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| 8-K - 8-K - NATURAL RESOURCE PARTNERS LP | a2018form8-k1stquarterer.htm |
Exhibit 99.1
Natural Resource Partners L.P.
1201 Louisiana St., Suite 3400, Houston, TX 77002
NEWS RELEASE
Natural Resource Partners L.P.
Announces First Quarter 2018 Results
HOUSTON, May 9, 2018 - Natural Resource Partners L.P. (NYSE:NRP) today reported first quarter of 2018 results as follows:
Three Months Ended March 31, | Increase (Decrease) | Percentage Change | ||||||||||||
(In thousands, except per unit data) | 2018 | 2017 | ||||||||||||
Net income from continuing operations | $ | 26,088 | $ | 6,111 | $ | 19,977 | 327 | % | ||||||
Net income | 26,074 | 5,904 | 20,170 | 342 | % | |||||||||
Net income attributable to common unitholders and general partner | 18,574 | 3,404 | 15,170 | 446 | % | |||||||||
Basic net income per common unit | 1.49 | 0.28 | 1.21 | 432 | % | |||||||||
Diluted net income per common unit | 1.15 | 0.28 | 0.87 | 311 | % | |||||||||
Adjusted EBITDA (1) | 54,886 | 51,285 | 3,601 | 7 | % | |||||||||
Net cash provided by operating activities of continuing operations | 20,211 | 20,489 | (278 | ) | (1 | )% | ||||||||
Net cash used in investing activities of continuing operations | (173 | ) | (2,068 | ) | 1,895 | 92 | % | |||||||
Net cash provided by (used in) financing activities of continuing operations | (28,713 | ) | 54,153 | (82,866 | ) | (153 | )% | |||||||
Distributable Cash Flow (1) | 20,845 | 18,547 | 2,298 | 12 | % | |||||||||
Free Cash Flow (1) | 19,302 | 18,712 | 590 | 3 | % | |||||||||
Craig Nunez, President and Chief Operating Officer, commented: "We delivered solid operating performance and continued to generate significant amounts of cash during the first quarter. As our leverage profile continues to improve, we remain focused on maximizing cash generation, strengthening our balance sheet and increasing our liquidity."
At the end of the first quarter of 2018, NRP had liquidity of $76.2 million, consisting of $21.2 million in cash and $55.0 million of borrowing capacity available under its credit facility. NRP's consolidated Debt-to-Adjusted EBITDA ratio at March 31, 2018 was 3.5x.
NRP continues to focus on reducing its debt while maintaining sufficient liquidity to operate its business. NRP's goal is to achieve a leverage ratio, defined as Debt-to-Adjusted 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 first quarter of 2018, NRP declared a cash distribution of $0.45 per common unit and a distribution of $7.5 million in cash on NRP’s preferred units. NRP's distribution coverage ratio over the last twelve months was 6.0x before taking into account the $30 million annual distribution on NRP's preferred units, and 4.6x after taking into account the preferred unit distribution.
(1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
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Segment Information
Coal Royalty and Other
Three Months Ended March 31, | Increase (Decrease) | Percentage Change | ||||||||||||
(In thousands) | 2018 | 2017 | ||||||||||||
Net income | $ | 40,728 | $ | 35,094 | $ | 5,634 | 16 | % | ||||||
Adjusted EBITDA (1) | 46,070 | 43,845 | 2,225 | 5 | % | |||||||||
Net cash provided by operating activities of continuing operations | 38,793 | 37,932 | 861 | 2 | % | |||||||||
Net cash provided by investing activities of continuing operations | 1,143 | 6 | 1,137 | 18,950 | % | |||||||||
Net cash provided by financing activities of continuing operations | — | 16 | (16 | ) | (100 | )% | ||||||||
Distributable Cash Flow (1) | 39,936 | 37,937 | 1,999 | 5 | % | |||||||||
Free Cash Flow (1) | 39,280 | 38,346 | 934 | 2 | % | |||||||||
(1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Net income from the Coal Royalty and Other segment increased primarily due to lower depletion expense as a result of lower production and prior year asset impairment. Overall coal related revenues were essentially flat, as the impact of lower production was offset by higher coal prices. Distributable cash flow increased during the period primarily as a result of increased cash flow from our natural gas royalty properties.
Soda Ash
Three Months Ended March 31, | Increase (Decrease) | Percentage Change | ||||||||||||
(In thousands) | 2018 | 2017 | ||||||||||||
Net income | $ | 9,621 | $ | 10,294 | $ | (673 | ) | (7 | )% | |||||
Adjusted EBITDA (1) | 12,250 | 12,250 | — | — | % | |||||||||
Net cash provided by operating activities of continuing operations | 10,153 | 12,250 | (2,097 | ) | (17 | )% | ||||||||
Net cash provided by investing activities of continuing operations | 2,097 | — | 2,097 | 100 | % | |||||||||
Distributable Cash Flow (1) | 12,250 | 12,250 | — | — | % | |||||||||
Free Cash Flow (1) | 12,250 | 12,250 | — | — | % | |||||||||
(1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Net income from the Soda Ash segment decreased primarily as a result of lower international sales and higher selling, general and administrative costs.
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Construction Aggregates
Three Months Ended March 31, | Increase (Decrease) | Percentage Change | ||||||||||||
(In thousands) | 2018 | 2017 | ||||||||||||
Net loss | $ | (1,975 | ) | $ | (1,539 | ) | $ | (436 | ) | (28 | )% | |||
Adjusted EBITDA (1) | 902 | 2,375 | (1,473 | ) | (62 | )% | ||||||||
Net cash provided by operating activities of continuing operations | 2,797 | 4,046 | (1,249 | ) | (31 | )% | ||||||||
Net cash used in investing activities of continuing operations | (3,413 | ) | (2,074 | ) | (1,339 | ) | (65 | )% | ||||||
Net cash used in financing activities of continuing operations | (49 | ) | (96 | ) | 47 | 49 | % | |||||||
Distributable Cash Flow (1) | 191 | 2,099 | (1,908 | ) | (91 | )% | ||||||||
Free Cash Flow (1) | (696 | ) | 1,855 | (2,551 | ) | (138 | )% | |||||||
(1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Net loss from the Construction Aggregates segment increased primarily due to unfavorable weather and higher repair and maintenance and fuel costs. Distributable cash flow decreased as a result of these factors as well as increased capital expenditures.
Corporate and Finance
Three Months Ended March 31, | Increase (Decrease) | Percentage Change | ||||||||||||
(In thousands) | 2018 | 2017 | ||||||||||||
Net loss | $ | (22,286 | ) | $ | (37,738 | ) | $ | 15,452 | 41 | % | ||||
Adjusted EBITDA (1) | (4,336 | ) | (7,185 | ) | 2,849 | 40 | % | |||||||
Net cash used in operating activities of continuing operations | (31,532 | ) | (33,739 | ) | 2,207 | 7 | % | |||||||
Net cash provided by (used in) financing activities of continuing operations | (28,664 | ) | 54,233 | (82,897 | ) | (153 | )% | |||||||
Distributable Cash Flow (1) | (31,532 | ) | (33,739 | ) | 2,207 | 7 | % | |||||||
Free Cash Flow (1) | (31,532 | ) | (33,739 | ) | 2,207 | 7 | % | |||||||
(1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Net loss from corporate and financing activities decreased primarily due to prior year debt modification expense and performance based awards related to the completion of our recapitalization transactions in March 2017. In addition, interest expense decreased as a result of debt reduction. Distributable cash flow increased primarily as a result of prior year payment of performance based awards related to the completion of our recapitalization transactions and lower G&A costs, partially offset by the timing of interest payments on NRP's 2022 Senior Notes.
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 55454888. 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 55454888 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.
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Forward-Looking Statements
This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the partnership. These risks include, but are not limited to, commodity prices; decreases in demand for coal, aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; unanticipated geologic problems; our liquidity, leverage and access to capital and financing sources; changes in the legislative or regulatory environment, litigation risk, and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
“Distributable Cash Flow” is a non-GAAP financial measure that we define as net cash provided by operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from sales of assets, including those included in discontinued operations, and return of long-term contract receivables (including affiliate); less maintenance capital expenditures and distributions to non-controlling interest. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, DCF presented below is not calculated or presented on the same basis as Distributable Cash Flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. 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.
“Free Cash Flow” is a non-GAAP financial measure that we define as net cash provided by operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivables (including affiliate); less maintenance and expansion capital expenditures, cash flow used in mitigation payments and acquisition costs classified as financing activities and distributions to non-controlling interest. FCF 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. FCF may not be calculated the same for us as for other companies. FCF 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 EBITDA" is a non-GAAP financial measure that we define as net income (loss) from continuing operations less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income (loss), the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.
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“Adjusted Net Income” is a non-GAAP financial measure that we define as Net income attributable to common unitholders and general partner plus restructuring transaction expenses that include debt modification expense, loss on extinguishment of debt and restructuring-related incentive compensation expense, asset impairments and income (loss) from discontinued operations; less gain on sale of assets. 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 are non-cash charges. Excluding these from net income allows us to better compare results from ongoing operations period-over-period.
-Financial Tables, Reconciliation of Non-GAAP Measures and Recap of Metrics Follow-
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Natural Resource Partners L.P.
Financial Tables
Consolidated Statements of Comprehensive Income | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | December 31, | ||||||||||
(In thousands, except per unit data) | 2018 | 2017 | 2017 | ||||||||
Revenues and other income: | |||||||||||
Coal royalty and other | $ | 45,973 | $ | 34,994 | $ | 47,130 | |||||
Coal royalty and other—affiliates | 237 | 11,505 | 223 | ||||||||
Transportation and processing services | 5,383 | — | 4,793 | ||||||||
Transportation and processing services—affiliates | — | 4,639 | — | ||||||||
Construction aggregates | 26,424 | 25,483 | 30,571 | ||||||||
Road construction and asphalt paving services | 728 | 1,738 | 5,324 | ||||||||
Equity in earnings of Ciner Wyoming | 9,621 | 10,294 | 12,781 | ||||||||
Gain on asset sales, net | 660 | 44 | 280 | ||||||||
Total revenues and other income | $ | 89,026 | $ | 88,697 | $ | 101,102 | |||||
Operating expenses: | |||||||||||
Operating and maintenance expenses | $ | 29,968 | $ | 29,628 | $ | 33,893 | |||||
Operating and maintenance expenses—affiliates, net | 2,465 | 2,555 | 2,606 | ||||||||
Depreciation, depletion and amortization | 7,957 | 9,724 | 8,790 | ||||||||
Amortization expense—affiliate | — | 768 | — | ||||||||
General and administrative | 3,405 | 6,078 | 2,756 | ||||||||
General and administrative—affiliates | 931 | 1,124 | 1,806 | ||||||||
Asset impairments | 242 | 1,778 | 1,253 | ||||||||
Total operating expenses | $ | 44,968 | $ | 51,655 | $ | 51,104 | |||||
Income from operations | $ | 44,058 | $ | 37,042 | $ | 49,998 | |||||
Other income (expense) | |||||||||||
Interest expense | $ | (18,006 | ) | $ | (23,141 | ) | $ | (19,304 | ) | ||
Debt modification expense | — | (7,807 | ) | — | |||||||
Interest income | 36 | 17 | 47 | ||||||||
Other expense, net | $ | (17,970 | ) | $ | (30,931 | ) | $ | (19,257 | ) | ||
Net income from continuing operations | $ | 26,088 | $ | 6,111 | $ | 30,741 | |||||
Loss from discontinued operations | (14 | ) | (207 | ) | (34 | ) | |||||
Net income | $ | 26,074 | $ | 5,904 | $ | 30,707 | |||||
Less: income attributable to preferred unitholders | (7,500 | ) | (2,500 | ) | (7,765 | ) | |||||
Net income attributable to common unitholders and general partner | $ | 18,574 | $ | 3,404 | $ | 22,942 | |||||
Net income attributable to common unitholders | 18,203 | 3,404 | 22,483 | ||||||||
Net income attributable to the general partner | 371 | — | 459 | ||||||||
Income from continuing operations per common unit | |||||||||||
Basic | $ | 1.49 | $ | 0.30 | $ | 1.84 | |||||
Diluted | $ | 1.16 | $ | 0.30 | $ | 1.26 | |||||
Net income per common unit | |||||||||||
Basic | $ | 1.49 | $ | 0.28 | $ | 1.84 | |||||
Diluted | $ | 1.15 | $ | 0.28 | $ | 1.26 | |||||
Net income | $ | 26,074 | $ | 5,904 | $ | 30,707 | |||||
Add: comprehensive loss from unconsolidated investment and other | (1,125 | ) | (1,132 | ) | (234 | ) | |||||
Comprehensive income | $ | 24,949 | $ | 4,772 | $ | 30,473 | |||||
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Natural Resource Partners L.P.
Financial Tables
Consolidated Statements of Cash Flows | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | December 31, | |||||||||||
(In thousands) | 2018 | 2017 | 2017 | |||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 26,074 | $ | 5,904 | $ | 30,707 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | ||||||||||||
Depreciation, depletion and amortization | 7,957 | 9,724 | 8,790 | |||||||||
Amortization expense—affiliates | — | 768 | — | |||||||||
Distributions from unconsolidated investment | 10,153 | 12,250 | 12,250 | |||||||||
Equity earnings from unconsolidated investment | (9,621 | ) | (10,294 | ) | (12,781 | ) | ||||||
Gain on asset sales, net | (660 | ) | (44 | ) | (280 | ) | ||||||
Debt modification expense | — | 7,807 | — | |||||||||
Loss from discontinued operations | 14 | 207 | 34 | |||||||||
Asset impairments | 242 | 1,778 | 1,253 | |||||||||
Unit-based compensation expense | 792 | 257 | 106 | |||||||||
Amortization of debt issuance costs and other | 771 | 973 | 2,490 | |||||||||
Other, net—affiliates | (190 | ) | 135 | 1,119 | ||||||||
Change in operating assets and liabilities: | ||||||||||||
Accounts receivable | (5,189 | ) | (1,267 | ) | 698 | |||||||
Accounts receivable—affiliates | 67 | (196 | ) | 1,144 | ||||||||
Accounts payable | (845 | ) | 986 | 631 | ||||||||
Accounts payable—affiliates | 1,531 | 256 | (107 | ) | ||||||||
Accrued liabilities | (5,169 | ) | (7,948 | ) | (1,363 | ) | ||||||
Accrued liabilities—affiliates | (515 | ) | — | 515 | ||||||||
Accrued interest | (9,777 | ) | (271 | ) | 5,217 | |||||||
Deferred revenue | 2,346 | 1,077 | (5,786 | ) | ||||||||
Deferred revenue—affiliates | — | (2,897 | ) | — | ||||||||
Other items, net | 2,230 | 1,284 | 1,807 | |||||||||
Net cash provided by operating activities of continuing operations | $ | 20,211 | $ | 20,489 | $ | 46,444 | ||||||
Net cash used in operating activities of discontinued operations | (412 | ) | (284 | ) | (92 | ) | ||||||
Net cash provided by operating activities | $ | 19,799 | $ | 20,205 | $ | 46,352 | ||||||
Cash flows from investing activities: | ||||||||||||
Distributions from unconsolidated investment in excess of cumulative earnings | $ | 2,097 | $ | — | $ | — | ||||||
Proceeds from sale of assets | 687 | (387 | ) | 563 | ||||||||
Return of long-term contract receivables | 487 | — | 399 | |||||||||
Return of long-term contract receivables—affiliate | — | 414 | — | |||||||||
Acquisition of plant and equipment and other | (3,444 | ) | (2,095 | ) | (1,065 | ) | ||||||
Net cash used in investing activities of continuing operations | $ | (173 | ) | $ | (2,068 | ) | $ | (103 | ) | |||
Net cash provided by investing activities of discontinued operations | — | 29 | — | |||||||||
Net cash used in investing activities | $ | (173 | ) | $ | (2,039 | ) | $ | (103 | ) | |||
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Consolidated Statements of Cash Flows—Continued | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | December 31, | |||||||||||
(In thousands) | 2018 | 2017 | 2017 | |||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of preferred units and warrants, net | $ | — | $ | 242,100 | $ | — | ||||||
Proceeds from issuance of 2022 Senior Notes, net | — | 103,688 | — | |||||||||
Proceeds from loans | 35,000 | — | 8,000 | |||||||||
Repayments of loans | (40,800 | ) | (251,010 | ) | (136,027 | ) | ||||||
Redemption of preferred units paid in kind | (8,844 | ) | — | — | ||||||||
Distributions to common unitholders and general partner | (5,617 | ) | (5,615 | ) | (5,617 | ) | ||||||
Distributions to preferred unitholders | (7,765 | ) | — | (3,825 | ) | |||||||
Contributions to discontinued operations | (412 | ) | (255 | ) | (92 | ) | ||||||
Debt issue costs and other | (275 | ) | (34,755 | ) | (197 | ) | ||||||
Net cash provided by (used in) financing activities of continuing operations | $ | (28,713 | ) | $ | 54,153 | $ | (137,758 | ) | ||||
Net cash provided by financing activities of discontinued operations | 412 | 255 | 92 | |||||||||
Net cash provided by (used in) financing activities | $ | (28,301 | ) | $ | 54,408 | $ | (137,666 | ) | ||||
Net increase (decrease) in cash and cash equivalents | $ | (8,675 | ) | $ | 72,574 | $ | (91,417 | ) | ||||
Cash and cash equivalents at beginning of period | 29,827 | 40,371 | 121,244 | |||||||||
Cash and cash equivalents at end of period | $ | 21,152 | $ | 112,945 | $ | 29,827 | ||||||
Supplemental cash flow information: | ||||||||||||
Cash paid during the period for interest from continuing operations | $ | 26,023 | $ | 19,851 | $ | 10,993 | ||||||
Non-cash investing and financing activities: | ||||||||||||
Issuance of 2022 Senior Notes in exchange for 2018 Senior Notes | $ | — | $ | 240,638 | $ | — | ||||||
Plant, equipment and mineral rights funded with accounts payable or accrued liabilities | $ | 24 | $ | — | $ | 294 | ||||||
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Natural Resource Partners L.P.
Financial Tables
Consolidated Balance Sheets | |||||||
March 31, | December 31, | ||||||
(In thousands, except unit data) | 2018 | 2017 | |||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 21,152 | $ | 29,827 | |||
Accounts receivable, net | 55,651 | 47,026 | |||||
Accounts receivable—affiliates | 94 | 161 | |||||
Inventory | 8,071 | 7,553 | |||||
Prepaid expenses and other | 3,088 | 5,838 | |||||
Current assets of discontinued operations | 991 | 991 | |||||
Total current assets | $ | 89,047 | $ | 91,396 | |||
Land | 24,809 | 25,247 | |||||
Plant and equipment, net | 47,237 | 46,170 | |||||
Mineral rights, net | 878,845 | 883,885 | |||||
Intangible assets, net | 48,769 | 49,554 | |||||
Equity in unconsolidated investment | 241,679 | 245,433 | |||||
Long-term contracts receivable | 40,331 | 40,776 | |||||
Other assets | 6,489 | 6,547 | |||||
Other assets—affiliate | — | 156 | |||||
Total assets | $ | 1,377,206 | $ | 1,389,164 | |||
LIABILITIES AND CAPITAL | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 5,911 | $ | 6,957 | |||
Accounts payable—affiliates | 2,093 | 562 | |||||
Accrued liabilities | 11,409 | 16,890 | |||||
Accrued liabilities—affiliates | — | 515 | |||||
Accrued interest | 5,706 | 15,484 | |||||
Current portion of deferred revenue | 1,554 | — | |||||
Current portion of long-term debt, net | 79,723 | 79,740 | |||||
Current liabilities of discontinued operations | 3 | 401 | |||||
Total current liabilities | $ | 106,399 | $ | 120,549 | |||
Deferred revenue | 14,622 | 100,605 | |||||
Long-term debt, net | 724,854 | 729,608 | |||||
Other non-current liabilities | 2,492 | 2,808 | |||||
Other non-current liabilities—affiliate | — | 346 | |||||
Total liabilities | $ | 848,367 | $ | 953,916 | |||
Commitments and contingencies | |||||||
Class A Convertible Preferred Units (250,000 and 258,844 units issued and outstanding at March 31, 2018 and December 31, 2017, respectively, at $1,000 par value per unit; liquidation preference of $1,500 per unit) | $ | 164,587 | $ | 173,431 | |||
Partners’ capital: | |||||||
Common unitholders’ interest (12,245,920 and 12,232,006 units issued and outstanding at March 31, 2018 and December 31, 2017, respectively) | $ | 301,344 | $ | 199,851 | |||
General partner’s interest | 3,924 | 1,857 | |||||
Warrant holders interest | 66,816 | 66,816 | |||||
Accumulated other comprehensive loss | (4,438 | ) | (3,313 | ) | |||
Total partners’ capital | $ | 367,646 | $ | 265,211 | |||
Non-controlling interest | (3,394 | ) | (3,394 | ) | |||
Total capital | 364,252 | 261,817 | |||||
Total liabilities and capital | $ | 1,377,206 | $ | 1,389,164 | |||
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Natural Resource Partners L.P.
Financial Tables
Consolidated Statement of Partners' Capital | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Common Unitholders | General Partner | Warrant Holders | Accumulated Other Comprehensive Loss | Partners' Capital Excluding Non-Controlling Interest | Non-Controlling Interest | Total Capital | ||||||||||||||||||||||||
(In thousands) | Units | Amounts | ||||||||||||||||||||||||||||
Balance at December 31, 2017 | 12,232 | $ | 199,851 | $ | 1,857 | $ | 66,816 | $ | (3,313 | ) | $ | 265,211 | $ | (3,394 | ) | $ | 261,817 | |||||||||||||
Cumulative effect of adoption of accounting standard | — | 88,448 | 1,805 | — | — | 90,253 | — | 90,253 | ||||||||||||||||||||||
Net income | — | 25,553 | 521 | — | — | 26,074 | — | 26,074 | ||||||||||||||||||||||
Distributions to common unitholders and general partner | — | (5,505 | ) | (112 | ) | — | — | (5,617 | ) | — | (5,617 | ) | ||||||||||||||||||
Distributions to preferred unitholders | — | (7,610 | ) | (155 | ) | — | — | (7,765 | ) | — | (7,765 | ) | ||||||||||||||||||
Issuance of unit-based awards | 14 | 410 | — | — | — | 410 | — | 410 | ||||||||||||||||||||||
Unit-based awards amortization and vesting | — | 197 | — | — | — | 197 | — | 197 | ||||||||||||||||||||||
Comprehensive loss from unconsolidated investment and other | — | — | 8 | — | (1,125 | ) | (1,117 | ) | — | (1,117 | ) | |||||||||||||||||||
Balance at March 31, 2018 | 12,246 | $ | 301,344 | $ | 3,924 | $ | 66,816 | $ | (4,438 | ) | $ | 367,646 | $ | (3,394 | ) | $ | 364,252 | |||||||||||||
10
Natural Resource Partners L.P.
Financial Tables (Unaudited)
The table below presents NRP's unaudited business results by segment for three months ended March 31, 2018 and 2017:
Operating Business Segments | ||||||||||||||||||||
Coal Royalty and Other | Construction Aggregates | Corporate and Financing | ||||||||||||||||||
(In thousands) | Soda Ash | Total | ||||||||||||||||||
Three Months Ended March 31, 2018 | ||||||||||||||||||||
Revenues and other income | $ | 51,593 | $ | 9,621 | $ | 27,152 | $ | — | $ | 88,366 | ||||||||||
Gains on asset sales | 651 | — | 9 | — | 660 | |||||||||||||||
Total revenues and other income | $ | 52,244 | $ | 9,621 | $ | 27,161 | $ | — | $ | 89,026 | ||||||||||
Asset impairments | $ | 242 | $ | — | $ | — | $ | — | $ | 242 | ||||||||||
Net income (loss) from continuing operations | $ | 40,728 | $ | 9,621 | $ | (1,975 | ) | $ | (22,286 | ) | $ | 26,088 | ||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||||||
Revenues and other income | $ | 51,138 | $ | 10,294 | $ | 27,221 | $ | — | $ | 88,653 | ||||||||||
Gains on asset sales | 29 | — | 15 | — | 44 | |||||||||||||||
Total revenues and other income | $ | 51,167 | $ | 10,294 | $ | 27,236 | $ | — | $ | 88,697 | ||||||||||
Asset impairments | $ | 1,778 | $ | — | $ | — | $ | — | $ | 1,778 | ||||||||||
Net income (loss) from continuing operations | $ | 35,094 | $ | 10,294 | $ | (1,539 | ) | $ | (37,738 | ) | $ | 6,111 | ||||||||
Three Months Ended December 31, 2017 | ||||||||||||||||||||
Revenues and other income | $ | 52,146 | $ | 12,781 | $ | 35,895 | $ | — | $ | 100,822 | ||||||||||
Gains on asset sales | 178 | — | 102 | — | 280 | |||||||||||||||
Total revenues and other income | $ | 52,324 | $ | 12,781 | $ | 35,997 | $ | — | $ | 101,102 | ||||||||||
Asset impairments | $ | 1,189 | $ | — | $ | 64 | $ | — | $ | 1,253 | ||||||||||
Net income (loss) from continuing operations | $ | 39,729 | $ | 12,781 | $ | 1,989 | $ | (23,758 | ) | $ | 30,741 | |||||||||
Adjusted EBITDA (1) | $ | 46,679 | $ | 12,250 | $ | 5,143 | $ | (4,696 | ) | $ | 59,376 | |||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 45,550 | $ | 12,250 | $ | 4,010 | $ | (15,366 | ) | $ | 46,444 | |||||||||
Net cash provided by (used in) investing activities of continuing operations | $ | 591 | $ | — | $ | (694 | ) | $ | — | $ | (103 | ) | ||||||||
Net cash provided by financing activities of continuing operations | $ | — | $ | — | $ | (197 | ) | $ | (137,561 | ) | $ | (137,758 | ) | |||||||
11
Natural Resource Partners L.P.
Financial Tables (Unaudited)
Operating Statistics - Coal Royalty and Other | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | December 31, | |||||||||||
($ in thousands, except tons and per ton amounts) | 2018 | 2017 | 2017 | |||||||||
Coal production (tons) | ||||||||||||
Appalachia | ||||||||||||
Northern | 225 | 1,206 | 464 | |||||||||
Central | 3,545 | 3,699 | 3,542 | |||||||||
Southern | 546 | 562 | 535 | |||||||||
Total Appalachia | 4,316 | 5,467 | 4,541 | |||||||||
Illinois Basin | 743 | 2,017 | 828 | |||||||||
Northern Powder River Basin | 1,233 | 950 | 1,678 | |||||||||
Total coal production | 6,292 | 8,434 | 7,047 | |||||||||
Coal royalty revenue per ton | ||||||||||||
Appalachia | ||||||||||||
Northern | $ | 4.73 | $ | 0.50 | $ | 2.14 | ||||||
Central | $ | 5.71 | $ | 5.46 | $ | 5.21 | ||||||
Southern | $ | 7.16 | $ | 6.46 | $ | 5.90 | ||||||
Illinois Basin | $ | 4.14 | $ | 3.30 | $ | 4.75 | ||||||
Northern Powder River Basin | $ | 2.24 | $ | 2.63 | $ | 2.27 | ||||||
Combined average coal royalty revenue per ton | $ | 4.93 | $ | 3.98 | $ | 4.31 | ||||||
Coal royalty revenues | ||||||||||||
Appalachia | ||||||||||||
Northern | $ | 1,066 | $ | 607 | $ | 992 | ||||||
Central | 20,232 | 20,184 | 18,462 | |||||||||
Southern | 3,914 | 3,632 | 3,157 | |||||||||
Total Appalachia | $ | 25,212 | $ | 24,423 | $ | 22,611 | ||||||
Illinois Basin | 3,075 | 6,646 | 3,934 | |||||||||
Northern Powder River Basin | 2,765 | 2,498 | 3,815 | |||||||||
Unadjusted coal royalty revenue | $ | 31,052 | $ | 33,567 | $ | 30,360 | ||||||
Coal royalty adjustment for minimum leases | (2,361 | ) | — | — | ||||||||
Total coal royalty revenue | $ | 28,691 | $ | 33,567 | $ | 30,360 | ||||||
Other revenues | ||||||||||||
Production lease minimum revenue | $ | 425 | $ | 5,196 | $ | 8,266 | ||||||
Minimum lease straight line revenue | 6,760 | — | — | |||||||||
Property tax revenue | 1,182 | 2,698 | 813 | |||||||||
Wheelage | 1,974 | 1,267 | 1,224 | |||||||||
Coal overriding royalty revenue | 2,872 | 824 | 4,067 | |||||||||
Aggregates royalty revenue | 1,091 | 1,244 | 728 | |||||||||
Oil and gas royalty revenues | 2,898 | 1,491 | 1,693 | |||||||||
Other | 317 | 212 | 202 | |||||||||
Total other revenues | $ | 17,519 | $ | 12,932 | $ | 16,993 | ||||||
Coal royalty and other income | 46,210 | 46,499 | 47,353 | |||||||||
Transportation and processing services fees | 5,383 | 4,639 | 4,793 | |||||||||
Gain on coal royalty and other segment asset sales | 651 | 29 | 178 | |||||||||
Total coal royalty and other segment revenues and other income | $ | 52,244 | $ | 51,167 | $ | 52,324 | ||||||
12
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Distributable Cash Flow and Free Cash Flow | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Coal Royalty and Other | Construction Aggregates | Corporate and Financing | ||||||||||||||||||
(In thousands) | Soda Ash | Total | ||||||||||||||||||
Three Months Ended March 31, 2018 | ||||||||||||||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 38,793 | $ | 10,153 | $ | 2,797 | $ | (31,532 | ) | $ | 20,211 | |||||||||
Add: distributions from unconsolidated investment in excess of cumulative earnings | — | 2,097 | — | — | 2,097 | |||||||||||||||
Add: proceeds from the sale of assets | 656 | — | 31 | — | 687 | |||||||||||||||
Add: return of long-term contract receivables | 487 | — | — | — | 487 | |||||||||||||||
Less: maintenance capital expenditures | — | — | (2,637 | ) | — | (2,637 | ) | |||||||||||||
Distributable cash flow | $ | 39,936 | $ | 12,250 | $ | 191 | $ | (31,532 | ) | $ | 20,845 | |||||||||
Less: proceeds from the sale of assets | 656 | — | 31 | — | 687 | |||||||||||||||
Less: expansion capital expenditures | — | — | 807 | — | 807 | |||||||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | — | — | 49 | — | 49 | |||||||||||||||
Free cash flow | $ | 39,280 | $ | 12,250 | $ | (696 | ) | $ | (31,532 | ) | $ | 19,302 | ||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 37,932 | $ | 12,250 | $ | 4,046 | $ | (33,739 | ) | $ | 20,489 | |||||||||
Add: Proceeds from the sale of assets | (409 | ) | — | 22 | — | (387 | ) | |||||||||||||
Add: return of long-term contract receivables—affiliate | 414 | — | — | — | 414 | |||||||||||||||
Less: maintenance capital expenditures | — | — | (1,969 | ) | — | (1,969 | ) | |||||||||||||
Distributable cash flow | $ | 37,937 | $ | 12,250 | $ | 2,099 | $ | (33,739 | ) | $ | 18,547 | |||||||||
Less: proceeds from the sale of assets | (409 | ) | — | 22 | — | (387 | ) | |||||||||||||
Less: expansion capital expenditures | — | — | 126 | — | 126 | |||||||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | — | — | 96 | — | 96 | |||||||||||||||
Free cash flow | $ | 38,346 | $ | 12,250 | $ | 1,855 | $ | (33,739 | ) | $ | 18,712 | |||||||||
Three Months Ended December 31, 2017 | ||||||||||||||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 45,550 | $ | 12,250 | $ | 4,010 | $ | (15,366 | ) | $ | 46,444 | |||||||||
Add: proceeds from sale of assets | 192 | — | 371 | — | 563 | |||||||||||||||
Add: return of long-term contract receivable | 399 | — | — | — | 399 | |||||||||||||||
Less: maintenance capital expenditures | — | — | (1,025 | ) | — | (1,025 | ) | |||||||||||||
Distributable cash flow | $ | 46,141 | $ | 12,250 | $ | 3,356 | $ | (15,366 | ) | $ | 46,381 | |||||||||
Less: proceeds from the sale of assets | 192 | — | 371 | — | 563 | |||||||||||||||
Less: expansion capital expenditures | — | — | 39 | — | 39 | |||||||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | — | — | 197 | — | 197 | |||||||||||||||
Free cash flow | $ | 45,949 | $ | 12,250 | $ | 2,749 | $ | (15,366 | ) | $ | 45,582 | |||||||||
13
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Adjusted EBITDA | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Coal Royalty and Other | Construction Aggregates | Corporate and Financing | ||||||||||||||||||
(In thousands) | Soda Ash | Total | ||||||||||||||||||
Three Months Ended March 31, 2018 | ||||||||||||||||||||
Net income (loss) from continuing operations | 40,728 | $ | 9,621 | $ | (1,975 | ) | $ | (22,286 | ) | $ | 26,088 | |||||||||
Less: equity earnings from unconsolidated investment | — | (9,621 | ) | — | — | (9,621 | ) | |||||||||||||
Add: total distributions from unconsolidated investment | — | 12,250 | — | — | 12,250 | |||||||||||||||
Add: interest expense, net | — | — | 20 | 17,950 | 17,970 | |||||||||||||||
Add: depreciation, depletion and amortization | 5,100 | — | 2,857 | — | 7,957 | |||||||||||||||
Add: asset impairments | 242 | — | — | — | 242 | |||||||||||||||
Adjusted EBITDA | $ | 46,070 | $ | 12,250 | $ | 902 | $ | (4,336 | ) | $ | 54,886 | |||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 35,094 | $ | 10,294 | $ | (1,539 | ) | $ | (37,738 | ) | $ | 6,111 | ||||||||
Less: equity earnings from unconsolidated investment | — | (10,294 | ) | — | — | (10,294 | ) | |||||||||||||
Add: total distributions from unconsolidated investment | — | 12,250 | — | — | 12,250 | |||||||||||||||
Add: interest expense, net | — | — | 395 | 22,746 | 23,141 | |||||||||||||||
Add: debt modification expense | — | — | — | 7,807 | 7,807 | |||||||||||||||
Add: depreciation, depletion and amortization | 6,973 | — | 3,519 | — | 10,492 | |||||||||||||||
Add: asset impairments | 1,778 | — | — | — | 1,778 | |||||||||||||||
Adjusted EBITDA | $ | 43,845 | $ | 12,250 | $ | 2,375 | $ | (7,185 | ) | $ | 51,285 | |||||||||
Three Months Ended December 31, 2017 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 39,729 | $ | 12,781 | $ | 1,989 | $ | (23,758 | ) | $ | 30,741 | |||||||||
Less: equity earnings from unconsolidated investment | — | (12,781 | ) | — | — | (12,781 | ) | |||||||||||||
Add: total distributions from unconsolidated investment | — | 12,250 | — | — | 12,250 | |||||||||||||||
Add: interest expense, net | — | — | 61 | 19,062 | 19,123 | |||||||||||||||
Add: depreciation, depletion and amortization | 5,761 | — | 3,029 | — | 8,790 | |||||||||||||||
Add: asset impairments | 1,189 | — | 64 | — | 1,253 | |||||||||||||||
Adjusted EBITDA | $ | 46,679 | $ | 12,250 | $ | 5,143 | $ | (4,696 | ) | $ | 59,376 | |||||||||
14
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Adjusted Net Income
(Unaudited)
Three Months Ended | ||||||||||||
March 31, | December 31, | |||||||||||
(In thousands) | 2018 | 2017 | 2017 | |||||||||
Net income | $ | 26,074 | $ | 5,904 | $ | 30,707 | ||||||
Less: income attributable to preferred unitholders | (7,500 | ) | (2,500 | ) | (7,765 | ) | ||||||
Net income attributable to common unitholders and general partner | $ | 18,574 | $ | 3,404 | $ | 22,942 | ||||||
Add: asset impairments | 242 | 1,778 | 1,253 | |||||||||
Add: loss from discontinued operations | 14 | 207 | 34 | |||||||||
Add: loss on extinguishment of debt | — | 7,807 | — | |||||||||
Add: restructuring-related incentive compensation expense | — | 3,847 | — | |||||||||
Less: gain on asset sales | (660 | ) | (44 | ) | (280 | ) | ||||||
Adjusted net income | $ | 18,170 | $ | 16,999 | $ | 23,949 | ||||||
Last Twelve Months Distributable Cash Flow and Free Cash Flow | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands) | June 30, 2017 | September 30, 2017 | December 31, 2017 | March 31, 2018 | Last 12 Months | |||||||||||||||
Net cash provided by operating activities of continuing operations | $ | 35,105 | $ | 25,800 | $ | 46,444 | $ | 20,211 | $ | 127,560 | ||||||||||
Add: distributions from unconsolidated investment in excess of cumulative earnings | 2,388 | 3,258 | — | 2,097 | 7,743 | |||||||||||||||
Add: proceeds from the sale of assets | 1,655 | 151 | 563 | 687 | 3,056 | |||||||||||||||
Add: return on long-term contract receivables (including affiliate) | 1,597 | 600 | 399 | 487 | 3,083 | |||||||||||||||
Less: maintenance capital expenditures | (2,415 | ) | (926 | ) | (1,025 | ) | (2,637 | ) | (7,003 | ) | ||||||||||
Distributable cash flow | $ | 38,330 | $ | 28,883 | $ | 46,381 | $ | 20,845 | $ | 134,439 | ||||||||||
Less: proceeds from the sale of assets | 1,655 | 151 | 563 | 687 | 3,056 | |||||||||||||||
Less: expansion capital expenditures | 489 | 311 | 39 | 807 | 1,646 | |||||||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | 1,000 | — | 197 | 49 | 1,246 | |||||||||||||||
Free cash flow | $ | 35,186 | $ | 28,421 | $ | 45,582 | $ | 19,302 | $ | 128,491 | ||||||||||
Distribution Coverage Ratio (1) | 6.0 | x | ||||||||||||||||||
(1) | Distribution Coverage Ratio is calculated as last twelve months' DCF divided by annual common unit distributions times number of common units and general partner units outstanding. |
15
Last Twelve Months Adjusted EBITDA | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands) | June 30, 2017 | September 30, 2017 | December 31, 2017 | March 31, 2018 | Last 12 Months | |||||||||||||||
Net income from continuing operations | $ | 25,857 | $ | 26,499 | $ | 30,741 | $ | 26,088 | $ | 109,185 | ||||||||||
Less: equity earnings from unconsolidated investment | (8,389 | ) | (8,993 | ) | (12,781 | ) | (9,621 | ) | (39,784 | ) | ||||||||||
Add: total distributions from unconsolidated investment | 12,250 | 12,250 | 12,250 | 12,250 | 49,000 | |||||||||||||||
Add: interest expense | 20,377 | 20,080 | 19,123 | 17,970 | 77,550 | |||||||||||||||
Add: debt modification expense | 132 | — | — | — | 132 | |||||||||||||||
Add: loss on extinguishment of debt | 4,107 | — | — | — | 4,107 | |||||||||||||||
Add: depreciation, depletion and amortization | 8,405 | 8,306 | 8,790 | 7,957 | 33,458 | |||||||||||||||
Add: asset impairments | — | — | 1,253 | 242 | 1,495 | |||||||||||||||
Adjusted EBITDA | $ | 62,739 | $ | 58,142 | $ | 59,376 | $ | 54,886 | $ | 235,143 | ||||||||||
Debt—at March 31, 2018 | $ | 822,044 | ||||||||||||||||||
Leverage Ratio (1) | 3.50 | x | ||||||||||||||||||
(1) | Leverage Ratio is calculated as last twelve months' Adjusted EBITDA divided by the outstanding principal value of our debt as of March 31, 2018. |
-end-
16