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 Natural Resource Partners L.P. Reports First Quarter 2019 Results
   Wednesday, May 08, 2019 8:00:00 AM ET

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

       
Three Months Ended

Last Twelve
Months

March 31, March 31,

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

_________________________

         

(1)

 

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

 


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

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

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

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

First Quarter Segment Results (Unaudited)

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

_________________________

         

(1)

 

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

 

Coal Royalty and Other

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

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

Soda Ash

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

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

Corporate and Finance

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

Conference Call

A conference call will be held today at 10:00 a.m. ET. To join the conference call, dial (844) 379-6938 and provide the conference code 55454892. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com . To access the replay, please visit the Investor Relations section of NRP’s website.

Company Profile

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of mineral properties in the United States including interests in coal, industrial minerals and other natural resources. A large percentage of NRP’s revenues are generated from royalties and other passive income. In addition, NRP owns an equity investment in Ciner Wyoming, a trona/soda ash operation.

For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com . Further information about NRP is available on the partnership’s website at http://www.nrplp.com .

Forward-Looking Statements

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the partnership. These risks include, but are not limited to, commodity prices; decreases in demand for coal, aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; unanticipated geologic problems; our liquidity, leverage and access to capital and financing sources; changes in the legislative or regulatory environment, litigation risk, and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

“Adjusted EBITDA” is a non-GAAP financial measure that we define as net income (loss) from continuing operations less equity earnings from unconsolidated investment, net income attributable to non-controlling interest and gain on reserve swap; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income (loss), the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco’s debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

“Distributable cash flow” or “DCF” is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from sales of assets, including sales of discontinued operations, and return of long-term contract receivables (including affiliate); less maintenance capital expenditures and distributions to non-controlling interest. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, Distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

“Free cash flow” or “FCF” is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivables (including affiliate); less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as financing activities and distributions to non-controlling interest. FCF is calculated before mandatory debt repayments. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

“Free cash flow excluding discontinued operations and one-time beneficial items” is a non-GAAP financial measure that we define as Free cash flow excluding discontinued operations and one-time beneficial items. Free cash flow excluding discontinued operations and one-time beneficial items is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow excluding discontinued operations and one-time beneficial items may not be calculated the same for us as for other companies. Free cash flow excluding discontinued operations and one-time beneficial items is a supplemental liquidity measure used by our management to assess our ability to make cash distributions and repay debt.

“Cash flow cushion” is a non-GAAP financial measure that we define as Free cash flow excluding discontinued operations and one-time beneficial items less mandatory Opco debt amortization payments, preferred unit distributions and common unit distributions. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership’s ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units.

“Return on capital employed” or “ROCE” is a non-GAAP financial measure that we define as Net income from continuing operations plus interest expense divided by the sum of equity excluding equity of discontinued operations, and debt. Return on capital employed should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. Return on capital employed is a supplemental performance measure used by our management team that measures our profitability and efficiency with which our capital is employed. The measure provides an indication of operating performance before the impact of leverage in the capital structure.

“Return on capital employed excluding discontinued operations and one-time beneficial items” is a non-GAAP financial measure that we define as Return on capital employed excluding one-time beneficial items. Return on capital employed excluding discontinued operations and one-time beneficial items should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. Return on capital employed excluding discontinued operations and one-time beneficial items is a supplemental performance measure used by our management team that measures our profitability and efficiency with which our capital is employed excluding the impact of one-time beneficial items. The measure provides an indication of operating performance before the impact of leverage in the capital structure and excluding the impact of one-time beneficial items.

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

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

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

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

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

 

   

 

   

 

   

 

   

Partners'

   

 

   

 

 

Capital

 

Accumulated

Excluding

Common Unitholders

Other

Non-

Non-

    General Warrant Comprehensive

Controlling

Controlling

Total
(In thousands) Units Amounts Partner Holders Loss Interests

Interest

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

_________________________

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

 

   

 

   

 

   

 

   

 

   

 

   

 

 

Partners'

 

Capital

 

Accumulated

Excluding

Common Unitholders

Other

Non-

Non-

    General Warrant Comprehensive Controlling

Controlling

Total
(In thousands) Units Amounts Partner Holders Loss

Interest

Interest

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

_________________________

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

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

The following tables present NRP’s unaudited business results by segment for the three months ended March 31, 2019 and 2018 and December 31, 2018:

 
    Operating Business Segments        
Coal Royalty     Corporate and

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

_________________________

          (1)   See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.
 
(2) Includes net proceeds from sale of construction aggregates business which are classified as investing cash flow from discontinued operations.
 
 
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 
Operating Statistics - Coal Royalty and Other
 
    Three Months Ended
March 31,     December 31,

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

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 
Adjusted EBITDA
 
    Coal Royalty         Corporate and    

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

June 30,
2018

   

September 30,
2018

   

December 31,
2018

   

March 31,
2019

Last 12 Months

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

_________________________

          (1)  

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

 
(2)

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

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

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

Less: proceeds from sale of discontinued operations

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

June 30,
2018

   

September 30,
2018

   

December 31,
2018

   

March 31,
2019

Last 12 Months

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

Less: proceeds from sale of discontinued operations

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

Less: Preferred Unit distributions

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

Coal Royalty

       

Corporate

   

and Other

Soda Ash

and Financing

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

Less: total current liabilities of continuing operations excluding current debt

(8,306 ) (8,068 ) (16,374 )

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

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

_________________________

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

Tiffany Sammis
713-751-7515
tsammis@nrplp.com

Source: Natural Resource Partners L.P.



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