Exhibit 99.1
Natural Resource Partners L.P.
1201 Louisiana St., Suite 3400, Houston, TX 77002
NEWS RELEASE
Natural Resource Partners L.P.
Reports Third Quarter 2018 Results
HOUSTON, November 9, 2018 - Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter of 2018 results as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(In thousands, except per unit data) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income from continuing operations (1) | $ | 28,565 | $ | 26,499 | $ | 91,061 | $ | 58,467 | ||||||||
Adjusted EBITDA (2) | 58,060 | 58,094 | 170,503 | 172,032 | ||||||||||||
Cash flow provided by (used in) continuing operations: | ||||||||||||||||
Operating activities | 33,427 | 25,800 | 108,017 | 81,394 | ||||||||||||
Investing activities | (1,981 | ) | 2,771 | (3,814 | ) | 3,440 | ||||||||||
Financing activities | (21,034 | ) | 51,890 | (70,643 | ) | (3,961 | ) | |||||||||
Distributable cash flow (2) | 33,782 | 28,883 | 109,373 | 85,760 | ||||||||||||
Free cash flow (2) | 30,969 | 28,420 | 102,300 | 82,319 |
(1) | Net income from continuing operations during the nine months ended September 30, 2018 included income of $12.7 from a royalty dispute settlement in our Soda Ash business segment. |
(2) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
"NRP delivered another solid quarter of operating results as we continued to see strong demand for metallurgical and thermal coal,” remarked NRP’s President and Chief Operating Officer, Craig Nunez. “I would also like to highlight the favorable litigation settlement with Foresight Energy in October, which resulted in NRP receiving an initial payment of $25 million and a commitment from Foresight to pay us $11 million annually for 15 years beginning in 2019. We are pleased with this mutually beneficial outcome and look forward to continuing our long-term partnership with Foresight. These additional cash flows will assist in our commitment to strengthening our balance sheet."
NRP improved its liquidity since the end of the second quarter of 2018 by $10.4 million to $118.4 million at September 30, 2018, consisting of $63.4 million of cash and $55.0 million of borrowing capacity available under its credit facility. NRP's consolidated Debt-to-Adjusted EBITDA ratio at September 30, 2018 was 3.5x.
With respect to the third quarter of 2018, NRP declared a cash distribution of $0.45 per common unit and a cash distribution of $7.5 million on NRP’s preferred units. NRP's distribution coverage ratio over the last twelve months was 6.9x before taking into account the $30 million annual distribution on NRP's preferred units, and 5.6x after taking into account this preferred unit distribution.
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Segment Results
Operating Business Segments | ||||||||||||||||||||
Coal Royalty and Other | Soda Ash | Construction Aggregates | Corporate and Financing | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three Months Ended September 30, 2018 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 37,751 | $ | 8,836 | $ | 2,654 | $ | (20,676 | ) | $ | 28,565 | |||||||||
Adjusted EBITDA (1) | 42,998 | 12,250 | 5,995 | (3,183 | ) | 58,060 | ||||||||||||||
Cash flow provided by (used in) continuing operations: | ||||||||||||||||||||
Operating activities | 41,604 | 12,250 | 6,941 | (27,368 | ) | 33,427 | ||||||||||||||
Investing activities | 1,590 | — | (3,571 | ) | — | (1,981 | ) | |||||||||||||
Financing activities | — | — | (239 | ) | (20,795 | ) | (21,034 | ) | ||||||||||||
Distributable cash flow (1) | 43,194 | 12,250 | 5,706 | (27,368 | ) | 33,782 | ||||||||||||||
Free cash flow (1) | 43,194 | 12,250 | 2,893 | (27,368 | ) | 30,969 | ||||||||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 37,992 | $ | 8,993 | $ | 3,342 | $ | (23,828 | ) | $ | 26,499 | |||||||||
Adjusted EBITDA (1) | 43,297 | 12,250 | 6,402 | (3,855 | ) | 58,094 | ||||||||||||||
Cash flow provided by (used in) continuing operations: | ||||||||||||||||||||
Operating activities | 44,119 | 8,992 | 2,155 | (29,466 | ) | 25,800 | ||||||||||||||
Investing activities | 676 | 3,258 | (1,163 | ) | — | 2,771 | ||||||||||||||
Financing activities | 484 | — | — | 51,406 | 51,890 | |||||||||||||||
Distributable cash flow (1) | 44,795 | 12,250 | 1,304 | (29,466 | ) | 28,883 | ||||||||||||||
Free cash flow (1) | 44,719 | 12,250 | 917 | (29,466 | ) | 28,420 |
(1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Coal Royalty and Other
During the third quarter of 2018, we continued to see strong coal pricing driven by robust export demand and stable domestic markets for metallurgical and thermal coal. While total coal production remained steady, our average coal royalty revenue per ton increased 12% driven primarily by a strong global demand for metallurgical coal. Approximately 67% of NRP's coal royalty revenues and approximately 61% of its coal royalty production was derived from metallurgical coal during the three months ended September 30, 2018. Net income and Adjusted EBITDA were consistent with prior year.
Free cash flow decreased slightly in the third quarter of 2018 compared to the third quarter of 2017 primarily as a result of the timing of payments.
Soda Ash
Soda Ash segment results were consistent with prior year.
Construction Aggregates
Net income and Adjusted EBITDA results decreased slightly primarily due to higher operating expenses. Free cash flow increased primarily due to the timing of certain operating payments, partially offset by increased capital expenditures.
Corporate and Finance
Corporate and Finance segment results improved for the third quarter of 2018, primarily due to lower interest as a result of continued repayment of debt.
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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 55454890. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website.
Company Profile
Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns interests in coal, aggregates and industrial minerals across the United States. A large percentage of NRP's revenues are generated from royalties and other passive income. In addition, NRP owns a construction aggregates company and an equity investment in Ciner Wyoming, a trona/soda ash operation.
For additional information, please contact Kathy H. Roberts at 713-751-7555 or kroberts@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com.
Forward-Looking Statements
This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. 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. 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. Distributable cash flow may not be calculated the same for us as for other companies. In addition, Distributable cash flow 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. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess 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. Free cash flow is calculated before mandatory debt repayments. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the Partnership's ability to make cash distributions to our common and preferred unitholders and our general partner and repay debt.
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"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) from continuing operations less equity earnings from unconsolidated investment; plus (minus) net loss (income) attributable to non-controlling interest; plus 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.
“Adjusted net income attributable to NRP” is a non-GAAP financial measure that we define as Net income attributable to NRP 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.
"Return on capital employed" is a non-GAAP financial measure that we define as Net income from continuing operations plus interest expense divided by the sum of equity and debt. Return on capital employed should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. Return on capital employed is a supplemental performance measure used by our management team that measures our profitability and efficiency with which our capital is employed. The measure provides an indication of operating performance before the impact of leverage in the capital structure.
Revision of Previously Issued First Quarter and Second Quarter 2018 Financial Statements
During the three months ended September 30, 2018, NRP identified an error related to the modified retrospective adoption of ASC 606 on January 1, 2018 for certain coal royalty leases that impacted its financial statements as of and for the three-months ended March 31, 2018 and as of and for the three and six-months ended June 30, 2018. Management concluded that the impact of the error was not material to the previously issued financial statements. In order to properly reflect the application of ASC 606 retrospectively, financial information for the three months ended March 31, 2018 and for the three and six months ended June 30, 2018 in the following financial tables and Reconciliation of Non-GAAP Measures and Recap of Metrics have been revised to reflect the correction of this error. See Note 2. Revenue from Contracts with Customers of the Partnership's Third Quarter 2018 Form 10-Q for additional information.
-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 | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||||
(In thousands, except per unit data) | 2018 | 2017 | 2018 | 2018 | 2017 | ||||||||||||||
Revenues and other income | |||||||||||||||||||
Coal royalty and other | $ | 42,459 | $ | 43,507 | $ | 47,732 | $ | 134,428 | $ | 111,269 | |||||||||
Coal royalty and other—affiliates | 59 | 335 | 188 | 484 | 23,178 | ||||||||||||||
Transportation and processing services | 6,853 | 5,571 | 5,002 | 17,238 | 9,717 | ||||||||||||||
Transportation and processing services—affiliates | — | — | — | — | 6,013 | ||||||||||||||
Construction aggregates | 30,398 | 29,553 | 34,233 | 91,055 | 82,399 | ||||||||||||||
Road construction and asphalt paving services | 6,250 | 5,157 | 6,176 | 13,154 | 13,087 | ||||||||||||||
Equity in earnings of Ciner Wyoming | 8,836 | 8,993 | 16,529 | 34,986 | 27,676 | ||||||||||||||
Gain on asset sales, net | 163 | 171 | 210 | 1,033 | 3,576 | ||||||||||||||
Total revenues and other income | $ | 95,018 | $ | 93,287 | $ | 110,070 | $ | 292,378 | $ | 276,915 | |||||||||
Operating expenses | |||||||||||||||||||
Operating and maintenance expenses | $ | 35,134 | $ | 32,441 | $ | 38,301 | $ | 103,403 | $ | 93,089 | |||||||||
Operating and maintenance expenses—affiliates | 2,414 | 2,154 | 4,065 | 8,944 | 6,928 | ||||||||||||||
Depreciation, depletion and amortization | 8,221 | 8,306 | 8,563 | 24,741 | 26,195 | ||||||||||||||
Amortization expense—affiliate | — | — | — | — | 1,008 | ||||||||||||||
General and administrative | 2,249 | 2,648 | 2,414 | 8,068 | 10,757 | ||||||||||||||
General and administrative—affiliates | 934 | 1,207 | 849 | 2,714 | 3,183 | ||||||||||||||
Asset impairments | — | — | — | 242 | 1,778 | ||||||||||||||
Total operating expenses | $ | 48,952 | $ | 46,756 | $ | 54,192 | $ | 148,112 | $ | 142,938 | |||||||||
Income from operations | $ | 46,066 | $ | 46,531 | $ | 55,878 | $ | 144,266 | $ | 133,977 | |||||||||
Other expense, net | |||||||||||||||||||
Interest expense, net | $ | (17,501 | ) | $ | (20,032 | ) | $ | (17,734 | ) | $ | (53,205 | ) | $ | (63,464 | ) | ||||
Debt modification expense | — | — | — | — | (7,939 | ) | |||||||||||||
Loss on extinguishment of debt | — | — | — | — | (4,107 | ) | |||||||||||||
Total other expense, net | $ | (17,501 | ) | $ | (20,032 | ) | $ | (17,734 | ) | $ | (53,205 | ) | $ | (75,510 | ) | ||||
Net income from continuing operations | $ | 28,565 | $ | 26,499 | $ | 38,144 | $ | 91,061 | $ | 58,467 | |||||||||
Loss from discontinued operations | (24 | ) | (433 | ) | (34 | ) | (72 | ) | (507 | ) | |||||||||
Net income | $ | 28,541 | $ | 26,066 | $ | 38,110 | $ | 90,989 | $ | 57,960 | |||||||||
Net loss (income) attributable to non-controlling interest | 359 | — | (869 | ) | (510 | ) | — | ||||||||||||
Net income attributable to NRP | $ | 28,900 | $ | 26,066 | $ | 37,241 | $ | 90,479 | $ | 57,960 | |||||||||
Less: income attributable to preferred unitholders | (7,500 | ) | (7,650 | ) | (7,500 | ) | (22,500 | ) | (17,688 | ) | |||||||||
Net income attributable to common unitholders and general partner | $ | 21,400 | $ | 18,416 | $ | 29,741 | $ | 67,979 | $ | 40,272 | |||||||||
Net income attributable to common unitholders | $ | 20,972 | $ | 18,046 | $ | 29,146 | $ | 66,619 | $ | 39,466 | |||||||||
Net income attributable to the general partner | $ | 428 | $ | 370 | $ | 595 | $ | 1,360 | $ | 806 | |||||||||
Income from continuing operations per common unit | |||||||||||||||||||
Basic | $ | 1.71 | $ | 1.51 | $ | 2.38 | $ | 5.45 | $ | 3.27 | |||||||||
Diluted | $ | 1.30 | $ | 1.08 | $ | 1.71 | $ | 4.06 | $ | 2.67 | |||||||||
Net income per common unit | |||||||||||||||||||
Basic | $ | 1.71 | $ | 1.48 | $ | 2.38 | $ | 5.44 | $ | 3.23 | |||||||||
Diluted | $ | 1.30 | $ | 1.07 | $ | 1.71 | $ | 4.06 | $ | 2.65 | |||||||||
Net income | $ | 28,541 | $ | 26,066 | $ | 38,110 | $ | 90,989 | $ | 57,960 | |||||||||
Comprehensive income (loss) from unconsolidated investment and other | 791 | (268 | ) | (434 | ) | (768 | ) | (1,413 | ) | ||||||||||
Comprehensive income | $ | 29,332 | $ | 25,798 | $ | 37,676 | $ | 90,221 | $ | 56,547 | |||||||||
Comprehensive loss (income) attributable to non-controlling interest | 359 | — | (869 | ) | (510 | ) | — | ||||||||||||
Comprehensive income attributable to NRP | $ | 29,691 | $ | 25,798 | $ | 36,807 | $ | 89,711 | $ | 56,547 |
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Natural Resource Partners L.P.
Financial Tables
Consolidated Statements of Cash Flows | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 28,541 | $ | 26,066 | $ | 38,110 | $ | 90,989 | $ | 57,960 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | ||||||||||||||||||||
Depreciation, depletion and amortization | 8,221 | 8,306 | 8,563 | 24,741 | 26,195 | |||||||||||||||
Amortization expense—affiliates | — | — | — | — | 1,008 | |||||||||||||||
Distributions from unconsolidated investment | 12,250 | 8,992 | 12,250 | 34,653 | 31,104 | |||||||||||||||
Equity earnings from unconsolidated investment | (8,836 | ) | (8,993 | ) | (16,529 | ) | (34,986 | ) | (27,676 | ) | ||||||||||
Gain on asset sales, net | (163 | ) | (171 | ) | (210 | ) | (1,033 | ) | (3,576 | ) | ||||||||||
Debt modification expense | — | — | — | — | 7,939 | |||||||||||||||
Loss on extinguishment of debt | — | — | — | — | 4,107 | |||||||||||||||
Income (loss) from discontinued operations | 24 | 433 | 34 | 72 | 507 | |||||||||||||||
Asset impairments | — | — | — | 242 | 1,778 | |||||||||||||||
Unit-based compensation expense | 153 | (26 | ) | 281 | 1,226 | (23 | ) | |||||||||||||
Amortization of debt issuance costs and other | 568 | 3,203 | 1,202 | 2,541 | 6,547 | |||||||||||||||
Other—affiliates | — | 199 | — | (190 | ) | (974 | ) | |||||||||||||
Change in operating assets and liabilities: | ||||||||||||||||||||
Accounts receivable | 2,177 | 5,038 | (2,712 | ) | (7,004 | ) | 508 | |||||||||||||
Accounts receivable—affiliates | 118 | 49 | (46 | ) | 139 | 285 | ||||||||||||||
Accounts payable | 495 | 684 | 1,020 | 670 | 730 | |||||||||||||||
Accounts payable—affiliates | (844 | ) | (272 | ) | (641 | ) | 46 | (270 | ) | |||||||||||
Accrued liabilities | 1,397 | 206 | 1,788 | (1,984 | ) | (7,096 | ) | |||||||||||||
Accrued liabilities—affiliates | — | — | — | (515 | ) | — | ||||||||||||||
Accrued interest | (9,069 | ) | (8,727 | ) | 8,902 | (9,944 | ) | (5,322 | ) | |||||||||||
Deferred revenue | 193 | (4,494 | ) | 3,645 | 9,200 | (5 | ) | |||||||||||||
Deferred revenue—affiliates | — | — | — | — | (10,166 | ) | ||||||||||||||
Other items, net | (1,798 | ) | (4,693 | ) | (1,278 | ) | (846 | ) | (2,166 | ) | ||||||||||
Net cash provided by operating activities of continuing operations | $ | 33,427 | $ | 25,800 | $ | 54,379 | $ | 108,017 | $ | 81,394 | ||||||||||
Net cash used in operating activities of discontinued operations | (22 | ) | (76 | ) | (35 | ) | (469 | ) | (607 | ) | ||||||||||
Net cash provided by operating activities | $ | 33,405 | $ | 25,724 | $ | 54,344 | $ | 107,548 | $ | 80,787 | ||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Distributions from unconsolidated investment in excess of cumulative earnings | $ | — | $ | 3,258 | $ | — | $ | 2,097 | $ | 5,646 | ||||||||||
Proceeds from sale of assets | 238 | 151 | 224 | 1,149 | 1,419 | |||||||||||||||
Return of long-term contract receivables | 1,590 | 600 | 529 | 2,606 | 1,807 | |||||||||||||||
Return of long-term contract receivables—affiliate | — | — | — | — | 804 | |||||||||||||||
Acquisition of plant and equipment and other | (3,809 | ) | (1,238 | ) | (2,413 | ) | (9,666 | ) | (6,236 | ) | ||||||||||
Net cash provided by (used in) investing activities of continuing operations | $ | (1,981 | ) | $ | 2,771 | $ | (1,660 | ) | $ | (3,814 | ) | $ | 3,440 | |||||||
Net cash provided by investing activities of discontinued operations | — | 4 | — | — | 206 | |||||||||||||||
Net cash provided by (used in) investing activities | $ | (1,981 | ) | $ | 2,775 | $ | (1,660 | ) | $ | (3,814 | ) | $ | 3,646 |
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Natural Resource Partners L.P.
Financial Tables
Consolidated Statements of Cash Flows—Continued | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2018 | 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 | |||||||||||||||
Borrowings on credit facility | — | 69,000 | — | 35,000 | 69,000 | |||||||||||||||
Repayments of loans | (7,648 | ) | (8,000 | ) | (7,272 | ) | (55,720 | ) | (356,292 | ) | ||||||||||
Redemption of preferred units paid-in-kind | — | — | — | (8,844 | ) | — | ||||||||||||||
Distributions to common unitholders and general partner | (5,623 | ) | (5,616 | ) | (5,623 | ) | (16,863 | ) | (16,850 | ) | ||||||||||
Distributions to preferred unitholders | (7,500 | ) | (3,769 | ) | (7,500 | ) | (22,765 | ) | (5,019 | ) | ||||||||||
Contributions to discontinued operations | (22 | ) | (72 | ) | (35 | ) | (469 | ) | (401 | ) | ||||||||||
Debt issuance costs and other | (241 | ) | 347 | (466 | ) | (982 | ) | (40,187 | ) | |||||||||||
Net cash provided by (used in) financing activities of continuing operations | $ | (21,034 | ) | $ | 51,890 | $ | (20,896 | ) | $ | (70,643 | ) | $ | (3,961 | ) | ||||||
Net cash provided by financing activities of discontinued operations | 22 | 72 | 35 | 469 | 401 | |||||||||||||||
Net cash provided by (used in) financing activities | $ | (21,012 | ) | $ | 51,962 | $ | (20,861 | ) | $ | (70,174 | ) | $ | (3,560 | ) | ||||||
Net increase in cash and cash equivalents | $ | 10,412 | $ | 80,461 | $ | 31,823 | $ | 33,560 | $ | 80,873 | ||||||||||
Cash and cash equivalents at beginning of period | 52,975 | 40,783 | 21,152 | 29,827 | 40,371 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 63,387 | $ | 121,244 | $ | 52,975 | $ | 63,387 | $ | 121,244 | ||||||||||
Supplemental cash flow information: | ||||||||||||||||||||
Cash paid during the period for interest from continuing operations | $ | 24,998 | $ | 26,977 | $ | 7,132 | $ | 58,153 | $ | 61,857 | ||||||||||
Non-cash investing and financing activities: | ||||||||||||||||||||
Plant, equipment and mineral rights funded with accounts payable or accrued liabilities | $ | 75 | $ | — | $ | 894 | $ | 75 | $ | — | ||||||||||
Issuance of 2022 Senior Notes in exchange for 2018 Senior Notes | $ | — | $ | — | $ | — | $ | — | $ | 240,638 |
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Natural Resource Partners L.P.
Financial Tables
Consolidated Balance Sheets | |||||||
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
(In thousands, except unit data) | (Unaudited) | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 63,387 | $ | 29,827 | |||
Accounts receivable, net | 55,734 | 47,026 | |||||
Accounts receivable—affiliates | 22 | 161 | |||||
Inventory | 9,572 | 7,553 | |||||
Prepaid expenses and other | 4,665 | 5,838 | |||||
Current assets of discontinued operations | 988 | 991 | |||||
Total current assets | 134,368 | 91,396 | |||||
Land | 24,809 | 25,247 | |||||
Plant and equipment, net | 48,148 | 46,170 | |||||
Mineral rights, net | 869,106 | 883,885 | |||||
Intangible assets, net | 46,998 | 49,554 | |||||
Equity in unconsolidated investment | 242,901 | 245,433 | |||||
Long-term contracts receivable | 39,416 | 40,776 | |||||
Other assets | 6,188 | 6,547 | |||||
Other assets—affiliate | — | 156 | |||||
Total assets | $ | 1,411,934 | $ | 1,389,164 | |||
LIABILITIES AND CAPITAL | |||||||
Current liabilities | |||||||
Accounts payable | $ | 7,467 | $ | 6,957 | |||
Accounts payable—affiliates | 608 | 562 | |||||
Accrued liabilities | 14,005 | 16,890 | |||||
Accrued liabilities—affiliates | — | 515 | |||||
Accrued interest | 5,540 | 15,484 | |||||
Current portion of deferred revenue | 1,403 | — | |||||
Current portion of long-term debt, net | 75,201 | 79,740 | |||||
Current liabilities of discontinued operations | — | 401 | |||||
Total current liabilities | 104,224 | 120,549 | |||||
Deferred revenue | 40,885 | 100,605 | |||||
Long-term debt, net | 716,514 | 729,608 | |||||
Other non-current liabilities | 1,958 | 2,808 | |||||
Other non-current liabilities—affiliate | — | 346 | |||||
Total liabilities | 863,581 | 953,916 | |||||
Commitments and contingencies | |||||||
Class A Convertible Preferred Units (250,000 and 258,844 units issued and outstanding at September 30, 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 September 30, 2018 and December 31, 2017, respectively) | 319,673 | 199,851 | |||||
General partner’s interest | 4,293 | 1,857 | |||||
Warrant holders' interest | 66,816 | 66,816 | |||||
Accumulated other comprehensive loss | (4,081 | ) | (3,313 | ) | |||
Total partners’ capital | 386,701 | 265,211 | |||||
Non-controlling interest | (2,935 | ) | (3,394 | ) | |||
Total capital | 383,766 | 261,817 | |||||
Total liabilities and capital | $ | 1,411,934 | $ | 1,389,164 |
8
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 | — | 69,057 | 1,409 | — | — | 70,466 | — | 70,466 | ||||||||||||||||||||||
Net income (1) | — | 88,669 | 1,810 | — | — | 90,479 | 510 | 90,989 | ||||||||||||||||||||||
Distributions to common unitholders and general partner | — | (16,526 | ) | (337 | ) | — | — | (16,863 | ) | — | (16,863 | ) | ||||||||||||||||||
Distributions to preferred unitholders | — | (22,310 | ) | (455 | ) | — | — | (22,765 | ) | — | (22,765 | ) | ||||||||||||||||||
Issuance of unit-based awards | 14 | 410 | — | — | — | 410 | — | 410 | ||||||||||||||||||||||
Unit-based awards amortization and vesting | — | 472 | — | — | — | 472 | — | 472 | ||||||||||||||||||||||
Comprehensive income (loss) from unconsolidated investment and other | — | 50 | 9 | — | (768 | ) | (709 | ) | (51 | ) | (760 | ) | ||||||||||||||||||
Balance at September 30, 2018 | 12,246 | $ | 319,673 | $ | 4,293 | $ | 66,816 | $ | (4,081 | ) | $ | 386,701 | $ | (2,935 | ) | $ | 383,766 |
(1) | Net income includes $22.5 million attributable to Preferred Unitholders that accumulated during the period, of which $22.1 million is allocated to the common unitholders and $0.5 million is allocated to the general partner. |
9
Natural Resource Partners L.P.
Financial Tables
The tables below presents NRP's unaudited business results by segment for the three and nine months ended September 30, 2018 and 2017 and the three months ended June 30, 2018:
Operating Business Segments | ||||||||||||||||||||
Coal Royalty and Other | Construction Aggregates | Corporate and Financing | ||||||||||||||||||
(In thousands) | Soda Ash | Total | ||||||||||||||||||
Three Months Ended September 30, 2018 | ||||||||||||||||||||
Revenues and other income | $ | 49,371 | $ | 8,836 | $ | 36,648 | $ | — | $ | 94,855 | ||||||||||
Gains on asset sales, net | — | — | 163 | — | 163 | |||||||||||||||
Total revenues and other income | $ | 49,371 | $ | 8,836 | $ | 36,811 | $ | — | $ | 95,018 | ||||||||||
Net income (loss) from continuing operations | $ | 37,751 | $ | 8,836 | $ | 2,654 | $ | (20,676 | ) | $ | 28,565 | |||||||||
Adjusted EBITDA (1) | $ | 42,998 | $ | 12,250 | $ | 5,995 | $ | (3,183 | ) | $ | 58,060 | |||||||||
Distributable cash flow (1) | $ | 43,194 | $ | 12,250 | $ | 5,706 | $ | (27,368 | ) | $ | 33,782 | |||||||||
Free cash flow (1) | $ | 43,194 | $ | 12,250 | $ | 2,893 | $ | (27,368 | ) | $ | 30,969 | |||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||||||
Revenues and other income | $ | 49,413 | $ | 8,993 | $ | 34,710 | $ | — | $ | 93,116 | ||||||||||
Gains on asset sales, net | 154 | — | 17 | — | 171 | |||||||||||||||
Total revenues and other income | $ | 49,567 | $ | 8,993 | $ | 34,727 | $ | — | $ | 93,287 | ||||||||||
Net income (loss) from continuing operations | $ | 37,992 | $ | 8,993 | $ | 3,342 | $ | (23,828 | ) | $ | 26,499 | |||||||||
Adjusted EBITDA (1) | $ | 43,297 | $ | 12,250 | $ | 6,402 | $ | (3,855 | ) | $ | 58,094 | |||||||||
Distributable cash flow (1) | $ | 44,795 | $ | 12,250 | $ | 1,304 | $ | (29,466 | ) | $ | 28,883 | |||||||||
Free cash flow (1) | $ | 44,719 | $ | 12,250 | $ | 917 | $ | (29,466 | ) | $ | 28,420 | |||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||||
Revenues and other income | $ | 52,922 | $ | 16,529 | $ | 40,409 | $ | — | $ | 109,860 | ||||||||||
Gains on asset sales, net | 168 | — | 42 | — | 210 | |||||||||||||||
Total revenues and other income | $ | 53,090 | $ | 16,529 | $ | 40,451 | $ | — | $ | 110,070 | ||||||||||
Net income (loss) from continuing operations | $ | 39,671 | $ | 16,529 | $ | 2,941 | $ | (20,997 | ) | $ | 38,144 | |||||||||
Adjusted EBITDA (1) | $ | 44,178 | $ | 12,250 | $ | 6,128 | $ | (3,263 | ) | $ | 59,293 | |||||||||
Distributable cash flow (1) | $ | 52,424 | $ | 12,250 | $ | (614 | ) | $ | (10,082 | ) | $ | 53,978 | ||||||||
Free cash flow (1) | $ | 52,254 | $ | 12,250 | $ | (2,393 | ) | $ | (10,082 | ) | $ | 52,029 |
(1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
10
Natural Resource Partners L.P.
Financial Tables
Natural Resource Partners L.P.
Financial Tables (Unaudited)
Operating Business Segments | ||||||||||||||||||||
Coal Royalty and Other | Construction Aggregates | Corporate and Financing | ||||||||||||||||||
(In thousands) | Soda Ash | Total | ||||||||||||||||||
Nine Months Ended September 30, 2018 | ||||||||||||||||||||
Revenues and other income | $ | 152,150 | $ | 34,986 | $ | 104,209 | $ | — | $ | 291,345 | ||||||||||
Gains on asset sales, net | 819 | — | 214 | — | 1,033 | |||||||||||||||
Total revenues and other income | $ | 152,969 | $ | 34,986 | $ | 104,423 | $ | — | $ | 292,378 | ||||||||||
Asset impairments | $ | 242 | $ | — | $ | — | $ | — | $ | 242 | ||||||||||
Net income (loss) from continuing operations | $ | 116,414 | $ | 34,986 | $ | 3,620 | $ | (63,959 | ) | $ | 91,061 | |||||||||
Adjusted EBITDA (1) | $ | 131,510 | $ | 36,750 | $ | 13,025 | $ | (10,782 | ) | $ | 170,503 | |||||||||
Distributable cash flow (1) | $ | 135,554 | $ | 36,750 | $ | 6,051 | $ | (68,982 | ) | $ | 109,373 | |||||||||
Free cash flow (1) | $ | 134,728 | $ | 36,750 | $ | (196 | ) | $ | (68,982 | ) | $ | 102,300 | ||||||||
Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Revenues and other income | $ | 150,177 | $ | 27,676 | $ | 95,486 | $ | — | $ | 273,339 | ||||||||||
Gains on asset sales, net | 3,367 | — | 209 | — | 3,576 | |||||||||||||||
Total revenues and other income | $ | 153,544 | $ | 27,676 | $ | 95,695 | $ | — | $ | 276,915 | ||||||||||
Asset impairments | $ | 1,778 | $ | — | $ | — | $ | — | $ | 1,778 | ||||||||||
Net income (loss) from continuing operations | $ | 115,170 | $ | 27,676 | $ | 4,439 | $ | (88,818 | ) | $ | 58,467 | |||||||||
Adjusted EBITDA (1) | $ | 134,601 | $ | 36,750 | $ | 14,621 | $ | (13,940 | ) | $ | 172,032 | |||||||||
Distributable cash flow (1) | $ | 124,158 | $ | 36,750 | $ | 6,827 | $ | (81,975 | ) | $ | 85,760 | |||||||||
Free cash flow (1) | $ | 123,199 | $ | 36,750 | $ | 4,345 | $ | (81,975 | ) | $ | 82,319 |
(1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
11
Natural Resource Partners L.P.
Financial Tables
Operating Statistics - Coal Royalty and Other | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||
(In thousands, except per ton data) | 2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||
Coal production (tons) | ||||||||||||||||||||
Appalachia | ||||||||||||||||||||
Northern | 349 | 226 | 916 | 1,490 | 1,672 | |||||||||||||||
Central | 3,873 | 3,596 | 4,163 | 11,582 | 11,193 | |||||||||||||||
Southern | 346 | 468 | 396 | 1,288 | 1,721 | |||||||||||||||
Total Appalachia | 4,568 | 4,290 | 5,475 | 14,360 | 14,586 | |||||||||||||||
Illinois Basin | 609 | 794 | 739 | 2,091 | 3,545 | |||||||||||||||
Northern Powder River Basin | 855 | 849 | 808 | 2,896 | 2,708 | |||||||||||||||
Total coal production | 6,032 | 5,933 | 7,022 | 19,347 | 20,839 | |||||||||||||||
Coal royalty revenue per ton | ||||||||||||||||||||
Appalachia | ||||||||||||||||||||
Northern | $ | 4.01 | $ | 3.26 | $ | 3.52 | $ | 3.82 | $ | 1.36 | ||||||||||
Central | 5.37 | 4.77 | 5.65 | 5.57 | 5.09 | |||||||||||||||
Southern | 6.82 | 5.73 | 6.85 | 6.98 | 5.95 | |||||||||||||||
Illinois Basin | 4.89 | 4.32 | 4.72 | 4.56 | 3.68 | |||||||||||||||
Northern Powder River Basin | 3.79 | 3.47 | 2.25 | 2.70 | 2.89 | |||||||||||||||
Combined average coal royalty revenue per ton | 5.10 | 4.54 | 4.95 | 4.99 | 4.34 | |||||||||||||||
Coal royalty revenues | ||||||||||||||||||||
Appalachia | ||||||||||||||||||||
Northern | $ | 1,402 | $ | 737 | $ | 3,230 | $ | 5,698 | $ | 2,279 | ||||||||||
Central | 20,786 | 17,154 | 23,520 | 64,538 | 57,027 | |||||||||||||||
Southern | 2,359 | 2,683 | 2,712 | 8,985 | 10,242 | |||||||||||||||
Total Appalachia | 24,547 | 20,574 | 29,462 | 79,221 | 69,548 | |||||||||||||||
Illinois Basin | 2,973 | 3,431 | 3,485 | 9,533 | 13,055 | |||||||||||||||
Northern Powder River Basin | 3,237 | 2,945 | 1,815 | 7,817 | 7,827 | |||||||||||||||
Unadjusted coal royalty revenue | 30,757 | 26,950 | 34,762 | $ | 96,571 | $ | 90,430 | |||||||||||||
Coal royalty adjustment for minimum leases | (48 | ) | — | — | (98 | ) | — | |||||||||||||
Total coal royalty revenue | $ | 30,709 | $ | 26,950 | $ | 34,762 | $ | 96,473 | $ | 90,430 | ||||||||||
Other revenues | ||||||||||||||||||||
Production lease minimum revenue | $ | 1,769 | $ | 9,812 | $ | 2,006 | $ | 6,310 | $ | 22,556 | ||||||||||
Minimum lease straight line revenue | 567 | — | 569 | 1,739 | — | |||||||||||||||
Property tax revenue | 1,263 | 513 | 1,523 | 3,968 | 4,311 | |||||||||||||||
Wheelage | 1,572 | 1,219 | 1,609 | 5,155 | 3,510 | |||||||||||||||
Coal overriding royalty revenue | 3,918 | 3,059 | 3,702 | 10,492 | 5,769 | |||||||||||||||
Lease assignment fee | — | 1,000 | — | — | 1,000 | |||||||||||||||
Aggregates royalty revenue | 888 | 817 | 1,572 | 3,551 | 3,513 | |||||||||||||||
Oil and gas royalty revenues | 1,427 | 117 | 1,354 | 5,679 | 2,532 | |||||||||||||||
Other | 405 | 356 | 823 | 1,545 | 827 | |||||||||||||||
Total other revenues | 11,809 | 16,893 | 13,158 | 38,439 | 44,018 | |||||||||||||||
Coal royalty and other | 42,518 | 43,843 | 47,920 | 134,912 | 134,448 | |||||||||||||||
Transportation and processing services | 6,853 | 5,570 | 5,002 | 17,238 | 15,729 | |||||||||||||||
Gain on asset sales, net | — | 154 | 168 | 819 | 3,367 | |||||||||||||||
Total coal royalty and other segment revenues and other income | $ | 49,371 | $ | 49,567 | $ | 53,090 | $ | 152,969 | $ | 153,544 |
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 September 30, 2018 | ||||||||||||||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 41,604 | $ | 12,250 | $ | 6,941 | $ | (27,368 | ) | $ | 33,427 | |||||||||
Add: proceeds from sale of PP&E | — | — | 238 | — | 238 | |||||||||||||||
Add: proceeds from sale of mineral rights | — | — | — | — | — | |||||||||||||||
Add: return of long-term contract receivables | 1,590 | — | — | — | 1,590 | |||||||||||||||
Less: maintenance capital expenditures | — | — | (1,473 | ) | — | (1,473 | ) | |||||||||||||
Distributable cash flow | $ | 43,194 | $ | 12,250 | $ | 5,706 | $ | (27,368 | ) | $ | 33,782 | |||||||||
Less: proceeds from the sale of assets | — | — | (238 | ) | — | (238 | ) | |||||||||||||
Less: expansion capital expenditures | — | — | (2,336 | ) | — | (2,336 | ) | |||||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | — | — | (239 | ) | — | (239 | ) | |||||||||||||
Free cash flow | $ | 43,194 | $ | 12,250 | $ | 2,893 | $ | (27,368 | ) | $ | 30,969 | |||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 44,119 | $ | 8,992 | $ | 2,155 | $ | (29,466 | ) | $ | 25,800 | |||||||||
Add: distributions from unconsolidated investment in excess of cumulative earnings | — | 3,258 | — | — | 3,258 | |||||||||||||||
Add: proceeds from the sale of assets | 76 | — | 75 | — | 151 | |||||||||||||||
Add: return of long-term contract receivables | 600 | — | — | — | 600 | |||||||||||||||
Less: maintenance capital expenditures | — | — | (926 | ) | — | (926 | ) | |||||||||||||
Distributable cash flow | $ | 44,795 | $ | 12,250 | $ | 1,304 | $ | (29,466 | ) | $ | 28,883 | |||||||||
Less: proceeds from the sale of assets | (76 | ) | — | (75 | ) | — | (151 | ) | ||||||||||||
Less: expansion capital expenditures | — | — | (312 | ) | — | (312 | ) | |||||||||||||
Free cash flow | $ | 44,719 | $ | 12,250 | $ | 917 | $ | (29,466 | ) | $ | 28,420 | |||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 51,725 | $ | 12,250 | $ | 486 | $ | (10,082 | ) | $ | 54,379 | |||||||||
Add: proceeds from sale of assets | 170 | — | 54 | — | 224 | |||||||||||||||
Add: return of long-term contract receivable | 529 | — | — | — | 529 | |||||||||||||||
Less: maintenance capital expenditures | — | — | (1,154 | ) | — | (1,154 | ) | |||||||||||||
Distributable cash flow | $ | 52,424 | $ | 12,250 | $ | (614 | ) | $ | (10,082 | ) | $ | 53,978 | ||||||||
Less: proceeds from the sale of assets | (170 | ) | — | (54 | ) | — | (224 | ) | ||||||||||||
Less: expansion capital expenditures | — | — | (1,259 | ) | — | (1,259 | ) | |||||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | — | — | (466 | ) | — | (466 | ) | |||||||||||||
Free cash flow | $ | 52,254 | $ | 12,250 | $ | (2,393 | ) | $ | (10,082 | ) | $ | 52,029 |
13
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 | ||||||||||||||||||
Nine Months Ended September 30, 2018 | ||||||||||||||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 132,122 | $ | 34,653 | $ | 10,224 | $ | (68,982 | ) | $ | 108,017 | |||||||||
Add: distributions from unconsolidated investment in excess of cumulative earnings | — | 2,097 | — | — | 2,097 | |||||||||||||||
Add: proceeds from the sale of assets | 826 | — | 323 | — | 1,149 | |||||||||||||||
Add: return of long-term contract receivables | 2,606 | — | — | — | 2,606 | |||||||||||||||
Less: maintenance capital expenditures | — | — | (4,496 | ) | — | (4,496 | ) | |||||||||||||
Distributable cash flow | $ | 135,554 | $ | 36,750 | $ | 6,051 | $ | (68,982 | ) | $ | 109,373 | |||||||||
Less: proceeds from the sale of assets | (826 | ) | — | (323 | ) | — | (1,149 | ) | ||||||||||||
Less: expansion capital expenditures | — | — | (5,170 | ) | — | (5,170 | ) | |||||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | — | — | (754 | ) | — | (754 | ) | |||||||||||||
Free cash flow | $ | 134,728 | $ | 36,750 | $ | (196 | ) | $ | (68,982 | ) | $ | 102,300 | ||||||||
Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Net cash provided by (used in) operating activities of continuing operations | $ | 120,588 | $ | 31,104 | $ | 11,677 | $ | (81,975 | ) | $ | 81,394 | |||||||||
Add: distributions from unconsolidated investment in excess of cumulative earnings | — | 5,646 | — | — | 5,646 | |||||||||||||||
Add: proceeds from the sale of assets | 959 | — | 460 | — | 1,419 | |||||||||||||||
Add: return of long-term contract receivables (including affiliates) | 2,611 | — | — | — | 2,611 | |||||||||||||||
Less: maintenance capital expenditures | — | — | (5,310 | ) | — | (5,310 | ) | |||||||||||||
Distributable cash flow | $ | 124,158 | $ | 36,750 | $ | 6,827 | $ | (81,975 | ) | $ | 85,760 | |||||||||
Less: proceeds from the sale of assets | (959 | ) | — | (460 | ) | — | (1,419 | ) | ||||||||||||
Less: expansion capital expenditures | — | — | (926 | ) | — | (926 | ) | |||||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | — | — | (1,096 | ) | — | (1,096 | ) | |||||||||||||
Free cash flow | $ | 123,199 | $ | 36,750 | $ | 4,345 | $ | (81,975 | ) | $ | 82,319 |
14
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 September 30, 2018 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 37,751 | $ | 8,836 | $ | 2,654 | $ | (20,676 | ) | $ | 28,565 | |||||||||
Less: equity earnings from unconsolidated investment | — | (8,836 | ) | — | — | (8,836 | ) | |||||||||||||
Add: net loss attributable to non-controlling interest | 359 | — | — | — | 359 | |||||||||||||||
Add: total distributions from unconsolidated investment | — | 12,250 | — | — | 12,250 | |||||||||||||||
Add: interest expense, net | — | — | 8 | 17,493 | 17,501 | |||||||||||||||
Add: depreciation, depletion and amortization | 4,888 | — | 3,333 | — | 8,221 | |||||||||||||||
Adjusted EBITDA | $ | 42,998 | $ | 12,250 | $ | 5,995 | $ | (3,183 | ) | $ | 58,060 | |||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 37,992 | $ | 8,993 | $ | 3,342 | $ | (23,828 | ) | $ | 26,499 | |||||||||
Less: equity earnings from unconsolidated investment | — | (8,993 | ) | — | — | (8,993 | ) | |||||||||||||
Add: total distributions from unconsolidated investment | — | 12,250 | — | — | 12,250 | |||||||||||||||
Add: interest expense, net | — | — | 59 | 19,973 | 20,032 | |||||||||||||||
Add: depreciation, depletion and amortization | 5,305 | — | 3,001 | — | 8,306 | |||||||||||||||
Adjusted EBITDA | $ | 43,297 | $ | 12,250 | $ | 6,402 | $ | (3,855 | ) | $ | 58,094 | |||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 39,671 | $ | 16,529 | $ | 2,941 | $ | (20,997 | ) | $ | 38,144 | |||||||||
Less: equity earnings from unconsolidated investment | — | (16,529 | ) | — | — | (16,529 | ) | |||||||||||||
Less: net income attributable to non-controlling interest | (869 | ) | — | — | — | (869 | ) | |||||||||||||
Add: total distributions from unconsolidated investment | — | 12,250 | — | — | 12,250 | |||||||||||||||
Add: interest expense, net | — | — | — | 17,734 | 17,734 | |||||||||||||||
Add: depreciation, depletion and amortization | 5,376 | — | 3,187 | — | 8,563 | |||||||||||||||
Adjusted EBITDA | $ | 44,178 | $ | 12,250 | $ | 6,128 | $ | (3,263 | ) | $ | 59,293 |
15
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 | ||||||||||||||||||
Nine Months Ended September 30, 2018 | ||||||||||||||||||||
Net income (loss) from continuing operations | 116,414 | $ | 34,986 | $ | 3,620 | $ | (63,959 | ) | $ | 91,061 | ||||||||||
Less: equity earnings from unconsolidated investment | — | (34,986 | ) | — | — | (34,986 | ) | |||||||||||||
Less: net income attributable to non-controlling interest | (510 | ) | — | — | — | (510 | ) | |||||||||||||
Add: total distributions from unconsolidated investment | — | 36,750 | — | — | 36,750 | |||||||||||||||
Add: interest expense, net | — | — | 28 | 53,177 | 53,205 | |||||||||||||||
Add: depreciation, depletion and amortization | 15,364 | — | 9,377 | — | 24,741 | |||||||||||||||
Add: asset impairments | 242 | — | — | — | 242 | |||||||||||||||
Adjusted EBITDA | $ | 131,510 | $ | 36,750 | $ | 13,025 | $ | (10,782 | ) | $ | 170,503 | |||||||||
Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 115,170 | $ | 27,676 | $ | 4,439 | $ | (88,818 | ) | $ | 58,467 | |||||||||
Less: equity earnings from unconsolidated investment | — | (27,676 | ) | — | — | (27,676 | ) | |||||||||||||
Add: total distributions from unconsolidated investment | — | 36,750 | — | — | 36,750 | |||||||||||||||
Add: interest expense, net | — | — | 632 | 62,832 | 63,464 | |||||||||||||||
Add: debt modification expense | — | — | — | 7,939 | 7,939 | |||||||||||||||
Add: loss on extinguishment of debt | — | — | — | 4,107 | 4,107 | |||||||||||||||
Add: depreciation, depletion and amortization | 17,653 | — | 9,550 | — | 27,203 | |||||||||||||||
Add: asset impairments | 1,778 | — | — | — | 1,778 | |||||||||||||||
Adjusted EBITDA | $ | 134,601 | $ | 36,750 | $ | 14,621 | $ | (13,940 | ) | $ | 172,032 |
Adjusted Net Income Attributable to NRP | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||
Net income attributable to NRP | $ | 28,900 | $ | 26,066 | $ | 37,241 | $ | 90,479 | $ | 57,960 | ||||||||||
Add: debt modification expense | — | — | — | — | 7,939 | |||||||||||||||
Add: loss on extinguishment of debt | — | — | — | — | 4,107 | |||||||||||||||
Add: restructuring-related incentive compensation expense | — | — | — | — | 3,847 | |||||||||||||||
Less: income from Ciner Wyoming's royalty dispute settlement | — | — | (12,678 | ) | (12,678 | ) | — | |||||||||||||
Adjusted net income attributable to NRP | $ | 28,900 | $ | 26,066 | $ | 24,563 | $ | 77,801 | $ | 73,853 |
16
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Last Twelve Months Distributable Cash Flow and Free Cash Flow | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands) | December 31, 2017 | March 31, 2018 | June 30, 2018 | September 30, 2018 | Last 12 Months | |||||||||||||||
Net cash provided by operating activities of continuing operations | $ | 46,444 | $ | 20,211 | $ | 54,379 | $ | 33,427 | $ | 154,461 | ||||||||||
Add: distributions from unconsolidated investment in excess of cumulative earnings | — | 2,097 | — | — | 2,097 | |||||||||||||||
Add: proceeds from the sale of assets | 563 | 687 | 224 | 238 | 1,712 | |||||||||||||||
Add: return on long-term contract receivables | 399 | 487 | 529 | 1,590 | 3,005 | |||||||||||||||
Less: maintenance capital expenditures | (1,025 | ) | (1,869 | ) | (1,154 | ) | (1,473 | ) | (5,521 | ) | ||||||||||
Distributable cash flow | $ | 46,381 | $ | 21,613 | $ | 53,978 | $ | 33,782 | $ | 155,754 | ||||||||||
Less: proceeds from the sale of assets | (563 | ) | (687 | ) | (224 | ) | (238 | ) | (1,712 | ) | ||||||||||
Less: expansion capital expenditures | (39 | ) | (1,575 | ) | (1,259 | ) | (2,336 | ) | (5,209 | ) | ||||||||||
Less: mitigation payments and acquisition costs classified as financing activities | (197 | ) | (49 | ) | (466 | ) | (239 | ) | (951 | ) | ||||||||||
Free cash flow | $ | 45,582 | $ | 19,302 | $ | 52,029 | $ | 30,969 | $ | 147,882 | ||||||||||
Common Unit Distribution | $ | 0.45 | $ | 0.45 | $ | 0.45 | $ | 0.45 | $ | 1.80 | ||||||||||
Distribution Coverage Ratio (1) | 6.9 | x | ||||||||||||||||||
Less: Preferred Distributions | $ | (30,000 | ) | |||||||||||||||||
Distributable cash flow after Preferred Distributions | $ | 125,754 | ||||||||||||||||||
Distribution Coverage Ratio after Preferred Distributions (2) | 5.6 | x |
(1) | Calculated as last twelve months' DCF divided by annual common unit distributions times number of common units and general partner units outstanding. |
(2) | Calculated as last twelve months' DCF less preferred distributions divided by annual common unit distributions times number of common units and general partner units outstanding. |
17
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Last Twelve Months Adjusted EBITDA | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands) | December 31, 2017 | March 31, 2018 | June 30, 2018 | September 30, 2018 | Last 12 Months | |||||||||||||||
Net income from continuing operations | $ | 30,741 | $ | 24,352 | $ | 38,144 | $ | 28,565 | $ | 121,802 | ||||||||||
Less: equity earnings from unconsolidated investment | (12,781 | ) | (9,621 | ) | (16,529 | ) | (8,836 | ) | (47,767 | ) | ||||||||||
Add (less): net loss (income) attributable to non-controlling interest | — | — | (869 | ) | 359 | (510 | ) | |||||||||||||
Add: total distributions from unconsolidated investment | 12,250 | 12,250 | 12,250 | 12,250 | 49,000 | |||||||||||||||
Add: interest expense, net | 19,257 | 17,970 | 17,734 | 17,501 | 72,462 | |||||||||||||||
Add: depreciation, depletion and amortization | 8,790 | 7,957 | 8,563 | 8,221 | 33,531 | |||||||||||||||
Add: asset impairments | 1,253 | 242 | — | — | 1,495 | |||||||||||||||
Adjusted EBITDA | $ | 59,510 | $ | 53,150 | $ | 59,293 | $ | 58,060 | $ | 230,013 | ||||||||||
Debt—at September 30, 2018 | $ | 807,124 | ||||||||||||||||||
Leverage Ratio (1) | 3.5 | x |
(1) | Leverage Ratio is calculated as last twelve months' Adjusted EBITDA divided by the outstanding principal value of our debt as of September 30, 2018. |
Return on Capital Employed ("ROCE") | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Coal Royalty and Other | Construction Aggregates | Corporate and Financing | ||||||||||||||||||
(In thousands) | Soda Ash | Total | ||||||||||||||||||
LTM Ended September 30, 2018 | ||||||||||||||||||||
Net Income (loss) from continuing operations | $ | 156,143 | $ | 47,767 | $ | 5,609 | $ | (87,717 | ) | $ | 121,802 | |||||||||
Interest Expense, Net | — | — | 89 | 72,373 | 72,462 | |||||||||||||||
Return | $ | 156,143 | $ | 47,767 | $ | 5,698 | $ | (15,344 | ) | $ | 194,264 | |||||||||
As of September 30, 2017 | ||||||||||||||||||||
Partners' Capital | $ | 839,431 | $ | 248,147 | $ | 176,902 | $ | (1,081,765 | ) | $ | 182,715 | |||||||||
Add: warrants | — | — | — | 66,816 | 66,816 | |||||||||||||||
Add: discontinued operations | — | — | — | 1,553 | 1,553 | |||||||||||||||
Less: non-controlling interest | — | — | — | (3,394 | ) | (3,394 | ) | |||||||||||||
Less: other comprehensive loss | — | — | — | (3,079 | ) | (3,079 | ) | |||||||||||||
Total Partners' Capital | 839,431 | 248,147 | 176,902 | (1,019,869 | ) | 244,611 | ||||||||||||||
Debt | — | — | — | 955,869 | 955,869 | |||||||||||||||
Capital Employed | $ | 839,431 | $ | 248,147 | $ | 176,902 | $ | (64,000 | ) | $ | 1,200,480 | |||||||||
ROCE | 18.6% | 19.2% | 3.2% | N/A | 16.2% | |||||||||||||||
Income from Ciner Wyoming's royalty dispute settlement | 12,678 | 12,678 | ||||||||||||||||||
ROCE excluding income from Ciner Wyoming's royalty dispute settlement | 14.1% | 15.1% |
18
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Last Twelve Months Segment Details | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Coal Royalty and Other | Construction Aggregates | Corporate and Financing | ||||||||||||||||||
(In thousands) | Soda Ash | Total | ||||||||||||||||||
LTM Ended September 30, 2018 | ||||||||||||||||||||
Net Income (loss) from continuing operations | $ | 156,143 | $ | 47,767 | $ | 5,609 | $ | (87,717 | ) | $ | 121,802 | |||||||||
Net Income attributable to common unitholders | N/A | N/A | N/A | N/A | 89,102 | |||||||||||||||
Adjusted EBITDA | 178,323 | 49,000 | 18,168 | (15,478 | ) | 230,013 | ||||||||||||||
DCF | 181,695 | 49,000 | 9,407 | (84,348 | ) | 155,754 | ||||||||||||||
FCF | 180,677 | 49,000 | 2,553 | (84,348 | ) | 147,882 | ||||||||||||||
ROCE (1) | 18.6 | % | 14.1 | % | 3.2 | % | N/A | 15.1 | % |
(1) | Excludes $12.7 million of income from Ciner Wyoming's litigation settlement in the second quarter of 2018. |
-end-
19