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 Natural Resource Partners L.P. Reports Third Quarter 2019 Results
   Wednesday, November 06, 2019 8:00:00 AM ET

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

 

 

Three Months Ended

 

Last Twelve
Months

 

 

September 30,

 

September 30,

 

2019

 

 

2018

 

2019

Net income from continuing operations

 

$

39,163

 

 

$

25,853

 

 

$

129,126

 

Adjusted EBITDA (1)

 

46,014

 

 

52,007

 

 

234,190

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

Operating activities

 

41,734

 

 

26,486

 

198,414

Investing activities

 

6,567

 

 

1,590

 

 

10,040

 

Financing activities

 

(21,913

)

 

(20,798

)

 

(154,898

)

Distributable cash flow (1)

 

48,179

 

 

28,076

 

 

405,989

 

Free cash flow (1)

 

42,193

 

 

28,076

 

 

200,220

 

Cash flow cushion (last twelve months) (1)

 

 

 

 

 

39,619

 

_________________________

(1)

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



"We posted a solid quarter of financial results despite challenging coal markets," said Craig Nunez, NRP's President and Chief Operating Officer. "We continue to generate significant free cash flow, maintain robust liquidity and remain focused on de-levering and de-risking the Partnership.”

NRP's liquidity was $212.2 million at September 30, 2019, consisting of $99.6 million of cash, $12.5 million of cash restricted for debt repayment and $100.0 million of borrowing capacity available under its revolving credit facility. At September 30, 2019, NRP's consolidated Debt-to-Adjusted EBITDA ratio, excluding the one-time beneficial Hillsboro settlement in the fourth quarter of 2018, was 2.6x.

NRP declared a cash distribution of $0.45 per common unit and a cash distribution of $7.5 million on its preferred units for the third quarter of 2019.

Third Quarter Segment Results

 

 

Operating Business Segments

 

 

 

 

 

 

Coal Royalty
and Other

 

Soda Ash

 

Corporate
and Financing

 

Total

 

 

 

 

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

40,252

 

 

$

13,595

 

 

$

(14,684

)

 

$

39,163

 

Adjusted EBITDA (1)

 

44,120

 

 

6,147

 

 

(4,253

)

 

46,014

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

41,094

 

 

6,147

 

 

(5,507

)

 

41,734

 

Investing activities

 

6,567

 

 

—

 

 

—

 

 

6,567

 

Financing activities

 

—

 

 

—

 

 

(21,913

)

 

(21,913

)

Distributable cash flow (1) (2)

 

47,661

 

 

6,147

 

 

(5,507

)

 

48,179

 

Free cash flow (1)

 

41,553

 

 

6,147

 

 

(5,507

)

 

42,193

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

37,693

 

 

$

8,836

 

 

$

(20,676

)

 

$

25,853

 

Adjusted EBITDA (1)

 

42,940

 

 

12,250

 

 

(3,183

)

 

52,007

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

41,604

 

 

12,250

 

 

(27,368

)

 

26,486

 

Investing activities

 

1,590

 

 

—

 

 

—

 

 

1,590

 

Financing activities

 

—

 

 

—

 

 

(20,798

)

 

(20,798

)

Distributable cash flow (1)

 

43,194

 

 

12,250

 

 

(27,368

)

 

28,076

 

Free cash flow (1)

 

43,194

 

 

12,250

 

 

(27,368

)

 

28,076

 

_________________________

(1)

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

(2)

Includes adjustments of net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations.

Coal Royalty and Other

Overall results in the third quarter of 2019 were relatively flat compared to the prior year quarter as increases in certain areas were offset by reduced coal royalty realizations at certain properties as follows:

  • Increased performance from:
    • $6.1 million of gain on asset sales and disposals.
    • $3.4 million of increased minimum lease straight-line revenues primarily related to the Hillsboro property that NRP began to recognize in 2019 after completion of the Hillsboro litigation settlement with Foresight.
    • $1.5 million of increased lease amendment revenues during the third quarter of 2019.
  • Offset by decreased performance from:
    • $6.0 million of lower coal royalty revenues driven by weakened coal markets, the temporary idling of certain properties due to lessee bankruptcies and the idling of the Pinnacle mine since the fourth quarter of 2018.
    • $3.0 million of lower transportation and processing services revenues due to weakened demand for Illinois Basin coal.

The market for metallurgical coal weakened primarily due to a decline in global economic growth. The domestic market for thermal coal remained challenged by continued low natural gas prices and growing stockpiles at domestic utilities. In addition, the export market for thermal coal weakened due to a combination of lower demand from European utilities, competition from international producers and oversupply of LNG.

Approximately 60% of coal royalty revenues and approximately 55% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, 2019.

Soda Ash

Net income increased $4.8 million compared to the prior year quarter driven primarily by increased production and sales volumes and increased domestic and international sales prices.

Adjusted EBITDA, distributable cash flow and free cash flow decreased $6.1 million due to Ciner Wyoming's distribution reduction in order to fund a capacity expansion project that is expected to improve performance of that business over the long term resulting in increased cash distributions to NRP. NRP expects to receive approximately $25 million to $28 million of annual cash distributions from Ciner Wyoming for the next two to three years.

Corporate and Financing

Net loss decreased $6.0 million primarily due to lower interest expense as a result of debt repayment.

Distributable cash flow and free cash flow increased $21.9 million primarily due to the timing of interest payments on our 2022 Senior Notes in 2018 compared to the timing of interest payments on our 2025 Senior Notes in 2019, in addition to lower interest payments on our Opco Senior Notes as a result of lower debt balances during the third quarter of 2019.

Business Outlook

Despite solid operating performance and strong liquidity, declining coal prices, lessee bankruptcies, and the distribution reduction at the Partnership's Ciner Wyoming soda ash joint venture announced earlier in the year are expected to put downward pressure on NRP's performance in the coming months. The Partnership expects all key performance metrics, including net income, free cash flow and cash flow cushion to be negatively impacted. However, management believes the progress made to strengthen the financial profile in recent years positions the Partnership well to operate through a sustained downturn and continue to reduce debt and make distributions to its unitholders.

Conference Call

A conference call will be held today at 10:00 a.m. ET. To join the conference call, dial (844) 583-4546 and provide the conference ID 9089977. 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. 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 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 production levels by the Partnership's lessees; 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) from continuing operations less equity earnings from unconsolidated investment, plus (minus) net loss (income) attributable to non-controlling interest; plus gain on reserve swap, 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 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 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 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 from continuing 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, 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 and Reconciliation of Non-GAAP Measures Follow-

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Consolidated Statements of Comprehensive Income

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

()

2019

 

2018

 

2019

 

2019

 

2018

Revenues and other income

 

 

 

 

 

 

 

 

 

Coal royalty and other

$

39,919

 

 

$

42,518

 

 

$

64,616

 

 

$

154,037

 

 

$

134,912

 

Transportation and processing services

3,865

 

 

6,853

 

 

5,274

 

 

14,740

 

 

17,238

 

Equity in earnings of Ciner Wyoming

13,818

 

 

8,836

 

 

11,333

 

 

36,833

 

 

34,986

 

Gain on asset sales and disposals

6,107

 

 

—

 

 

246

 

 

6,609

 

 

819

 

Total revenues and other income

$

63,709

 

 

$

58,207

 

 

$

81,469

 

 

$

212,219

 

 

$

187,955

 

Operating expenses

 

 

 

 

 

 

 

 

 

Operating and maintenance expenses

$

5,994

 

 

$

6,790

 

 

$

12,459

 

 

$

26,813

 

 

$

21,122

 

Depreciation, depletion and amortization

3,384

 

 

4,888

 

 

3,970

 

 

11,746

 

 

15,364

 

General and administrative expenses

4,253

 

 

3,183

 

 

4,196

 

 

12,799

 

 

10,782

 

Asset impairments

484

 

 

—

 

 

—

 

 

484

 

 

242

 

Total operating expenses

$

14,115

 

 

$

14,861

 

 

$

20,625

 

 

$

51,842

 

 

$

47,510

 

 

 

 

 

 

 

 

 

 

 

Income from operations

$

49,594

 

 

$

43,346

 

 

$

60,844

 

 

$

160,377

 

 

$

140,445

 

Other expenses, net

 

 

 

 

 

 

 

 

 

Interest expense, net

$

(10,431

)

 

$

(17,493

)

 

$

(12,456

)

 

$

(37,061

)

 

$

(53,177

)

Loss on extinguishment of debt

—

 

 

—

 

 

(29,282

)

 

(29,282

)

 

—

 

Total other expenses, net

$

(10,431

)

 

$

(17,493

)

 

$

(41,738

)

 

$

(66,343

)

 

$

(53,177

)

Net income from continuing operations

$

39,163

 

 

$

25,853

 

 

$

19,106

 

 

$

94,034

 

 

$

87,268

 

Income from discontinued operations

7

 

 

2,688

 

 

245

 

 

206

 

 

3,721

 

Net income

$

39,170

 

 

$

28,541

 

 

$

19,351

 

 

$

94,240

 

 

$

90,989

 

Net loss (income) attributable to non-controlling interest

—

 

 

359

 

 

—

 

 

—

 

 

(510

)

Net income attributable to NRP

$

39,170

 

 

$

28,900

 

 

$

19,351

 

 

$

94,240

 

 

$

90,479

 

Less: income attributable to preferred unitholders

(7,500

)

 

(7,500

)

 

(7,500

)

 

(22,500

)

 

(22,500

)

Net income attributable to common unitholders and general partner

$

31,670

 

 

$

21,400

 

 

$

11,851

 

 

$

71,740

 

 

$

67,979

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common unitholders

$

31,036

 

 

$

20,972

 

 

$

11,614

 

 

$

70,305

 

 

$

66,619

 

Net income attributable to the general partner

634

 

 

428

 

 

237

 

 

1,435

 

 

1,360

 

Income from continuing operations per common unit

 

 

 

 

 

 

 

 

 

Basic

$

2.53

 

 

$

1.50

 

 

$

0.93

 

 

$

5.72

 

 

$

5.14

 

Diluted

1.66

 

 

1.18

 

 

0.85

 

 

3.91

 

 

3.89

 

Net income per common unit

 

 

 

 

 

 

 

 

 

Basic

$

2.53

 

 

$

1.71

 

 

$

0.95

 

 

$

5.73

 

 

$

5.44

 

Diluted

1.66

 

 

1.30

 

 

0.87

 

 

3.92

 

 

4.06

 

 

 

 

 

 

 

 

 

 

 

Net income

$

39,170

 

 

$

28,541

 

 

$

19,351

 

 

$

94,240

 

 

$

90,989

 

Comprehensive income (loss) from unconsolidated investment and other

(520

)

 

791

 

 

(825

)

 

(340

)

 

(768

)

Comprehensive income

$

38,650

 

 

$

29,332

 

 

$

18,526

 

 

$

93,900

 

 

$

90,221

 

Comprehensive loss (income) attributable to non-controlling interest

—

 

 

359

 

 

—

 

 

—

 

 

(510

)

Comprehensive income attributable to NRP

$

38,650

 

 

$

29,691

 

 

$

18,526

 

 

$

93,900

 

 

$

89,711

 

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Consolidated Statements of Cash Flows

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

()

2019

 

2018

 

2019

 

2019

 

2018

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Net income

$

39,170

 

 

$

28,541

 

 

$

19,351

 

 

$

94,240

 

 

$

90,989

 

Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

3,384

 

 

4,888

 

 

3,970

 

 

11,746

 

 

15,364

 

Distributions from unconsolidated investment

6,370

 

 

12,250

 

 

9,310

 

 

25,480

 

 

34,653

 

Equity earnings from unconsolidated investment

(13,818

)

 

(8,836

)

 

(11,333

)

 

(36,833

)

 

(34,986

)

Gain on asset sales and disposals

(6,107

)

 

—

 

 

(246

)

 

(6,609

)

 

(819

)

Loss on extinguishment of debt

—

 

 

—

 

 

29,282

 

 

29,282

 

 

—

 

Income from discontinued operations

(7

)

 

(2,688

)

 

(245

)

 

(206

)

 

(3,721

)

Asset impairments

484

 

 

—

 

 

—

 

 

484

 

 

242

 

Unit-based compensation expense

466

 

 

154

 

 

475

 

 

1,842

 

 

1,144

 

Amortization of debt issuance costs and other

1,072

 

 

1,206

 

 

355

 

 

3,223

 

 

4,021

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

1,147

 

 

760

 

 

8,511

 

 

4,731

 

 

(6,283

)

Accounts payable

355

 

 

(773

)

 

(561

)

 

(822

)

 

90

 

Accrued liabilities

439

 

 

94

 

 

642

 

 

(5,083

)

 

(3,193

)

Accrued interest

7,163

 

 

(9,069

)

 

2,889

 

 

19

 

 

(9,944

)

Deferred revenue

(1,236

)

 

194

 

 

(7,218

)

 

(3,920

)

 

9,200

 

Other items, net

2,852

 

 

(235

)

 

(1,823

)

 

351

 

 

1,036

 

Net cash provided by operating activities of continuing operations

$

41,734

 

 

$

26,486

 

 

$

53,359

 

 

$

117,925

 

 

$

97,793

 

Net cash provided by (used in) operating activities of discontinued operations

(359

)

 

6,919

 

 

234

 

 

(4

)

 

9,755

 

Net cash provided by operating activities

$

41,375

 

 

$

33,405

 

 

$

53,593

 

 

$

117,921

 

 

$

107,548

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Distributions from unconsolidated investment in excess of cumulative earnings

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

2,097

 

Proceeds from asset sales and disposals

6,108

 

 

—

 

 

247

 

 

6,611

 

 

826

 

Return of long-term contract receivable

459

 

 

1,590

 

 

451

 

 

1,351

 

 

2,606

 

Net cash provided by investing activities of continuing operations

$

6,567

 

 

$

1,590

 

 

$

698

 

 

$

7,962

 

 

$

5,529

 

Net cash provided by (used in) investing activities of discontinued operations

(122

)

 

(3,571

)

 

(44

)

 

(556

)

 

(9,343

)

Net cash provided by (used in) investing activities

$

6,445

 

 

$

(1,981

)

 

$

654

 

 

$

7,406

 

 

$

(3,814

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Debt borrowings

—

 

 

—

 

 

300,000

 

 

300,000

 

 

35,000

 

Debt repayments

(8,277

)

 

(7,648

)

 

(348,002

)

 

(442,747

)

 

(55,720

)

Redemption of preferred units paid-in-kind

—

 

 

—

 

 

—

 

 

—

 

 

(8,844

)

Distributions to common unitholders and general partner

(5,630

)

 

(5,623

)

 

(16,265

)

 

(27,520

)

 

(16,863

)

Distributions to preferred unitholders

(7,500

)

 

(7,500

)

 

(7,500

)

 

(22,500

)

 

(22,765

)

Contributions from (to) discontinued operations

(481

)

 

(25

)

 

190

 

 

(560

)

 

(2,275

)

Debt issuance costs and other

(25

)

 

(2

)

 

(26,412

)

 

(26,427

)

 

(228

)

Net cash used in financing activities of continuing operations

$

(21,913

)

 

$

(20,798

)

 

$

(97,989

)

 

$

(219,754

)

 

$

(71,695

)

Net cash provided by (used in) financing activities of discontinued operations

481

 

 

(214

)

 

(190

)

 

560

 

 

1,521

 

Net cash used in financing activities

$

(21,432

)

 

$

(21,012

)

 

$

(98,179

)

 

$

(219,194

)

 

$

(70,174

)

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

$

26,388

 

 

$

10,412

 

 

$

(43,932

)

 

$

(93,867

)

 

$

33,560

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash of continuing operations at beginning of period

$

85,775

 

 

$

51,329

 

 

$

129,707

 

 

$

206,030

 

 

$

26,980

 

Cash and cash equivalents of discontinued operations at beginning of period

—

 

 

1,646

 

 

—

 

 

—

 

 

2,847

 

Cash, cash equivalents and restricted cash at beginning of period

$

85,775

 

 

$

52,975

 

 

$

129,707

 

 

$

206,030

 

 

$

29,827

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at end of period

$

112,163

 

 

$

63,387

 

 

$

85,775

 

 

$

112,163

 

 

$

63,387

 

Less: cash and cash equivalents of discontinued operations at end of period

—

 

 

(4,780

)

 

—

 

 

—

 

 

(4,780

)

Cash, cash equivalents and restricted cash of continuing operations at end of period

$

112,163

 

 

$

58,607

 

 

$

85,775

 

 

$

112,163

 

 

$

58,607

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid during the period for interest of continuing operations

$

3,225

 

 

$

24,998

 

 

$

9,623

 

 

$

36,270

 

 

$

58,153

 

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Consolidated Balance Sheets

 

 

September 30,

 

December 31,

()

2019

 

2018

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

99,636

 

 

$

101,839

 

Restricted cash

12,527

 

 

104,191

 

Accounts receivable, net

27,447

 

 

32,058

 

Prepaid expenses and other

3,111

 

 

3,462

 

Current assets of discontinued operations

988

 

 

993

 

Total current assets

$

143,709

 

 

$

242,543

 

Land

24,008

 

 

24,008

 

Plant and equipment, net

762

 

 

984

 

Mineral rights, net

733,154

 

 

743,112

 

Intangible assets, net

40,461

 

 

42,513

 

Equity in unconsolidated investment

258,063

 

 

247,051

 

Long-term contract receivable

37,473

 

 

38,945

 

Other assets

6,274

 

 

2,491

 

Total assets

$

1,243,904

 

 

$

1,341,647

 

LIABILITIES AND CAPITAL

 

 

 

Current liabilities

 

 

 

Accounts payable

$

1,591

 

 

$

2,414

 

Accrued liabilities

7,290

 

 

12,347

 

Accrued interest

14,364

 

 

14,345

 

Current portion of deferred revenue

5,047

 

 

3,509

 

Current portion of long-term debt, net

45,789

 

 

115,184

 

Current liabilities of discontinued operations

174

 

 

947

 

Total current liabilities

$

74,255

 

 

$

148,746

 

Deferred revenue

43,587

 

 

49,044

 

Long-term debt, net

490,378

 

 

557,574

 

Other non-current liabilities

4,843

 

 

1,150

 

Total liabilities

$

613,063

 

 

$

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 September 30, 2019 and December 31, 2018, respectively)

$

400,266

 

 

$

355,113

 

General partner’s interest

5,909

 

 

5,014

 

Warrant holders' interest

66,816

 

 

66,816

 

Accumulated other comprehensive loss

(3,802

)

 

(3,462

)

Total partners’ capital

$

469,189

 

 

$

423,481

 

Non-controlling interest

(2,935

)

 

(2,935

)

Total capital

$

466,254

 

 

$

420,546

 

Total liabilities and capital

$

1,243,904

 

 

$

1,341,647

 

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

 

Consolidated Statements of Partners' Capital

 

 

Common Unitholders

 

General
Partner

 

Warrant
Holders

 

Accumulated
Other
Comprehensive
Loss

 

Partners'
Capital
Excluding
Non-
Controlling
Interest

 

Non-
Controlling
Interest

 

Total
Capital

 

()

Units

 

Amounts

 

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

 

Net income (1)

—

 

 

18,964

 

 

387

 

 

—

 

 

—

 

 

19,351

 

 

—

 

 

19,351

 

Distributions to common unitholders and general partner

—

 

 

(15,939

)

 

(326

)

 

—

 

 

—

 

 

(16,265

)

 

—

 

 

(16,265

)

Distributions to preferred unitholders

—

 

 

(7,350

)

 

(150

)

 

—

 

 

—

 

 

(7,500

)

 

—

 

 

(7,500

)

Unit-based awards amortization and vesting

—

 

 

460

 

 

—

 

 

—

 

 

—

 

 

460

 

 

—

 

 

460

 

Comprehensive loss from unconsolidated investment and other

—

 

 

—

 

 

—

 

 

—

 

 

(825

)

 

(825

)

 

—

 

 

(825

)

Balance at June 30, 2019

12,261

 

 

$

374,275

 

 

$

5,387

 

 

$

66,816

 

 

$

(3,282

)

 

$

443,196

 

 

$

(2,935

)

 

$

440,261

 

Net income (1)

—

 

 

38,386

 

 

784

 

 

—

 

 

—

 

 

39,170

 

 

—

 

 

39,170

 

Distributions to common unitholders and 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

—

 

 

473

 

 

—

 

 

—

 

 

—

 

 

473

 

 

—

 

 

473

 

Comprehensive loss from unconsolidated investment and other

—

 

 

—

 

 

—

 

 

—

 

 

(520

)

 

(520

)

 

—

 

 

(520

)

Balance at September 30, 2019

12,261

 

 

$

400,266

 

 

$

5,909

 

 

$

66,816

 

 

$

(3,802

)

 

$

469,189

 

 

$

(2,935

)

 

$

466,254

 

________________

(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)

 

Consolidated Statements of Partners' Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Unitholders

 

General
Partner

 

Warrant
Holders

 

Accumulated
Other
Comprehensive
Loss

 

Partners'
Capital
Excluding
Non-
Controlling
Interest

 

Non-
Controlling
Interest

 

Total
Capital

 

Units

 

Amounts

 

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

 

Net income (1)

—

 

 

36,496

 

 

745

 

 

—

 

 

—

 

 

37,241

 

 

869

 

 

38,110

 

Distributions to common unitholders and general partner

—

 

 

(5,510

)

 

(113

)

 

—

 

 

—

 

 

(5,623

)

 

—

 

 

(5,623

)

Distributions to preferred unitholders

—

 

 

(7,350

)

 

(150

)

 

—

 

 

—

 

 

(7,500

)

 

—

 

 

(7,500

)

Unit-based awards amortization and vesting

—

 

 

136

 

 

—

 

 

—

 

 

—

 

 

136

 

 

—

 

 

136

 

Comprehensive income (loss) from unconsolidated investment and other

—

 

 

50

 

 

1

 

 

—

 

 

(434

)

 

(383

)

 

(51

)

 

(434

)

Balance at June 30, 2018

12,246

 

 

$

304,073

 

 

$

3,977

 

 

$

66,816

 

 

$

(4,872

)

 

$

369,994

 

 

$

(2,576

)

 

$

367,418

 

Net income (loss) (1)

—

 

 

28,322

 

 

578

 

 

—

 

 

—

 

 

28,900

 

 

(359

)

 

28,541

 

Distributions to common unitholders and general partner

—

 

 

(5,511

)

 

(112

)

 

—

 

 

—

 

 

(5,623

)

 

—

 

 

(5,623

)

Distributions to preferred unitholders

—

 

 

(7,350

)

 

(150

)

 

—

 

 

—

 

 

(7,500

)

 

—

 

 

(7,500

)

Unit-based awards amortization and vesting

—

 

 

139

 

 

—

 

 

—

 

 

—

 

 

139

 

 

—

 

 

139

 

Comprehensive income from unconsolidated investment and other

—

 

 

—

 

 

—

 

 

—

 

 

791

 

 

791

 

 

—

 

 

791

 

Balance at September 30, 2018

12,246

 

 

$

319,673

 

 

$

4,293

 

 

$

66,816

 

 

$

(4,081

)

 

$

386,701

 

 

$

(2,935

)

 

$

383,766

 

________________

(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 September 30, 2019 and 2018 and June 30, 2019:

 

 

Operating Business Segments

 

 

 

 

 

 

Coal Royalty
and Other

 

 

 

Corporate and
Financing

 

 

 

 

Soda Ash

 

 

Total

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

Revenues

 

$

43,784

 

 

$

13,818

 

 

$

—

 

 

$

57,602

 

Gain on asset sales and disposals

 

6,107

 

 

—

 

 

—

 

 

6,107

 

Total revenues and other income

 

$

49,891

 

 

$

13,818

 

 

$

—

 

 

$

63,709

 

Asset impairments

 

$

484

 

 

$

—

 

 

$

—

 

 

$

484

 

Net income (loss) from continuing operations

 

$

40,252

 

 

$

13,595

 

 

$

(14,684

)

 

$

39,163

 

Adjusted EBITDA (1)

 

$

44,120

 

 

$

6,147

 

 

$

(4,253

)

 

$

46,014

 

Distributable cash flow (1) (2)

 

$

47,661

 

 

$

6,147

 

 

$

(5,507

)

 

$

48,179

 

Free cash flow (1)

 

$

41,553

 

 

$

6,147

 

 

$

(5,507

)

 

$

42,193

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

 

 

 

 

 

 

 

Revenues

 

$

49,371

 

 

$

8,836

 

 

$

—

 

 

$

58,207

 

Gain on asset sales and disposals

 

—

 

 

—

 

 

—

 

 

—

 

Total revenues and other income

 

$

49,371

 

 

$

8,836

 

 

$

—

 

 

$

58,207

 

Asset impairments

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Net income (loss) from continuing operations

 

$

37,693

 

 

$

8,836

 

 

$

(20,676

)

 

$

25,853

 

Adjusted EBITDA (1)

 

$

42,940

 

 

$

12,250

 

 

$

(3,183

)

 

$

52,007

 

Distributable cash flow (1)

 

$

43,194

 

 

$

12,250

 

 

$

(27,368

)

 

$

28,076

 

Free cash flow (1)

 

$

43,194

 

 

$

12,250

 

 

$

(27,368

)

 

$

28,076

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019

 

 

 

 

 

 

 

 

Revenues

 

$

69,890

 

 

$

11,333

 

 

$

—

 

 

$

81,223

 

Gain on asset sales and disposals

 

246

 

 

—

 

 

—

 

 

246

 

Total revenues and other income

 

$

70,136

 

 

$

11,333

 

 

$

—

 

 

$

81,469

 

Asset impairments

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Net income (loss) from continuing operations

 

$

53,707

 

 

$

11,333

 

 

$

(45,934

)

 

$

19,106

 

Adjusted EBITDA (1)

 

$

57,677

 

 

$

9,310

 

 

$

(4,196

)

 

$

62,791

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

55,811

 

 

$

9,310

 

 

$

(11,762

)

 

$

53,359

 

Investing activities

 

$

698

 

 

$

—

 

 

$

—

 

 

$

698

 

Financing activities

 

$

—

 

 

$

—

 

 

$

(97,989

)

 

$

(97,989

)

Distributable cash flow (1) (2)

 

$

56,509

 

 

$

9,310

 

 

$

(11,762

)

 

$

54,013

 

Free cash flow (1)

 

$

56,262

 

 

$

9,310

 

 

$

(11,762

)

 

$

53,810

 

_________________________

(1)

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

(2)

Includes adjustments of 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)

The following tables present NRP's unaudited business results by segment for the nine months ended September 30, 2019 and 2018:

 

 

Operating Business Segments

 

 

 

 

 

 

Coal Royalty
and Other

 

 

 

Corporate and
Financing

 

 

 

 

Soda Ash

 

 

Total

Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

Revenues

 

$

168,777

 

 

$

36,833

 

 

$

—

 

 

$

205,610

 

Gain on asset sales and disposals

 

6,609

 

 

—

 

 

—

 

 

6,609

 

Total revenues and other income

 

$

175,386

 

 

$

36,833

 

 

$

—

 

 

$

212,219

 

Asset impairments

 

$

484

 

 

$

—

 

 

$

—

 

 

$

484

 

Net income (loss) from continuing operations

 

$

136,566

 

 

$

36,610

 

 

$

(79,142

)

 

$

94,034

 

Adjusted EBITDA (1)

 

$

148,796

 

 

$

25,257

 

 

$

(12,799

)

 

$

161,254

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

139,821

 

 

$

25,257

 

 

$

(47,153

)

 

$

117,925

 

Investing activities

 

$

7,962

 

 

$

—

 

 

$

—

 

 

$

7,962

 

Financing activities

 

$

—

 

 

$

—

 

 

$

(219,754

)

 

$

(219,754

)

Distributable cash flow (1) (2)

 

$

147,783

 

 

$

25,257

 

 

$

(47,153

)

 

$

125,331

 

Free cash flow (1)

 

$

141,172

 

 

$

25,257

 

 

$

(47,153

)

 

$

119,276

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

 

Revenues

 

$

152,150

 

 

$

34,986

 

 

$

—

 

 

$

187,136

 

Gain on asset sales and disposals

 

819

 

 

—

 

 

—

 

 

819

 

Total revenues and other income

 

$

152,969

 

 

$

34,986

 

 

$

—

 

 

$

187,955

 

Asset impairments

 

$

242

 

 

$

—

 

 

$

—

 

 

$

242

 

Net income (loss) from continuing operations

 

$

116,241

 

 

$

34,986

 

 

$

(63,959

)

 

$

87,268

 

Adjusted EBITDA (1)

 

$

131,337

 

 

$

36,750

 

 

$

(10,782

)

 

$

157,305

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

132,122

 

 

$

34,653

 

 

$

(68,982

)

 

$

97,793

 

Investing activities

 

$

3,432

 

 

$

2,097

 

 

$

—

 

 

$

5,529

 

Financing activities

 

$

—

 

 

$

—

 

 

$

(71,695

)

 

$

(71,695

)

Distributable cash flow (1)

 

$

135,554

 

 

$

36,750

 

 

$

(68,982

)

 

$

103,322

 

Free cash flow (1)

 

$

134,728

 

 

$

36,750

 

 

$

(68,982

)

 

$

102,496

 

_________________________

(1)

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

(2)

Includes adjustments of 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

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

2019

 

2018

 

2019

 

2019

 

2018

Coal sales volumes (tons)

 

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

 

Northern (1)

 

290

 

 

349

 

 

1,625

 

 

2,774

 

 

1,490

 

Central

 

3,222

 

 

3,873

 

 

3,825

 

 

10,469

 

 

11,582

 

Southern

 

438

 

 

346

 

 

386

 

 

1,172

 

 

1,288

 

Total Appalachia

 

3,950

 

 

4,568

 

 

5,836

 

 

14,415

 

 

14,360

 

Illinois Basin

 

551

 

 

609

 

 

535

 

 

1,646

 

 

2,091

 

Northern Powder River Basin

 

532

 

 

855

 

 

591

 

 

1,979

 

 

2,896

 

Total coal sales volumes

 

5,033

 

 

6,032

 

 

6,962

 

 

18,040

 

 

19,347

 

Coal royalty revenue per ton

 

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

 

Northern (1)

 

$

2.54

 

 

$

4.01

 

 

$

0.86

 

 

$

2.23

 

 

$

3.82

 

Central

 

5.25

 

 

5.37

 

 

6.03

 

 

5.79

 

 

5.57

 

Southern

 

5.99

 

 

6.82

 

 

6.69

 

 

7.00

 

 

6.98

 

Illinois Basin

 

4.82

 

 

4.89

 

 

4.51

 

 

4.70

 

 

4.56

 

Northern Powder River Basin

 

4.69

 

 

3.79

 

 

2.75

 

 

3.21

 

 

2.70

 

Combined average coal royalty revenue per ton

 

5.05

 

 

5.10

 

 

4.46

 

 

4.94

 

 

4.99

 

Coal royalty revenues

 

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

 

Northern (1)

 

$

735

 

 

$

1,402

 

 

$

1,393

 

 

$

6,173

 

 

$

5,698

 

Central

 

16,929

 

 

20,786

 

 

23,055

 

 

60,628

 

 

64,538

 

Southern

 

2,626

 

 

2,359

 

 

2,581

 

 

8,204

 

 

8,985

 

Total Appalachia

 

20,290

 

 

24,547

 

 

27,029

 

 

75,005

 

 

79,221

 

Illinois Basin

 

2,658

 

 

2,973

 

 

2,411

 

 

7,739

 

 

9,533

 

Northern Powder River Basin

 

2,492

 

 

3,237

 

 

1,624

 

 

6,347

 

 

7,817

 

Unadjusted coal royalty revenues

 

25,440

 

 

30,757

 

 

31,064

 

 

89,091

 

 

96,571

 

Coal royalty adjustment for minimum leases

 

(713

)

 

(48

)

 

(361

)

 

(1,530

)

 

(98

)

Total coal royalty revenues

 

$

24,727

 

 

$

30,709

 

 

$

30,703

 

 

$

87,561

 

 

$

96,473

 

Other revenues

 

 

 

 

 

 

 

 

 

 

Production lease minimum revenues

 

$

2,752

 

 

$

1,769

 

 

$

15,879

 

 

$

21,331

 

 

$

6,310

 

Minimum lease straight-line revenues

 

3,982

 

 

567

 

 

3,854

 

 

11,152

 

 

1,739

 

Property tax revenues

 

1,606

 

 

1,263

 

 

1,377

 

 

4,416

 

 

3,968

 

Wheelage revenues

 

1,675

 

 

1,572

 

 

1,945

 

 

5,035

 

 

5,155

 

Coal overriding royalty revenues

 

2,189

 

 

3,918

 

 

3,999

 

 

10,163

 

 

10,492

 

Lease amendment revenues

 

1,535

 

 

—

 

 

4,414

 

 

6,720

 

 

—

 

Aggregates royalty revenues

 

954

 

 

888

 

 

1,237

 

 

3,655

 

 

3,551

 

Oil and gas royalty revenues

 

374

 

 

1,427

 

 

482

 

 

2,575

 

 

5,679

 

Other revenues

 

125

 

 

405

 

 

726

 

 

1,429

 

 

1,545

 

Total other revenues

 

$

15,192

 

 

$

11,809

 

 

$

33,913

 

 

$

66,476

 

 

$

38,439

 

Coal royalty and other

 

$

39,919

 

 

$

42,518

 

 

$

64,616

 

 

$

154,037

 

 

$

134,912

 

Transportation and processing services revenues

 

3,865

 

 

6,853

 

 

5,274

 

 

14,740

 

 

17,238

 

Gain on asset sales and disposals

 

6,107

 

 

—

 

 

246

 

 

6,609

 

 

819

 

Total Coal Royalty and Other segment revenues and other income

 

$

49,891

 

 

$

49,371

 

 

$

70,136

 

 

$

175,386

 

 

$

152,969

 

_________________________

(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.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

Adjusted EBITDA

 

 

 

 

 

Coal Royalty
and Other

 

 

 

Corporate and
Financing

 

 

 

 

Soda Ash

 

 

Total

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

40,252

 

 

$

13,595

 

 

$

(14,684

)

 

$

39,163

 

Less: equity earnings from unconsolidated investment

 

—

 

 

(13,818

)

 

—

 

 

(13,818

)

Add: net loss attributable to non-controlling interest

 

—

 

 

—

 

 

—

 

 

—

 

Add: total distributions from unconsolidated investment

 

—

 

 

6,370

 

 

—

 

 

6,370

 

Add: interest expense, net

 

—

 

 

—

 

 

10,431

 

 

10,431

 

Add: loss on extinguishment of debt

 

—

 

 

—

 

 

—

 

 

—

 

Add: depreciation, depletion and amortization

 

3,384

 

 

—

 

 

—

 

 

3,384

 

Add: asset impairments

 

484

 

 

—

 

 

—

 

 

484

 

Adjusted EBITDA

 

$

44,120

 

 

$

6,147

 

 

$

(4,253

)

 

$

46,014

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

37,693

 

 

$

8,836

 

 

$

(20,676

)

 

$

25,853

 

Less: equity earnings from unconsolidated investment

 

—

 

 

(8,836

)

 

—

 

 

(8,836

)

Add: net loss attributable to non-controlling interest

 

359

 

 

—

 

 

—

 

 

359

 

Add: total distributions from unconsolidated investment

 

—

 

 

12,250

 

 

—

 

 

12,250

 

Add: interest expense, net

 

—

 

 

—

 

 

17,493

 

 

17,493

 

Add: loss on extinguishment of debt

 

—

 

 

—

 

 

—

 

 

—

 

Add: depreciation, depletion and amortization

 

4,888

 

 

—

 

 

—

 

 

4,888

 

Add: asset impairments

 

—

 

 

—

 

 

—

 

 

—

 

Adjusted EBITDA

 

$

42,940

 

 

$

12,250

 

 

$

(3,183

)

 

$

52,007

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

53,707

 

 

$

11,333

 

 

$

(45,934

)

 

$

19,106

 

Less: equity earnings from unconsolidated investment

 

—

 

 

(11,333

)

 

—

 

 

(11,333

)

Add: net loss attributable to non-controlling interest

 

—

 

 

—

 

 

—

 

 

—

 

Add: total distributions from unconsolidated investment

 

—

 

 

9,310

 

 

—

 

 

9,310

 

Add: interest expense, net

 

—

 

 

—

 

 

12,456

 

 

12,456

 

Add: loss on extinguishment of debt

 

—

 

 

—

 

 

29,282

 

 

29,282

 

Add: depreciation, depletion and amortization

 

3,970

 

 

—

 

 

—

 

 

3,970

 

Add: asset impairments

 

—

 

 

—

 

 

—

 

 

—

 

Adjusted EBITDA

 

$

57,677

 

 

$

9,310

 

 

$

(4,196

)

 

$

62,791

 

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

Adjusted EBITDA

 

 

 

Coal Royalty
and Other

 

 

 

Corporate and
Financing

 

 

 

 

Soda Ash

 

 

Total

Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

136,566

 

 

$

36,610

 

 

$

(79,142

)

 

$

94,034

 

Less: equity earnings from unconsolidated investment

 

—

 

 

(36,833

)

 

—

 

 

(36,833

)

Less: net income attributable to non-controlling interest

 

—

 

 

—

 

 

—

 

 

—

 

Add: total distributions from unconsolidated investment

 

—

 

 

25,480

 

 

—

 

 

25,480

 

Add: interest expense, net

 

—

 

 

—

 

 

37,061

 

 

37,061

 

Add: loss on extinguishment of debt

 

—

 

 

—

 

 

29,282

 

 

29,282

 

Add: depreciation, depletion and amortization

 

11,746

 

 

—

 

 

—

 

 

11,746

 

Add: asset impairments

 

484

 

 

—

 

 

—

 

 

484

 

Adjusted EBITDA

 

$

148,796

 

 

$

25,257

 

 

$

(12,799

)

 

$

161,254

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

116,241

 

 

$

34,986

 

 

$

(63,959

)

 

$

87,268

 

Less: equity earnings from unconsolidated investment

 

—

 

 

(34,986

)

 

—

 

 

(34,986

)

Less: net income attributable to non-controlling interest

 

(510

)

 

—

 

 

—

 

 

(510

)

Add: total distributions from unconsolidated investment

 

—

 

 

36,750

 

 

—

 

 

36,750

 

Add: interest expense, net

 

—

 

 

—

 

 

53,177

 

 

53,177

 

Add: loss on extinguishment of debt

 

—

 

 

—

 

 

—

 

 

—

 

Add: depreciation, depletion and amortization

 

15,364

 

 

—

 

 

—

 

 

15,364

 

Add: asset impairments

 

242

 

 

—

 

 

—

 

 

242

 

Adjusted EBITDA

 

$

131,337

 

 

$

36,750

 

 

$

(10,782

)

 

$

157,305

 

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

 

 

 

 

Soda Ash

 

 

Total

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

41,094

 

 

$

6,147

 

 

$

(5,507

)

 

41,734

 

Add: distributions from unconsolidated investment in excess of cumulative earnings

 

—

 

 

—

 

 

—

 

 

—

 

Add: proceeds from asset sales and disposals

 

6,108

 

 

—

 

 

—

 

 

6,108

 

Add: proceeds from sale of discontinued operations

 

—

 

 

—

 

 

—

 

 

(122

)

Add: return of long-term contract receivable

 

459

 

 

—

 

 

—

 

 

459

 

Distributable cash flow

 

$

47,661

 

 

$

6,147

 

 

$

(5,507

)

 

$

48,179

 

Less: proceeds from asset sales and disposals

 

(6,108

)

 

—

 

 

—

 

 

(6,108

)

Less: proceeds from sale of discontinued operations

 

—

 

 

—

 

 

—

 

 

122

 

Free cash flow

 

$

41,553

 

 

$

6,147

 

 

$

(5,507

)

 

$

42,193

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

41,604

 

 

$

12,250

 

 

$

(27,368

)

 

$

26,486

 

Add: distributions from unconsolidated investment in excess of cumulative earnings

 

—

 

 

—

 

 

—

 

 

—

 

Add: proceeds from asset sales and disposals

 

—

 

 

—

 

 

—

 

 

—

 

Add: proceeds from sale of discontinued operations

 

—

 

 

—

 

 

—

 

 

—

 

Add: return of long-term contract receivable

 

1,590

 

 

—

 

 

—

 

 

1,590

 

Distributable cash flow

 

$

43,194

 

 

$

12,250

 

 

$

(27,368

)

 

$

28,076

 

Less: proceeds from asset sales and disposals

 

—

 

 

—

 

 

—

 

 

—

 

Less: proceeds from sale of discontinued operations

 

—

 

 

—

 

 

—

 

 

—

 

Free cash flow

 

$

43,194

 

 

$

12,250

 

 

$

(27,368

)

 

$

28,076

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

55,811

 

 

$

9,310

 

 

$

(11,762

)

 

$

53,359

 

Add: distributions from unconsolidated investment in excess of cumulative earnings

 

—

 

 

—

 

 

—

 

 

—

 

Add: proceeds from asset sales and disposals

 

247

 

 

—

 

 

—

 

 

247

 

Add: proceeds from sale of discontinued operations

 

—

 

 

—

 

 

—

 

 

(44

)

Add: return of long-term contract receivable

 

451

 

 

—

 

 

—

 

 

451

 

Distributable cash flow

 

$

56,509

 

 

$

9,310

 

 

$

(11,762

)

 

$

54,013

 

Less: proceeds from asset sales and disposals

 

(247

)

 

—

 

 

—

 

 

(247

)

Less: proceeds from sale of discontinued operations

 

—

 

 

—

 

 

—

 

 

44

 

Free cash flow

 

$

56,262

 

 

$

9,310

 

 

$

(11,762

)

 

$

53,810

 

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

 

 

 

 

Soda Ash

 

 

Total

Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

139,821

 

 

$

25,257

 

 

$

(47,153

)

 

$

117,925

 

Add: distributions from unconsolidated investment in excess of cumulative earnings

 

—

 

—

 

—

 

—

Add: proceeds from asset sales and disposals

 

6,611

 

—

 

—

 

6,611

Add: proceeds from sale of discontinued operations

 

—

 

—

 

—

 

(556

)

Add: return of long-term contract receivable

 

1,351

 

—

 

—

 

1,351

Distributable cash flow

 

$

147,783

 

 

$

25,257

 

 

$

(47,153

)

 

$

125,331

 

Less: proceeds from asset sales and disposals

 

(6,611

)

 

—

 

—

 

(6,611

)

Less: proceeds from sale of discontinued operations

 

—

 

—

 

—

 

556

Free cash flow

 

$

141,172

 

 

$

25,257

 

 

$

(47,153

)

 

$

119,276

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities of continuing operations

 

$

132,122

 

 

$

34,653

 

 

$

(68,982

)

 

$

97,793

 

Add: distributions from unconsolidated investment in excess of cumulative earnings

 

—

 

2,097

 

—

 

2,097

Add: proceeds from asset sales and disposals

 

826

 

—

 

—

 

826

Add: proceeds from sale of discontinued operations

 

—

 

—

 

—

 

—

Add: return of long-term contract receivable

 

2,606

 

—

 

—

 

2,606

Distributable cash flow

 

$

135,554

 

 

$

36,750

 

 

$

(68,982

)

 

$

103,322

 

Less: proceeds from asset sales and disposals

 

(826

)

 

—

 

—

 

(826

)

Less: proceeds from sale of discontinued operations

 

—

 

—

 

—

 

—

Free cash flow

 

$

134,728

 

 

$

36,750

 

 

$

(68,982

)

 

$

102,496

 

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

LTM Free Cash Flow and Cash Flow Cushion

 

 

 

 

 

 

 

Three Months Ended

 

 

 

December 31,
2018

 

March 31,
2019

 

June 30,
2019

 

September 30,
2019

 

Last 12 Months

Net cash provided by (used in) operating activities of continuing operations

 

$

80,489

 

 

$

22,832

 

 

$

53,359

 

 

$

41,734

 

 

$

198,414

 

Add: proceeds from asset sales and disposals

 

1,623

 

 

256

 

 

247

 

 

6,108

 

 

8,234

 

Add: proceeds from sale of discontinued operations

 

198,091

 

 

(390

)

 

(44

)

 

(122

)

 

197,535

 

Add: return of long-term contract receivable

 

455

 

 

441

 

 

451

 

 

459

 

 

1,806

 

Distributable cash flow

 

$

280,658

 

 

$

23,139

 

 

$

54,013

 

 

$

48,179

 

 

$

405,989

 

Less: proceeds from asset sales and disposals

 

(1,623

)

 

(256

)

 

(247

)

 

(6,108

)

 

(8,234

)

Less: proceeds from sale of discontinued operations

 

(198,091

)

 

390

 

 

44

 

 

122

 

 

(197,535

)

Free cash flow

 

$

80,944

 

 

$

23,273

 

 

$

53,810

 

 

$

42,193

 

 

$

200,220

 

Add (less): free cash flow provided by (used in) discontinued operations

 

125

 

 

121

 

 

234

 

 

(359

)

 

121

 

Free cash flow including discontinued operations

 

$

81,069

 

 

$

23,394

 

 

$

54,044

 

 

$

41,834

 

 

$

200,341

 

Add (less): free cash flow used in (provided by) discontinued operations

 

(125

)

 

(121

)

 

(234

)

 

359

 

 

(121

)

Less: cash flow from one-time Hillsboro litigation settlement

 

(25,000

)

 

—

 

 

—

 

 

—

 

 

(25,000

)

Free cash flow excluding discontinued operations and one-time beneficial items

 

$

55,944

 

 

$

23,273

 

 

$

53,810

 

 

$

42,193

 

 

$

175,220

 

Less: mandatory Opco debt repayments

 

(24,665

)

 

(37,152

)

 

(2,365

)

 

(8,276

)

 

(72,458

)

Less: preferred unit distributions

 

(7,500

)

 

(7,500

)

 

(7,500

)

 

(7,500

)

 

(30,000

)

Less: common unit distributions

 

(5,623

)

 

(5,625

)

 

(16,265

)

 

(5,630

)

 

(33,143

)

Cash flow cushion

 

$

18,156

 

 

$

(27,004

)

 

$

27,680

 

 

$

20,787

 

 

$

39,619

 

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

Leverage Ratio

 

 

 

Three Months Ended

 

 

 

December 31,
2018

 

March 31,
2019

 

June 30,
2019

 

September 30,
2019

 

Last 12 Months

Net income from continuing operations

 

$

35,092

 

 

$

35,765

 

 

$

19,106

 

 

$

39,163

 

 

$

129,126

 

Less: equity earnings from unconsolidated investment

 

(13,320

)

 

(11,682

)

 

(11,333

)

 

(13,818

)

 

(50,153

)

Add: total distributions from unconsolidated investment

 

9,800

 

 

9,800

 

 

9,310

 

 

6,370

 

 

35,280

 

Add: interest expense, net

 

17,001

 

 

14,174

 

 

12,456

 

 

10,431

 

 

54,062

 

Add: loss on extinguishment of debt

 

—

 

 

—

 

 

29,282

 

 

—

 

 

29,282

 

Add: depreciation, depletion and amortization

 

6,325

 

 

4,392

 

 

3,970

 

 

3,384

 

 

18,071

 

Add: asset impairments

 

18,038

 

 

—

 

 

—

 

 

484

 

 

18,522

 

Adjusted EBITDA

 

$

72,936

 

 

$

52,449

 

 

$

62,791

 

 

$

46,014

 

 

$

234,190

 

Less: one-time Hillsboro litigation settlement

 

 

 

 

 

 

 

 

 

(25,000

)

Adjusted EBITDA less one-time Hillsboro litigation settlement

 

 

 

 

 

 

 

 

 

$

209,190

 

 

 

 

 

 

 

 

 

 

 

 

Debt—at September 30, 2019

 

 

 

 

 

 

 

 

 

$

544,390

 

 

 

 

 

 

 

 

 

 

 

 

Leverage Ratio (1)

 

 

 

 

 

 

 

 

 

2.3

x

 

 

 

 

 

 

 

 

 

 

 

Leverage Ratio less one-time Hillsboro litigation settlement (2)

 

 

 

 

 

 

 

 

 

2.6

x

_________________________

(1)

Leverage Ratio is calculated as the outstanding principal of NRP's debt as of September 30, 2019 divided by the last twelve months' Adjusted EBITDA.

(2)

Leverage Ratio less one-time Hillsboro litigation settlement is calculated as the outstanding principal of NRP's debt as of September 30, 2019 divided by the last twelve months' Adjusted EBITDA less one-time Hillsboro litigation settlement.

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

 

Return on Capital Employed ("ROCE")

 

 

Coal Royalty
and Other

 

 

 

Corporate and
Financing

 

 

 

 

Soda Ash

 

 

Total

LTM Ended September 30, 2019

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

181,053

 

 

$

49,930

 

 

$

(101,857

)

 

$

129,126

 

Financing costs

 

—

 

 

—

 

 

85,942

 

 

85,942

 

Return

 

$

181,053

 

 

$

49,930

 

 

$

(15,915

)

 

$

215,068

 

 

 

 

 

 

 

 

 

 

As of September 30, 2018

 

 

 

 

 

 

 

 

Total assets of continuing operations

 

$

968,310

 

 

$

242,901

 

 

$

3,051

 

 

$

1,214,262

 

Less: total current liabilities of continuing operations excluding current debt

 

(8,991

)

 

—

 

 

(8,415

)

 

(17,406

)

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

 

(40,938

)

 

—

 

 

(51

)

 

(40,989

)

Capital employed excluding discontinued operations

 

$

918,381

 

 

$

242,901

 

 

$

(5,415

)

 

$

1,155,867

 

 

 

 

 

 

 

 

 

 

Total Partners' Capital (1)

 

$

921,316

 

 

$

242,901

 

 

$

(961,717

)

 

$

386,701

 

Less: non-controlling interest

 

(2,935

)

 

—

 

 

—

 

 

(2,935

)

Less: Partners' Capital from discontinued operations

 

—

 

 

—

 

 

—

 

 

(184,201

)

Total Partners' Capital excluding discontinued operations

 

$

918,381

 

 

$

242,901

 

 

$

(961,717

)

 

$

199,565

 

Class A Convertible Preferred Units

 

—

 

 

—

 

 

164,587

 

 

164,587

 

Debt

 

—

 

 

—

 

 

791,715

 

 

791,715

 

Capital employed excluding discontinued operations

 

$

918,381

 

 

$

242,901

 

 

$

(5,415

)

 

$

1,155,867

 

 

 

 

 

 

 

 

 

 

ROCE excluding discontinued operations

 

19.7%

 

20.6%

 

N/A

 

18.6%

 

 

 

 

 

 

 

 

 

Excluding one-time beneficial items:

 

 

 

 

 

 

 

 

Return

 

$

181,053

 

 

$

49,930

 

 

$

(15,915

)

 

$

215,068

 

Less: income from Hillsboro litigation settlement

 

(25,000

)

 

—

 

 

—

 

 

(25,000

)

Return excluding discontinued operations and one-time beneficial items

 

$

156,053

 

 

$

49,930

 

 

$

(15,915

)

 

$

190,068

 

 

 

 

 

 

 

 

 

 

ROCE excluding discontinued operations and one-time beneficial items

 

17.0%

 

20.6%

 

N/A

 

16.4%

_________________________

(1)

Total Partners' Capital includes $184.2 million from discontinued operations.

 

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

Source: Natural Resource Partners L.P.



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