Natural Resource Partners L.P. (NYSE:NRP) today reported
third quarter 2021 results as follows:
For the Three Months
Ended
Last Twelve Months
Ended
(In thousands) (Unaudited)
September 30, 2021
Operating cash flow
$
30,059
$
79,798
Free cash flow (1)
30,599
81,080
Cash flow cushion (last twelve months)
(1)
3,740
Net income
$
29,498
$
67,948
Adjusted EBITDA (1)
37,717
119,421
(1)
See "Non-GAAP Financial Measures" and
reconciliation tables at the end of this release.
“Our strong performance in the third quarter reflects continued
global economic recovery and strong demand for metallurgical coal,
thermal coal and soda ash, and we expect conditions to remain
favorable over the near and intermediate term,” said Craig Nunez,
NRP’s President & Chief Operating Officer. “We remain committed
to using our robust free cash flow to reduce debt and continue to
believe our long-term strategy of de-risking the Partnership in
this manner is the best means to maximize unitholder value. In
addition, we returned $5.6 million of distributions to common
unitholders in the third quarter and have paid out $22.2 million to
common unitholders over the last twelve months.”
Mr. Nunez continued, “I am also pleased to report that we
generated and sold $13.8 million in carbon offset credits in
October by sequestering over 1 million tonnes of carbon dioxide in
our forestlands. This transaction will be reflected in our fourth
quarter results and is the first tangible result of our ongoing
initiative to generate cash flow from alternative revenue sources
we have told you about in previous quarters. We continue to pursue
additional alternative revenue projects that have the potential to
provide important benefits to the environment and add significant
value to NRP over the coming years.”
NRP's liquidity was $219.0 million at September 30, 2021,
consisting of $119.0 million of cash and $100.0 million of
borrowing capacity available under its revolving credit
facility.
NRP announced today that the Board of Directors of its general
partner declared a third quarter 2021 cash distribution of $0.45
per common unit of NRP to be paid on November 23, 2021 to
unitholders of record on November 16, 2021. In addition, the Board
declared an $8.0 million distribution on the preferred units, which
will be paid one-half in cash and one-half in kind through the
issuance of additional preferred units. The preferred unit
distribution includes interest on previously paid-in-kind units and
will also be paid one-half in cash and one-half in kind through the
issuance of additional preferred units.
Segment Performance
Coal Royalty and Other
In the third quarter of 2021 net income increased $17.4 million
and free cash flow increased $5.6 million as compared to the prior
year period primarily due to stronger metallurgical coal demand and
pricing in the third quarter of 2021. Approximately 65% of coal
royalty revenues and approximately 45% of coal royalty sales
volumes were derived from metallurgical coal in the third quarter
of 2021.
Metallurgical coal markets have rebounded significantly from the
lows seen in 2020 to record highs and the outlook remains strong as
steel demand driven by global economic recovery is more than
offsetting challenges related to the COVID-19 pandemic. Domestic
and export thermal coal markets have also significantly improved
from the lows seen in 2020, however NRP does not have meaningful
sensitivity to thermal coal price movements this year since the
substantial majority of NRP's thermal cash flows are fixed through
2021 pursuant to a contract with Foresight Energy that went into
effect as they emerged from bankruptcy in 2020. While there is
potential for NRP to capture upside from improved thermal coal
demand and pricing in 2022, thermal coal markets still face the
long-term challenges of lower electricity demand, competition from
natural gas and the secular shift to renewable energy.
In addition to actively managing its producing coal and hard
mineral properties, NRP continues to identify alternative revenue
sources across its large portfolio of land, mineral and timber
assets. The types of opportunities include the sequestration of
carbon dioxide underground and in standing forests, and the
generation of electricity using geothermal, solar and wind energy.
In the fourth quarter of this year, NRP was able to execute on one
such project through the issuance and subsequent sale of 1.1
million forest carbon offset credits for $13.8 million. The offset
credits were issued to NRP by the California Air Resources Board
under its cap-and-trade program and represent 1.1 million tonnes of
carbon sequestered from approximately 39,000 acres of NRP's forest
assets in West Virginia. This is an encouraging first step in NRP's
ability to create value through alternative revenue sources. While
the timing and likelihood of additional cash flows being realized
from further activities is uncertain, NRP believes its large
ownership footprint throughout the United States will provide
additional opportunities to create value in this regard with
minimal capital investment.
Soda Ash
Net income in the third quarter of 2021 increased $4.7 million
as compared to the prior year period as demand for soda ash
continues to improve globally from the lows caused by the COVID-19
pandemic. Free cash flow in the third quarter of 2021 was flat as
compared to the prior year period as a result of Ciner Wyoming's
decision in August of 2020 to suspend its quarterly distributions
in an effort to achieve greater financial and liquidity flexibility
as a result of the COVID-19 pandemic.
However, as a result of the continued improvement in global soda
ash demand and pricing, Ciner Wyoming reinstated its quarterly cash
distribution and NRP will receive $7.4 million in the fourth
quarter of 2021.
Corporate and Financing
Corporate and financing costs in the third quarter of 2021 were
relatively flat as compared to the prior year period. Free cash
flow improved $0.3 million in the third quarter of 2021 as compared
to the prior year period primarily due to lower cash paid for
interest as a result of less debt outstanding in 2021.
As noted earlier, NRP declared a third quarter 2021 preferred
unit distribution of $8.0 million which will be paid one-half in
cash and one-half in kind. The indenture governing the 2025 parent
company notes restricts NRP from paying more than one-half of the
quarterly distribution on the preferred units in cash if NRP's
consolidated leverage ratio exceeds 3.75x, and as of September 30,
2021, NRP's leverage ratio was 3.8x. However, as a result of the
strong coal and soda ash pricing expected in the fourth quarter,
and the forest carbon offset transaction described above, NRP
expects its leverage ratio to fall below the 3.75x threshold by
December 31, 2021. If this occurs, NRP plans to redeem its
outstanding paid-in-kind preferred units and continue paying cash
distributions to its common unitholders. If NRP’s consolidated
leverage ratio were to remain above 3.75x and NRP remains unable to
redeem its outstanding paid-in-kind preferred units, NRP would be
required to temporarily suspend distributions on its common units
until the leverage ratio drops below 3.75x and the outstanding
paid-in-kind preferred units are redeemed. Additionally, NRP
expects its leverage ratio to continue its long-term decline as NRP
pays down debt.
Future distributions on NRP's common and preferred units and
decisions regarding paid-in-kind preferred unit redemptions will be
determined on a quarterly basis by the Board of Directors. The
Board of Directors considers numerous factors each quarter in
determining cash distributions, including profitability, cash flow,
debt service obligations, market conditions and outlook, estimated
unitholder income tax liability and the level of cash reserves that
the Board determines is necessary for future operating and capital
needs.
Conference Call
A conference call will be held today at 9:00 a.m. ET. To
register for the conference call, please use this link
https://conferencingportals.com/event/kfJdSHYP. After
registering a confirmation will be sent via email, including dial
in details and unique conference call codes for entry. Registration
is open through the live call, however, to ensure you are connected
for the full call we suggest registering at least 10 minutes prior
to the start of the call. Investors may also listen to the call via
the Investor Relations section of the NRP website at www.nrplp.com.
To access the replay, please visit the Investor Relations section
of NRP’s website.
Withholding Information for Foreign Investors
This release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Brokers and nominees should treat
one hundred percent (100.0%) of NRP's distributions to foreign
investors as being attributable to income that is effectively
connected with a United States trade or business. Accordingly,
NRP's distributions to foreign investors are subject to federal
income tax withholding at the highest applicable rate.
Company Profile
Natural Resource Partners L.P., a master limited partnership
headquartered in Houston, TX, is a diversified natural resource
company that owns, manages and leases a diversified portfolio of
mineral properties in the United States including interests in
coal, industrial minerals and other natural resources. In addition,
NRP owns an equity investment in Ciner Wyoming LLC, a trona ore
mining and soda ash production business.
For additional information, please contact Tiffany Sammis at
713-751-7515 or tsammis@nrplp.com. Further information about NRP is
available on the Partnership’s website at http://www.nrplp.com.
Forward-Looking Statements
This press release includes “forward-looking statements” as
defined by the Securities and Exchange Commission. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that the
Partnership expects, believes or anticipates will or may occur in
the future are forward-looking statements. These statements are
based on certain assumptions made by the Partnership based on its
experience and perception of historical trends, current conditions,
expected future developments and other factors it believes are
appropriate in the circumstances. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are
beyond the control of the Partnership. These risks include, among
other things, statements regarding: the effects of the global
COVID-19 pandemic; future distributions on the Partnership’s common
and preferred units; the Partnership's business strategy; its
liquidity and access to capital and financing sources; its
financial strategy; prices of and demand for coal, trona and soda
ash, and other natural resources; estimated revenues, expenses and
results of operations; projected future performance by the
Partnership's lessees, including Foresight Energy; Ciner Wyoming
LLC’s trona mining and soda ash refinery operations; distributions
from the soda ash joint venture; the impact of governmental
policies, laws and regulations, as well as regulatory and legal
proceedings involving the Partnership, and of scheduled or
potential regulatory or legal changes; global and U.S. economic
conditions; and other factors detailed in Natural Resource
Partners’ Securities and Exchange Commission filings. Natural
Resource Partners L.P. has no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
Non-GAAP Financial Measures
"Adjusted EBITDA" is a non-GAAP financial measure that we
define as net income (loss) less equity earnings from
unconsolidated investment, net income attributable to
non-controlling interest and gain on reserve swap; plus total
distributions from unconsolidated investment, interest expense,
net, debt modification expense, loss on extinguishment of debt,
depreciation, depletion and amortization and asset impairments.
Adjusted EBITDA should not be considered an alternative to, or more
meaningful than, net income or loss, net income or loss
attributable to partners, operating income or loss, cash flows from
operating activities or any other measure of financial performance
presented in accordance with GAAP as measures of operating
performance, liquidity or ability to service debt obligations.
There are significant limitations to using Adjusted EBITDA as a
measure of performance, including the inability to analyze the
effect of certain recurring items that materially affect our net
income, the lack of comparability of results of operations of
different companies and the different methods of calculating
Adjusted EBITDA reported by different companies. In addition,
Adjusted EBITDA presented below is not calculated or presented on
the same basis as Consolidated EBITDA as defined in our partnership
agreement or Consolidated EBITDDA as defined in Opco's debt
agreements. Adjusted EBITDA is a supplemental performance measure
used by our management and by external users of our financial
statements, such as investors, commercial banks, research analysts
and others to assess the financial performance of our assets
without regard to financing methods, capital structure or
historical cost basis.
“Distributable cash flow” or "DCF" is a non-GAAP
financial measure that we define as net cash provided by (used in)
operating activities of continuing operations plus distributions
from unconsolidated investment in excess of cumulative earnings,
proceeds from asset sales and disposals, including sales of
discontinued operations, and return of long-term contract
receivable; less maintenance capital expenditures and distributions
to non-controlling interest. DCF is not a measure of financial
performance under GAAP and should not be considered as an
alternative to cash flows from operating, investing or financing
activities. DCF may not be calculated the same for us as for other
companies. In addition, distributable cash flow is not calculated
or presented on the same basis as distributable cash flow as
defined in our partnership agreement, which is used as a metric to
determine whether we are able to increase quarterly distributions
to our common unitholders. Distributable cash flow is a
supplemental liquidity measure used by our management and by
external users of our financial statements, such as investors,
commercial banks, research analysts and others to assess our
ability to make cash distributions and repay debt.
“Free cash flow” or "FCF" is a non-GAAP financial measure
that we define as net cash provided by (used in) operating
activities of continuing operations plus distributions from
unconsolidated investment in excess of cumulative earnings and
return of long-term contract receivable; less maintenance and
expansion capital expenditures, cash flow used in acquisition costs
classified as investing or financing activities and distributions
to non-controlling interest. FCF is calculated before mandatory
debt repayments. Free cash flow is not a measure of financial
performance under GAAP and should not be considered as an
alternative to cash flows from operating, investing or financing
activities. Free cash flow may not be calculated the same for us as
for other companies. Free cash flow is a supplemental liquidity
measure used by our management and by external users of our
financial statements, such as investors, commercial banks, research
analysts and others to assess our ability to make cash
distributions and repay debt.
"Cash flow cushion" is a non-GAAP financial measure that
we define as free cash flow less one-time beneficial items,
mandatory Opco debt repayments, preferred unit distributions and
common unit distributions. Cash flow cushion is not a measure of
financial performance under GAAP and should not be considered as an
alternative to cash flows from operating, investing or financing
activities. Cash flow cushion is a supplemental liquidity measure
used by our management to assess the Partnership's ability to make
or raise cash distributions to our common and preferred unitholders
and our general partner and repay debt or redeem preferred
units.
"Return on capital employed" or "ROCE" is a non-GAAP
financial measure that we define as net income (loss) operations
plus financing costs (interest expense plus loss on extinguishment
of debt) divided by the sum of equity excluding equity of
discontinued operations, and debt. Return on capital employed
should not be considered an alternative to, or more meaningful
than, net income or loss, net income or loss attributable to
partners, operating income or loss, cash flows from operating
activities or any other measure of financial performance presented
in accordance with GAAP as measures of operating performance,
liquidity or ability to service debt obligations. Return on capital
employed is a supplemental performance measure used by our
management team that measures our profitability and efficiency with
which our capital is employed. The measure provides an indication
of operating performance before the impact of leverage in the
capital structure.
-Financial Tables and Reconciliation of
Non-GAAP Measures Follow-
Natural Resource Partners
L.P.
Financial Tables
(Unaudited)
Consolidated Statements of
Comprehensive Income (Loss)
For the Three Months
Ended
For the Nine Months
Ended
September 30,
June 30,
September 30,
(In thousands,
except per unit data)
2021
2020
2021
2021
2020
Revenues and other income
Coal royalty and other
$
47,884
$
25,740
$
33,611
$
114,422
$
88,839
Transportation and processing services
2,171
2,204
2,182
6,545
6,651
Equity in earnings of Ciner Wyoming
6,672
1,986
2,601
11,246
5,200
Gain on asset sales and disposals
68
—
116
243
465
Total revenues and other income
$
56,795
$
29,930
$
38,510
$
132,456
$
101,155
Operating expenses
Operating and maintenance expenses
$
8,354
$
5,781
$
5,170
$
19,076
$
19,200
Depreciation, depletion and
amortization
5,182
2,111
4,871
15,145
6,185
General and administrative expenses
4,052
3,634
3,388
11,550
11,168
Asset impairments
57
934
16
4,116
133,217
Total operating expenses
$
17,645
$
12,460
$
13,445
$
49,887
$
169,770
Income (loss) from operations
$
39,150
$
17,470
$
25,065
$
82,569
$
(68,615
)
Interest expense, net
$
(9,652
)
$
(10,254
)
$
(9,683
)
$
(29,308
)
$
(30,891
)
Net income (loss)
$
29,498
$
7,216
$
15,382
$
53,261
$
(99,506
)
Less: income attributable to preferred
unitholders
(7,961
)
(7,500
)
(7,842
)
(23,530
)
(22,613
)
Net income (loss) attributable to common
unitholders and the general partner
$
21,537
$
(284
)
$
7,540
$
29,731
$
(122,119
)
Net income (loss) attributable to common
unitholders
$
21,106
$
(279
)
$
7,389
$
29,136
$
(119,677
)
Net income (loss) attributable to the
general partner
431
(5
)
151
595
(2,442
)
Net income (loss) per common unit
Basic
$
1.71
$
(0.02
)
$
0.60
$
2.36
$
(9.76
)
Diluted
1.10
(0.02
)
0.56
1.98
(9.76
)
Net income (loss)
$
29,498
$
7,216
$
15,382
$
53,261
$
(99,506
)
Comprehensive income from unconsolidated
investment and other
4,204
2,428
2,533
7,469
2,764
Comprehensive income (loss)
$
33,702
$
9,644
$
17,915
$
60,730
$
(96,742
)
Natural Resource Partners
L.P.
Financial Tables
(Unaudited)
Consolidated Statements of
Cash Flows
For the Three Months
Ended
For the Nine Months
Ended
September 30,
June 30,
September 30,
(In
thousands)
2021
2020
2021
2021
2020
Cash flows from operating activities
Net income (loss)
$
29,498
$
7,216
$
15,382
$
53,261
$
(99,506
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities of continuing
operations:
Depreciation, depletion and
amortization
5,182
2,111
4,871
15,145
6,185
Distributions from unconsolidated
investment
—
—
—
3,920
14,210
Equity earnings from unconsolidated
investment
(6,672
)
(1,986
)
(2,601
)
(11,246
)
(5,200
)
Gain on asset sales and disposals
(68
)
—
(116
)
(243
)
(465
)
Asset impairments
57
934
16
4,116
133,217
Bad debt expense
2,069
258
(737
)
1,715
3,915
Unit-based compensation expense
1,118
913
593
2,837
2,566
Amortization of debt issuance costs and
other
653
1,577
977
1,899
491
Change in operating assets and
liabilities:
Accounts receivable
(9,163
)
4,621
162
(12,332
)
7,994
Accounts payable
182
144
(83
)
89
193
Accrued liabilities
357
791
1,838
(839
)
(2,985
)
Accrued interest
7,262
7,248
(7,424
)
6,971
6,957
Deferred revenue
(2,652
)
(273
)
677
(2,121
)
10,194
Other items, net
2,236
769
(171
)
3,471
(3,353
)
Net cash provided by operating activities
of continuing operations
$
30,059
$
24,323
$
13,384
$
66,643
$
74,413
Net cash provided by operating activities
of discontinued operations
—
—
—
—
1,706
Net cash provided by operating
activities
$
30,059
$
24,323
$
13,384
$
66,643
$
76,119
Cash flows from investing activities
Proceeds from asset sales and
disposals
$
74
$
—
$
116
$
249
$
507
Return of long-term contract
receivable
540
332
541
1,622
1,462
Acquisition of non-controlling interest in
BRP
—
—
—
—
(1,000
)
Net cash provided by investing activities
of continuing operations
$
614
$
332
$
657
$
1,871
$
969
Net cash used in investing activities of
discontinued operations
—
—
—
—
(66
)
Net cash provided by investing
activities
$
614
$
332
$
657
$
1,871
$
903
Cash flows from financing activities
Debt repayments
$
—
$
(6,780
)
$
(2,365
)
$
(19,061
)
$
(25,841
)
Distributions to common unitholders and
the general partner
(5,671
)
(5,630
)
(5,672
)
(16,973
)
(11,260
)
Distributions to preferred unitholders
(3,921
)
(7,500
)
(3,864
)
(11,591
)
(22,613
)
Contributions from discontinued
operations
—
—
—
—
1,640
Acquisition of non-controlling interest in
BRP
—
—
(1,000
)
(1,000
)
—
Other items
—
—
1
(690
)
—
Net cash used in financing activities of
continuing operations
$
(9,592
)
$
(19,910
)
$
(12,900
)
$
(49,315
)
$
(58,074
)
Net cash used in financing activities of
discontinued operations
—
—
—
—
(1,640
)
Net cash used in financing activities
$
(9,592
)
$
(19,910
)
$
(12,900
)
$
(49,315
)
$
(59,714
)
Net increase in cash and cash
equivalents
$
21,081
$
4,745
$
1,141
$
19,199
$
17,308
Cash and cash equivalents at beginning of
period
97,908
110,828
96,767
99,790
98,265
Cash and cash equivalents at end of
period
$
118,989
$
115,573
$
97,908
$
118,989
$
115,573
Supplemental cash flow information:
Cash paid for interest
$
1,898
$
2,490
$
16,611
$
20,829
$
22,712
Non-cash investing and financing
activities:
Plant, equipment, mineral rights and other
funded with accounts payable or accrued liabilities
$
—
$
23
$
—
$
—
$
947
Preferred unit distributions
paid-in-kind
3,921
—
3,863
11,591
—
Natural Resource Partners
L.P.
Financial Tables
Consolidated Balance
Sheets
September 30,
December 31,
(In thousands,
except unit data)
2021
2020
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
118,989
$
99,790
Accounts receivable, net
23,231
12,322
Other current assets, net
1,010
5,080
Total current assets
$
143,230
$
117,192
Land
24,008
24,008
Mineral rights, net
442,454
460,373
Intangible assets, net
16,243
17,459
Equity in unconsolidated investment
277,309
262,514
Long-term contract receivable, net
31,948
33,264
Other long-term assets, net
5,814
7,067
Total assets
$
941,006
$
921,877
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable
$
1,474
$
1,385
Accrued liabilities
6,228
7,733
Accrued interest
8,685
1,714
Current portion of deferred revenue
11,201
11,485
Current portion of long-term debt, net
39,082
39,055
Total current liabilities
$
66,670
$
61,372
Deferred revenue
48,232
50,069
Long-term debt, net
414,437
432,444
Other non-current liabilities
4,920
5,131
Total liabilities
$
534,259
$
549,016
Commitments and contingencies
Class A Convertible Preferred Units
(265,341 and 253,750 units issued and outstanding at September 30,
2021 and December 31, 2020, respectively, at $1,000 par value per
unit; liquidation preference of $1,850 per unit at September 30,
2021 and $1,700 per unit at December 31, 2020)
$
179,927
$
168,337
Partners’ capital:
Common unitholders’ interest (12,351,306
and 12,261,199 units issued and outstanding at September 30, 2021
and December 31, 2020, respectively)
$
151,459
$
136,927
General partner’s interest
754
459
Warrant holders' interest
66,816
66,816
Accumulated other comprehensive income
7,791
322
Total partners’ capital
$
226,820
$
204,524
Total liabilities and capital
$
941,006
$
921,877
Natural Resource Partners
L.P.
Financial Tables
(Unaudited)
Consolidated Statements of
Partners' Capital
Common Unitholders
General Partner
Warrant Holders
Accumulated Other
Comprehensive Income
Partners' Capital Excluding
Non-Controlling Interest
Non-Controlling
Interest
Total Capital
(In
thousands)
Units
Amounts
Balance at December 31, 2020
12,261
$
136,927
$
459
$
66,816
$
322
$
204,524
$
—
$
204,524
Net income (1)
—
8,213
168
—
—
8,381
—
8,381
Distributions to common unitholders and
the general partner
—
(5,517
)
(113
)
—
—
(5,630
)
—
(5,630
)
Distributions to preferred unitholders
—
(7,461
)
(152
)
—
—
(7,613
)
—
(7,613
)
Issuance of unit-based awards
90
—
—
—
—
—
—
—
Unit-based awards amortization and
vesting, net
—
215
—
—
—
215
—
215
Capital contribution
—
—
32
—
—
32
—
32
Comprehensive income from unconsolidated
investment and other
—
—
—
—
732
732
—
732
Balance at March 31, 2021
12,351
$
132,377
$
394
$
66,816
$
1,054
$
200,641
$
—
$
200,641
Net income (2)
—
15,074
308
—
—
15,382
—
15,382
Distributions to common unitholders and
general partner
—
(5,559
)
(113
)
—
—
(5,672
)
—
(5,672
)
Distributions to preferred unitholders
—
(7,571
)
(155
)
—
—
(7,726
)
—
(7,726
)
Unit-based awards amortization and
vesting
—
515
—
—
—
515
—
515
Comprehensive income from unconsolidated
investment and other
—
—
—
—
2,533
2,533
—
2,533
Balance at June 30, 2021
12,351
$
134,836
$
434
$
66,816
$
3,587
$
205,673
$
—
$
205,673
Net income (3)
—
28,909
589
—
—
29,498
—
29,498
Distributions to common unitholders and
the general partner
—
(5,558
)
(113
)
—
—
(5,671
)
—
(5,671
)
Distributions to preferred unitholders
—
(7,687
)
(156
)
—
—
(7,843
)
—
(7,843
)
Issuance of unit-based awards
—
—
—
—
—
—
—
—
Unit-based awards amortization and
vesting
—
959
—
—
—
959
—
959
Comprehensive income from unconsolidated
investment and other
—
—
—
—
4,204
4,204
—
4,204
Balance at September 30, 2021
12,351
$
151,459
$
754
$
66,816
$
7,791
$
226,820
$
—
$
226,820
(1)
Net income includes $7.7 million of income attributable to
preferred unitholders that accumulated during the period, of which
$7.6 million is allocated to the common unitholders and $0.2
million is allocated to the general partner.
(2)
Net income includes $7.8 million of income attributable to
preferred unitholders that accumulated during the period, of which
$7.7 million is allocated to the common unitholders and $0.2
million is allocated to the general partner.
(3)
Net income includes $8.0 million of income attributable to
preferred unitholders that accumulated during the period, of which
$7.8 million is allocated to the common unitholders and $0.2
million is allocated to the general partner.
Natural Resource Partners
L.P.
Financial Tables
(Unaudited)
Consolidated Statement of
Partners’ Capital
Common Unitholders
General Partner
Warrant Holders
Accumulated Other
Comprehensive Income (Loss)
Partners' Capital Excluding
Non-Controlling Interest
Non-Controlling
Interest
Total Capital
(In
thousands)
Units
Amounts
Balance at December 31, 2019
12,261
$
271,471
$
3,270
$
66,816
$
(2,594
)
$
338,963
$
(2,935
)
$
336,028
Cumulative effect of adoption of
accounting standard
—
(3,833
)
(78
)
—
—
(3,911
)
—
(3,911
)
Net income (1)
—
18,403
376
—
—
18,779
—
18,779
Distributions to common unitholders and
the general partner
—
(5,517
)
(113
)
—
—
(5,630
)
—
(5,630
)
Distributions to preferred unitholders
—
(7,350
)
(150
)
—
—
(7,500
)
—
(7,500
)
Unit-based awards amortization and
vesting
—
673
—
—
—
673
—
673
Comprehensive loss from unconsolidated
investment and other
—
—
—
—
(1,023
)
(1,023
)
—
(1,023
)
Balance at March 31, 2020
12,261
$
273,847
$
3,305
$
66,816
$
(3,617
)
$
340,351
$
(2,935
)
$
337,416
Net loss (2)
—
(122,991
)
(2,510
)
—
—
(125,501
)
—
(125,501
)
Distributions to preferred unitholders
—
(7,461
)
(152
)
—
—
(7,613
)
—
(7,613
)
Acquisition of non-controlling interest in
BRP
—
(4,747
)
(97
)
—
—
(4,844
)
2,935
(1,909
)
Unit-based awards amortization and
vesting
—
869
—
—
—
869
—
869
Comprehensive income from unconsolidated
investment and other
—
—
—
—
1,359
1,359
—
1,359
Balance at June 30, 2020
12,261
$
139,517
$
546
$
66,816
$
(2,258
)
$
204,621
$
—
$
204,621
Net income (1)
—
7,072
144
—
—
7,216
—
7,216
Distributions to common unitholders and
the general partner
—
(5,518
)
(112
)
—
—
(5,630
)
—
(5,630
)
Distributions to preferred unitholders
—
(7,350
)
(150
)
—
—
(7,500
)
—
(7,500
)
Unit-based awards amortization and
vesting
—
824
—
—
—
824
—
824
Comprehensive income from unconsolidated
investment and other
—
—
—
—
2,428
2,428
—
2,428
Balance at September 30, 2020
12,261
$
134,545
$
428
$
66,816
$
170
$
201,959
—
$
201,959
(1)
Net income includes $7.5 million of income attributable to
preferred unitholders that accumulated during the period, of which
$7.4 million is allocated to the common unitholders and $0.2
million is allocated to the general partner.
(2)
Net loss includes $7.6 million of income attributable to
preferred unitholders that accumulated during the period, of which
$7.5 million is allocated to the common unitholders and $0.2
million is allocated to the general partner.
Natural Resource Partners
L.P.
Financial Tables
(Unaudited)
The following tables present NRP's
unaudited business results by segment for the three months ended
September 30, 2021 and 2020 and June 30, 2021:
Operating Segments
(In
thousands)
Coal Royalty and Other
Soda Ash
Corporate and
Financing
Total
For the Three Months Ended September 30,
2021
Revenues
$
50,055
$
6,672
$
—
$
56,727
Gain on asset sales and disposals
68
—
—
68
Total revenues and other income
$
50,123
$
6,672
$
—
$
56,795
Asset impairments
$
57
$
—
$
—
$
57
Net income (loss)
$
36,606
$
6,596
$
(13,704
)
$
29,498
Adjusted EBITDA (1)
$
41,845
$
(76
)
$
(4,052
)
$
37,717
Cash flow provided by (used in) continuing
operations:
Operating activities
$
33,968
$
(36
)
$
(3,873
)
$
30,059
Investing activities
$
614
$
—
$
—
$
614
Financing activities
$
—
$
—
$
(9,592
)
$
(9,592
)
Distributable cash flow (1)
$
34,582
$
(36
)
$
(3,873
)
$
30,673
Free cash flow (1)
$
34,508
$
(36
)
$
(3,873
)
$
30,599
For the Three Months Ended September 30,
2020
Revenues
$
27,944
$
1,986
$
—
$
29,930
Gain on asset sales and disposals
—
—
—
—
Total revenues and other income
$
27,944
$
1,986
$
—
$
29,930
Asset impairments
$
934
$
—
$
—
$
934
Net income (loss)
$
19,173
$
1,890
$
(13,847
)
$
7,216
Adjusted EBITDA (1)
$
22,259
$
(96
)
$
(3,634
)
$
18,529
Cash flow provided by (used in) continuing
operations:
Operating activities
$
28,573
$
(75
)
$
(4,175
)
$
24,323
Investing activities
$
332
$
—
$
—
$
332
Financing activities
$
—
$
—
$
(19,910
)
$
(19,910
)
Distributable cash flow (1)
$
28,905
$
(75
)
$
(4,175
)
$
24,655
Free cash flow (1)
$
28,905
$
(75
)
$
(4,175
)
$
24,655
For the Three Months Ended June 30,
2021
Revenues
$
35,793
$
2,601
$
—
$
38,394
Gain on asset sales and disposals
116
—
—
116
Total revenues and other income
$
35,909
$
2,601
$
—
$
38,510
Asset impairments
$
16
$
—
$
—
$
16
Net income (loss)
$
25,886
$
2,566
$
(13,070
)
$
15,382
Adjusted EBITDA (1)
$
30,774
$
(35
)
$
(3,388
)
$
27,351
Cash flow provided by (used in) continuing
operations:
Operating activities
$
32,028
$
(35
)
$
(18,609
)
$
13,384
Investing activities
$
657
$
—
$
—
$
657
Financing activities
$
(1,000
)
$
—
$
(11,900
)
$
(12,900
)
Distributable cash flow (1)
$
32,685
$
(35
)
$
(18,609
)
$
14,041
Free cash flow (1)
$
31,569
$
(35
)
$
(18,609
)
$
12,925
(1)
See "Non-GAAP Financial Measures" and reconciliation tables at
the end of this release.
Natural Resource Partners
L.P.
Financial Tables
(Unaudited)
The following table presents NRP's
unaudited business results by segment for the nine months ended
September 30, 2021 and 2020:
Operating Segments
(In
thousands)
Coal Royalty and Other
Soda Ash
Corporate and
Financing
Total
For the Nine Months Ended September 30,
2021
Revenues
$
120,967
$
11,246
$
—
$
132,213
Gain on asset sales and disposals
243
—
—
243
Total revenues and other income
$
121,210
$
11,246
$
—
$
132,456
Asset impairments
$
4,116
$
—
$
—
$
4,116
Net income (loss)
$
82,980
$
11,115
$
(40,834)
$
53,261
Adjusted EBITDA (1)
$
102,265
$
3,789
$
(11,550)
$
94,504
Cash flow provided by (used in) continuing
operations:
Operating activities
$
91,958
$
3,817
$
(29,132)
$
66,643
Investing activities
$
1,871
$
—
$
—
$
1,871
Financing activities
$
(1,132)
$
—
$
(48,183)
$
(49,315)
Distributable cash flow (1)
$
93,829
$
3,817
$
(29,132)
$
68,514
Free cash flow (1)
$
92,580
$
3,817
$
(29,132)
$
67,265
For the Nine Months Ended September 30,
2020
Revenues
$
95,490
$
5,200
$
—
$
100,690
Gain on asset sales and disposals
465
—
—
465
Total revenues and other income
$
95,955
$
5,200
$
—
$
101,155
Asset impairments
$
133,217
$
—
$
—
$
133,217
Net income (loss)
$
(62,562)
$
5,059
$
(42,003)
$
(99,506)
Adjusted EBITDA (1)
$
76,896
$
14,069
$
(11,168)
$
79,797
Cash flow provided by (used in) continuing
operations:
Operating activities
$
91,082
$
14,091
$
(30,760)
$
74,413
Investing activities
$
969
$
—
$
—
$
969
Financing activities
$
—
$
—
$
(58,074)
$
(58,074)
Distributable cash flow (1) (2)
$
93,051
$
14,091
$
(30,760)
$
76,316
Free cash flow (1)
$
91,544
$
14,091
$
(30,760)
$
74,875
(1)
See "Non-GAAP Financial Measures" and reconciliation tables at
the end of this release.
(2)
Includes net proceeds from the sale of the construction
aggregates business which are classified as investing cash flow
from discontinued operations.
Natural Resource Partners
L.P.
Financial Tables
(Unaudited)
Operating Statistics - Coal
Royalty and Other
For the Three Months
Ended
For the Nine Months
Ended
September 30,
June 30,
September 30,
(In thousands,
except per ton data)
2021
2020
2021
2021
2020
Coal sales volumes (tons)
Appalachia
Northern (1)
422
102
405
947
516
Central
3,199
2,247
2,975
8,824
7,643
Southern
642
172
316
1,058
820
Total Appalachia
4,263
2,521
3,696
10,829
8,979
Illinois Basin
2,689
758
2,640
7,987
1,841
Northern Powder River Basin
1,047
365
185
2,291
1,232
Gulf Coast
13
—
—
13
—
Total coal sales volumes
8,012
3,644
6,521
21,120
12,052
Coal royalty revenue per ton
Appalachia
Northern (1)
$
7.18
$
3.06
$
4.45
$
5.57
$
2.22
Central
5.74
3.83
4.62
4.91
4.28
Southern
11.61
4.78
7.63
9.82
4.70
Illinois Basin
2.33
1.63
2.01
2.13
2.48
Northern Powder River Basin
3.71
3.46
4.15
3.59
3.66
Gulf Coast
0.54
—
—
0.54
—
Combined average coal royalty revenue per
ton
4.87
3.36
3.69
3.99
3.88
Coal royalty revenues
Appalachia
Northern (1)
$
3,031
$
312
$
1,804
$
5,272
$
1,143
Central
18,357
8,602
13,756
43,308
32,726
Southern
7,452
823
2,410
10,390
3,857
Total Appalachia
28,840
9,737
17,970
58,970
37,726
Illinois Basin
6,261
1,234
5,300
17,044
4,570
Northern Powder River Basin
3,881
1,262
768
8,222
4,510
Gulf Coast
7
—
—
7
—
Unadjusted coal royalty revenues
38,989
12,233
24,038
84,243
46,806
Coal royalty adjustment for minimum
leases
(6,557
)
(1,623
)
(5,740
)
(18,148
)
(6,247
)
Total coal royalty revenues
$
32,432
$
10,610
$
18,298
$
66,095
$
40,559
Other revenues
Production lease minimum revenues
$
3,235
$
4,267
$
3,556
$
10,241
$
13,554
Minimum lease straight-line revenues
4,808
3,553
4,869
15,773
12,349
Property tax revenues
1,466
1,896
1,587
4,522
4,256
Wheelage revenues
1,964
1,680
1,844
5,589
5,468
Coal overriding royalty revenues
757
1,314
976
3,592
3,319
Lease amendment revenues
1,519
858
772
3,159
2,591
Aggregates royalty revenues
429
221
456
1,339
1,068
Oil and gas royalty revenues
1,154
1,078
900
3,420
4,923
Other revenues
120
263
353
692
752
Total other revenues
$
15,452
$
15,130
$
15,313
$
48,327
$
48,280
Coal royalty and other
$
47,884
$
25,740
$
33,611
$
114,422
$
88,839
Transportation and processing services
revenues
2,171
2,204
2,182
6,545
6,651
Gain on asset sales and disposals
68
—
116
243
465
Total Coal Royalty and Other segment
revenues and other income
$
50,123
$
27,944
$
35,909
$
121,210
$
95,955
(1)
Northern Appalachia includes NRP's Hibbs
Run property that has significant sales volumes, but a low fixed
rate per ton.
Natural Resource Partners
L.P.
Financial Tables
(Unaudited)
Adjusted EBITDA
(In
thousands)
Coal Royalty and Other
Soda Ash
Corporate and
Financing
Total
For the Three Months Ended September
30, 2021
Net income (loss)
$
36,606
$
6,596
$
(13,704
)
$
29,498
Less: equity earnings from unconsolidated
investment
—
(6,672
)
—
(6,672
)
Add: total distributions from
unconsolidated investment
—
—
—
—
Add: interest expense, net
—
—
9,652
9,652
Add: depreciation, depletion and
amortization
5,182
—
—
5,182
Add: asset impairments
57
—
—
57
Adjusted EBITDA
$
41,845
$
(76
)
$
(4,052
)
$
37,717
For the Three Months Ended September
30, 2020
Net income (loss)
$
19,173
$
1,890
$
(13,847
)
$
7,216
Less: equity earnings from unconsolidated
investment
—
(1,986
)
—
(1,986
)
Add: total distributions from
unconsolidated investment
—
—
—
—
Add: interest expense, net
41
—
10,213
10,254
Add: depreciation, depletion and
amortization
2,111
—
—
2,111
Add: asset impairments
934
—
—
934
Adjusted EBITDA
$
22,259
$
(96
)
$
(3,634
)
$
18,529
For the Three Months Ended June 30,
2021
Net income (loss)
$
25,886
$
2,566
(13,070
)
$
15,382
Less: equity earnings from unconsolidated
investment
—
(2,601
)
—
(2,601
)
Add: total distributions from
unconsolidated investment
—
—
—
—
Add: interest expense, net
1
—
9,682
9,683
Add: depreciation, depletion and
amortization
4,871
—
—
4,871
Add: asset impairments
16
—
—
16
Adjusted EBITDA
$
30,774
$
(35
)
$
(3,388
)
$
27,351
Natural Resource Partners
L.P.
Reconciliation of Non-GAAP
Measures
(Unaudited)
Adjusted EBITDA
(In
thousands)
Coal Royalty and Other
Soda Ash
Corporate and
Financing
Total
For the Nine Months Ended September 30,
2021
Net income (loss)
$
82,980
$
11,115
$
(40,834
)
$
53,261
Less: equity earnings from unconsolidated
investment
—
(11,246
)
—
(11,246
)
Add: total distributions from
unconsolidated investment
—
3,920
—
3,920
Add: interest expense, net
24
—
29,284
29,308
Add: depreciation, depletion and
amortization
15,145
—
—
15,145
Add: asset impairments
4,116
—
—
4,116
Adjusted EBITDA
$
102,265
$
3,789
$
(11,550
)
$
94,504
For the Nine Months Ended September 30,
2020
Net income (loss)
$
(62,562
)
$
5,059
$
(42,003
)
$
(99,506
)
Less: equity earnings from unconsolidated
investment
—
(5,200
)
—
(5,200
)
Add: total distributions from
unconsolidated investment
—
14,210
—
14,210
Add: interest expense, net
56
—
30,835
30,891
Add: depreciation, depletion and
amortization
6,185
—
—
6,185
Add: asset impairments
133,217
—
—
133,217
Adjusted EBITDA
$
76,896
$
14,069
$
(11,168
)
$
79,797
Natural Resource Partners
L.P.
Reconciliation of Non-GAAP
Measures
(Unaudited)
Distributable Cash Flow and
Free Cash Flow
(In
thousands)
Coal Royalty and Other
Soda Ash
Corporate and
Financing
Total
For the Three Months Ended September
30, 2021
Net cash provided by (used in) operating
activities of continuing operations
$
33,968
$
(36
)
$
(3,873
)
$
30,059
Add: proceeds from asset sales and
disposals
74
—
—
74
Add: return of long-term contract
receivable
540
—
—
540
Distributable cash flow
$
34,582
$
(36
)
$
(3,873
)
$
30,673
Less: proceeds from asset sales and
disposals
(74
)
—
—
(74
)
Less: acquisition costs
—
—
—
—
Free cash flow
$
34,508
$
(36
)
$
(3,873
)
$
30,599
Net cash provided by investing
activities
$
614
$
—
$
—
$
614
Net cash used in financing activities
—
—
(9,592
)
(9,592
)
For the Three Months Ended September
30, 2020
Net cash provided by (used in) operating
activities of continuing operations
$
28,573
$
(75
)
$
(4,175
)
$
24,323
Add: proceeds from asset sales and
disposals
—
—
—
—
Add: return of long-term contract
receivable
332
—
—
332
Distributable cash flow
$
28,905
$
(75
)
$
(4,175
)
$
24,655
Less: proceeds from asset sales and
disposals
—
—
—
—
Less: acquisition costs
—
—
—
—
Free cash flow
$
28,905
$
(75
)
$
(4,175
)
$
24,655
Net cash provided by investing
activities
$
332
$
—
$
—
$
332
Net cash used in financing activities
—
—
(19,910
)
(19,910
)
For the Three Months Ended June 30,
2021
Net cash provided by (used in) operating
activities of continuing operations
$
32,028
$
(35
)
$
(18,609
)
$
13,384
Add: proceeds from asset sales and
disposals
116
—
—
116
Add: return of long-term contract
receivable
541
—
—
541
Distributable cash flow
$
32,685
$
(35
)
$
(18,609
)
$
14,041
Less: proceeds from asset sales and
disposals
(116
)
—
—
(116
)
Less: acquisition costs
(1,000
)
—
—
(1,000
)
Free cash flow
$
31,569
$
(35
)
$
(18,609
)
$
12,925
Net cash provided by investing
activities
$
657
$
—
$
—
$
657
Net cash used in financing activities
(1,000
)
—
(11,900
)
(12,900
)
Natural Resource Partners
L.P.
Reconciliation of Non-GAAP
Measures
(Unaudited)
Distributable Cash Flow and
Free Cash Flow
(In
thousands)
Coal Royalty and Other
Soda Ash
Corporate and
Financing
Total
For the Nine Months Ended September 30,
2021
Net cash provided by (used in) operating
activities of continuing operations
$
91,958
$
3,817
$
(29,132
)
$
66,643
Add: proceeds from asset sales and
disposals
249
—
—
249
Add: proceeds from sale of discontinued
operations
—
—
—
—
Add: return of long-term contract
receivable
1,622
—
—
1,622
Distributable cash flow
$
93,829
$
3,817
$
(29,132
)
$
68,514
Less: proceeds from asset sales and
disposals
(249
)
—
—
(249
)
Less: acquisition costs
(1,000
)
—
—
(1,000
)
Free cash flow
$
92,580
$
3,817
$
(29,132
)
$
67,265
Net cash provided by investing
activities
$
1,871
$
—
$
—
$
1,871
Net cash used in financing activities
(1,132
)
—
(48,183
)
(49,315
)
For the Nine Months Ended September 30,
2020
Net cash provided by (used in) operating
activities of continuing operations
$
91,082
$
14,091
$
(30,760
)
$
74,413
Add: proceeds from asset sales and
disposals
507
—
—
507
Add: proceeds from sale of discontinued
operations
—
—
—
(66
)
Add: return of long-term contract
receivable
1,462
—
—
1,462
Distributable cash flow
$
93,051
$
14,091
$
(30,760
)
$
76,316
Less: proceeds from asset sales and
disposals
(507
)
—
—
(507
)
Less: proceeds from sale of discontinued
operations
—
—
—
66
Less: acquisition costs
(1,000
)
—
—
(1,000
)
Free cash flow
$
91,544
$
14,091
$
(30,760
)
$
74,875
Net cash provided by investing
activities
$
969
$
—
$
—
$
969
Net cash used in financing activities
—
—
(58,074
)
(58,074
)
Natural Resource Partners
L.P.
Reconciliation of Non-GAAP
Measures
(Unaudited)
LTM Free Cash Flow and Cash
Flow Cushion
For the Three Months
Ended
(In
thousands)
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
Last 12 Months
Net cash provided by operating activities
of continuing operations
$
13,155
$
23,200
$
13,384
$
30,059
$
79,798
Add: proceeds from asset sales and
disposals
116
59
116
74
365
Add: proceeds from sale of discontinued
operations
1
—
—
—
1
Add: return of long-term contract
receivable
660
541
541
540
2,282
Distributable cash flow
$
13,932
$
23,800
$
14,041
$
30,673
$
82,446
Less: proceeds from asset sales and
disposals
(116
)
(59
)
(116
)
(74
)
(365
)
Less: proceeds from sale of discontinued
operations
(1
)
—
—
—
(1
)
Less: acquisition costs
—
—
(1,000
)
—
(1,000
)
Free cash flow
$
13,815
$
23,741
$
12,925
$
30,599
$
81,080
Less: mandatory Opco debt repayments
(20,335
)
(16,696
)
(2,365
)
—
(39,396
)
Less: preferred unit distributions
(3,750
)
(3,806
)
(3,864
)
(3,921
)
(15,341
)
Less: common unit distributions
(5,630
)
(5,630
)
(5,672
)
(5,671
)
(22,603
)
Cash flow cushion
$
(15,900
)
$
(2,391
)
$
1,024
$
21,007
$
3,740
Leverage Ratio
For the Three Months
Ended
(In
thousands)
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
Last 12 Months
Net income
$
14,687
$
8,381
$
15,382
$
29,498
$
67,948
Less: equity earnings from unconsolidated
investment
(5,528
)
(1,973
)
(2,601
)
(6,672
)
(16,774
)
Add: total distributions from
unconsolidated investment
—
3,920
—
—
3,920
Add: interest expense, net
10,077
9,973
9,683
9,652
39,385
Add: depreciation, depletion and
amortization
3,013
5,092
4,871
5,182
18,158
Add: asset impairments
2,668
4,043
16
57
6,784
Adjusted EBITDA
$
24,917
$
29,436
$
27,351
$
37,717
$
119,421
Debt—at September 30, 2021
$
458,819
Leverage Ratio (1)
3.8 x
(1)
Leverage Ratio is calculated as the
outstanding principal of NRP's debt as of September 30, 2021
divided by the last twelve months' Adjusted EBITDA. Note that
Adjusted EBITDA under the indenture governing NRP's 2025 parent
company notes may be different than the amount shown above.
However, NRP's last twelve months Leverage ratio as of September
30, 2021, was 3.8x as calculated under the indenture governing
NRP's 2025 parent company notes.
Natural Resource Partners
L.P.
Reconciliation of Non-GAAP
Measures
(Unaudited)
Return on Capital Employed
("ROCE")
(In
thousands)
Coal Royalty and Other
Soda Ash
Corporate and
Financing
Total
LTM Ended September 30, 2021
Net income (loss)
$
105,362
$
16,599
$
(54,013
)
$
67,948
Financing costs
53
—
39,391
39,444
Return
$
105,415
$
16,599
$
(14,622
)
$
107,392
As of September 30, 2020
Total assets
$
683,821
$
256,834
$
1,903
$
942,558
Less: total current liabilities excluding
current debt, net
(16,570
)
(22
)
(11,947
)
(28,539
)
Less: total long-term liabilities
excluding long-term debt, net
(55,499
)
—
(501
)
(56,000
)
Capital employed
$
611,752
$
256,812
$
(10,545
)
$
858,019
Total partners' capital
$
611,752
$
256,812
$
(666,605
)
$
201,959
Class A convertible preferred units
—
—
164,587
164,587
Debt, net
—
—
491,473
491,473
Capital employed
$
611,752
$
256,812
$
(10,545
)
$
858,019
ROCE
17.2%
6.5%
N/A
12.5%
Excluding asset impairments:
Return
$
105,415
$
16,599
$
(14,622
)
$
107,392
Add: asset impairments
6,784
—
—
6,784
Return excluding asset impairments
$
112,199
$
16,599
$
(14,622
)
$
114,176
ROCE excluding asset impairments
18.3%
6.5%
N/A
13.3%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211103005258/en/
Tiffany Sammis 713-751-7515 tsammis@nrplp.com
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