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Name | Symbol | Market | Type |
---|---|---|---|
Natural Resource Partners Ltd New | NYSE:NRP | NYSE | Trust |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.51 | 0.57% | 90.51 | 90.65 | 90.00 | 90.25 | 10,435 | 01:00:00 |
Third Quarter 2017 Highlights
Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2017 net income of $26.1 million and net income attributable to the common unitholders and general partner of $18.4 million, which equated to $1.48 and $1.07 basic and diluted net income per common unit, respectively. NRP also generated Adjusted EBITDA of $58.1 million.
Craig Nunez, President and Chief Operating Officer, commented: "I am pleased with our recent performance. We continue to generate substantial amounts of cash from operations and our third quarter results have considerably improved compared to prior year levels. In addition, we continue to strengthen our balance sheet and have reduced debt $294.4 million during 2017. Compared to the prior quarter, our results were reflective of the steady performances from our Coal Royalty, Soda Ash and Construction Aggregates segments."
At the end of the third quarter, NRP had $121.2 million in cash and $111.0 million of borrowing capacity available under its credit facility. Subsequent to the end of the quarter, NRP redeemed the remaining $94.4 million of its outstanding 9.125% Senior Notes due 2018 at par and repaid $17.0 million on its credit facility. NRP's consolidated Debt-to-Adjusted EBITDA ratio now stands at 3.8x, down from 4.5x at year-end 2016 and 5.3x at year-end 2015.
NRP continues to focus on reducing its debt while maintaining sufficient liquidity to operate its businesses. NRP's goal is to achieve a leverage ratio, defined as Debt-to-EBITDA, of less than 3.0x, while maintaining minimum liquidity of $100 million, which may consist of a combination of cash and/or available borrowing capacity.
With respect to the third quarter of 2017, NRP’s Board of Directors declared a cash distribution of $0.45 per common unit and declared a distribution on NRP’s 12.0% Class A Convertible Preferred Units, one-half of which will be paid-in-kind through the issuance of additional preferred units.
____________________
(1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.Segment Information
Coal Royalty and Other
Operating income for the quarter was $38.0 million and Adjusted EBITDA was $43.3 million. For the quarter, net cash provided by operating, investing and financing activities were $44.1 million, $0.7 million and $0.5 million, respectively, and DCF was $44.8 million. NRP's Q3 2017 results represent a substantial improvement from Q3 of 2016 and are essentially flat compared to Q2 of 2017. Adjusted Coal Royalty and Other Operating Income compared to Q3 of 2016 increased 26% and excluding the impact of asset sales, DCF increased 26% and Adjusted EBITDA increased 6%. Further discussion of the key drivers for each major producing region follows:
Soda Ash
During the third quarter of 2017, international prices for soda ash, particularly in Asia, continued to be strong, and domestic prices have improved slightly over last year. NRP received $12.3 million of cash distributions from its 49% investment in Ciner Wyoming during the period, which was unchanged from the previous quarter and from Q3 of 2016. NRP's equity in earnings from Ciner Wyoming of $9.0 million declined 16% in Q3 2017, compared to the prior year period due to temporary production issues. However, NRP's earnings from Ciner Wyoming increased 7% compared to the previous quarter as a result of the progress made to improve production efficiency at the facility.
Construction Aggregates
Operating income for the quarter was $3.3 million and Adjusted EBITDA was $6.4 million. For the quarter, net cash provided by (used in) operating and investing activities were $2.2 million and $(1.2) million, respectively, and DCF was $1.3 million. While operating performance was in line with the previous quarter, performance improved compared to Q3 2016 as a result of increased production and sales volumes, higher margins on road construction and asphalt paving projects and increased marine terminal activity. DCF was lower in Q3 2017 due to temporary timing differences in cash receipts and payments that we expect to reverse during the remainder of the year.
Corporate and Finance
Total costs in Q3 2017 were $23.8 million, which includes $20.0 million of interest expense. While these amounts were in line with the previous quarter, total corporate and financing costs decreased 14% compared to the same period last year due to lower interest expense and lower legal and consulting fees compared to amounts incurred in Q3 of 2016 in connection with NRP's recapitalization transactions.
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 55454886. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com.
Audio replays of the conference call will be available for approximately one week. To access the replay, dial (855) 859-2056 and provide the conference code 55454886 or 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 interests in coal, aggregates and industrial minerals across the United States. A large percentage of NRP's revenues are generated from royalties and other passive income. In addition, NRP owns a construction aggregates company and an equity investment in Ciner Wyoming, a trona/soda ash operation.
For additional information, please contact Kathy H. Roberts at 713-751-7555 or kroberts@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, including statements regarding future cash distributions to our common unitholders. 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, 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 and income to non-controlling interest; plus distributions from unconsolidated investment, interest expense, 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. 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” is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations, plus returns of equity from unconsolidated investment, proceeds from sales of assets, including those included in discontinued operations, and return on 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. DCF 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 the Partnership's ability to make cash distributions to our common and preferred unitholders and our general partner and repay debt.
“Adjusted Net Income” is a non-GAAP financial measure that we define as Net income attributable to common unitholders and general partner, plus asset impairments, loss from discontinued operations and write-off of bad debt expense; less gain on sale of assets and non-cash revenue from lease modifications. Adjusted net income should not be considered in isolation or as a substitute for operating income (loss), net income (loss), cash flows provided by operating, investing and financial activities, or other income or cash flow statement data prepared in accordance with GAAP. Our management team believes Adjusted net income is useful in evaluating our financial performance because restructuring transaction expenses are one time charges, gains on asset sales are not related to the operations of our business and asset impairments and fair value adjustments for warrant liabilities are non-cash charges and excluding these from net income allows us to better compare results period-over-period. Reconciliations of Net income attributable to common unitholders and general partner to Adjusted net income are included in the table on the first page of this release.
“Adjusted Coal Royalty and Other Operating Income” is a non-GAAP financial measure that we define as Coal royalty and other operating income plus asset impairments and write-off of bad debt expense; less gains on asset sales and non-cash revenue associated with lease modifications and terminations. Adjusted coal royalty and other operating income should not be considered in isolation or as a substitute for operating income (loss), net income (loss), cash flows provided by operating, investing and financial activities, or other income or cash flow statement data prepared in accordance with GAAP. Our management team believes Adjusted coal royalty and other operating income is useful in evaluating our financial performance because gains on asset sales are not related to the operations of our business and asset impairments and non-cash revenue associated with lease modifications and forfeitures are non-cash charges and excluding these from Coal royalty and other operating income allows us to better compare results period-over-period. Reconciliations of Coal royalty and other operating income to Adjusted coal royalty and other operating income are included in the tables attached to this release.
-Financial Tables, Reconciliation of Non-GAAP Measures and Recap of Metrics Follow-
Natural Resource Partners L.P. Financial Tables Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30,(In thousands, except per unit data)
2017 2016 2017 2017 2016 Revenues and other income: Coal royalty and other $ 49,078 $ 27,504 $ 36,914 $ 120,986 $ 116,336 Coal royalty and other—affiliates 335 21,434 12,712 29,191 49,508 Construction aggregates 34,710 31,757 33,555 95,486 88,081 Equity in earnings of Ciner Wyoming 8,993 10,753 8,389 27,676 30,742 Gain (loss) on asset sales, net 171 6,426 3,361 3,576 27,280 Total revenues and other income $ 93,287 $ 97,874 $ 94,931 $ 276,915 $ 311,947 Operating expenses: Operating and maintenance expenses $ 32,441 $ 31,242 $ 31,020 $ 93,089 $ 87,824 Operating and maintenance expenses—affiliates, net 2,154 4,062 2,219 6,928 9,948 Depreciation, depletion and amortization 8,306 11,929 8,165 26,195 32,181 Amortization expense—affiliate — 902 240 1,008 2,328 General and administrative 2,648 4,268 2,031 10,757 10,676 General and administrative—affiliates 1,207 867 852 3,183 2,670 Asset impairments — 5,697 — 1,778 7,681 Total operating expenses $ 46,756 $ 58,967 $ 44,527 $ 142,938 $ 153,308 Income from operations $ 46,531 $ 38,907 $ 50,404 $ 133,977 $ 158,639 Other income (expense) Interest expense $ (20,080 ) $ (22,491 ) $ (20,377 ) $ (63,598 ) $ (66,742 ) Interest expense—affiliate — — — — (523 ) Debt modification expense — — (132 ) (7,939 ) — Loss on extinguishment of debt — — (4,107 ) (4,107 ) — Interest income 48 3 69 134 29 Other expense, net $ (20,032 ) $ (22,488 ) $ (24,547 ) $ (75,510 ) $ (67,236 ) Net income from continuing operations $ 26,499 $ 16,419 $ 25,857 $ 58,467 $ 91,403 Income (loss) from discontinued operations (433 ) 7,112 133 (507 ) 2,001 Net income $ 26,066 $ 23,531 $ 25,990 $ 57,960 $ 93,404 Less: income attributable to preferred unitholders (7,650 ) — (7,538 ) (17,688 ) — Net income attributable to common unitholders and general partner $ 18,416 $ 23,531 $ 18,452 $ 40,272 $ 93,404 Income from continuing operations per common unit Basic $ 1.51 $ 1.32 $ 1.46 $ 3.27 $ 7.34 Diluted $ 1.08 $ 1.32 $ 1.13 $ 2.67 $ 7.34 Net income per common unit Basic $ 1.48 $ 1.89 $ 1.47 $ 3.23 $ 7.50 Diluted $ 1.07 $ 1.89 $ 1.13 $ 2.65 $ 7.50 Net income $ 26,066 $ 23,531 $ 25,990 $ 57,960 $ 93,404 Add: comprehensive loss from unconsolidated investment and other (268 ) (609 ) (13 ) (1,413 ) (692 ) Comprehensive income $ 25,798 $ 22,922 $ 25,977 $ 56,547 $ 92,712 Natural Resource Partners L.P. Financial Tables Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30,(In thousands)
2017 2016 2017 2017 2016 Cash flows from operating activities: Net income $ 26,066 $ 23,531 $ 25,990 $ 57,960 $ 93,404 Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: Depreciation, depletion and amortization 8,306 11,929 8,165 26,195 32,181 Amortization expense—affiliates — 902 240 1,008 2,328 Return on earnings from unconsolidated investment 8,993 12,250 9,862 31,104 34,300 Equity earnings from unconsolidated investment (8,993 ) (10,753 ) (8,389 ) (27,676 ) (30,742 ) (Gain) loss on asset sales, net (171 ) (6,426 ) (3,361 ) (3,576 ) (27,280 ) Debt modification expense — — 132 7,939 — Loss on extinguishment of debt — — 4,107 4,107 — (Income) loss from discontinued operations 433 (7,112 ) (133 ) 507 (2,001 ) Asset impairments — 5,697 — 1,778 7,681 Amortization of debt issuance costs and other 3,037 2,600 1,332 5,459 6,694 Other, net—affiliates 200 636 (999 ) 88 848 Change in operating assets and liabilities: Accounts receivable 5,210 (4,263 ) (2,336 ) 1,607 (341 ) Accounts receivable—affiliates 49 1,559 121 (777 ) (712 ) Accounts payable 684 485 (940 ) 730 635 Accounts payable—affiliates (272 ) 54 (254 ) (270 ) 29 Accrued liabilities (8,554 ) 10,418 4,182 (12,452 ) 7,287 Accrued liabilities—affiliates — — — — (456 ) Deferred revenue (4,494 ) (2,558 ) 3,412 (5 ) (40,762 ) Deferred revenue—affiliates — (4,130 ) (7,269 ) (10,166 ) (8,190 ) Other items, net (4,694 ) 1,689 1,243 (2,166 ) (356 ) Other items, net—affiliates — (607 ) — — — Net cash provided by operating activities of continuing operations $ 25,800 $ 35,901 $ 35,105 $ 81,394 $ 74,547 Net cash provided by (used in) operating activities of discontinued operations (76 ) 2,358 (247 ) (607 ) 8,173 Net cash provided by operating activities $ 25,724 $ 38,259 $ 34,858 $ 80,787 $ 82,720 Cash flows from investing activities: Return of equity from unconsolidated investment $ 3,258 $ — $ 2,388 $ 5,646 $ —Proceeds from sale of assets
151 10,372 1,655 1,419 55,364 Return of long-term contract receivables 600 — 1,207 1,807 — Return of long-term contract receivables—affiliate — 397 390 804 2,577 Acquisition of plant and equipment and other (1,238 ) (512 ) (2,903 ) (6,236 ) (4,431 ) Net cash provided by investing activities of continuing operations $ 2,771 $ 10,257 $ 2,737 $ 3,440 $ 53,510 Net cash provided by investing activities of discontinued operations 4 110,635 173 206 106,821 Net cash provided by investing activities $ 2,775 $ 120,892 $ 2,910 $ 3,646 $ 160,331 Cash flows from financing activities: Proceeds from issuance of Convertible Preferred Units and Warrants, net $ — $ — $ — $ 242,100 $ — Proceeds from issuance of 2022 Senior Notes, net — — — 103,688 — Proceeds from loans 69,000 — — 69,000 20,000 Repayments of loans (8,000 ) (7,692 ) (97,282 ) (356,292 ) (106,174 ) Distributions to common unitholders and general partner (5,616 ) (5,617 ) (5,619 ) (16,850 ) (16,849 ) Distributions to preferred unitholders (3,769 ) — (1,250 ) (5,019 ) — Proceeds from (contributions to) discontinued operations (72 ) 40,226 (74 ) (401 ) 40,226 Debt issue costs and other 347 (2,074 ) (5,779 ) (40,187 ) (14,072 ) Net cash provided by (used in) financing activities of continuing operations$
51,890
$
24,843
$
(110,004
)$
(3,961
)$
(76,869
) Net cash provided by (used in) financing activities of discontinued operations 72 (114,994 ) 74 401 (125,564 ) Net cash provided by (used in) financing activities $ 51,962 $ (90,151 ) $ (109,930 ) $ (3,560 ) $ (202,433 ) Net increase (decrease) in cash and cash equivalents $ 80,461 $ 69,000 $ (72,162 ) $ 80,873 $ 40,618 Cash and cash equivalents of continuing operations at beginning of period $ 40,783 $ 21,391 $ 112,945 $ 40,371 $ 41,204 Cash and cash equivalents of discontinued operations at beginning of period — 2,000 — — 10,569 Cash and cash equivalents at beginning of period $ 40,783 $ 23,391 $ 112,945 $ 40,371 $ 51,773 Cash and cash equivalents at end of period $ 121,244 $ 92,391 $ 40,783 $ 121,244 $ 92,391 Less: cash and cash equivalents of discontinued operations at end of period — — — — — Cash and cash equivalents of continuing operations at end of period $ 121,244 $ 92,391 $ 40,783 $ 121,244 $ 92,391 Supplemental cash flow information: Cash paid during the period for interest from continuing operations $ 26,977 $ 12,078 $ 15,029 $ 61,857 $ 54,749 Cash paid during the period for interest from discontinued operations $ — $ — $ — $ — $ 1,906 Non-cash financing activities: Issuance of 2022 Senior Notes in exchange for 2018 Senior Notes $ — $ — $ — $ 240,638 $ —Natural Resource Partners L.P.
Financial Tables
Consolidated Balance Sheets (Unaudited) September 30, December 31,(In thousands, except unit data)
2017 2016 ASSETS Current assets: Cash and cash equivalents $ 121,244 $ 40,371 Accounts receivable, net 48,788 43,202 Accounts receivable—affiliates, net 243 6,658 Inventory 7,671 6,893 Prepaid expenses and other 7,525 7,271 Current assets of discontinued operations 991 991 Total current assets $ 186,462 $ 105,386 Land 25,261 25,252 Plant and equipment, net 47,584 49,443 Mineral rights, net 890,610 908,192 Intangible assets, net 50,370 3,236 Intangible assets, net—affiliate — 49,811 Equity in unconsolidated investment 245,382 255,901 Long-term contracts receivable 41,211 — Long-term contracts receivable—affiliate — 43,785 Other assets 7,741 6,625 Other assets—affiliate 892 1,018 Total assets $ 1,495,513 $ 1,448,649 LIABILITIES AND CAPITAL Current liabilities: Accounts payable $ 5,812 $ 6,234 Accounts payable—affiliates 670 940 Accrued liabilities 28,659 41,587 Current portion of long-term debt, net 174,138 140,037 Current liabilities of discontinued operations 458 353 Total current liabilities $ 209,737 $ 189,151 Deferred revenue 106,391 44,931 Deferred revenue—affiliates — 71,632 Long-term debt, net 762,441 990,234 Other non-current liabilities 2,727 4,565 Total liabilities $ 1,081,296 $ 1,300,513 Commitments and contingencies Convertible Preferred Units (255,019 units issued and outstanding at $1,000 par value per unit; liquidation preference of $1,500 per unit) $ 169,606 $ — Partners’ capital: Common unitholders’ interest (12,232,006 units issued and outstanding) $ 182,760 $ 152,309 General partner’s interest 1,508 887 Warrant holders interest 66,816 — Accumulated other comprehensive loss (3,079 ) (1,666 ) Total partners’ capital $ 248,005 $ 151,530 Non-controlling interest (3,394 ) (3,394 ) Total capital 244,611 148,136 Total liabilities and capital $ 1,495,513 $ 1,448,649Natural Resource Partners L.P.
Financial Tables
The table below presents NRP's unaudited business results by segment for the three months ended September 30, 2017 and 2016 and June 30, 2017, respectively:
Operating Business SegmentsCoalRoyaltyand Other
ConstructionAggregates
CorporateandFinancing
($ In thousands)
Soda Ash Total Three Months Ended September 30, 2017 Revenues and other income $ 49,413 $ 8,993 $ 34,710 $ — $ 93,116 Gains on asset sales 154 — 17 — 171 Total revenues and other income $ 49,567 $ 8,993 $ 34,727 $ — $ 93,287 Net income (loss) from continuing operations $ 37,992 $ 8,993 $ 3,342 $ (23,828 ) $ 26,499 Adjusted EBITDA (1) $ 43,297 $ 12,250 $ 6,402 $ (3,807 ) $ 58,142 Net cash provided by (used in) operating activities of continuing operations $ 44,119 $ 8,992 $ 2,155 $ (29,466 ) $ 25,800 Net cash provided by (used in) investing activities of continuing operations $ 676 $ 3,258 $ (1,163 ) $ — $ 2,771Net cash provided by financing activities of continuing operations
$ 484 $ — $ — $ 51,406 $ 51,890 Distributable Cash Flow (1) $ 44,795 $ 12,250 $ 1,304 $ (29,466 ) $ 28,883 Three Months Ended September 30, 2016 Revenues and other income $ 48,938 $ 10,753 $ 31,757 $ — $ 91,448Gain on asset sales
6,425 — 1 — 6,426 Total revenues and other income $ 55,363 $ 10,753 $ 31,758 $ — $ 97,874 Asset impairments $ 5,697 $ — $ — $ — $ 5,697 Net income (loss) from continuing operations $ 32,250 $ 10,753 $ 1,039 $ (27,623 ) $ 16,419 Adjusted EBITDA (1) $ 47,017 $ 12,250 $ 4,800 $ (5,132 ) $ 58,935 Net cash provided by (used in) operating activities of continuing operations $ 34,997 $ 12,250 $ 4,357 $ (15,703 ) $ 35,901 Net cash provided by (used in) investing activities of continuing operations $ 10,691 $ — $ (434 ) $ — $ 10,257Net cash provided by financing activities of continuing operations
$ — $ — $ — $ 24,843 $ 24,843 Distributable Cash Flow (1) $ 45,683 $ 12,250 $ 4,093 $ (15,703 ) $ 156,212 Three Months Ended June 30, 2017 Revenues and other income $ 49,626 $ 8,389 $ 33,555 $ — $ 91,570 Gains on asset sales 3,184 — 177 — 3,361 Total revenues and other income $ 52,810 $ 8,389 $ 33,732 $ — $ 94,931 Net income (loss) from continuing operations $ 42,084 $ 8,389 $ 2,636 $ (27,252 ) $ 25,857 Adjusted EBITDA (1) $ 47,459 $ 12,250 $ 5,844 $ (2,814 ) $ 62,739 Net cash provided by (used in) operating activities of continuing operations $ 38,537 $ 9,862 $ 5,476 $ (18,770 ) $ 35,105 Net cash provided by (used in) investing activities of continuing operations $ 2,888 $ 2,388 $ (2,539 ) $ — $ 2,737 Net cash provided by (used in) financing activities of continuing operations $ 17 $ — $ (1,000 ) $ (109,021 ) $ (110,004 ) Distributable Cash Flow (1) $ 41,426 $ 12,250 $ 3,424 $ (18,770 ) $ 38,330Natural Resource Partners L.P.
Financial Tables
The table below presents NRP's unaudited business results by segment for the nine months ended September 30, 2017 and 2016:
Operating Business SegmentsCoalRoyaltyand Other
ConstructionAggregates
CorporateandFinancing
(In thousands)
Soda Ash Total Nine Months Ended September 30, 2017 Revenues and other income $ 150,177 $ 27,676 $ 95,486 $ — $ 273,339 Gains on asset sales 3,367 — 209 — 3,576 Total revenues and other income $ 153,544 $ 27,676 $ 95,695 $ — $ 276,915 Asset impairments $ 1,778 $ — $ — $ — $ 1,778 Net income (loss) from continuing operations $ 115,170 $ 27,676 $ 4,439 $ (88,818 ) $ 58,467 Adjusted EBITDA (1) $ 134,601 $ 36,750 $ 14,621 $ (13,806 ) $ 172,166 Net cash provided by (used in) operating activities of continuing operations $ 120,588 $ 31,104 $ 11,677 $ (81,975 ) $ 81,394 Net cash provided by (used in) investing activities of continuing operations $ 3,570 $ 5,646 $ (5,776 ) $ — $ 3,440 Net cash provided by (used in) financing activities of continuing operations $ 517 $ — $ (1,096 ) $ (3,382 ) $ (3,961 ) Distributable Cash Flow (1) $ 124,158 $ 36,750 $ 6,827 $ (81,975 ) $ 85,760 Nine Months Ended September 30, 2016 Revenues and other income $ 165,844 $ 30,742 $ 88,081 $ — $ 284,667 Gains on asset sales 27,270 — 10 — 27,280 Total revenues and other income $ 193,114 $ 30,742 $ 88,091 $ — $ 311,947 Asset impairments $ 7,681 $ — $ — $ — $ 7,681 Net income (loss) from continuing operations $ 137,802 $ 30,742 $ 3,441 $ (80,582 ) $ 91,403 Adjusted EBITDA (1) $ 168,979 $ 34,300 $ 14,454 $ (13,317 ) $ 204,416 Net cash provided by (used in) operating activities of continuing operations $ 91,372 $ 34,300 $ 16,680 $ (67,805 ) $ 74,547 Net cash provided by (used in) investing activities of continuing operations $ 57,834 $ — $ (4,324 ) $ — $ 53,510 Net cash used in financing activities of continuing operations $ — $ (7,229 ) $ (1,593 ) $ (68,047 ) $ (76,869 ) Distributable Cash Flow (1) $ 149,206 $ 34,300 $ 13,111 $ (67,805 ) $ 238,701____________________
(1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Natural Resource Partners L.P. Financial Tables Operating Statistics - Coal Royalty and Other (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30,($ in thousands, except tons and per tons amounts)
2017 2016 2017 2017 2016 Coal production (tons) Appalachia Northern (1) 226 (356 ) 247 1,672 479 Central 3,596 3,348 3,897 11,193 10,046 Southern 468 683 690 1,721 2,201 Total Appalachia 4,290 3,675 4,834 14,586 12,726 Illinois Basin 794 2,411 734 3,545 6,056 Northern Powder River Basin 849 1,318 910 2,708 2,734 Total coal production 5,933 7,404 6,478 20,839 21,516 Coal royalty revenue per ton Appalachia Northern (1) $ 3.26 $ 1.98 $ 3.78 $ 1.36 $ 4.19 Central $ 4.77 $ 3.28 $ 5.05 $ 5.09 $ 3.22 Southern $ 5.73 $ 3.83 $ 5.69 $ 5.95 $ 3.37 Illinois Basin $ 4.32 $ 3.63 $ 4.06 $ 3.68 $ 3.57 Northern Powder River Basin $ 3.47 $ 3.27 $ 2.62 $ 2.89 $ 3.04 Coal royalty revenues Appalachia Northern (1) $ 737 $ 370 $ 933 $ 2,279 $ 2,005 Central 17,154 10,994 19,691 57,027 32,331 Southern 2,683 2,618 3,927 10,242 7,419 Total Appalachia $ 20,574 $ 13,982 $ 24,551 $ 69,548 $ 41,755 Illinois Basin 3,431 8,745 2,978 13,055 21,611 Northern Powder River Basin 2,945 4,314 2,384 7,827 8,314 Total coal royalty revenue $ 26,950 $ 27,041 $ 29,913 $ 90,430 $ 71,680 Other revenues Minimums recognized as revenue $ 9,812 $ 9,755 $ 7,547 $ 22,556 $ 60,455 Transportation and processing fees 5,570 6,127 5,520 15,729 15,663 Property tax revenue 513 2,567 1,100 4,311 8,899 Wheelage 1,219 919 1,025 3,510 1,797 Coal override revenue 3,059 615 1,885 5,769 1,482 Lease assignment fee 1,000 — — 1,000 Hard mineral royalty revenues 817 700 1,452 3,513 2,194 Oil and gas royalty revenues 117 1,283 924 2,532 2,538 Other 356 (69 ) 260 827 1,136 Total other revenues $ 22,463 $ 21,897 $ 19,713 $ 59,747 $ 94,164 Coal royalty and other income 49,413 48,938 49,626 150,177 165,844 Gain on coal royalty and other segment asset sales 154 6,425 3,184 3,367 27,270 Total coal royalty and other segment revenues and other income $ 49,567 $ 55,363 $ 52,810 $ 153,544 $ 193,114____________________
(1) During the three months ended September 30, 2016, Northern Appalachia was impacted by a prior period adjustment of 0.5 million tons and less than $0.1 million in royalty revenue related to the Hibbs Run mine that temporarily ceased production during 2016. Absent this adjustment, production in the Northern Appalachia region was 0.2 million tons with revenue of $0.4 million. Coal royalty revenue per ton removes the impact of the Hibbs Run prior period adjustment. Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures Distributable Cash Flow (Unaudited)CoalRoyalty andOther
ConstructionAggregates
CorporateandFinancing
(In thousands)
Soda Ash Total Three Months Ended September 30, 2017 Net cash provided by (used in) operating activities of continuing operations $ 44,119 $ 8,992 $ 2,155 $ (29,466 ) $ 25,800 Add: return of equity from unconsolidated investment — 3,258 — — 3,258 Add: proceeds from sale of assets 76 — 75 — 151 Add: return on long-term contract receivable 600 — — — 600 Less: maintenance capital expenditures — — (926 ) — (926 ) Distributable cash flow $ 44,795 $ 12,250 $ 1,304 $ (29,466 ) $ 28,883 Proceeds from sale of assets 76 — 75 — 151 Distributable cash flow adjusted for proceeds from sale of assets $ 44,719 $ 12,250 $ 1,229 $ (29,466 ) $ 28,732 Three Months Ended September 30, 2016 Net cash provided by (used in) operating activities of continuing operations $ 34,997 $ 12,250 $ 4,357 $ (15,703 ) $ 35,901 Add: proceeds from sale of assets 10,294 — 78 — 10,372 Add: proceeds from sale of assets from discontinued operations — — — — 109,889 Add: return on long-term contract receivables—affiliate 397 — — — 397 Less: maintenance capital expenditures (5 ) — (342 ) — (347 ) Distributable cash flow $ 45,683 $ 12,250 $ 4,093 $ (15,703 ) $ 156,212 Proceeds from sale of assets, including discontinued operations 10,294 — 78 — 120,261 Distributable cash flow adjusted for proceeds from sale of assets $ 35,389 $ 12,250 $ 4,015 $ (15,703 ) $ 35,951 Three Months Ended June 30, 2017 Net cash provided by (used in) operating activities of continuing operations $ 38,537 $ 9,862 $ 5,476 $ (18,770 ) $ 35,105 Add: return of equity from unconsolidated investment — 2,388 — — 2,388 Add: proceeds from sale of assets 1,292 — 363 — 1,655 Add: return on long-term contract receivables (including affiliate) 1,597 — — — 1,597 Less: maintenance capital expenditures — — (2,415 ) — (2,415 )Distributable cash flow
$ 41,426 $ 12,250 $ 3,424 $ (18,770 ) $ 38,330 Proceeds from sale of assets 1,292 — 363 — 1,655 Distributable cash flow adjusted for proceeds from sale of assets $ 40,134 $ 12,250 $ 3,061 $ (18,770 ) $ 36,675Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Distributable Cash Flow (Unaudited)Coal Royalty andOther
ConstructionAggregates
CorporateandFinancing
(In thousands)
Soda Ash Total Nine Months Ended September 30, 2017 Net cash provided by (used in) operating activities of continuing operations $ 120,588 $ 31,104 $ 11,677 $ (81,975 ) $ 81,394 Add: return of equity from unconsolidated investment — 5,646 — — 5,646 Add: proceeds from the sale of assets 959 — 460 — 1,419 Add: return on long-term contract receivables (including affiliate) 2,611 — — — 2,611 Less: maintenance capital expenditures — — (5,310 ) — (5,310 ) Distributable cash flow $ 124,158 $ 36,750 $ 6,827 $ (81,975 ) $ 85,760 Proceeds from sale of assets 959 — 460 — 1,419 Distributable cash flow adjusted for proceeds from sale of assets $ 123,199 $ 36,750 $ 6,367 $ (81,975 ) $ 84,341 Nine Months Ended September 30, 2016 Net cash provided by (used in) operating activities of continuing operations $ 91,372 $ 34,300 $ 16,680 $ (67,805 ) $ 74,547 Add: Proceeds from the sale of assets 55,262 — 102 — 55,364 Add: proceeds from sale of assets included in discontinued operations — — 109,889 Add: return on long-term contract receivables—affiliate 2,577 — — — 2,577 Less: maintenance capital expenditures (5 ) — (3,671 ) — (3,676 ) Distributable cash flow $ 149,206 $ 34,300 $ 13,111 $ (67,805 ) $ 238,701 Proceeds from sale of assets, including discontinued operations 55,262 — 102 — 165,253 Distributable cash flow adjusted for proceeds from sale of assets $ 93,944 $ 34,300 $ 13,009 $ (67,805 ) $ 73,448
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Adjusted EBITDA
(Unaudited)
CoalRoyalty andOther
ConstructionAggregates
CorporateandFinancing
(In thousands)
Soda Ash Total Three Months Ended September 30, 2017 Net income (loss) from continuing operations $ 37,992 $ 8,993 $ 3,342 $ (23,828 ) $ 26,499 Less: equity earnings from unconsolidated investment — (8,993 ) — — (8,993 ) Add: distributions from unconsolidated investment — 12,250 — — 12,250 Add: interest expense — — 59 20,021 20,080 Add: depreciation, depletion and amortization 5,305 — 3,001 — 8,306 Add: asset impairments — — — — — Adjusted EBITDA $ 43,297 $ 12,250 $ 6,402 $ (3,807 ) $ 58,142 Gains on sale of assets 154 — 17 — 171 Adjusted EBITDA excluding gains on sale of assets $ 43,143 $ 12,250 $ 6,385 $ (3,807 ) $ 57,971 Three Months Ended September 30, 2016 Net income (loss) from continuing operations $ 32,250 $ 10,753 $ 1,039 $ (27,623 ) $ 16,419 Less: equity earnings from unconsolidated investment — (10,753 ) — — (10,753 ) Add: distributions from unconsolidated investment — 12,250 — — 12,250 Add: interest expense — — — 22,491 22,491 Add: depreciation, depletion and amortization 9,070 — 3,761 — 12,831 Add: asset impairments 5,697 — — — 5,697 Adjusted EBITDA $ 47,017 $ 12,250 $ 4,800 $ (5,132 ) $ 58,935 Gains on sale of assets 6,425 — 1 — 6,426 Adjusted EBITDA excluding gains on sale of assets $ 40,592 $ 12,250 $ 4,799 $ (5,132 ) $ 52,509 Three Months Ended June 30, 2017 Net income (loss) from continuing operations $ 42,084 $ 8,389 $ 2,636 $ (27,252 ) $ 25,857 Less: equity earnings from unconsolidated investment — (8,389 ) — — (8,389 ) Add: distributions from unconsolidated investment — 12,250 — — 12,250 Add: interest expense — — 178 20,199 20,377 Add: debt modification expense — — — 132 132 Add: loss on extinguishment of debt — — — 4,107 4,107 Add: depreciation, depletion and amortization 5,375 — 3,030 — 8,405 Adjusted EBITDA $ 47,459 $ 12,250 $ 5,844 $ (2,814 ) $ 62,739 Gains on sale of assets 3,184 — 177 — 3,361 Adjusted EBITDA excluding gains on sale of assets $ 44,275 $ 12,250 $ 5,667 $ (2,814 ) $ 59,378 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures Adjusted EBITDA (Unaudited)CoalRoyalty andOther
ConstructionAggregates
CorporateandFinancing
(In thousands)
Soda Ash Total Nine Months Ended September 30, 2017 Net income (loss) from continuing operations $ 115,170 $ 27,676 $ 4,439 $ (88,818 ) $ 58,467 Less: equity earnings from unconsolidated investment — (27,676 ) — — (27,676 ) Add: distributions from unconsolidated investment — 36,750 — — 36,750 Add: interest expense — — 632 62,966 63,598 Add: debt modification expense — — — 7,939 7,939 Add: loss on extinguishment of debt — — — 4,107 4,107 Add: depreciation, depletion and amortization 17,653 — 9,550 — 27,203 Add: asset impairments 1,778 — — — 1,778 Adjusted EBITDA $ 134,601 $ 36,750 $ 14,621 $ (13,806 ) $ 172,166 Gains on sale of assets 3,367 — 209 — 3,576 Adjusted EBITDA excluding gains on sale of assets $ 131,234 $ 36,750 $ 14,412 $ (13,806 ) $ 168,590 Nine Months Ended September 30, 2016 Net income (loss) from continuing operations $ 137,802 $ 30,742 $ 3,441 $ (80,582 ) $ 91,403 Less: equity earnings from unconsolidated investment — (30,742 ) — — (30,742 ) Add: distributions from unconsolidated investment — 34,300 — — 34,300 Add: interest expense — — — 67,265 67,265 Add: depreciation, depletion and amortization 23,496 — 11,013 — 34,509 Add: asset impairments 7,681 — — — 7,681 Adjusted EBITDA $ 168,979 $ 34,300 $ 14,454 $ (13,317 ) $ 204,416 Gains on sale of assets 27,270 — 10 — 27,280 Adjusted EBITDA excluding gains on sale of assets $ 141,709 $ 34,300 $ 14,444 $ (13,317 ) $ 177,136 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures Last Twelve Months Distributable Cash Flow (Unaudited) Three Months Ended December March 31, June 30, September Last 12(In thousands, except ratios)
31, 2016 2017 2017 30, 2017 MonthsNet cash provided by operating activities of continuing operations
$ 26,096 $ 20,489 $ 35,105 $ 25,800 $ 107,490 Add: return of equity from unconsolidated investment — — 2,388 3,258 5,646 Add: proceeds from the sale of assets 7,019 (387 ) 1,655 151 8,438 Add: proceeds from the sale of assets included in discontinued operations (17 ) — — — (17 ) Add: return on long-term contract receivables (including affiliate) 391 414 1,597 600 3,002 Less: maintenance capital expenditures (775 ) (1,969 ) (2,415 ) (926 ) (6,085 ) Distributable cash flow $ 32,714 $ 18,547 $ 38,330 $ 28,883 $ 118,474 Proceeds from sale of assets, including discontinued operations 7,002 (387 ) 1,655 151 8,421 Distributable cash flow adjusted for proceeds from sale of assets $ 25,712 $ 18,934 $ 36,675 $ 28,732 $ 110,053 Unit Distribution Coverage Ratio (1) 5.3 x____________________
(1) Common unit distribution coverage ratio is calculated by dividing distributable cash flow by total distributions on the common units and to the general partner. Last Twelve Months Adjusted EBITDA (Unaudited) Three Months Ended December March 31, June 30, September Last 12(In thousands, except ratios)
31, 2016 2017 2017 30, 2017 MonthsNet income from continuing operations
$ 3,811 $ 6,111 $ 25,857 $ 26,499 $ 62,278 Less: equity earnings from unconsolidated investment (9,319 ) (10,294 ) (8,389 ) (8,993 ) (36,995 ) Add: distributions from unconsolidated investment 12,250 12,250 12,250 12,250 49,000 Add: interest expense 23,305 23,141 20,377 20,080 86,903 Add: debt modification expense — 7,807 132 — 7,939 Add: loss on extinguishment of debt — — 4,107 — 4,107 Add: depreciation, depletion and amortization 11,763 10,492 8,405 8,306 38,966 Add: asset impairments 9,245 1,778 — — 11,023 Adjusted EBITDA $ 51,055 $ 51,285 $ 62,739 $ 58,142 $ 223,221 Debt-to-Adjusted EBITDA, September 30, 2017 4.3 x Redemption of 9.125% senior notes, October 2017 $ 94,362 Payment on credit facility, October 2017 $ 17,000 Debt at November 7, 2017, face value (after redemption and payment noted above) $ 844,507 Debt-to-Adjusted EBITDA, November 7, 2017 3.8 x Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures Adjusted Net Income (Unaudited) Three Months Ended September 30,(In thousands)
2017 2016 Net income $ 26,066 $ 23,531 Less: income attributable to preferred unitholders (7,650 ) — Net income attributable to common unitholders and general partner $ 18,416 $ 23,531 Add: asset impairments — 5,697 Add: loss from discontinued operations 433 (7,112 ) Add: write-off of bad debt expense 1,534 1,679 Less: gain on asset sales (171 ) (6,426 ) Less: non-cash revenue associated with lease modifications and forfeitures (2,142 ) (3,627 ) Adjusted net income $ 18,070 $ 13,742Adjusted Coal Royalty and Other Operating Income (Unaudited)
Three Months Ended September 30,(In thousands)
2017 2016 Coal royalty and other operating income $ 37,992 $ 32,250 Add: asset impairments — 5,697 Add: write-off of bad debt expense 1,534 1,679 Less: gain on asset sales (154 ) (6,425 ) Less: non-cash revenue associated with lease modifications and forfeitures (2,142 ) (3,627 ) Adjusted coal royalty and other operating income $ 37,230 $ 29,574 Natural Resource Partners L.P. Recap of Metrics (Unaudited)(In thousands, except units, prices, ratio and yields)
November 7, 2017 Common Unit price $ 24.95 Enterprise value Equity market cap $ 305,188 Debt 844,507 Preferred Units 250,000 Intrinsic Value of Warrants 3,745 Total enterprise value $ 1,403,440 DCF—last twelve months $ 118,474 DCF/Equity market cap 39 % Adjusted EBITDA—last twelve months $ 223,221 Adjusted EBITDA/Total Enterprise value 16 %
View source version on businesswire.com: http://www.businesswire.com/news/home/20171108005652/en/
Natural Resource Partners L.P.Kathy H. Roberts, 713-751-7555kroberts@nrplp.com
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