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Exhibit 99.1

 

Natural Resource Partners L.P.

601 Jefferson St., Suite 3600, Houston, TX 77002

   LOGO
  
  

NEWS RELEASE

 

 

Natural Resource Partners L.P.

Reports 2014 Results and Issues 2015 Guidance

2014 Highlights

 

    Revenues and other income of $399.8 million

 

    Net income per unit of $0.94, or $1.17 excluding impairments

 

    Distributable cash flow of $217.7 million

 

    Adjusted EBITDA of $300.3 million

HOUSTON, February 12, 2015Natural Resource Partners L.P. (NYSE:NRP) today reported 2014 revenues and other income of $399.8 million compared to $358.1 million for 2013. Net income attributable to the limited partners for 2014 was $106.7 million, or $0.94 per unit, versus $168.6 million and $1.54 per unit for 2013. Results for 2014 included a non-cash charge of $26.2 million, or $0.23 per unit, for the impairment of several coal and aggregates properties. Distributable cash flow for 2014 was $217.7 million compared to $309.4 million for 2013. Distributable cash flow in 2013 included a one-time special distribution of $44.8 million from OCI Wyoming and an additional $9.5 million in cash from the sale of assets. NRP also reported adjusted EBITDA of $300.3 million for 2014 versus $340.3 million for 2013. For reconciliations of the non-GAAP measures of distributable cash flow, adjusted EBITDA and net income per unit before considering non-cash impairments, see “Non-GAAP Financial Measures” and the reconciliation tables elsewhere in this release.

For the quarter ended December 31, 2014, revenues totaled $137.3 million compared to $94.7 million reported for the same period 2013. The increase in revenues was principally due to contributions from the VantaCore construction aggregates business and producing oil and gas properties in the Sanish Field, both of which were acquired during the fourth quarter. Net income attributable to the limited partners for the fourth quarter was $8.5 million, or $0.07 per unit, compared to $46.0 million and $0.42 per unit for the fourth quarter 2013. Results for the quarter included a non-cash charge of $20.6 million, or $0.17 per unit, for the impairment of several coal and aggregates properties. Distributable cash flow for the fourth quarter was $56.1 million and adjusted EBITDA was $80.1 million, compared to $69.6 million and $69.1 million, respectively, for the fourth quarter 2013.

“In this challenging commodity price environment, our 2014 financial and operational results met or exceeded our guidance,” said Wyatt Hogan, President of NRP. “Our


NRP Reports 2014 Results and Issues 2015 Guidance   Page 2 of 16

 

performance in 2014 is a testament not only to our NRP team and the quality and diversity of our assets, but also to the exceptional efforts of our coal lessees, oil and gas operators, OCI Wyoming soda ash operations and our recently acquired VantaCore construction aggregates business. In 2014, we made two significant acquisitions that have established NRP as a diversified natural resource company. Nevertheless, as we look forward to 2015, the markets for coal and oil and gas remain difficult, and we will continue to manage our business with a long-term perspective through this cycle.”

 

Highlights    Quarter Ended     For the Year Ended  
     December 31,
2014
     December 31,
2013
     %
Change
    December 31,
2014
     December 31,
2013
     %
Change
 
     (in thousands except per unit
and per ton)
           (in thousands except per unit
and per ton)
        

Revenues

                

Total revenues and other income

   $ 137,273       $ 94,744         45   $ 399,752       $ 358,117         12

Coal production (tons)

     12,986         11,089         17     50,459         53,292         -5

Average coal royalty revenue per ton

   $ 3.39       $ 4.30         -21   $ 3.65       $ 3.99         -9

Total coal related revenues

   $ 53,797       $ 66,958         -20   $ 226,724       $ 274,194         -17

Aggregates and industrial minerals related revenue

   $ 44,510       $ 3,817         1066   $ 54,124       $ 13,479         302

Oil and gas related revenue

   $ 22,085       $ 7,338         201   $ 59,566       $ 17,080         249

Equity and other unconsolidated investment income

   $ 12,551       $ 12,018         4   $ 41,416       $ 34,186         21

Operating Expenses

   $ 106,223       $ 27,992         279   $ 210,833       $ 121,881         73

Net income

                

Net income to limited partners

   $ 8,472       $ 46,041         -82   $ 106,653       $ 168,636         -37

Net income per unit

   $ 0.07       $ 0.42         -83   $ 0.94       $ 1.54         -39

Average units outstanding

     121,449         109,812         11     113,262         109,584         3

Net income before considering any impairments (1)

                

Net income to limited partners

     28,645         46,041         -38     132,338         169,356         -22

Net income per unit

   $ 0.24       $ 0.42         -43   $ 1.17       $ 1.55         -25

Distributable cash flow(1)

   $ 56,066       $ 69,646         -19   $ 217,710       $ 309,394         -30

Adjusted EBITDA(1)

   $ 80,143       $ 69,092         16     300,322         340,345         -12

 

(1) See “Non-GAAP Financial Measures” and reconciliation tables at the end of the release.

Twelve Months 2014 compared to Twelve Months 2013

Revenues and Other Income

Total revenues and other income for 2014 increased 12% to $399.8 million from the same period of 2013 due to significant increases in aggregates related revenues, oil and gas related revenues and equity income from NRP’s soda ash business. These increases, mainly due to acquisitions that occurred in both 2013 and 2014, more than offset the $47.5 million decline in coal related revenues. Coal related revenues decreased mainly due to decreases in prices for both metallurgical and thermal coal equating to a 9% reduction in average coal royalty revenue per ton; a 5% decline in coal production volumes; and a gain on sale of assets recorded in 2013. Metallurgical coal represented 32% of coal production and 40% of coal royalty revenues for 2014.

NRP benefitted from its diversification into other asset classes, as revenues and other income other than coal related revenues increased to 43% of total revenues and other income in 2014 as compared to 23% of total revenues and other income in 2013. The most significant increase occurred in oil and gas revenues, which increased by $42.5 million due primarily to a full year of production realized on the two acquisitions that occurred in 2013 and the addition of six weeks of revenues accrued for the Sanish Field assets in the Williston Basin in the fourth quarter 2014. NRP’s average realized oil price in the Williston Basin, after differentials to WTI, was $77.85 in 2014. Aggregates related revenues increased $40.6 million due to the revenues realized for VantaCore’s construction aggregates business also purchased in the fourth quarter 2014. NRP also recognized an increase related to the equity income recognized from the soda ash business. Equity and other unconsolidated income increased $7.2 million, most of which was due to improved operating revenues.

Operating Expenses

Total operating expenses increased $89.0 million to $210.8 million, including non-cash impairments of $26.2 million taken in 2014 and $0.7 million taken in 2013. Although NRP still derives significant revenues from higher margin royalty assets, the acquisition of operating companies such as VantaCore in addition to non-operated oil and and gas interests have resulted in increased operating expenses for NRP. NRP reported aggregates operating expenses of $32.3 million related to VantaCore’s construction aggregates business acquired in the fourth quarter and $8.4 million of additional oil and gas operating expenses. In addition, property, franchise and other taxes increased $4.8 million. Depreciation, depletion and amortization increased $15.5 million resulting from more significant oil and gas operations.


NRP Reports 2014 Results and Issues 2015 Guidance Page 3 of 16

 

Net Income

Net income attributable to the limited partners decreased $61.9 million to $106.7 million, and net income per unit decreased $0.60 compared to the 2013 period. Before considering non-cash impairments, net income to the limited partners decreased $37.1 million to $132.3 million for 2014 from $169.4 million in 2013. Before considering non-cash impairments, net income per unit was $1.17 versus $1.55 for 2013. Impacting net income per unit was a 3.7 million unit increase in the weighted average number of units outstanding in 2014 versus the same period in 2013.

Distributable Cash Flow

Distributable cash flow decreased by $91.7 million to $217.7 million due mainly to a $44.8 million special distribution received from OCI Wyoming in 2013; declines in the coal business resulting in a $36.3 million decrease in net cash provided by operations relative to 2013; an additional $21.0 million of interest paid in 2014; and a $9.5 million difference in proceeds from the sale of assets.


NRP Reports 2014 Results and Issues 2015 Guidance   Page 4 of 16

 

Adjusted EBITDA

Adjusted EBITDA declined 12% in 2014 to $300.3 million from $340.3 million generated in 2013. The decrease is mainly related to the special distribution received in 2013 from OCI Wyoming.

Fourth Quarter 2014 compared to Third Quarter 2014

 

Highlights   Quarter Ended  
    December 31      September 30      % Change  
    (in thousands, except per ton
and per unit)
        

Revenues and other income

       

Total revenues and other income

  $ 137,273       $ 91,609         50

Coal production (tons)

    12,986         13,370         -3

Average coal royalty revenue per ton

  $ 3.39       $ 3.80         -11

Total coal related revenue

  $ 53,797       $ 65,193         -17

Aggregates and industrial minerals related revenue

  $ 44,510       $ 2,655         1576

Oil and gas related revenue

  $ 22,085       $ 9,601         130

Equity and other unconsolidated investment income

  $ 12,551       $ 9,685         30

Operating expenses

  $ 106,223       $ 36,582         190

Net income

       

Net income to limited partners

  $ 8,472       $ 35,450         -76

Net income to the limited partners, before considering any impairments(1)

  $ 28,645       $ 35,450         -19

Net income per unit

  $ 0.07       $ 0.32         -78

Net income per unit, before considering any impairments(1)

  $ 0.24       $ 0.32         -25

Average units outstanding

    121,449         111,244         9

Distributable cash flow(1)

  $ 56,066       $ 57,773         -3

Adjusted EBITDA(1)

  $ 80,143       $ 74,261         8

 

(1) See “Non-GAAP Financial Measures” and reconciliation tables at the end of the release.

Revenues and Other Income

Total revenues and other income for the fourth quarter increased 50% to $137.3 million from the third quarter mainly due to revenue from VantaCore’s construction aggregates business of $42.1 million, oil and gas revenues of $12.5 million due to increased production and activity from recent acquisitions and $2.9 million from improved soda ash operations offset by decreases in coal related revenues. Average coal royalty revenue per ton decreased 11%, and coal production volumes decreased modestly.

Operating Expenses

Operating expenses increased $69.6 million due to aggregates operating expenses associated with VantaCore of $32.3 million, increased depreciation, depletion and amortization expenses of $11.6 million, increased general and administrative expenses due to additional personnel and expenses related to the fourth quarter acquisitions and $20.6 million of non-cash impairments recorded in the fourth quarter.

Net Income

Net income to the limited partners and net income per unit decreased 76% and 78% respectively in the fourth quarter from the previous quarter. Before considering the non-cash impairment of $20.6 million, net income to the limited partners decreased $6.8 million or 19% to $28.6 million mainly due to increased interest expense of $3.6 million related to the two fourth quarter acquisitions.

Distributable Cash Flow

Distributable cash flow decreased $1.7 million in the fourth quarter to $56.1 million.

Adjusted EBITDA

Adjusted EBITDA for the fourth quarter 2014 increased $5.8 million to $80.1 million over the $74.3 million generated in the third quarter 2014.

Acquisitions

In 2014, NRP invested approximately $540 million in non-coal-related acquisitions in an effort to diversify its revenues. Those acquisitions included VantaCore, a construction aggregates company that now places NRP as one of the top 25 aggregates producers in the nation, and the purchase of non-operated oil and gas working interests in the Sanish Field in the Williston Basin.


NRP Reports 2014 Results and Issues 2015 Guidance   Page 5 of 16

 

2015 Outlook and Guidance

NRP expects its coal business to be down slightly from 2014 results and expects its soda ash business to improve over 2014. NRP’s aggregates-related revenues in 2015 are expected to increase substantially over 2014 due to the VantaCore acquisition made in the fourth quarter. NRP’s interests in oil and natural gas properties remain a small portion of NRP’s business, and oil and gas revenues are expected to remain flat as compared to 2014, with increased production offset by significantly lower prices. NRP will continue to monitor the development programs of the operators of its Williston Basin non-operated working interest properties and manage the capital expenditures associated with these properties by only participating in wells that are expected to provide acceptable economic returns.

In spite of the expected increase in revenues, adjusted EBITDA is expected to remain relatively flat due to the lower margins of the VantaCore construction aggregates business.

Distributable cash flow for 2015 is estimated to be $175 million to $200 million, which is calculated after deducting maintenance capital expenditures of approximately $23 million associated with NRP’s non-operated working interests in oil and natural gas properties and VantaCore’s construction aggregates mining and production operations.

The following table sets forth NRP’s guidance for the year ending December 31, 2015:

 

     2014 Actuals      2015 Guidance  
     (in millions      (Range)
(in millions)
 

Coal production (mm tons)

     50.5         44.0      -     51.0   

Coal-related revenues(1)

   $ 226.7       $ 207.0      -   $ 221.0   

Aggregates and industrial minerals revenues(2)

     54.1         163.0      -     179.0   

Oil and gas revenues(3)

     59.6         56.0      -     66.0   

Equity and other unconsolidated investment income (soda ash revenues)

     41.4         47.0      -     50.0   

Total revenues

   $ 399.8       $ 490.0      -   $ 535.0   

Operating income

   $ 188.9       $ 176.0      -   $ 206.0   

Interest expense (net)

   $ 80.1       $ 88.0      -   $ 91.0   

Adjusted EBITDA (4)

   $ 300.3       $ 280.0      -   $ 310.0   

Distributable cash flow (4)

   $ 217.7       $ 175.0      -   $ 200.0   

 

(1)  Includes coal royalty revenues, coal lease minimums recognized as revenues, coal overriding royalties, wheelage fees and coal-related processing and transportation fees.
(2)  Includes aggregate royalty revenues and revenues from VantaCore’s construction aggregates operations
(3) Includes revenues from NRP’s Williston Basin non-operated working interest assets as well as oil and gas royalty revenues. Assumes an average WTI price of $52 per Bbl.
(4)  “Adjusted EBITDA” and “Distributable cash flow” are non-GAAP financial measures. For an explanation of these measures, see “Non-GAAP Financial Measures” at the end of this release.

Liquidity and Capital Resources

At December 31, 2014, NRP had approximately $50.1 million in cash and $127.0 million available for borrowing under its revolving credit facilities, and does not anticipate any debt covenant compliance issues over the next year. NRP has $81 million in principal payments due on NRP Operating’s senior notes during each of 2015 and 2016, and NRP Operating’s revolving credit facility and term loan facility both mature in 2016. NRP remains committed to furthering its long-term goals of reducing debt and enhancing liquidity.

Distributions

In January 2015, the Board of Directors of NRP’s general partner declared a quarterly distribution of $0.35 per unit for the fourth quarter 2014.


NRP Reports 2014 Results and Issues 2015 Guidance Page 6 of 16

 

Company Profile

Natural Resource Partners L.P. is a master limited partnership headquartered in Houston, TX. NRP is a diversified natural resource company that owns interests in oil and gas, 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 an equity investment in OCI Wyoming, a trona/soda ash operation, owns non-operated working interests in oil and gas properties and owns VantaCore, a construction aggregates business, making NRP ranked as one of the top 25 aggregates producers in the United States.

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.

Non-GAAP Financial Measures

“Distributable cash flow” represents cash flow from operations plus return on unconsolidated equity investments, proceeds from the sale of assets, and the return on direct financing lease and contractual overrides. Distributable cash flow is a “non-GAAP financial measure” that is presented because management believes it is a useful adjunct to net cash provided by operating activities under GAAP. Distributable cash flow is a significant liquidity metric that is an indicator of NRP’s ability to make quarterly cash distributions to its partners. Distributable cash flow is also the quantitative standard used throughout the investment community with respect to publicly traded partnerships. Distributable 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. A reconciliation of historical distributable cash flow to net cash provided by operating activities is included in the tables attached to this release. Distributable cash flow may not be calculated the same for NRP as other companies.

“Adjusted EBITDA” is a non-GAAP financial measure that we define as net income less equity and other unconsolidated investment income; plus cash distributions received from unconsolidated affiliates, interest expense, taxes, depreciation, depletion and amortization, and asset impairments. “Adjusted EBITDA,” as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Adjusted EBITDA provides no information regarding a company’s capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax positions. Adjusted EBITDA does not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital and other commitments and obligations. Our management team believes adjusted EBITDA is useful in evaluating our financial performance because this measure is widely used by analysts, investors and rating agencies for comparative purposes. There are significant limitations to using adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect our net income or loss, the lack of comparability of results of operations of different companies and the different methods of calculating adjusted EBITDA reported by different companies. A reconciliation of historical adjusted EBITDA to net income is included in the tables attached to this release.

This press release contains information based upon forward-looking estimates of distributable cash flow and adjusted EBITDA for the year ending December 31, 2015. We do not provide financial guidance for projected net income or changes in working capital, and, therefore, we are unable to provide a reconciliation of our adjusted EBITDA or distributable cash flow projections to net income, operating income, or net cash flow provided by operating activities, the most comparable financial measures calculated in accordance with GAAP.


NRP Reports 2014 Results and Issues 2015 Guidance Page 7 of 16

 

Forward-Looking Statements

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the partnership. These risks include, but are not limited to, commodity prices; decreases in demand for coal, oil, natural gas, and aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; the pace of development of our oil and natural gas properties; unanticipated geologic problems; our liquidity 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.

15-02

-Financial statements follow-


Page 8 of 16

 

Natural Resource Partners L.P.

Operating Statistics - Coal Related Revenue

(in thousands except per ton data)

 

     Quarter Ended      For the Year Ended  
     December 31
2014
     December 31
2013
     December 31
2014
     December 31
2013
 
     (unaudited)      (unaudited)  

Regional Statistics

           

Coal royalty production (tons):

           

Appalachia

           

Northern

     2,802         1,454         9,339         11,505   

Central

     4,996         4,739         20,092         20,801   

Southern

     964         963         3,914         4,151   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Appalachia

  8,762      7,156      33,345      36,457   

Illinois Basin

  3,113      3,546      13,177      13,087   

Northern Powder River Basin

  738      279      2,844      2,778   

Gulf Coast

  373      108      1,093      970   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

  12,986      11,089      50,459      53,292   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average royalty revenue per ton:

Appalachia

Northern

$ 0.96    $ 1.81    $ 0.92    $ 1.27   

Central

  4.07      4.88      4.46      5.05   

Southern

  5.00      5.75      5.18      6.30   

Total Appalachia

  3.18      4.38      3.55      4.00   

Illinois Basin

  4.21      4.27      4.10      4.28   

Northern Powder River Basin

  2.39      3.10      2.74      2.72   

Gulf Coast

  3.54      3.63      3.47      3.39   

Combined average royalty revenue per ton

$ 3.39    $ 4.30    $ 3.65    $ 3.99   

Coal royalty revenues:

Appalachia

Northern

$ 2,680    $ 2,635    $ 8,621    $ 14,643   

Central

  20,338      23,143      89,627      105,004   

Southern

  4,823      5,533      20,292      26,156   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Appalachia

$ 27,841    $ 31,311    $ 118,540    $ 145,803   

Illinois Basin

  13,093      15,137      54,049      56,001   

Northern Powder River Basin

  1,763      866      7,804      7,569   

Gulf Coast

  1,320      392      3,793      3,290   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total coal royalty revenues

$ 44,017    $ 47,706    $ 184,186    $ 212,663   
  

 

 

    

 

 

    

 

 

    

 

 

 

Other coal related revenues:

Override revenue

  1,085      1,659      4,601      10,372   

Transportation and processing fees

  5,366      5,509      22,048      22,519   

Minimums recognized as revenue

  2,455      915      6,659      6,528   

Reserve swap

  —        —        5,690      8,149   

DOH - Coal Property Sale

  —        10,370      —        10,370   

Coal Bonus

  98      —        98      —     

Wheelage

  776      799      3,442      3,593   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other coal related revenues

$ 9,780    $ 19,252    $ 42,538    $ 61,531   
  

 

 

    

 

 

    

 

 

    

 

 

 

    

  

 

 

    

 

 

    

 

 

    

 

 

 

Total coal related revenues

$ 53,797    $ 66,958    $ 226,724    $ 274,194   
  

 

 

    

 

 

    

 

 

    

 

 

 


Page 9 of 16

 

Natural Resource Partners L.P.

Operating Statistics - Aggregates and Industrial Minerals

(in thousands except per ton data)

 

     Quarter Ended      For the Year Ended  
     December 31,
2014
     December 31,
2013
     December 31,
2014
     December 31,
2013
 
     (unaudited)      (unaudited)  

VantaCore

           

Tonnage Sold

     4,281         —           4,281         —     

Revenues

   $ 42,051       $ —         $ 42,051       $ —     

Operating expenses

   $ 32,309       $ —         $ 32,309       $ —     

Aggregates royalty revenues and production

           

Tonnage

     648         1,642         3,492         6,155   

Aggregate royalty revenues

   $ 501       $ 1,774       $ 3,179       $ 7,073   

Other aggregate related revenue

   $ 1,958       $ 2,043       $ 8,894       $ 6,406   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total aggregate related revenues

$ 44,510    $ 3,817    $ 54,124    $ 13,479   
  

 

 

    

 

 

    

 

 

    

 

 

 

Soda ash revenues and distributions

Equity and other unconsolidated investment earnings

$ 12,551    $ 12,018    $ 41,416    $ 34,186   

Cash distributions received from OCI Wyoming

$ 10,780    $ —      $ 46,638    $ 72,946   


Page 10 of 16

 

Natural Resource Partners L.P.

Operating Statistics - Oil and Gas

($ in thousands)

 

     Quarter Ended      Year Ended  
     December 31,
2014
     December 31,
2013
     December 31,
2014
     December 31,
2013
 
     (unaudited)      (unaudited)  

Williston Basin non-operated working interests

           

Production volumes

           

Oil (MBbls)

     295         N/A         578         N/A   

Natural gas (Mcf)

     207         N/A         408         N/A   

NGL (MBoe)

     33         N/A         53         N/A   

Average sales price per unit

           

Oil ($/Bbl)

   $ 63.17         N/A       $ 77.85         N/A   

Natural gas ($/Mcf)

   $ 3.64         N/A       $ 5.04         N/A   

NGL ($/Boe)

   $ 26.42         N/A       $ 33.64         N/A   

Revenues

           

Oil

   $ 18,635         N/A       $ 44,995         N/A   

Natural gas

   $ 753         N/A       $ 2,056         N/A   

NGL

   $ 872         N/A       $ 1,783         N/A   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

$ 20,260      N/A    $ 48,834      N/A   

Other oil and gas related revenues

Royalty and overriding revenues

$ 1,825      N/A    $ 10,732      N/A   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total oil and gas revenues

$ 22,085    $ 7,338    $ 59,566    $ 17,080   
  

 

 

    

 

 

    

 

 

    

 

 

 


Page 11 of 16

 

Natural Resource Partners L.P.

Consolidated Statements of Comprehensive Income

(in thousands, except per unit data)

 

     Quarter Ended     For the Year Ended  
     December 31,
2014
    December 31,
2013
    December 31,
2014
    December 31,
2013
 
     (unaudited)     (unaudited)        

Revenues and other income:

        

Coal related revenues

   $ 53,797      $ 66,958      $ 226,724      $ 274,194   

Aggregate related revenues

     44,510        3,817        54,124        13,479   

Oil and gas related revenues

     22,085        7,338        59,566        17,080   

Equity and other unconsolidated investment income

     12,551        12,018        41,416        34,186   

Property taxes

     2,744        3,611        13,609        15,416   

Other

     1,586        1,002        4,313        3,762   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues and other income

  137,273      94,744      399,752      358,117   

Operating expenses:

Depreciation, depletion and amortization

  30,258      14,352      79,876      64,377   

Asset impairments

  20,585      —        26,209      734   

General and administrative

  13,887      9,052      36,437      36,821   

Property, franchise and other taxes

  5,443      3,653      21,279      16,463   

Oil and gas lease operating expenses

  2,785      256      9,144      739   

Aggregate operating expenses

  32,309      —        32,309      —     

Transportation costs

  366      402      1,604      1,644   

Royalty payments

  590      277      3,975      1,103   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  106,223      27,992      210,833      121,881   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

  31,050      66,752      188,919      236,236   

Other income (expense)

  —     

Interest expense

  (22,426   (19,777   (80,185   (64,396

Interest income

  21      6      96      238   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

$ 8,645    $ 46,981    $ 108,830    $ 172,078   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to:

General partner

$ 173    $ 940    $ 2,177    $ 3,442   
  

 

 

   

 

 

   

 

 

   

 

 

 

Limited partners

$ 8,472    $ 46,041    $ 106,653    $ 168,636   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net income per limited partner unit:

$ 0.07    $ 0.42    $ 0.94    $ 1.54   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of units outstanding:

  121,449      109,812      113,262      109,584   
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

$ 8,458    $ 46,900    $ 108,749    $ 172,143   
  

 

 

   

 

 

   

 

 

   

 

 

 


Page 12 of 16

 

Natural Resource Partners L.P.

Consolidated Statements of Cash Flow

(in thousands, except per unit data)

 

     Quarter Ended     For the Year Ended  
     December 31,
2014
    December 31,
2013
    December 31,
2014
    December 31,
2013
 
     (unaudited)     (unaudited)        

Cash flows from operating activities:

        

Net income

   $ 8,645      $ 46,981      $ 108,830      $ 172,078   

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation, depletion and amortization

     30,258        14,352        79,876        64,377   

Gain on reserve swap

     —          —          (5,690     (8,149

Equity and other unconsolidated investment income

     (12,551     (12,018     (41,416     (34,186

Distributions of earnings from unconsolidated investments

     10,780        —          43,005        24,113   

Non-cash interest charge, net

     1,183        746        3,328        2,200   

Gain on sale of assets

     (1,383     (10,370     (1,386     (10,921

Asset impairment

     20,585        —          26,209        734   

Change in operating assets and liabilities:

        

Inventory

     748        —          748        —     

Accounts receivable

     (3,151     (2,651     (10,693     6,826   

Other assets

     (1,545     (1,380     (795     (516

Accounts payable and accrued liabilities

     (6,034     1,405        (4,411     2,197   

Accrued interest

     (2,160     9,517        1,032        6,919   

Deferred revenue

     6,329        5,909        17,674        19,240   

Accrued incentive plan expenses

     180        2,364        (5,265     2,284   

Property, franchise and other taxes payable

     1,775        2,704        (291     (122
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities:

  53,659      57,559      210,755      247,074   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

Acquisition of plant and equipment

  (2,247   —        (2,454   —     

Acquisition of land, coal, other mineral rights, and related intangibles

  (339,000   (33,697   (339,768   (72,000

Acquisition of equity interests

  —        (8   —        (293,085

Acquisition of aggregate operations

  (168,978   —        (168,978   —     

Oil and gas capital expenditures

  (2,991   —        (16,258   —     

Return on unconsolidated equity investments

  —        —        3,633      48,833   

Proceeds from sale of assets

  1,413      10,370      1,418      10,929   

Return on direct financing lease and contractual override

  994      1,717      1,904      2,558   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

  (510,809   (21,618   (520,503   (302,765
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

Proceeds from loans

  635,375      20,000      637,375      567,020   

Repayment of loans

  (258,808   —        (327,983   (386,230

Deferred financing costs

  (5,094   (148   (5,094   (9,209

Proceeds from issuance of common units

  102,376      —        127,202      75,000   

Capital contribution by general partner

  2,733      —        3,240      1,531   

Costs associated with equity transactions

  (3,812   (233   (4,413   (293

Distributions to partners

  (43,670   (62,722   (163,016   (249,039
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

  429,100      (43,103   267,311      (1,220
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

  (28,050   (7,162   (42,437   (56,911

Cash and cash equivalents at beginning of period

  78,126      99,675      92,513      149,424   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

$ 50,076    $ 92,513    $ 50,076    $ 92,513   
  

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental cash flow information:

Cash paid during the period for interest

$ 23,889    $ 9,475    $ 76,155    $ 55,191   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-cash activities:

Units issued for aggregate operations

$ 31,604    $ —      $ 31,604    $ —     

Non-cash contingent consideration on equity investments

$ —      $ 15,000    $ —      $ 15,000   


Page 13 of 16

 

Natural Resource Partners L.P.

Consolidated Balance Sheets

(in thousands, except for unit information)

 

 

     December 31
2014
    December 31,
2013
 
     (unaudited)        
ASSETS   

Current assets:

    

Cash and cash equivalents

   $ 50,076      $ 92,513   

Accounts receivable, net of allowance for doubtful accounts

     66,455        33,737   

Accounts receivable - affiliates

     9,494        7,666   

Inventory

     5,814        —     

Other

     4,279        1,691   
  

 

 

   

 

 

 

Total current assets

  136,118      135,607   

Land

  25,243      24,340   

Plant and equipment, net

  60,093      26,435   

Mineral rights, net

  1,781,896      1,405,455   

Intangible assets, net

  60,689      66,950   

Goodwill

  52,012      —     

Equity and other unconsolidated investments

  264,020      269,338   

Loan financing costs, net

  13,905      11,502   

Long-term contracts receivable - affiliate

  50,008      51,732   

Other assets

  740      497   
  

 

 

   

 

 

 

Total assets

$ 2,444,724    $ 1,991,856   
  

 

 

   

 

 

 
LIABILITIES AND PARTNERS’ CAPITAL   

Current liabilities:

Accounts payable and accrued liabilities

$ 32,416    $ 8,659   

Accounts payable - affiliates

  950      391   

Current portion of long-term debt

  80,983      80,983   

Accrued incentive plan expenses - current portion

  7,048      8,341   

Property, franchise and other taxes payable

  8,318      7,830   

Accrued interest

  18,216      17,184   
  

 

 

   

 

 

 

Total current liabilities

  147,931      123,388   

Deferred revenue

  160,260      142,586   

Accrued incentive plan expenses

  6,554      10,526   

Asset retirement obligation

  4,905      —     

Other non-current liabilities

  10,679      14,341   

Long-term debt

  1,394,240      1,084,226   

Partners’ capital:

Common units outstanding ( 122,299,825 and 109,812,408)

  709,018      606,774   

General partner’s interest

  12,246      10,069   

Non-controlling interest

  (650   324   

Accumulated other comprehensive loss

  (459   (378
  

 

 

   

 

 

 

Total partners’ capital

  720,155      616,789   
  

 

 

   

 

 

 

Total liabilities and partners’ capital

$ 2,444,724    $ 1,991,856   
  

 

 

   

 

 

 


Page 14 of 16

 

Natural Resource Partners L.P.

Reconciliation of GAAP Financial Measures

to Non-GAAP Financial Measures

(in thousands)

Reconciliation of GAAP “Net cash provided by operating activities”

to Non-GAAP “Distributable cash flow”

 

     Quarter Ended      For the Year Ended  
     December 31,
2014
     December 31,
2013
     December 31,
2014
     December 31,
2013
 
     (unaudited)      (unaudited)  

Net cash provided by operating activities

   $ 53,659       $ 57,559       $ 210,755       $ 247,074   

Return on direct financing lease and contractual override

     994         1,717         1,904         2,558   

Return on unconsolidated equity investments

     —           —           3,633         48,833   

Proceeds from sale of assets

     1,413         10,370         1,418         10,929   
  

 

 

    

 

 

    

 

 

    

 

 

 

Distributable cash flow

$ 56,066    $ 69,646    $ 217,710    $ 309,394   
  

 

 

    

 

 

    

 

 

    

 

 

 

Reconciliation of GAAP “Net cash provided by operating activities”

to Non-GAAP “Distributable cash flow”

 

     Quarter Ended  
     December 31,
2014
     September 30,
2014
 
     (unaudited)  

Net cash provided by operating activities

   $ 53,659       $ 57,458   

Return on direct financing lease and contractual override

     994         310   

Return on unconsolidated equity investments

     —           —     

Proceeds from sale of assets

     1,413         5   
  

 

 

    

 

 

 

Distributable cash flow

$ 56,066    $ 57,773   
  

 

 

    

 

 

 


Page 15 of 16

 

Natural Resource Partners L.P.

Reconciliation of GAAP Financial Measures

to Non-GAAP Financial Measures

(in thousands)

Reconciliation of GAAP “Net income”

to Non-GAAP “Adjusted EBITDA”

 

     Quarter Ended     For the Year Ended  
     December 31,
2014
    December 31,
2013
    December 31,
2014
    December 31,
2013
 
     (unaudited)     (unaudited)  

Net income

   $ 8,645      $ 46,981      $ 108,830      $ 172,078   

Less: Equity and other unconsolidated investment income

     (12,551     (12,018     (41,416     (34,186

Add: Distributions from unconsolidated affiliates

     10,780        —          46,638        72,946   

Add depreciation, depletion and amortization

     30,258        14,352        79,876        64,377   

Add asset impairments

     20,585        —          26,209        734   

Add interest expense, gross

     22,426        19,777        80,185        64,396   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

$ 80,143    $ 69,092    $ 300,322    $ 340,345   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP “Net income”

to Non-GAAP “Adjusted EBITDA”

 

     Quarter Ended  
     December 31,
2014
    September 30,
2014
 
     (unaudited)  

Net income

   $ 8,645      $ 36,173   

Less: Equity and other unconsolidated investment income

     (12,551     (9,685

Add: Distributions from unconsolidated affiliates

     10,780        10,290   

Add depreciation, depletion and amortization

     30,258        18,621   

Add asset impairments

     20,585        —     

Add interest expense, gross

     22,426        18,862   
  

 

 

   

 

 

 

Adjusted EBITDA

$ 80,143    $ 74,261   
  

 

 

   

 

 

 


  Page 16 of 16

 

Reconciliation of GAAP “Total operating costs and expenses”

to Non-GAAP “Total operating expenses before considering any impairments”

 

     Quarter Ended      For the Year Ended  
     September 30,
2014
     December 31,
2014
    December 31,
2013
     December 31,
2014
    December 31,
2013
 
     (unaudited)      (unaudited)  

Operating expenses

            

Total operating expenses as reported

   $ 36,582       $ 106,223      $ 27,992       $ 210,833      $ 121,881   

Impairments

   $ —         $ (20,585   $ —         $ (26,209   $ (734

Total operating costs before considering any impairments

   $ 36,582       $ 85,638      $ 27,992       $ 184,624      $ 121,147   

Reconciliation of GAAP “Net income attributable to the limited partners”

to Non-GAAP “Net income attributable to the limited partners before considering any impairments”

 

     Quarter Ended      For the Year Ended  
     September
2014
     December
2014
     December
2013
     December
2014
     December
2013
 
     (unaudited)      (unaudited)  

Net income attributable to the limited partners

              

Net income as reported

   $ 36,173       $ 8,645       $ 46,981       $ 108,830       $ 172,078   

Impairments

     —           20,585         —         $ 26,209       $ 734   

Net income before considering any impairments

   $ 36,173       $ 29,230       $ 46,981       $ 135,039       $ 172,812   

Net income, before considering any impairments, attributable to:

              

General partner

   $ 723       $ 585       $ 940       $ 2,701       $ 3,456   

Limited partners

   $ 35,450       $ 28,645       $ 46,041       $ 132,338       $ 169,356   

Reconciliation of GAAP “Basic and diluted net income per unit”

to Non-GAAP “Net income per unit before considering any impairments”

 

     Quarter Ended      For the Year Ended  
     September
2014
     December
2014
     December
2013
     December
2014
    December
2013
 
     (unaudited)      (unaudited)  

Net income per unit

                 

Net income per unit as reported

   $ 0.32       $ 0.07       $ 0.42       $ 0.94      $ 1.54   

Adjustment for impairments

     —           0.17         —           0.23        0.01   

Net income per limited partner unit, before considering any impairments

   $ 0.32       $ 0.24       $ 0.42       $ 1.17      $ 1.55   

Weighted number of units outstanding

     111,244         121,449         109,812         113,262        109,584   

 

* Numbers may not add due to rounding

-end-