NRP - Earnings call transcript Q3 2017 | Natural Resource Partners L.P.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Natural Resource Partners L.P.

Third Quarter 2017 Earnings Conference Call.

As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Kathy Roberts, Natural Resource Partners’ Vice President of Investor Relations. Ms. begin. may you Roberts,

Kathy Roberts

our Good Quarter and call XXXX a available webcast Teresa. days. Resource is to Partners’ and on be will Third Conference replay for morning, you, seven welcome everyone, Natural being website Thank Call. Today's

Nunez, are Aggregates Craig, Chris Donahoo, Kevin and Chief Vice CEO and business. Perry President of of Joining Zolas, Craig Operating Financial Construction Chief me President today Division; our Officer; Executive Officer; our Coal

update future are materially discussed about for These any any Some cause statements risks our comments reflecting SEC the and risk of forward-looking uncertainties XX-K matters forward-looking for today forward-looking reasons. and other year views our involve or ended filings. We include These obligation publicly our NRP's may NRP's actual XX, no XXXX, differ statements. events. that in could results to statements December undertake Form revise to from

comments also include non-GAAP financial measures. Our today

and our that or website. operations or measures also for most not reconciliations on outlook our to directly I Additional XXXX the to discuss pricing can intend co-lessee found do or any GAAP sales operations. which everyone remind construction quarter discuss release, with third to respect like our particular comparable to be details in we would included the aggregates are press

Ash addition, refer segment. business Soda specific Ciner you regarding Resources’ to questions public In our I for disclosures and commentary

President and Officer. would I turn Operating over to to Chief like Now, our Nunez, the Craig call

Craig Nunez

Thank our you, call. Kathy, welcome and everyone to quarterly

times lowered debt million time will hard our decision debt, in improve we to that X.X time, we near-term Let common X.X to a EBITDA have down and at we me made and reduced to difficult that work reduce distribution maturities a by our begin our we extend debt of by pay from very ratio that Since times. unit to peak debt XXXX saying liquidity. that $XXX our said and

liquidity XXXX our manage working is more have the out available XXXX, than our capital strong We and our and sufficient comfortably maturities current we of have XXXX to debt cash business. and needs to extended as capacity borrowing

all X.X distribution unit, accomplished have what of other were of we per distribution ratio times. have we We we while $X.XX said paying we currently In to of have year, coverage done going words, do. what per this a and a

While we have to we have intend business balance of We continue of sheet for prudent made still and strengthening margin significant our work liquidity sufficient progress more operations. today, maintain provide us. a safety to ahead

to X leverage a Our goal capacity. achieve times, borrowing debt of less time, may liquidity $XXX available consist as of to is while than and/or of a cash maintaining defined EBITDA which combination minimum of ratio over million,

of was As which our for the of price just NRP our million, under Distributable of $XX cash generate market equity ended over substantial $XXX cash. performance, months continues XX% unit. to current September operating XX amounts at the equates cap XX flow closing per yesterday's

EBITDA or currently $XXX We equates multiple over we’re an also of the value enterprise XX% which of generated million other of the than months, way, at last value; total enterprise trading XX times. of less X.X EBITDA said to

by for in to reserves consists Royalty the our all with basins than are XX essentially production producing collect expenses recent ratio over receivables X.X more of of to operators, years. long-life across coal the interest as three tons ability throughout Our among coal segment downturn. billion royalty a priority highest industry mines of reserves with payments evidenced

exposure and minimum arrangements provide in to Our plus form the upside protection payments royalty volume. downside price with us of

coal. the estimate $XX that above in have XX% third earlier quarter, million seaborne administration the plant. increase as at downturn. improving or power royalty a our well, this revenue our coal meteorological year regulatory segment the stabilized producers of production to back environment and third in on the works Our result Based noting efforts generators, claim higher $X.X peaks price NRP levels It’s the levels in continues in experience back coal those coal from including we would Approximately increase and to from net benefit which coal cash in flow. is worth regulations coal that on pricing metrological the prices from the in the also in and as power every pulled annual to Trump roll Appalachia, revenue refill have but quarter reached was recent

Our in interest world. and position ash leadings and to operations in the Ciner one of soda to trona producers This divided of one the soda and ash the in investment NRP continues come. well for investment soda remain ownership Wyoming refining pay world’s mining decades to ash of provides lowest-cost is

During reserves the long-life Louisiana the compared that to XXXX, for Virginia positions of in serve. we third and from West realized three separate local soda the last prices of Construction ash have aggregates, smallest prices and in Asia domestic year. four modestly divisions, markets consist particularly quarter of operations international leading they to higher our

opening We operations financial have E&P customer turn marine it to demand decreased Chris performance. With to activity Campbell Tennessee the Louisiana offset and construction Chris? terminal remarks, realized have review and Fort base and I army gravel the will in operations the Clarksville, over and at lower businesses those Tennessee. our now products for the solid Appalachian performance this sand from paving at year. These

Chris Zolas

Thank you, morning, Craig, and everyone. good

refer our would adjustments. list results. of With transaction. reconciliation Before there certain continue to of review let's for press we adjust jumping for purposes, QX move numbers point that to further comparative we adjusting to that, complete items other from into our these and our few GAAP results, as while way are these recapitalization release out like Please I our

strength year We unitholders XXXX increased our of net quarter of environment, QX profit production substantially improved lower general and results million. increased compared business $X.X driven was million and attributable XX%. to to by a coal of QX of general in net unitholders common $XX.X construction compared Including or improvement aggregates from This prior and effect net partner to expense. income common $XX.X levels. in third a income the our interest Our partner primarily generated the and the attributable to million income adjustments,

In addition, of million generate and quarter. during $XX.X we EBITDA million adjusted third the $XX.X DCF

common per cash sales recapitalization diluted immediate unit businesses In of conversion payments our point from and differences the steady of DCF settlement to performances net soda a the for royalty, of the $X.XX diluted ash were I increased impact respectively. XX% quarter Basic comparison the and transactions, our $X.XX XXXX. results interest that result asset reflects the of units to Excluding of from which proceeds in coal as units. aggregate timing our preferred flat, the assumes XXXX. QX on into NRP’s compared earnings common like warrants the in prior per common remains essentially and and unit quarter per unit would units earnings the common and out QX

in the the preferred units settle and warrants to ability we net However, redeem the have cash. cash for to

each of DCF I Including Next operating QX operating Beginning quarter the and would million effect like EBITDA QX to adjusted with XX% XXXX. our $XX.X the business was key was adjustments, income for of million, the our of our the of drivers $XX.X income increased was compared performance. for review the million. coal and $XX results segments royalty segment,

of by by production from XX% XX% QX increase our for properties X% compared to per were revenue the in These coal adjusted asset evidenced driven Appalachian XX% region. ton in in to EBITDA XXXX, in and our XX% from increase a royalty this primarily QX improved increased metallurgical addition, the results XXXX, In DCF increased sales. compared to and market impact of excluding

lower partially Illinois performance by production this in in a temporary this coal relocation overriding However, in $X.X from certain compared improved XXXX QX from million revenue of our coal Appalachian offset and royalty region revenues was royalty XXXX. compared of productions, decrease to [indiscernible] of offset basin property this Illinois to basin partially our QX by However, royalty in to in due properties was revenue the a increase

In addition, of our this basin offset properties impact QX XXXX an also per region. from production coal from increase helped Illinois the reduced in of the royalty in the ton revenue in our

remained flat performance to quarter Our royalty second compared third quarter. essentially coal XXXX segment

in Moving QX the previous XXXX. Ash. of second from is received unchanged cash which business a $XX.XX period, from We to Wyoming the XX% million and period from Ciner our segments, investment Soda distributions during

Our $X Ciner XX% declined the QX to compared issue. Wyoming a earnings XXXX, million of production prior from in year in temporary equity due to

equity earnings Ciner of progress facility. XXXX in the X% the Wyoming second the from quarter at third to a our as increased production improve efficiency compared made However, result quarter to

quarter Construction operating was Aggregates, our final the was for EBITDA $X.X income and operating DCF $X.X For million, was million $X.X adjusted business million. and segment, third

in sales volumes, and of in payment flat production the to activity. margins operating XXXX a temporary road projects compared marine on result we second in received lower paving increased While performance increased and year. improved of timing to quarter, the asphalt QX QX due of terminal to and the performance was during essentially cash differences of quarter remained XXXX XXXX as reverse on compared DCF third construction higher the to of remainder expect that

Corporate were million $XX.X includes Financing in XXXX As $XX million, for and of our costs total segment, which of QX expense. interest

the of and our XXXX of to million with lower were transaction. quarter the X, $XXX $XX.X of million in consulting of third cost to our million QX bank of quarter ended of incurred year recapitalization with XXXX compared capital increase in While quarter period far. and in capacity XXXX. to fees due our remaining total compared lower OpCo cash in the X.X corporate facility. XX% in incurred as of We interest in QX expenditures to on and $XXX.X amounts million we million On $X.X the third previous financing million October $X.X compared line XXXX amounts same these of with bonds borrowing XXXX, We last legal and repaid expense QX available and XXXX connection

paid distributions our we the of of XXXX our per $X.XX in We unit. third common $X.X $XXX.X During million. XXXX unitholders million or common quarter to-date, reduced debt to

of $X.X million call paid that, units during operator in to questions. like to to also With the additional and unitholders preferred preferred turn issued XXXX. I'd the for over QX We cash our back X,XXX

Operator

Mark your from first the line of And with Levin Seaport Instructions] question [Operator Global. comes

Mark Levin

couple investors distribution least target. at is which to three picture. that that referenced A the will, or raises I to you level questions. about times you the One into of think the assume level, we debt is, you at should entering which Once quick on get

Craig Nunez

Hi, Mark. that, we well. Hope everything the doing target. a is one That table. This is are clearly target Craig. is Once reach you

unitholder focus primary enhancing be going and list. do clearly is to increase do that to and going distribution is everything on we Our be will high consider to value, can that we

Mark Levin

point the year, of started? that end getting or achieved can is that you the be in something that at Craig, XXXX XX some think the meaning middle whether to

Craig Nunez

Mark. Yes,

years, two last We’re just forward again the we’re – our here policy we had not observe giving for guidance.

Mark Levin

Okay, fair that. appreciate I enough. No,

Craig Nunez

at the also months, and I what's provided to you numbers we would we’ve to the you have done encourage over last seen last happened look over have that you, what referenced we quarters our two with respect recap, somewhat stabilized operating XX looks do if the math and most conclusions – over post own you months the look like is your performance on your and that. at can it business own and six you our draw those, the last

Mark Levin

that. try models hopefully I as putting touching to helpful appreciate And at the our we least this it is I into No, Sure. but guidance, not about be world -- know directionally would think of together. then just

million you And properties tons at of million factors XXX,XXX and QX. QX Northern App, at and QX tons both basin or production, for went -- you QX, that think tons you QX QX. then production then guys if than did For you million in less your was into for QX. X.X X the in there tons XXX,XXX of example, but of example, And then did look the on than in numerated I in and Illinois one X in looking less that

to pretty your idea at So again, huge, how can deltas. as production, us region of forward? think asking look least royalty but but to imagine without give for the just that’s given Can guidance, company can we in huge some impact not you any the you disparity and significantly a help, about numbers specific wide the

Craig Nunez

It give giving a you on few right. you're I Well, does guidance, but points border to maybe ponder can here.

-- corresponding royalty in certain talked basin, I Illinois extent, you First to royalty fallen of from Chris and as particular described coal that as the make royalty we’ve overriding line, as revenue has in part. one earlier, to earlier, increase because has basin always levels offset at the revenue overriding production the sure Illinois in in in there respect about to a that Illinois you conjunction been production that with basin a all, line, encourage would revenue look with

that Illinois two you when that belief I been a pointing flattening don't at and you -- So Appalachian appear With back take but are we that you it's years, may would sure forward will trend at will downward have to make does in I go the look Appalachian, look it see my tell so look trend, that out respect years, out. it five back guidance. you over together. those basin, is very that that you if more be you pronounced

without don't So as that. pattern I more think clear it’s But going forecast, going I'm are to I likely that given in guidance trend. on estimate is that to my see stabilizing not of view. give a a have we

Mark Levin

question. Last

basis? base flow. or and/or prepared coal of base your what you off think it. -- remarks, $XX referring? You I'm are prices think, of it, what change every cash $X.X revenues mentioned, you are I what so net I flow and cash Off off of trying in revenue referring is just to net can of million baseline What in about

Craig Nunez

Sure.

We $XXX or the today. are price, around is seaborne so which using coking

a impact And $XX you of so if to million $X.X delta us. revenue that, off it’s use

Operator

next from [Operator Paul Your Forward comes with Stifel. Instructions] question

Paul Forward

on up questions. follow a wanted Mark’s Just

you was sequential bit mean, quarter, decline the up I up I was the million. about a Or of look couple over just to rail individual has Appalachian kind year-on-year seasonal wondering, Could just trend down. the it? a to think last you at of about in quarters -- Can you even talk of been decline the why volumes, significantly, volumes was due issues? sequentially as the it little tons service? down though were have nicely X.X year-on-year? million was but in lines in to Appalachian of it they you obviously X.X I component Was mine was And the the it third from talk pretty obviously

Kevin Craig

This is Kevin Craig.

albeit quarter, you mentioned, have rail seem note working I think to Certain transportation would into in seem that would the come mines Also on earlier the issues, those themselves but issue did to all trend. the operational impacted play. on have out We I have have issues. really issues – we the the operational impacted, items the geological has that be and issues see be improving you been categorize, now resolved. significant production. some transportation I

Paul Forward

be limitations them? of match volumes factors on Okay, so the the rails if were the you to kind Can Appalachia. am net certainly coal talk one feasibility for your looking other about to the that less thinking particularly any seems improving. I in increasing of of market market with

Kevin Craig

Again various that. what is specific either increase really a it to to on are cannot give don’t comment comments any have really I Kevin match our orders. the and doing Craig. operators on this I production

Operator

And there are questions at no time. further this

Kathy Roberts

further questions, our Thank you, Teresa, you have me a call. conclude will today. we if please call And for give

Craig Nunez

we with you of month. forward good a you look day. Have for Thank support to you, for next and NRP, everyone, joining your Thanks us. speaking

Operator

gentleman, your participation. and ladies for you, Thank

disconnect. now may You

Natural Resource Partners (NRP) 8 Nov 172017 Q3 Earnings call transcript