Exhibit 99.1
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Natural Resource Partners L.P. 601 Jefferson St., Suite 3600, Houston, TX 77002 | |  |
NEWS RELEASE
Natural Resource Partners L.P.
Reports 2013 Results
2013 Highlights
| | • | | Revenues of $358.1 million |
| | • | | Net income per unit of $1.54 |
| | • | | Distributable cash flow of $309.4 million |
| | • | | EBITDA of $316.7 million |
HOUSTON, February 12, 2014 –Natural Resource Partners L.P. (NYSE:NRP)today reported 2013 revenues of $358.1 million compared to $379.1 million for 2012 and net income per unit of $1.54 versus $1.97 reported for 2012. Distributable cash flow was $309.4 million for 2013 compared to $298.9 million for 2012. NRP also reported EBITDA of $316.7 million for 2013 versus $328.1 million for 2012. Reconciliations of the non-GAAP measures of distributable cash flow and EBITDA are included in the tables at the end of this release.
For the quarter ended December 31, 2013, revenues totaled $94.7 million compared to $102.4 million reported for the same period 2012. Net income per unit for the fourth quarter was $0.42 per unit compared to $0.56 per unit for the fourth quarter 2012. Distributable cash flow for the fourth quarter was $69.6 million and EBITDA was $87.1 million compared to $87.6 million and $92.0 million, respectively, for the fourth quarter 2012.
“In 2013, NRP made big strides in our diversification process with over $365 million of acquisitions outside of the coal space,” said Nick Carter, President and Chief Operating Officer. “Our investment in OCI Wyoming, a trona and soda ash operation, helped to dampen the impact of a decline in coal revenues in Appalachia. While coal related revenues remain a large portion of NRP’s business, the investments made to diversify our revenues, including the two Williston Basin oil and gas acquisitions completed in 2013, will continue to minimize the impact of the weaker coal markets until a recovery is experienced in both the metallurgical and thermal coal markets. The results of NRP’s operations reported today were in the middle to upper end of the 2013 guidance ranges released in August and reconfirmed in early January.”
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| NRP Reports 2013 Results | | Page 2 of 12 |
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Highlights | | Quarter Ended | | | For the Year Ended | |
| | | December | | | December | | | % | | | December | | | December | | | % | |
| | | 2013 | | | 2012 | | | Change | | | 2013 | | | 2012 | | | Change | |
| | | (in thousands except per unit and per ton) | | | | | | (in thousands except per unit and per ton) | | | | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues and other income | | $ | 94,744 | | | $ | 102,436 | | | | -8 | % | | $ | 358,117 | | | $ | 379,147 | | | | -6 | % |
Coal production (tons) | | | 11,089 | | | | 17,012 | | | | -35 | % | | | 53,292 | | | | 54,444 | | | | -2 | % |
Coal royalty revenues | | $ | 47,706 | | | $ | 67,681 | | | | -30 | % | | $ | 212,663 | | | $ | 260,734 | | | | -18 | % |
Average coal royalty revenue per ton | | $ | 4.30 | | | $ | 3.98 | | | | 8 | % | | $ | 3.99 | | | $ | 4.79 | | | | -17 | % |
Revenues other than coal royalties | | $ | 47,038 | | | $ | 34,755 | | | | 35 | % | | $ | 145,454 | | | $ | 118,413 | | | | 23 | % |
Operating Expenses | | $ | 27,992 | | | $ | 29,230 | | | | -4 | % | | $ | 121,881 | | | $ | 111,982 | | | | 9 | % |
Net income | | | | | | | | | | | | | | | | | | | | | | | | |
Net income to limited partners | | $ | 46,041 | | | $ | 58,905 | | | | -22 | % | | $ | 168,636 | | | $ | 209,088 | | | | -19 | % |
Net income per unit | | $ | 0.42 | | | $ | 0.56 | | | | -25 | % | | $ | 1.54 | | | $ | 1.97 | | | | -22 | % |
Average units outstanding | | | 109,812 | | | | 106,028 | | | | 4 | % | | | 109,584 | | | | 106,028 | | | | 3 | % |
Distributable cash flow(1) | | $ | 69,646 | | | $ | 87,581 | | | | -20 | % | | $ | 309,394 | | | $ | 298,899 | | | | 4 | % |
EBITDA(1) | | $ | 87,113 | | | $ | 91,987 | | | | -5 | % | | | 316,657 | | | | 328,116 | | | | -3 | % |
EBITDA margin(1) | | | 92 | % | | | 90 | % | | | 2 | % | | | 88 | % | | | 87 | % | | | 2 | % |
| (1) | See “Non-GAAP Financial Measures” and reconciliation tables at the end of the release. |
Twelve Months 2013 compared to Twelve Months 2012
Revenues
Total revenues for 2013 declined 6% to $358.1 million from the same period of 2012 due to a decrease in coal related revenues offset by equity income from the OCI investment and increased oil and gas revenues. Coal royalty revenues decreased $48.1 million, or 18%, from 2012 to $212.7 million due primarily to decreases in prices for both metallurgical and steam coal. Coal production volumes decreased slightly to 53.3 million tons, while average coal royalty revenue per ton decreased 17% to $3.99 per ton. Metallurgical coal represented 31% of coal production and 41% of coal royalty revenues for 2013.
NRP benefitted from its diversification into other asset classes, as revenues other than coal royalty revenues increased to 41% of total revenues in 2013 as compared to 31% of total revenues in 2012. The increase was primarily due to revenues associated with the investment in OCI Wyoming, as well as increases in aggregates and oil and gas revenues. These increases more than offset the slight decreases experienced in infrastructure revenues and overriding royalties, as well as the larger decrease in minimums recognized as revenue, all of which are primarily coal related.
Operating Expenses
Total operating expenses increased by 9% mainly due to increased depreciation, depletion and amortization resulting from production from higher cost properties and increased general and administrative expense.
Net Income
Net income attributable to the limited partners and net income per unit decreased 19% and 22% respectively in 2013 compared to the 2012 period. In addition to lower revenues and higher expenses, a small portion of the decrease in net income per unit was due to an increase in the number of units outstanding in 2013 versus the same period in 2012.
Distributable Cash Flow
Distributable cash flow increased by 4% to $309.4 million mainly due to cash distributions received from OCI Wyoming, which offset other declines.
EBITDA
EBITDA declined 3% in 2013 to $316.7 million from the $328.1 million generated in 2012. The decrease is mainly related to decreased coal related revenues. NRP, due to its unique business structure that generates predominantly royalty income, realized an EBITDA margin of 88% in 2013 versus 87% in 2012.
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| NRP Reports 2013 Results | | Page 3 of 12 |
Fourth Quarter 2013 compared to Third Quarter 2013
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Highlights | | Quarter Ended | |
| | | December 2013 | | | September 2013 | | | % Change | |
| | | (in thousands, except per ton and
per unit) | | | | |
Revenues | | | | | | | | | | | | |
Total revenues and other income | | $ | 94,744 | | | $ | 82,237 | | | | 15 | % |
Coal production (tons) | | | 11,089 | | | | 13,476 | | | | -18 | % |
Coal royalty revenues | | $ | 47,706 | | | $ | 52,305 | | | | -9 | % |
Average coal royalty revenue per ton | | $ | 4.30 | | | $ | 3.88 | | | | 11 | % |
Revenues other than coal royalty | | $ | 47,038 | | | $ | 29,932 | | | | 57 | % |
Operating expenses | | $ | 27,992 | | | $ | 30,613 | | | | -9 | % |
Net income | | | | | | | | | | | | |
Net income to limited partners | | $ | 46,041 | | | $ | 35,403 | | | | 30 | % |
Net income per unit | | $ | 0.42 | | | $ | 0.32 | | | | 31 | % |
Average units outstanding | | | 109,812 | | | | 109,812 | | | | 0 | % |
Distributable cash flow(1) | | $ | 69,646 | | | $ | 104,613 | | | | -33 | % |
EBITDA(1) | | $ | 87,113 | | | $ | 72,860 | | | | 20 | % |
EBITDA margin(1) | | | 92 | % | | | 89 | % | | | 3 | % |
| (1) | See “Non-GAAP Financial Measures” and reconciliation tables at the end of the release. |
Revenues
Total revenues for the fourth quarter increased 15% to $94.7 million from the third quarter due to increased revenue from our equity investment in OCI, increased oil and gas revenues, and the receipt of a right-of-way condemnation payment of $10.4 million in the fourth quarter. These increases more than offset the 18% decline in coal production, a significant portion of which was due to lessees mining on adjacent property not owned by NRP, and the resultant decrease in coal royalty revenues. The 11% increase in coal royalty revenue per ton over the third quarter is predominantly due to lower production allocable to NRP in the fourth quarter on properties that receive lower royalty rates than the remainder of the production. These properties are currently mining on adjacent reserves.
Operating Expenses
Operating expenses were less than the third quarter predominantly due to lower depreciation, depletion and amortization on lower production volumes.
Net Income
Net income to the limited partners and net income per unit increased 30% in the fourth quarter from the previous quarter mainly due to higher revenues other than coal royalty revenues, decreased depreciation, depletion and amortization partially offset by declines in coal related revenues and increased interest expense related to the high-yield notes issued in September 2013.
Distributable Cash Flow
Distributable cash flow decreased $35.0 million in the fourth quarter, as NRP received a special one-time distribution of $44.8 million from OCI during the third quarter.
EBITDA
EBITDA for the fourth quarter 2013 increased to $87.1 million over the $72.9 million generated in the third quarter 2013. The EBITDA margin for the fourth quarter was 92%, up from 89% in the third quarter.
Market Outlook
As a result of the exceptionally cold winter of 2013-2014, natural gas prices have increased substantially and natural gas storage levels have dropped below the five-year average. In addition, utilities have been running their coal units, including those units expected to be retired in 2015, at near full capacity, and coal stockpiles have been reduced below their 2013 levels. The impact of the high natural gas prices and cold weather on thermal coal prices has been muted so far, but utilities have entered 2014 with larger spot positions than in the past, and the reduced stockpiles could force them to purchase coal on the spot market at higher prices during the peak heating and cooling
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| NRP Reports 2013 Results | | Page 4 of 12 |
seasons in 2014. “Higher natural gas prices and the possibility of improving thermal coal prices due to the weather, benefits NRP in both our interests in natural gas as well as our coal business,” said Nick Carter. “On the other hand, federal government policy and regulations are continuing to be challenging.”
On the metallurgical side of the market, NRP continues to have substantial exposure to metallurgical coal, from which it derived 31% of its coal production and 41% of its coal royalty revenues during 2013. The market remains weak, with the first quarter 2014 benchmark price at a multi-year low of $143 per metric ton. Although global demand for steel continues to increase, global production continues to outpace demand. In addition, rising exports of metallurgical coal from Australia continue to have a negative effect on prices received for metallurgical coal produced in the United States. “NRP does not anticipate metallurgical coal prices to recover in 2014, due to the continued high global production levels and currently weak Australian and Canadian dollars,” said Nick Carter.
As indicated in the guidance issued in January, NRP anticipates significant growth in its oil and gas revenues in 2014, primarily due to increased crude oil production derived from the two recent Williston Basin acquisitions. As NRP completes additional oil and gas acquisitions and the current assets become developed further, NRP will report more detailed information to the market related to the reserves, production and commodity prices. NRP is currently not hedged with respect to any of its oil and gas assets. In addition to the coal and oil and gas markets, NRP now has exposure to the soda ash market through its investment in OCI Wyoming. NRP anticipates receiving approximately $42.5 million in distributions from OCI in 2014, and believes that the domestic soda ash market will remain stable throughout the year. Market reports indicate that the international soda ash market should show improvement over 2013, primarily due to anticipated price increases in the Asian market.
Distributions
In January 2014, the Board of Directors of NRP’s general partner declared a quarterly distribution of $0.35 per unit for the fourth quarter 2013. This $0.20 per unit reduction in the quarterly distribution will reduce NRP’s total distributions by approximately $90 million in 2014. The reduction was predicated by the lower budgeted revenues and increased interest expense expected in 2014 and will allow NRP to preserve its liquidity for acquisitions.
Acquisitions and Liquidity
In 2013, NRP invested more than $365 million in non-coal-related acquisitions in an effort to diversify its revenues.
At year-end 2013, NRP’s liquidity was approximately $390 million, consisting of $93 million in cash and $296 million available under its credit facilities. This positions NRP to continue to make accretive acquisitions that will create value for its unitholders.
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| NRP Reports 2013 Results | | Page 5 of 12 |
Company Profile
Natural Resource Partners L.P. is a master limited partnership headquartered in Houston, TX, with its operations headquarters in Huntington, WV. NRP is principally engaged in the business of owning and managing mineral reserve properties. NRP primarily owns coal, aggregate and oil and gas reserves across the United States that generate royalty income for the partnership. In addition, NRP owns an equity investment in OCI Wyoming, a trona/soda ash operation, and owns non-operated working interests in oil and gas properties.
For additional information, please contact Kathy H. Roberts at 713-751-7555 orkroberts@nrplp.com. Further information about NRP is available on the partnership’s website athttp://www.nrplp.com.
Non-GAAP Financial Measures
“Distributable cash flow” represents cash flow from operations plus any distributions received in excess of equity income recognized for OCI Wyoming, plus any proceeds from the sale of assets plus the return on direct financing lease and contractual overrides shown in the cash flows from investing activities section of the cash flow statement. Distributable cash flow is a “non-GAAP financial measure” that is presented because management believes it is a useful adjunct to net cash provided by operating activities under GAAP. Distributable cash flow is a significant liquidity metric that is an indicator of NRP’s ability to make quarterly cash distributions to its partners. Distributable cash flow is also the quantitative standard used throughout the investment community with respect to publicly traded partnerships. Distributable cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. A reconciliation of distributable cash flow to net cash provided by operating activities is included in the tables attached to this release. Distributable cash flow may not be calculated the same for NRP as other companies.
“EBITDA” is a non-GAAP financial measure that we define as earnings before interest, taxes, depreciation, depletion and amortization and asset impairment. “EBITDA,” as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. EBITDA provides no information regarding a company’s capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax positions. EBITDA does not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital and other commitments and obligations. Our management team believes EBITDA is useful in evaluating our financial performance because this measure is widely used by analysts and investors for comparative purposes. NRP has not previously included EBITDA as a financial measure in its press releases. However, NRP entered the high-yield bond market in 2013, and EBITDA is a financial measure widely used by investors in that market. There are significant limitations to using EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect our net income or loss, the lack of comparability of results of operations of different companies and the different methods of calculating EBITDA reported by different companies.
“EBITDA margin” represents NRP’s EBITDA as a percentage of total revenues.
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| NRP Reports 2013 Results | | Page 6 of 12 |
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, decreases in demand for coal, oil and gas, and aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; commodity prices; unanticipated geologic problems; changes in the legislative or regulatory environment and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
14-02
-Financial statements follow-
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| NRP Reports 2013 Results | | Page 7 of 12 |
Natural Resource Partners L.P.
Operating Statistics
(in thousands except per ton data)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | For the Year Ended | |
| | | December | | | December | | | December | | | December | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | (unaudited) | | | (unaudited) | | | | |
Coal Royalties: | | | | | | | | | | | | | | | | |
Coal royalty revenues: | | | | | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | | | | | |
Northern | | $ | 2,635 | | | $ | 4,772 | | | $ | 14,643 | | | $ | 15,768 | |
Central | | | 23,143 | | | | 36,510 | | | | 105,004 | | | | 156,390 | |
Southern | | | 5,533 | | | | 8,631 | | | | 26,156 | | | | 29,325 | |
| | | | | | | | | | | | | | | | |
Total Appalachia | | $ | 31,311 | | | $ | 49,913 | | | $ | 145,803 | | | $ | 201,483 | |
Illinois Basin | | | 15,137 | | | | 14,652 | | | | 56,001 | | | | 49,538 | |
Northern Powder River Basin | | | 866 | | | | 2,237 | | | | 7,569 | | | | 8,501 | |
Gulf Coast | | | 392 | | | | 879 | | | | 3,290 | | | | 1,212 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 47,706 | | | $ | 67,681 | | | $ | 212,663 | | | $ | 260,734 | |
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Coal royalty production (tons): | | | | | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | | | | | |
Northern | | | 1,454 | | | | 4,620 | | | | 11,505 | | | | 10,486 | |
Central | | | 4,739 | | | | 6,466 | | | | 20,801 | | | | 26,098 | |
Southern | | | 963 | | | | 1,171 | | | | 4,151 | | | | 3,718 | |
| | | | | | | | | | | | | | | | |
Total Appalachia | | | 7,156 | | | | 12,257 | | | | 36,457 | | | | 40,302 | |
Illinois Basin | | | 3,546 | | | | 3,391 | | | | 13,087 | | | | 11,299 | |
Northern Powder River Basin | | | 279 | | | | 930 | | | | 2,778 | | | | 2,377 | |
Gulf Coast | | | 108 | | | | 434 | | | | 970 | | | | 466 | |
| | | | | | | | | | | | | | | | |
Total | | | 11,089 | | | | 17,012 | | | | 53,292 | | | | 54,444 | |
| | | | | | | | | | | | | | | | |
Average royalty revenue per ton: | | | | | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | | | | | |
Northern | | $ | 1.81 | | | $ | 1.03 | | | $ | 1.27 | | | $ | 1.50 | |
Central | | | 4.88 | | | | 5.65 | | | | 5.05 | | | | 5.99 | |
Southern | | | 5.75 | | | | 7.37 | | | | 6.30 | | | | 7.89 | |
Total Appalachia | | | 4.38 | | | | 4.07 | | | | 4.00 | | | | 5.00 | |
Illinois Basin | | | 4.27 | | | | 4.32 | | | | 4.28 | | | | 4.38 | |
Northern Powder River Basin | | | 3.10 | | | | 2.41 | | | | 2.72 | | | | 3.58 | |
Gulf Coast | | | 3.63 | | | | 2.03 | | | | 3.39 | | | | 2.60 | |
Combined average royalty revenue per ton | | $ | 4.30 | | | $ | 3.98 | | | $ | 3.99 | | | $ | 4.79 | |
Aggregates: | | | | | | | | | | | | | | | | |
Royalty revenues | | $ | 1,774 | | | $ | 1,537 | | | $ | 7,073 | | | $ | 6,598 | |
Aggregate royalty bonus | | $ | — | | | $ | — | | | $ | 570 | | | $ | — | |
Production | | | 1,642 | | | | 1,234 | | | | 6,155 | | | | 5,287 | |
Average base royalty per ton | | $ | 1.08 | | | $ | 1.25 | | | $ | 1.15 | | | $ | 1.25 | |
Oil and gas: | | | | | | | | | | | | | | | | |
Revenues | | $ | 7,338 | | | $ | 2,448 | | | $ | 17,080 | | | $ | 9,160 | |
Investment in OCI Wyoming: | | | | | | | | | | | | | | | | |
Equity and other unconsolidated investment earnings | | $ | 12,018 | | | $ | — | | | $ | 34,186 | | | $ | — | |
Cash distributions received | | $ | — | | | $ | — | | | $ | 72,946 | | | $ | — | |
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| NRP Reports 2013 Results | | Page 8 of 12 |
Natural Resource Partners L.P.
Consolidated Statements of Comprehensive Income
(in thousands, except per unit data)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | For the Year Ended | |
| | | December | | | December | | | December | | | December | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | (unaudited) | | | (unaudited) | | | | |
Revenues and other income: | | | | | | | | | | | | | | | | |
Coal royalties | | $ | 47,706 | | | $ | 67,681 | | | $ | 212,663 | | | $ | 260,734 | |
Equity and other unconsolidated investment income | | | 12,018 | | | | — | | | | 34,186 | | | | — | |
Aggregate royalties | | | 1,774 | | | | 1,537 | | | | 7,643 | | | | 6,598 | |
Processing fees | | | 1,163 | | | | 1,394 | | | | 5,049 | | | | 8,299 | |
Transportation fees | | | 4,478 | | | | 5,152 | | | | 17,977 | | | | 19,513 | |
Oil and gas revenues | | | 7,338 | | | | 2,448 | | | | 17,080 | | | | 9,160 | |
Property taxes | | | 3,611 | | | | 3,852 | | | | 15,416 | | | | 15,273 | |
Minimums recognized as revenue | | | 1,860 | | | | 10,208 | | | | 8,285 | | | | 23,956 | |
Override royalties | | | 2,488 | | | | 3,529 | | | | 13,499 | | | | 15,527 | |
Other | | | 12,308 | | | | 6,635 | | | | 26,319 | | | | 20,087 | |
| | | | | | | | | | | | | | | | |
Total revenues and other income | | | 94,744 | | | | 102,436 | | | | 358,117 | | | | 379,147 | |
Operating expenses: | | | | | | | | | | | | | | | | |
Depreciation, depletion and amortization | | | 14,352 | | | | 16,155 | | | | 64,377 | | | | 58,221 | |
Asset impairments | | | — | | | | 2,568 | | | | 734 | | | | 2,568 | |
General and administrative | | | 9,052 | | | | 5,460 | | | | 36,821 | | | | 29,714 | |
Property, franchise and other taxes | | | 3,653 | | | | 4,088 | | | | 16,463 | | | | 17,678 | |
Lease operating expenses | | | 256 | | | | — | | | | 739 | | | | — | |
Transportation costs | | | 402 | | | | 498 | | | | 1,644 | | | | 1,944 | |
Coal royalty and override payments | | | 277 | | | | 461 | | | | 1,103 | | | | 1,857 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 27,992 | | | | 29,230 | | | | 121,881 | | | | 111,982 | |
| | | | | | | | | | | | | | | | |
Income from operations | | | 66,752 | | | | 73,206 | | | | 236,236 | | | | 267,165 | |
Other income (expense) | | | | | | | | | | | | | | | — | |
Interest expense | | | (19,777 | ) | | | (13,157 | ) | | | (64,396 | ) | | | (53,972 | ) |
Interest income | | | 6 | | | | 58 | | | | 238 | | | | 162 | |
| | | | | | | | | | | | | | | | |
Income before non-controlling interest | | $ | 46,981 | | | $ | 60,107 | | | $ | 172,078 | | | $ | 213,355 | |
Non-controlling interest | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net income | | $ | 46,981 | | | $ | 60,107 | | | $ | 172,078 | | | $ | 213,355 | |
| | | | | | | | | | | | | | | | |
Net income attributable to: | | | | | | | | | | | | | | | | |
General partner | | $ | 940 | | | $ | 1,202 | | | $ | 3,442 | | | $ | 4,267 | |
| | | | | | | | | | | | | | | | |
Limited partners | | $ | 46,041 | | | $ | 58,905 | | | $ | 168,636 | | | $ | 209,088 | |
| | | | | | | | | | | | | | | | |
Basic and diluted net income per limited partner unit: | | $ | 0.42 | | | $ | 0.56 | | | $ | 1.54 | | | $ | 1.97 | |
| | | | | | | | | | | | | | | | |
Weighted average number of units outstanding: | | | 109,812 | | | | 106,028 | | | | 109,584 | | | | 106,028 | |
| | | | | | | | | | | | | | | | |
Comprehensive income | | $ | 46,900 | | | $ | 60,120 | | | $ | 172,143 | | | $ | 213,405 | |
| | | | | | | | | | | | | | | | |
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| NRP Reports 2013 Results | | Page 9 of 12 |
Natural Resource Partners L.P.
Consolidated Statements of Cash Flow
(in thousands, except per unit data)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | For the Year Ended | |
| | | December | | | December | | | December | | | December | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | (unaudited) | | | (unaudited) | | | | |
Cash flows from operating activities: | | | | | | | | | | | | | | | | |
Net income | | $ | 46,981 | | | $ | 60,107 | | | $ | 172,078 | | | $ | 213,355 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | | | | |
Depreciation, depletion and amortization | | | 14,352 | | | | 16,155 | | | | 64,377 | | | | 58,221 | |
Gain on reserve swap | | | — | | | | — | | | | (8,149 | ) | | | — | |
Equity and other unconsolidated investment income | | | (12,018 | ) | | | — | | | | (34,186 | ) | | | — | |
Distributions from unconsolidated investments | | | — | | | | — | | | | 24,113 | | | | — | |
Non-cash interest charge, net | | | 746 | | | | 152 | | | | 2,200 | | | | 605 | |
Gain on sale of assets | | | (10,370 | ) | | | (4,752 | ) | | | (10,921 | ) | | | (13,575 | ) |
Asset impairment | | | — | | | | 2,568 | | | | 734 | | | | 2,568 | |
Change in operating assets and liabilities: | | | | | | | | | | | | | | | | |
Accounts receivable | | | (2,651 | ) | | | (1,468 | ) | | | 6,826 | | | | (802 | ) |
Other assets | | | (1,380 | ) | | | (605 | ) | | | (516 | ) | | | (236 | ) |
Accounts payable and accrued liabilities | | | 1,405 | | | | 854 | | | | 2,197 | | | | 1,909 | |
Accrued interest | | | 9,517 | | | | 2,275 | | | | 6,919 | | | | (496 | ) |
Deferred revenue | | | 5,909 | | | | (183 | ) | | | 19,240 | | | | 11,684 | |
Accrued incentive plan expenses | | | 2,364 | | | | 83 | | | | 2,284 | | | | (3,461 | ) |
Property, franchise and other taxes payable | | | 2,704 | | | | 2,350 | | | | (122 | ) | | | 1,636 | |
| | | | | | | | | | | | | | | | |
Net cash provided by operating activities: | | | 57,559 | | | | 77,536 | | | | 247,074 | | | | 271,408 | |
| | | | | | | | | | | | | | | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | |
Acquisition of land and mineral rights | | | (33,697 | ) | | | (46,071 | ) | | | (72,000 | ) | | | (180,534 | ) |
Acquisition or construction of plant and equipment | | | — | | | | — | | | | — | | | | (681 | ) |
Acquisition of equity interests | | | (8 | ) | | | — | | | | (293,085 | ) | | | — | |
Distributions from unconsolidated investments | | | — | | | | — | | | | 48,833 | | | | — | |
Proceeds from sale of assets | | | 10,370 | | | | 9,775 | | | | 10,929 | | | | 24,822 | |
Return on direct financing lease and contractual override | | | 1,717 | | | | 270 | | | | 2,558 | | | | 2,669 | |
Investment in direct financing lease | | | — | | | | — | | | | — | | | | (59,009 | ) |
| | | | | | | | | | | | | | | | |
Net cash used in investing activities | | | (21,618 | ) | | | (36,026 | ) | | | (302,765 | ) | | | (212,733 | ) |
| | | | | | | | | | | | | | | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | |
Proceeds from loans | | | 20,000 | | | | 45,000 | | | | 567,020 | | | | 148,000 | |
Repayment of loans | | | — | | | | — | | | | (386,230 | ) | | | (30,800 | ) |
Deferred financing costs | | | (148 | ) | | | — | | | | (9,209 | ) | | | — | |
Proceeds from issuance of common units | | | — | | | | — | | | | 75,000 | | | | — | |
Capital contribution by general partner | | | — | | | | — | | | | 1,531 | | | | — | |
Costs associated with equity transactions | | | (233 | ) | | | — | | | | (293 | ) | | | (59 | ) |
Repayment of obligation related to acquisitions | | | — | | | | — | | | | | | | | (500 | ) |
Distributions to partners | | | (62,722 | ) | | | (59,505 | ) | | | (249,039 | ) | | | (240,814 | ) |
| | | | | | | | | | | | | | | | |
Net cash used in financing activities | | | (43,103 | ) | | | (14,505 | ) | | | (1,220 | ) | | | (124,173 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | | (7,162 | ) | | | 27,005 | | | | (56,911 | ) | | | (65,498 | ) |
Cash and cash equivalents at beginning of period | | | 99,675 | | | | 122,419 | | | | 149,424 | | | | 214,922 | |
| | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | | $ | 92,513 | | | $ | 149,424 | | | $ | 92,513 | | | $ | 149,424 | |
| | | | | | | | | | | | | | | | |
Supplemental cash flow information: | | | | | | | | | | | | | | | | |
Cash paid during the period for interest | | $ | 9,475 | | | $ | 10,729 | | | $ | 55,191 | | | $ | 53,842 | |
| | | | | | | | | | | | | | | | |
Non-cash activities: | | | | | | | | | | | | | | | | |
Notes receivable related to sale of asset | | $ | — | | | | | | | $ | — | | | $ | 1,808 | |
Non-cash contingent consideration on equity investments | | $ | 15,000 | | | | | | | $ | 15,000 | | | | | |
| | |
| NRP Reports 2013 Results | | Page 10 of 12 |
Natural Resource Partners L.P.
Consolidated Balance Sheets
(in thousands, except for unit information)
| | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2013 | | | 2012 | |
| | | (unaudited) | | | | |
| ASSETS | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 92,513 | | | $ | 149,424 | |
Accounts receivable, net of allowance for doubtful accounts | | | 33,737 | | | | 35,116 | |
Accounts receivable—affiliates | | | 7,666 | | | | 10,613 | |
Other | | | 1,691 | | | | 1,042 | |
| | | | | | | | |
Total current assets | | | 135,607 | | | | 196,195 | |
Land | | | 24,340 | | | | 24,340 | |
Plant and equipment, net | | | 26,435 | | | | 32,401 | |
Mineral rights, net | | | 1,405,455 | | | | 1,380,473 | |
Intangible assets, net | | | 66,950 | | | | 70,766 | |
Equity and other unconsolidated investments | | | 269,338 | | | | — | |
Loan financing costs, net | | | 11,502 | | | | 4,291 | |
Long-term contracts receivable—affiliate | | | 51,732 | | | | 55,576 | |
Other assets, net | | | 497 | | | | 630 | |
| | | | | | | | |
Total assets | | $ | 1,991,856 | | | $ | 1,764,672 | |
| | | | | | | | |
| LIABILITIES AND PARTNERS’ CAPITAL | |
Current liabilities: | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 8,659 | | | $ | 3,693 | |
Accounts payable—affiliates | | | 391 | | | | 957 | |
Current portion of long-term debt | | | 80,983 | | | | 87,230 | |
Accrued incentive plan expenses—current portion | | | 8,341 | | | | 7,718 | |
Property, franchise and other taxes payable | | | 7,830 | | | | 7,952 | |
Accrued interest | | | 17,184 | | | | 10,265 | |
| | | | | | | | |
Total current liabilities | | | 123,388 | | | | 117,815 | |
Deferred revenue | | | 142,586 | | | | 123,506 | |
Accrued incentive plan expenses | | | 10,526 | | | | 8,865 | |
Other non-current liabilities | | | 14,341 | | | | — | |
Long-term debt | | | 1,084,226 | | | | 897,039 | |
Partners’ capital: | | | | | | | | |
Common units outstanding (109,812,408 and 106,027,836) | | | 606,774 | | | | 605,019 | |
General partner’s interest | | | 10,069 | | | | 10,026 | |
Non-controlling interest | | | 324 | | | | 2,845 | |
Accumulated other comprehensive loss | | | (378 | ) | | | (443 | ) |
| | | | | | | | |
Total partners’ capital | | | 616,789 | | | | 617,447 | |
| | | | | | | | |
Total liabilities and partners’ capital | | $ | 1,991,856 | | | $ | 1,764,672 | |
| | | | | | | | |
| | |
| NRP Reports 2013 Results | | Page 11 of 12 |
Natural Resource Partners L.P.
Reconciliation of GAAP Financial Measures
to Non-GAAP Financial Measures
(in thousands)
Reconciliation of GAAP “Net cash provided by operating activities”
to Non-GAAP “Distributable cash flow”
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | For the Year Ended | |
| | | December | | | December | | | December | | | December | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | (unaudited) | | | (unaudited) | |
Net cash provided by operating activities | | $ | 57,559 | | | $ | 77,536 | | | $ | 247,074 | | | $ | 271,408 | |
Distributions from unconsolidated investments(1) | | | — | | | | — | | | | 48,833 | | | | — | |
Return on direct financing lease and contractual override | | | 1,717 | | | | 270 | | | | 2,558 | | | | 2,669 | |
Proceeds from sale of assets | | | 10,370 | | | | 9,775 | | | | 10,929 | | | | 24,822 | |
| | | | | | | | | | | | | | | | |
Distributable cash flow | | $ | 69,646 | | | $ | 87,581 | | | $ | 309,394 | | | $ | 298,899 | |
| | | | | | | | | | | | | | | | |
| (1) | The cash distributions that NRP received were $72.9 million for the twelve months ended December 31, 2013. The amounts included in the table reflect the difference between the cash distributions received and the revenues we recorded from the OCI Wyoming investment, which are included in net cash provided by operating activities. |
Reconciliation of GAAP “Net cash provided by operating activities”
to Non-GAAP “Distributable cash flow”
| | | | | | | | |
| | | Quarter Ended | |
| | | December | | | September | |
| | | 2013 | | | 2013 | |
| | | (unaudited) | |
Net cash provided by operating activities | | $ | 57,559 | | | $ | 65,866 | |
Distributions from unconsolidated investments(1) | | | — | | | | 38,056 | |
Return on direct financing lease and contractual override | | | 1,717 | | | | 286 | |
Proceeds from sale of assets | | | 10,370 | | | | 405 | |
| | | | | | | | |
Distributable cash flow | | $ | 69,646 | | | $ | 104,613 | |
| | | | | | | | |
| (1) | NRP received no cash distributions in the fourth quarter 2013 and $46.0 million for the third quarter. The amounts included in the table reflect the difference between the cash distributions received and the revenues we recorded from the OCI Wyoming investment, which are included in net cash provided by operating activities. |
| | |
| NRP Reports 2013 Results | | Page 12 of 12 |
Natural Resource Partners L.P.
Reconciliation of GAAP Financial Measures
to Non-GAAP Financial Measures
(in thousands)
Reconciliation of GAAP “Net income”
to Non-GAAP “EBITDA”
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | For the Year Ended | |
| | | December | | | December | | | December | | | December | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | (unaudited) | | | (unaudited) | |
Net income | | $ | 46,981 | | | $ | 60,107 | | | $ | 172,078 | | | $ | 213,355 | |
Add depreciation, depletion and amortization | | | 14,352 | | | | 16,155 | | | | 64,377 | | | | 58,221 | |
Add asset impairments | | | — | | | | 2,568 | | | | 734 | | | | 2,568 | |
Add interest expense, gross | | | 19,777 | | | | 13,157 | | | | 64,396 | | | | 53,972 | |
Add depreciation, depletion and amortization and interest relating to OCI Wyoming | | | 6,003 | | | | — | | | | 15,072 | | | | — | |
| | | | | | | | | | | | | | | | |
EBITDA | | $ | 87,113 | | | $ | 91,987 | | | $ | 316,657 | | | $ | 328,116 | |
| | | | | | | | | | | | | | | | |
EBITDA margin | | | | | | | | | | | | | | | | |
EBITDA | | $ | 87,113 | | | $ | 91,987 | | | $ | 316,657 | | | $ | 328,116 | |
Total revenues | | | 94,744 | | | | 102,436 | | | | 358,117 | | | | 379,147 | |
EBITDA margin | | | 92 | % | | | 90 | % | | | 88 | % | | | 87 | % |
Reconciliation of GAAP “Net income”
to Non-GAAP “EBITDA”
| | | | | | | | |
| | | Quarter Ended | |
| | | December | | | September | |
| | | 2013 | | | 2013 | |
| | | (unaudited) | |
Net income | | $ | 46,981 | | | $ | 36,126 | |
Add depreciation, depletion and amortization | | | 14,352 | | | | 17,852 | |
Add asset impairments | | | — | | | | — | |
Add interest expense, gross | | | 19,777 | | | | 15,516 | |
Add depreciation, depletion and amortization and interest relating to OCI Wyoming | | | 6,003 | | | | 3,366 | |
| | | | | | | | |
EBITDA | | $ | 87,113 | | | $ | 72,860 | |
| | | | | | | | |
EBITDA margin | | | | | | | | |
EBITDA | | $ | 87,113 | | | $ | 72,860 | |
Total revenues | | | 94,744 | | | | 82,237 | |
EBITDA margin | | | 92 | % | | | 89 | % |
-end-
