Attached files
| file | filename |
|---|---|
| 8-K - 8-K - NATURAL RESOURCE PARTNERS LP | a2016form8-kogassetproform.htm |
EXHIBIT 99.1
NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
On July 28, 2016, NRP Oil and Gas LLC ("NRP Oil and Gas"), a wholly owned subsidiary of Natural Resource Partners L.P. (“NRP" or the "Partnership"), closed on the sale of its non-operated oil and gas working interest assets to Lime Rock Resources IV-A, L.P. ("Lime Rock") for $116.1 million, subject to certain post-closing purchase price adjustments. This sale had an effective date of April 1, 2016.
The unaudited consolidated pro forma financial statements presented in this exhibit are based on the Partnership's historical financial statements and are being presented to give effect to this sale of assets to Lime Rock. The unaudited pro forma consolidated balance sheet reflects the sale as if it occurred on March 31, 2016. The unaudited consolidated pro forma statements of income give effect to the sale as if it occurred on January 1, 2013, the beginning of the earliest period presented.
The unaudited pro forma consolidated financial statements, including notes thereto, should be read in conjunction with the Partnership's audited consolidated financial statements and notes thereto for the year ended December 31, 2015, contained in its Annual Report on Form 10-K, as well as in conjunction with the Partnership's unaudited consolidated financial statements and notes thereto for the three months ended March 31, 2016 contained in its Quarterly Report on Form 10-Q.
The pro forma adjustments, described in the related notes, are based on upon presently available information and assumptions that management believes are reasonable under the circumstances as of the date of this filing. Actual adjustments may differ materially from the information presented.The unaudited pro forma consolidated financial information presented is for informational purposes only, and do not reflect what the Partnership's financial position and results of operations would have been had the sale occurred on the dates indicated and these statements are not indicative of the Partnership's future financial position and future results of operations.
i
NATURAL RESOURCE PARTNERS L.P.
TABLE OF CONTENTS
Page | |
ii
NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2016
(In thousands)
Historical | Reclassification Adjustments (1) | Pro Forma Adjustments (2) | Pro Foma | ||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 52,097 | $ | — | $ | 40,632 | (a) | $ | 92,729 | ||||||
Accounts receivable, net | 48,154 | — | — | 48,154 | |||||||||||
Accounts receivable—affiliates | 7,525 | — | 7,525 | ||||||||||||
Inventory | 7,406 | — | — | 7,406 | |||||||||||
Prepaid expenses and other | 3,835 | — | — | 3,835 | |||||||||||
Total current assets | 119,017 | — | 40,632 | 159,649 | |||||||||||
Land | 25,022 | — | 25,022 | ||||||||||||
Plant and equipment, net | 57,444 | — | — | 57,444 | |||||||||||
Mineral rights, net | 1,060,829 | — | (107,150 | ) | (b) | 953,679 | |||||||||
Intangible assets, net | 3,701 | — | — | 3,701 | |||||||||||
Intangible assets, net—affiliate | 52,274 | — | — | 52,274 | |||||||||||
Equity in unconsolidated investment | 258,939 | — | — | 258,939 | |||||||||||
Long-term contracts receivable—affiliate | 45,931 | — | — | 45,931 | |||||||||||
Other assets | 1,204 | — | — | 1,204 | |||||||||||
Other assets—affiliate | 532 | — | — | 532 | |||||||||||
Total assets | $ | 1,624,893 | $ | — | $ | (66,518 | ) | $ | 1,558,375 | ||||||
LIABILITIES AND CAPITAL | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable | $ | 7,595 | $ | — | $ | — | $ | 7,595 | |||||||
Accounts payable—affiliates | 1,227 | — | — | 1,227 | |||||||||||
Accrued liabilities | 40,004 | (913 | ) | (257 | ) | (c) | 38,834 | ||||||||
Accrued liabilities—affiliates | — | 913 | — | 913 | |||||||||||
Current portion of long-term debt, net | 154,441 | — | (73,696 | ) | (d) | 80,745 | |||||||||
Total current liabilities | 203,267 | — | (73,953 | ) | 129,314 | ||||||||||
Deferred revenue | 76,750 | — | — | 76,750 | |||||||||||
Deferred revenue—affiliates | 81,868 | — | — | 81,868 | |||||||||||
Long-term debt, net | 1,146,958 | — | — | 1,146,958 | |||||||||||
Long-term debt, net—affiliate | 19,936 | — | — | 19,936 | |||||||||||
Other non-current liabilities | 5,839 | — | (1,637 | ) | (e) | 4,202 | |||||||||
Commitments and contingencies | |||||||||||||||
Partners’ capital: | |||||||||||||||
Common unitholders’ interest (12.2 million units outstanding) | 96,615 | — | 8,891 | (f) | 105,506 | ||||||||||
General partner’s interest | (249 | ) | — | 181 | (f) | (68 | ) | ||||||||
Accumulated other comprehensive loss | (2,697 | ) | — | — | (2,697 | ) | |||||||||
Total partners’ capital | 93,669 | — | 9,072 | 102,741 | |||||||||||
Non-controlling interest | (3,394 | ) | — | — | (3,394 | ) | |||||||||
Total capital | 90,275 | — | 9,072 | 99,347 | |||||||||||
Total liabilities and capital | $ | 1,624,893 | $ | — | $ | (66,518 | ) | $ | 1,558,375 | ||||||
See accompanying notes to unaudited pro forma consolidated financial statements
1
NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF NET INCOME
THREE MONTHS ENDED MARCH 31, 2016
(In thousands, except per unit data)
Historical | Reclassification Adjustments (1) | Pro Forma Adjustments (2) | Pro Foma | ||||||||||||
Revenues and other income: | |||||||||||||||
Coal, hard mineral royalty and other | $ | 28,476 | $ | — | $ | — | $ | 28,476 | |||||||
Coal, hard mineral royalty and other—affiliates | 10,569 | — | — | 10,569 | |||||||||||
VantaCore | 24,682 | — | — | 24,682 | |||||||||||
Oil and gas | 7,298 | — | (6,925 | ) | (g) | 373 | |||||||||
Equity in earnings of Ciner Wyoming | 9,801 | — | — | 9,801 | |||||||||||
Gain on asset sales | 21,925 | — | — | 21,925 | |||||||||||
Total revenues and other income | 102,751 | — | (6,925 | ) | 95,826 | ||||||||||
Operating expenses: | |||||||||||||||
Operating and maintenance expenses | 30,902 | — | (4,117 | ) | (g) | 26,785 | |||||||||
Operating and maintenance expenses—affiliates, net | 3,748 | — | (264 | ) | (g) | 3,484 | |||||||||
Depreciation, depletion and amortization | 14,021 | — | (4,241 | ) | (g) | 9,780 | |||||||||
Amortization expense—affiliate | 722 | — | — | 722 | |||||||||||
General and administrative | 3,235 | — | — | 3,235 | |||||||||||
General and administrative—affiliates | 937 | — | — | 937 | |||||||||||
Asset impairments | 2,030 | — | (137 | ) | (g) | 1,893 | |||||||||
Total operating expenses | 55,595 | — | (8,759 | ) | 46,836 | ||||||||||
Income from operations | 47,156 | — | 1,834 | 48,990 | |||||||||||
Other income (expense) | |||||||||||||||
Interest expense | (23,748 | ) | 462 | 1,090 | (g) | (22,196 | ) | ||||||||
Interest expense—affiliate | — | (462 | ) | — | (462 | ) | |||||||||
Interest income | 19 | — | — | 19 | |||||||||||
Other expense, net | (23,729 | ) | — | 1,090 | (22,639 | ) | |||||||||
Net income | $ | 23,427 | $ | — | $ | 2,924 | $ | 26,351 | |||||||
Net income attributable to partners: | |||||||||||||||
Limited partners | 23,024 | 25,890 | |||||||||||||
General partner | 403 | 461 | |||||||||||||
Basic and diluted net income per common unit | $ | 1.88 | $ | 2.12 | |||||||||||
Weighted average number of common units outstanding | 12,232 | 12,232 | |||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements
2
NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF NET INCOME
YEAR ENDED DECEMBER 31, 2015
(In thousands, except per unit data)
Historical | Reclassification Adjustments (1) | Pro Forma Adjustments (2) | Pro Foma | ||||||||||||
Revenues and other income: | |||||||||||||||
Coal, hard mineral royalty and other | $ | 156,638 | $ | — | $ | — | $ | 156,638 | |||||||
Coal, hard mineral royalty and other—affiliates | 89,715 | — | — | 89,715 | |||||||||||
VantaCore | 139,013 | — | — | 139,013 | |||||||||||
Oil and gas | 53,565 | — | (49,201 | ) | (g) | 4,364 | |||||||||
Equity in earnings of Ciner Wyoming | 49,918 | — | — | 49,918 | |||||||||||
Total revenues and other income | 488,849 | — | (49,201 | ) | 439,648 | ||||||||||
Operating expenses: | |||||||||||||||
Operating and maintenance expenses | 155,959 | — | (19,016 | ) | (g) | 136,943 | |||||||||
Operating and maintenance expenses—affiliates, net | 16,031 | — | (708 | ) | (g) | 15,323 | |||||||||
Depreciation, depletion and amortization | 100,828 | (3,621 | ) | (39,912 | ) | (g) | 57,295 | ||||||||
Amortization expense—affiliate | — | 3,621 | — | 3,621 | |||||||||||
General and administrative | 7,036 | — | — | 7,036 | |||||||||||
General and administrative—affiliates | 5,312 | — | — | 5,312 | |||||||||||
Asset impairments | 681,594 | — | (297,049 | ) | (g) | 384,545 | |||||||||
Total operating expenses | 966,760 | — | (356,685 | ) | 610,075 | ||||||||||
Income from operations | (477,911 | ) | — | 307,484 | (170,427 | ) | |||||||||
Other income (expense) | |||||||||||||||
Interest expense | (93,827 | ) | 1,851 | 4,065 | (g) | (87,911 | ) | ||||||||
Interest expense—affiliate | — | (1,851 | ) | — | (1,851 | ) | |||||||||
Interest income | 18 | — | — | 18 | |||||||||||
Other expense, net | (93,809 | ) | — | 4,065 | (89,744 | ) | |||||||||
Net income (loss) | $ | (571,720 | ) | $ | — | $ | 311,549 | $ | (260,171 | ) | |||||
Net income (loss) attributable to partners: | |||||||||||||||
Limited partners | (559,492 | ) | (254,173 | ) | |||||||||||
General partner | (12,228 | ) | (5,998 | ) | |||||||||||
Basic and diluted net income (loss) per common unit | $ | (45.75 | ) | $ | (20.78 | ) | |||||||||
Weighted average number of common units outstanding | 12,232 | 12,232 | |||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements
3
NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF NET INCOME
YEAR ENDED DECEMBER 31, 2014
(In thousands, except per unit data)
Historical | Reclassification Adjustments (1) | Pro Forma Adjustments (2) | Pro Foma | ||||||||||||
Revenues and other income: | |||||||||||||||
Coal, hard mineral royalty and other | $ | 172,160 | $ | — | $ | — | $ | 172,160 | |||||||
Coal, hard mineral royalty and other—affiliates | 84,559 | — | — | 84,559 | |||||||||||
VantaCore | 42,051 | — | — | 42,051 | |||||||||||
Oil and gas | 59,566 | — | (48,834 | ) | (g) | 10,732 | |||||||||
Equity in earnings of Ciner Wyoming | 41,416 | — | — | 41,416 | |||||||||||
Total revenues and other income | 399,752 | — | (48,834 | ) | 350,918 | ||||||||||
Operating expenses: | |||||||||||||||
Operating and maintenance expenses | 83,433 | — | (17,500 | ) | (g) | 65,933 | |||||||||
Operating and maintenance expenses—affiliates, net | 10,770 | — | (573 | ) | (g) | 10,197 | |||||||||
Depreciation, depletion and amortization | 79,876 | (3,308 | ) | (17,982 | ) | (g) | 58,586 | ||||||||
Amortization expense—affiliate | — | 3,308 | — | 3,308 | |||||||||||
General and administrative | 7,287 | — | — | 7,287 | |||||||||||
General and administrative—affiliates | 3,258 | — | — | 3,258 | |||||||||||
Asset impairments | 26,209 | — | — | 26,209 | |||||||||||
Total operating expenses | 210,833 | — | (36,055 | ) | 174,778 | ||||||||||
Income from operations | 188,919 | — | (12,779 | ) | 176,140 | ||||||||||
Other income (expense) | |||||||||||||||
Interest expense | (80,185 | ) | 379 | 662 | (g) | (79,144 | ) | ||||||||
Interest expense—affiliate | — | (379 | ) | — | (379 | ) | |||||||||
Interest income | 96 | — | — | 96 | |||||||||||
Other expense, net | (80,089 | ) | — | 662 | (79,427 | ) | |||||||||
Net income (loss) | $ | 108,830 | $ | — | $ | (12,117 | ) | $ | 96,713 | ||||||
Net income (loss) attributable to partners: | |||||||||||||||
Limited partners | 106,653 | 94,779 | |||||||||||||
General partner | 2,177 | 1,934 | |||||||||||||
Basic and diluted net income (loss) per common unit | $ | 9.42 | $ | 8.37 | |||||||||||
Weighted average number of common units outstanding | 11,326 | 11,326 | |||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements
4
NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF NET INCOME
YEAR ENDED DECEMBER 31, 2013
(In thousands, except per unit data)
Historical | Reclassification Adjustments (1) | Pro Forma Adjustments (2) | Pro Foma | ||||||||||||
Revenues and other income: | |||||||||||||||
Coal, hard mineral royalty and other | $ | 213,825 | $ | — | $ | — | $ | 213,825 | |||||||
Coal, hard mineral royalty and other—affiliates | 93,026 | — | — | 93,026 | |||||||||||
VantaCore | — | — | — | — | |||||||||||
Oil and gas | 17,080 | — | (5,378 | ) | (g) | 11,702 | |||||||||
Equity in earnings of Ciner Wyoming | 34,186 | — | — | 34,186 | |||||||||||
Total revenues and other income | 358,117 | — | (5,378 | ) | 352,739 | ||||||||||
Operating expenses: | |||||||||||||||
Operating and maintenance expenses | 33,211 | — | (1,616 | ) | (g) | 31,595 | |||||||||
Operating and maintenance expenses—affiliates, net | 8,821 | — | (256 | ) | (g) | 8,565 | |||||||||
Depreciation, depletion and amortization | 64,377 | (3,667 | ) | (1,010 | ) | (g) | 59,700 | ||||||||
Amortization expense—affiliate | — | 3,667 | — | 3,667 | |||||||||||
General and administrative | 11,452 | — | — | 11,452 | |||||||||||
General and administrative—affiliates | 3,286 | — | — | 3,286 | |||||||||||
Asset impairments | 734 | — | — | 734 | |||||||||||
Total operating expenses | 121,881 | — | (2,882 | ) | 118,999 | ||||||||||
Income from operations | 236,236 | — | (2,496 | ) | 233,740 | ||||||||||
Other income (expense) | |||||||||||||||
Interest expense | (64,396 | ) | — | 39 | (g) | (64,357 | ) | ||||||||
Interest income | 238 | — | — | 238 | |||||||||||
Other expense, net | (64,158 | ) | — | 39 | (64,119 | ) | |||||||||
Net income (loss) | $ | 172,078 | $ | — | $ | (2,457 | ) | $ | 169,621 | ||||||
Net income (loss) attributable to partners: | |||||||||||||||
Limited partners | 168,636 | 166,229 | |||||||||||||
General partner | 3,442 | 3,392 | |||||||||||||
Basic and diluted net income (loss) per common unit | $ | 15.39 | $ | 15.17 | |||||||||||
Weighted average number of common units outstanding | 10,958 | 10,958 | |||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements
5
NATURAL RESOURCE PARTNERS L.P.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The historical information for Natural Resource Partners L.P. (the "Partnership" or "NRP") is derived from the historical financial statements of the Partnership. The unaudited pro forma consolidated balance sheet as of March 31, 2016 is presented to illustrate the estimated effects of selling the Partnership's non-operated oil and gas working interest assets to Lime Rock Resources IV-A, L.P. ("Lime Rock") as if the transaction had occurred on March 31, 2016. The unaudited pro forma consolidated statements of income are presented for the three months ended March 31, 2016 and for the years ended December 31, 2015, 2014 and 2013 as if the sale transaction had occurred at January 1, 2013, the beginning of the earliest period presented.
The pro forma adjustments are based on available information and assumptions management believes are factually supportable and for income statement purposes are recurring in nature. The pro forma adjustments to reflect the sale of the Partnership's non-operated oil and gas working interest assets to Lime Rock include:
• | the associated assets, liabilities, revenue and expenses associated with the assets sold to Lime Rock; |
• | collection of anticipated cash proceeds in the unaudited pro forma consolidated balance sheet as if the sale had occurred on March 31, 2016, net of transaction fees; and |
• | the costs of effecting the sale of assets to Lime Rock that are factually supportable (primarily legal and lender fees). |
Note 2. Adjustments to Pro Forma Financial Statements
(1) | Reclassification adjustments reflect prior period amounts that have been reclassified to conform to the current period presentation. The reclassifications had no impact on the Partnership’s overall consolidated financial statements. | |
(2) | The following pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change: | |
(a) | Reflects $116.1 million of gross sales proceeds less $75.0 million cash used to pay off the NRP Oil and Gas RBL Facility in full and less $0.5 million cash used to pay accrued interest on the RBL Facility, legal costs and lender fees directly related to the sale transaction. | |
(b) | Reflects the assets to be acquired by Lime Rock. | |
(c) | Reflects accrued interest related to the RBL Facility paid using a portion of the proceeds from the asset sale as well as removal of short-term asset retirement obligations assumed by Lime Rock. | |
(d) | Reflects the payment in full of the NRP Oil and Gas RBL Facility using a portion of asset sale proceeds, partially offset by the write off of the associated debt issuance costs. The RBL Facility was secured by a first priority lien and security interest in the non operated oil and gas working interest assets and NRP Oil and Gas was required to use the net proceeds of any asset sale to repay the RBL Facility. | |
(e) | Reflects removal of long-term asset retirement obligations assumed by Lime Rock. | |
(f) | Reflects the estimated net gain on asset sale had the transaction closed on March 31, 2016. | |
(g) | Reflects the removal of revenue and costs directly associated with the non-operated oil and gas working interests assets sold to Lime Rock. | |
6