve months Leverage ratio as of June 30, 2021, was 4.6x as
calculated under the indenture governing NRP's 2025 parent company
notes.
Return on Capital Employed
("ROCE")
Coal Royalty
and Other
Corporate and
Financing
(In
thousands)
Soda Ash
Total
LTM Ended June 30, 2021
Net income (loss)
$
87,929
$
11,893
$
(54,156
)
$
45,666
Financing costs
94
—
39,955
40,049
Return
$
88,023
$
11,893
$
(14,201
)
$
85,715
As of June 30, 2020
Total assets
$
688,828
$
252,420
$
2,317
$
943,565
Less: total current liabilities excluding
current debt
(14,202
)
—
(3,936
)
(18,138
)
Less: total long-term liabilities
excluding long-term debt
(57,886
)
—
(446
)
(58,332
)
Capital employed
$
616,740
$
252,420
$
(2,065
)
$
867,095
Total partners' capital
$
616,740
$
252,420
$
(664,539
)
$
204,621
Class A convertible preferred units
—
—
164,587
164,587
Debt
—
—
497,887
497,887
Capital employed
$
616,740
$
252,420
$
(2,065
)
$
867,095
ROCE
14.3
%
4.7
%
N/A
9.9
%
Excluding asset impairments:
Return
$
88,023
$
11,893
$
(14,201
)
$
85,715
Add: asset impairments
7,661
—
—
7,661
Return excluding asset impairments
$
95,684
$
11,893
$
(14,201
)
$
93,376
ROCE excluding asset impairments
15.5
%
4.7
%
N/A
10.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210806005028/en/
Tiffany Sammis 713-751-7515 tsammis@nrplp.com
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