NRP - Earnings call transcript Q3 2019 | Natural Resource Partners L.P.

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Operator

Good morning, ladies and gentlemen, and welcome to the Natural Resource Partners LP Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to introduce your host for today's conference, Tiffany Sammis, Natural Resource Partners, Head of Investor Relations. Ms. Sammis, you may begin.

Tiffany Sammis

to Resource welcome XXXX Third and Call. Conference morning, the Partners Natural Quarter Good being a webcast available is call Today's and website. on replay our be will

Joining Chief President Zolas, Craig Financial me and Chief Officer; Chris and Officer. today are Operating Nunez,

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

Our comments today also non-GAAP measures. financial include

can and in our website. be measures to reconciliations directly most are details our comparable XXXX included quarter GAAP which found Additional third on the release, press

to fundamentals. we lessee particular any intend would do outlook operations market remind coal the I that detailed not or into everyone discuss to for or get like

refer specific disclosures you public to Resources' our In segment. business regarding addition, ash questions I Ciner for commentaries and soda

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

Craig Nunez

welcome which Tiffany add million generate cash, over everyone out pay significant of to unitholder earn last unitholders million of common our on I'm pleased quarterly and distributions to the to continues announce amounts you, Thank and returns equity and attractive to allowed call. us that capital, NRP to common $XX nearly $XX year.

year dispute, same on and to return months. Excluding recorded was legal over our XX payment over million last employed the satellite cash And discontinued operations capital flow of last XX.X%. the the received one-time $XXX we period free consolidated

soda segment ash coal coming XX% the in delivering almost and XX%. With at

placement debt our was $XX the preferred which flow free cushion the remaining million current private after flow distribution repayments mandatory payments cash the over period. unit and dividends cash same of common is of notes, Our

coal bankruptcy this Blackjewel, of our year, lack prices lessees, recently Black largest our are foresight of lenders. particular prices our the not Hawk, representing with challenges. entered solid metallurgical have XX% it over revenues into of for agreement In in lessee year. on lessees. pressure last segment we has our While coal have coal declared Falling posted Four has Emory putting a results increasing forbearance been for its Cambrian roughly

Falling contracts a on coal be by yet prices results, not change contracts lower that's are direct entered we had and into impact about believe we have believe our our and what will significant with prices. lessees as new year replaced last expire but to

process do While to combined anticipate cushion sentiment, quarter, When joint we recent to considerably. negative finance XX% months out to do this this as are flow our venture not in the the we us Despite be reduce lower ash confident capacity distribution plus our announced old cash our this we the expect soda to ride positions and made well streamline however in the years with liquidity cost significantly our we’ve into debt, that coal storm. we lessees, revenues ahead have past. last shrink visibility to progress at recent the the same than experienced expansion cut in

during to liquidity much make flow cash our to obligations run We unitholders. our than have pay to better and a are common the continue ample We our in will downturn. we and preferred and position business, believe XXXX-XXXX distributions

slower bank a $XXX year four trend of cash, years. in multi-year unitholder years, for the we our no continue I'm over million to equity. to million expect parent company have weather the confident five while of with pace of $XXX recent debt, financial borrowing continuing maturities to delivered available than also common bond With we've reducing We albeit strength capacity facility storm, and at build a

it turn performance. financial our Chris cover I’ll to over to that, With

Chris Zolas

everyone. you, and morning Thank good Craig,

and $XX third net unit, quarter unit flow $XX generated free $X.XX earnings income. common we for and respectively. quarter, diluted Basic third per the million and of $X.XX per the During of were cash and per million unit operating

royalty million royalty third cash of markets overall as the segment coal of income segment $XX free coal were flat in coal results quarter areas during net relatively from offset generated to increases at Our $XX million year weakened of other quarter by $XX properties. million XXXX. reduced operating our prior Despite coal compared flow, certain the realizations and were royalty flow cash of

minimum properties additional markets, weakened the processing coal million certain revenues lessee offset by property total of amendment on increases Pinnacle fee lease by and since revenue transportation the coal bankruptcies million idling of quarter lease of royalty of temporary $XX to additional gains our idling $X of driven and Specifically sales asset due from XXXX. decreases and the in fourth disposals, were the revenue and total

weakened In our lessees saw result we sales our sold tons of total, quarter million of coal during the coal begin our the markets. third X XXXX. And to decline a coal as of prices

coal the coal metallurgical up our In approximately total mix, volumes quarter. royalty coal our third made of revenues our of royalty XX% sales during terms of coal royalty and sales approximately XX%

prices increased to quarter the year net generated million third compared cash income our compared of million during million We $X and volumes year quarter. second our $X a prior $XX segment, of production quarter. year on and XXXX as to international and and prior Ciner million of quarter third of the flow quarter $X free from domestic the the flow in business sales Moving received to Wyoming soda to prior segment XXXX. less result Net of cash ash the compared income sales increased increased free

previous earnings an discussed free to in capacity, find that over project our provide significant increases Wyoming and to flow the NRP distributions As production expansion order Ciner cash in is long-term. call, distribution to reduction intended due cash to is this decrease in

annual approximately years. million next $XX Wyoming from receive to distributions to two $XX to the of expect Ciner for We million cash three

million down and interest or financing XX% of to debt resulting million, compared the months. million the corporate we have expense XX $XXX last in quarter, from third the lower year $X prior $XX Our to repaid over quarter segment the primarily due costs were

common to we holders and unitholders quarterly million $X.XX unit August. our Regarding distribution cash paid million another per unit $X.XX in preferred In of preferred per a declared $X.X October, unit distributions, cash quarterly we $X.X a our to unitholders. of common to a and distribution distribution quarterly cash distribution our

And call turn questions. back for the with to that, I'll the operator over

Operator

Seaport Thank Levin comes you. [Operator Global. Mark question Instructions] from Your first from

open. is line Your

Mark Levin

roughly A talk sales disposals we QX about this Hillsboro of maybe going Great. into and questions, or out minimum should called how as model forward? to items on Can thinking out, of one $X.X that related revenues the increased sales additional then XXXX? quick related million and items discrete some repeatability those, of asset you about million to of onetime couple kind the increased and the the Hillsboro. the and $X.X to about be disposals revenue you gain Or and is asset think also minimum just straight from we of line

Christopher Zolas

types business, -- that, This transactions transactions. of gain are Sure. like Thank about happen domain past in those The had but we've quarter the is our Mark. does something we $X to transactions and disposal an this asset sales, had in right-of-way those you, primarily that similar transactions. we of easement type that's other plan don't to million That's on eminent on asset to Chris. sale related

to that other something that we be expect Hillsboro, ongoing, going forward. do The is

Mark Levin

weaker. is referenced, comments people you idling there that I X think this from ahead, But bankrupt you're mean, say your tons I clearly to with and going market And then given Craig's as I gone we're and of kind in how you right give to then of all of in rate you is And met quarter, the volumes seeing, great. Okay, think market I that assume guidance, to lessees proper lessee you Can referenced a had of weakness million other it we be it a the use expect than don't the to going number of things about seeing to coal realize coal. sell forward. think tons. million during any model obviously the the now? about $X lot forward, way that run what not you materially

Craig Nunez

budget don't lessees this the our like have that, observe uncertainty Hi, the the in to And to later, what months. look we the what is tends of cycle that coming going is is with greater XXXX visibility, us. level for Craig. Mark. conclude. with as We to the season The is This and unfortunately. And market budget

yet, made their we So I put good it's their place they yet decisions just from don't haven't either. think really and contracts our visibility because in have lessees and

Mark Levin

fair a point. That's

a while. referenced a and prices would that I before XXXX when went ton think, seaborne XXXX, once in $XXX prices Craig, for collapse the stayed there quite at look metric you'd premium met level met below you

bring? that you course you XXXX, the I maybe the could if at in it’s doesn't bad, with mortgage could maybe venue get you things took that of think another are control had refresh you tested XXXX seem everybody’s what you macro-driven. can of it give out color XXXX it had us conference prices Maybe some met and you type very cash but against referenced to that like flow and But our stress learned us a of was going what or market. about overlaid that that

Craig Nunez

again, then. were some where albeit what today felt to still flow If through in we’re have that one. similarities a before XXXX-XXXX we portion are some we have to a in that environment positive we period would we respects, which of I we’ve many can think cushion, said is that we cash a go Yes, modest argue to

for year-over-year, to of things think As to going think a we’re yeah. the far still Could what our still need on think have cash go do. kind were we to ability that flow do be to sustainable be sufficient as we’ll and two to negative said our cash us, decrease cushion continue pay or earlier that debt. what is again, cushion run basis continue flow still But our to down We think substantially. or debt we have means do a we we quarter if to it to I that to pay happen going potentially, to business, I

Mark Levin

takes that account or distributions into And from obviously Ciner Wyoming? cash lower into consideration

Craig Nunez

it does. yes Ciner,

Mark Levin

Ciner.

us with wash to or Can what what remind may maybe you the you’re or and process contracts eventual what or around, of that what relate if that how time learned the with price this was prepared results us, round has you coal maybe sort of through now a last years met you cohorts to Okay. had different And was of out. all even the then from through ago to treated of refresh going some you several how of lease the going can that went was you previous your it bankruptcies in industry the anything? last ask bankruptcies question sort during through again coal I going do remarks, maybe referenced just that through your

Craig Nunez

would is I with I leases the What determines on driver, it the in key factor in just economic market really the like that underlying that to our bankruptcy. of is assets outcome any our comment principle think

underlying taking process property operator tend money we property term fundamental cash on asset idling contract the in have from it economically bankruptcy bankruptcy flows any profitable, falls are end a Then premise think cash maybe that long us, operation back that operating. material cash operating. will But I for over may from delay process. if not bankruptcy is if place. to temporary an the our long bankruptcy invariably the is, structure the the continue term. to with actually the receipts and and it that some emerge during our on the that emerges one change in the and There viable proceedings And There in for make from can be it’s negative. while

to to of economically we you, excess we’ve profitable had it that associated won’t On protect hand, not for not vast not, if liabilities the that viable the if it of significant the leased it’s us. that is been not you’ve would marginal, that losing from properties the have a The economic say asset that XXXX I the other through operator for have not is we now majority is chances bad structure another in of contract if amounts an operator. with fortunate, which that it, money, for endured operator viable. if proposition were the we bankruptcies it bankruptcy We’ve are make process, has operator,

all, bankruptcy it's the structure for remained basis, of contract survived and the and quality it's intact. has they've our -- the part most case-by-case quality So assets. on depends But the process a it

Mark Levin

Thank your very color. Great. you much Thanks. for

Operator

to turn no Instructions] for closing [Operator over the We presenters call remarks. back back have questions, further I the

Craig Nunez

us look this you in joining Bye. day. to for talking call, good follow on Thank Have soon. NRP, and and forward you We you in investment a to everyone we appreciate NRP. your

Operator

this gentleman call. Ladies you Thank and conference participation. concludes for your today's

all now may You disconnect.

Natural Resource Partners (NRP) 6 Nov 192019 Q3 Earnings call transcript