8-K
Natural Resource Partners LP (NRP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________
FORM 8-K
______________________________________________________
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 27, 2020
______________________________________________________
NATURAL RESOURCE PARTNERS L.P.
(Exact Name of Registrant as Specified in Charter)
______________________________________________________
| Delaware<br><br>(State or other jurisdiction<br><br>of incorporation or organization) | 001-31465<br><br>(Commission File<br><br>Number) | 35-2164875<br><br>(I.R.S. Employer<br><br>Identification No.) |
|---|---|---|
| 1201 Louisiana St., Suite 3400 Houston, Texas 77002<br>(Address of principal executive office) (Zip Code) | ||
| (713) 751-7507<br><br>(Registrant's telephone number, including area code) |
______________________________________________________
| Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|---|
| Common Units representing limited partner interests | NRP | New York Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging Growth Company | o |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨
| Item 2.02. | Results of Operations and Financial Condition |
|---|
In accordance with General Instruction B.2. of Form 8-K, the following information and the exhibit referenced therein are being furnished pursuant to Item 2.02 of Form 8-K and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, are not subject to the liabilities of that section and are not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
On February 27, 2020, Natural Resource Partners L.P. announced via press release its earnings and operating results for the fourth quarter of 2019. A copy of NRP’s press release is attached hereto as Exhibit 99.1.
| Item 9.01. | Financial Statements and Exhibits | | --- | --- || (d) | Exhibits. | | --- | --- | | 99.1 | Natural Resource Partners L.P. press release dated as of February 27, 2020 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NATURAL RESOURCE PARTNERS L.P. | ||
|---|---|---|
| (Registrant) | ||
| By: | NRP (GP) LP | |
| its General Partner | ||
| By: | GP Natural Resource Partners LLC | |
| its General Partner | ||
| Date: February 27, 2020 | /s/ Kathryn S. Wilson | |
| Kathryn S. Wilson | ||
| Vice President and General Counsel |
Exhibit
Exhibit 99.1
Natural Resource Partners L.P.
1201 Louisiana St., Suite 3400, Houston, TX 77002
NEWS RELEASE
Natural Resource Partners L.P. Reports
Fourth Quarter and Full Year 2019 Results
HOUSTON, February 27, 2020 - Natural Resource Partners L.P. (NYSE:NRP) today reported fourth quarter and full year 2019 results as follows:
| Three Months Ended | Year Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | ||||||||||
| (In thousands) (Unaudited) | 2019 | 2018 | 2019 | 2018 | |||||||
| Net income (loss) from continuing operations ^(1)^ | $ | (119,448 | ) | $ | 35,092 | $ | (25,414 | ) | $ | 122,360 | |
| Asset impairments | 147,730 | 18,038 | 148,214 | 18,280 | |||||||
| Net income from continuing operations excluding asset impairments ^(1)^ | $ | 28,282 | $ | 53,130 | $ | 122,800 | $ | 140,640 | |||
| Adjusted EBITDA ^(1)(2)^ | 37,974 | 72,936 | 199,228 | 230,241 | |||||||
| Cash flow provided by (used in) continuing operations: | |||||||||||
| Operating activities | 19,394 | 80,489 | 137,319 | 178,282 | |||||||
| Investing activities | 259 | 2,078 | 8,221 | 7,607 | |||||||
| Financing activities | (33,551 | ) | 64,856 | (253,305 | ) | (6,839 | ) | ||||
| Distributable cash flow ^(1)(2)(3)^ | 19,602 | 280,658 | 144,933 | 383,980 | |||||||
| Free cash flow ^(1)(2)^ | 19,764 | 80,944 | 139,040 | 183,440 | |||||||
| Cash flow cushion (last twelve months) ^(2)^ | 7,762 | 16,080 | |||||||||
| (1) | Includes $25.0 million from the Hillsboro litigation settlement in NRP's Coal Royalty and Other Segment for the three months and year ended December 31, 2018. | ||||||||||
| --- | --- | ||||||||||
| (2) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. | ||||||||||
| --- | --- | ||||||||||
| (3) | Includes net proceeds from the sale of NRP's construction aggregates business which were classified as investing cash flows from discontinued operations. | ||||||||||
| --- | --- |
"Despite a weakened coal market, we generated $139 million of free cash flow and repaid $163 million of debt in 2019," said Craig Nunez, NRP's President and Chief Operating Officer. "We continue to maintain strong cash balances and liquidity, and our efforts to de-lever and de-risk the Partnership over the past five years have prepared us to operate through this downturn.”
NRP's liquidity was $198.3 million at December 31, 2019, consisting of $98.3 million of cash and $100.0 million of borrowing capacity available under its revolving credit facility. At December 31, 2019, NRP's consolidated Debt-to-Adjusted EBITDA ratio was 2.6x.
NRP declared a cash distribution of $0.45 per common unit and a cash distribution of $7.5 million on its preferred units for the fourth quarter of 2019.
1
Segment Results
Coal Royalty and Other
NRP's Coal Royalty and Other segment revenues and other income in the fourth quarter and full year 2019 was lower by $35.8 million and $13.4 million, respectively, as compared to the prior year periods primarily due to weakened metallurgical and thermal coal markets in 2019 and the $25 million one-time payment from the Hillsboro litigation settlement in the fourth quarter of 2018. These decreases were partially offset by increased minimum lease straight-line revenues primarily related to the Hillsboro property that we began to recognize in 2019 after the completion of the Hillsboro litigation settlement with Foresight. Additionally, full year 2019 results benefited from a $15.9 million increase in revenues primarily related to lessee forfeitures of recoupable balances from minimums paid in prior periods. While a number of NRP's lessees went through the bankruptcy process in 2019, there was minimal impact to NRP as bankrupt lessees bad debt expense was offset by increased lease amendment fees associated with bankruptcies.
NRP also recorded $147.7 million and $148.2 million in non-cash asset impairment expense in the fourth quarter and full year 2019, respectively, primarily as a result of the deterioration in thermal coal markets, lessee capital constraints and the termination of certain thermal coal leases.
Approximately 60% and 65% of coal royalty revenues and approximately 45% and 50% of coal royalty sales volumes were derived from metallurgical coal during the three months and year ended December 31, 2019, respectively.
Soda Ash
Distributions received from Ciner Wyoming were $6.4 million and $31.9 million in the fourth quarter and full year 2019, respectively, as compared to $9.8 million and $46.6 million in the fourth quarter and full year 2018, respectively. The managing partner of Ciner Wyoming decided to reduce distributions during the year to fund a multi-year capacity expansion project that is expected to result in higher earnings and distributions. NRP expects to receive approximately $25 million to $28 million of annual cash distributions from Ciner Wyoming until the project is funded.
Corporate and Financing
Corporate and financing costs declined $8.4 million in the fourth quarter of 2019 compared to the prior year quarter primarily due to lower interest expense as a result of less debt outstanding. Cash paid for interest in the fourth quarter of 2019 increased $15.5 million as compared to the prior year quarter as a result of the timing of interest payments on the parent company bonds that were refinanced in the second quarter of 2019. NRP paid interest on the new 9.125% Notes in the fourth quarter of 2019, compared to interest payments made on the previous 10.5% Notes in the third quarter of 2018.
Corporate and financing costs increased $6.8 million in 2019 as compared to the prior year primarily driven by the refinancing of NRP's bonds and revolving credit facility in the second quarter of 2019 which reduced interest costs, extended maturities and significantly improved the partnership's liquidity and financial flexibility. The refinancings resulted in a $29.3 million loss on extinguishment of debt, which was partially offset by $22.7 million decreased interest expense, net of interest income.
Anadarko Litigation Update
In November 2019, the trial court ruled in NRP’s favor in the contingent purchase price consideration payment lawsuit brought against NRP by Anadarko. Anadarko did not appeal the trial court’s ruling. Accordingly, this case is now concluded with no liability incurred by NRP.
Conference Call
A conference call will be held today at 9:00 a.m. ET. To join the conference call, dial (844) 583-4546 and provide the conference ID 1465967. 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.
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Company Profile
Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of mineral properties in the United States including interests in coal, industrial minerals and other natural resources. In addition, NRP owns an equity investment in Ciner Wyoming LLC, a trona ore mining and soda ash production business.
For additional information, please contact Tiffany Sammis at 713-751-7515 or [email protected]. 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, among other things, statements regarding: the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected production levels by the Partnership's lessees; Ciner Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; 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
"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) from continuing operations less equity earnings from unconsolidated investment, net income attributable to non-controlling interest and gain on reserve swap; 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 or loss, 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.
“Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures and distributions to non-controlling interest. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, distributable cash flow 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 our ability to make cash distributions and repay debt.
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“Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as financing activities and distributions to non-controlling interest. FCF 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 our ability to make cash distributions and repay debt.
"Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions and common unit distributions. Cash flow cushion 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. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units.
"Return on capital employed" or "ROCE" is a non-GAAP financial measure that we define as net income (loss) from continuing operations plus financing costs (interest expense plus loss on extinguishment of debt) divided by the sum of equity excluding equity of discontinued operations, 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 or loss, 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.
-Financial Tables and Reconciliation of Non-GAAP Measures Follow-
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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
| Consolidated Statements of Comprehensive Income (Loss) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | September 30, | December 31, | |||||||||||||
| (In thousands, except per unit data) | 2019 | 2018 | 2019 | 2019 | 2018 | ||||||||||
| Revenues and other income | |||||||||||||||
| Coal royalty and other | $ | 37,032 | $ | 43,966 | $ | 39,919 | $ | 191,069 | $ | 178,878 | |||||
| Transportation and processing services | 4,539 | 6,649 | 3,865 | 19,279 | 23,887 | ||||||||||
| Equity in earnings of Ciner Wyoming | 10,256 | 13,320 | 13,818 | 47,089 | 48,306 | ||||||||||
| Gain on litigation settlement | — | 25,000 | — | — | 25,000 | ||||||||||
| Gain (loss) on asset sales and disposals | (111 | ) | 1,622 | 6,107 | 6,498 | 2,441 | |||||||||
| Total revenues and other income | $ | 51,716 | $ | 90,557 | $ | 63,709 | $ | 263,935 | $ | 278,512 | |||||
| Operating expenses | |||||||||||||||
| Operating and maintenance expenses | $ | 5,925 | $ | 8,387 | $ | 5,994 | $ | 32,738 | $ | 29,509 | |||||
| Depreciation, depletion and amortization | 3,186 | 6,325 | 3,384 | 14,932 | 21,689 | ||||||||||
| General and administrative expenses | 3,931 | 5,714 | 4,253 | 16,730 | 16,496 | ||||||||||
| Asset impairments | 147,730 | 18,038 | 484 | 148,214 | 18,280 | ||||||||||
| Total operating expenses | $ | 160,772 | $ | 38,464 | $ | 14,115 | $ | 212,614 | $ | 85,974 | |||||
| Income (loss) from operations | $ | (109,056 | ) | $ | 52,093 | $ | 49,594 | $ | 51,321 | $ | 192,538 | ||||
| Other expenses, net | |||||||||||||||
| Interest expense, net | $ | (10,392 | ) | $ | (17,001 | ) | $ | (10,431 | ) | $ | (47,453 | ) | $ | (70,178 | ) |
| Loss on extinguishment of debt | — | — | — | (29,282 | ) | — | |||||||||
| Total other expenses, net | $ | (10,392 | ) | $ | (17,001 | ) | $ | (10,431 | ) | $ | (76,735 | ) | $ | (70,178 | ) |
| Net income (loss) from continuing operations | $ | (119,448 | ) | $ | 35,092 | $ | 39,163 | $ | (25,414 | ) | $ | 122,360 | |||
| Income from discontinued operations | 750 | 13,966 | 7 | 956 | 17,687 | ||||||||||
| Net income (loss) | $ | (118,698 | ) | $ | 49,058 | $ | 39,170 | $ | (24,458 | ) | $ | 140,047 | |||
| Net income attributable to non-controlling interest | — | — | — | — | (510 | ) | |||||||||
| Net income (loss) attributable to NRP | $ | (118,698 | ) | $ | 49,058 | $ | 39,170 | $ | (24,458 | ) | $ | 139,537 | |||
| Less: income attributable to preferred unitholders | (7,500 | ) | (7,500 | ) | (7,500 | ) | (30,000 | ) | (30,000 | ) | |||||
| Net income (loss) attributable to common unitholders and general partner | $ | (126,198 | ) | $ | 41,558 | $ | 31,670 | $ | (54,458 | ) | $ | 109,537 | |||
| Net income (loss) attributable to common unitholders | $ | (123,674 | ) | $ | 40,727 | $ | 31,036 | $ | (53,369 | ) | $ | 107,346 | |||
| Net income (loss) attributable to the general partner | (2,524 | ) | 831 | 634 | (1,089 | ) | 2,191 | ||||||||
| Income (loss) from continuing operations per common unit | |||||||||||||||
| Basic | $ | (10.15 | ) | $ | 2.21 | $ | 2.53 | $ | (4.43 | ) | $ | 7.35 | |||
| Diluted | (10.15 | ) | 1.69 | 1.66 | (4.43 | ) | 5.90 | ||||||||
| Net income (loss) per common unit | |||||||||||||||
| Basic | $ | (10.09 | ) | $ | 3.33 | $ | 2.53 | $ | (4.35 | ) | $ | 8.77 | |||
| Diluted | (10.09 | ) | 2.36 | 1.66 | (4.35 | ) | 6.76 | ||||||||
| Net income (loss) | $ | (118,698 | ) | $ | 49,058 | $ | 39,170 | $ | (24,458 | ) | $ | 140,047 | |||
| Comprehensive income (loss) from unconsolidated investment and other | 1,208 | 619 | (520 | ) | 868 | (149 | ) | ||||||||
| Comprehensive income (loss) | $ | (117,490 | ) | $ | 49,677 | $ | 38,650 | $ | (23,590 | ) | $ | 139,898 | |||
| Comprehensive income attributable to non-controlling interest | — | — | — | — | (510 | ) | |||||||||
| Comprehensive income (loss) attributable to NRP | $ | (117,490 | ) | $ | 49,677 | $ | 38,650 | $ | (23,590 | ) | $ | 139,388 |
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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
| Consolidated Statements of Cash Flows | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | September 30, | December 31, | |||||||||||||
| (In thousands) | 2019 | 2018 | 2019 | 2019 | 2018 | ||||||||||
| Cash flows from operating activities | |||||||||||||||
| Net income (loss) | $ | (118,698 | ) | $ | 49,058 | $ | 39,170 | $ | (24,458 | ) | $ | 140,047 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations: | |||||||||||||||
| Depreciation, depletion and amortization | 3,186 | 6,325 | 3,384 | 14,932 | 21,689 | ||||||||||
| Distributions from unconsolidated investment | 6,370 | 9,800 | 6,370 | 31,850 | 44,453 | ||||||||||
| Equity earnings from unconsolidated investment | (10,256 | ) | (13,320 | ) | (13,818 | ) | (47,089 | ) | (48,306 | ) | |||||
| Loss (gain) on asset sales and disposals | 111 | (1,622 | ) | (6,107 | ) | (6,498 | ) | (2,441 | ) | ||||||
| Loss on extinguishment of debt | — | — | — | 29,282 | — | ||||||||||
| Income from discontinued operations | (750 | ) | (13,966 | ) | (7 | ) | (956 | ) | (17,687 | ) | |||||
| Asset impairments | 147,730 | 18,038 | 484 | 148,214 | 18,280 | ||||||||||
| Bad debt expense | 620 | (302 | ) | 151 | 7,462 | (62 | ) | ||||||||
| Unit-based compensation expense | 519 | 290 | 466 | 2,361 | 1,434 | ||||||||||
| Amortization of debt issuance costs and other | 464 | 3,112 | 1,072 | 3,687 | 7,133 | ||||||||||
| Change in operating assets and liabilities: | |||||||||||||||
| Accounts receivable | (3,924 | ) | 461 | 996 | (6,035 | ) | (6,062 | ) | |||||||
| Accounts payable | (412 | ) | 1,048 | 355 | (1,234 | ) | 1,138 | ||||||||
| Accrued liabilities | 1,427 | 3,212 | 439 | (3,656 | ) | 19 | |||||||||
| Accrued interest | (12,048 | ) | 8,806 | 7,163 | (12,029 | ) | (1,138 | ) | |||||||
| Deferred revenue | 3,188 | 10,265 | (1,236 | ) | (732 | ) | 19,465 | ||||||||
| Other items, net | 1,867 | (716 | ) | 2,852 | 2,218 | 320 | |||||||||
| Net cash provided by operating activities of continuing operations | $ | 19,394 | $ | 80,489 | $ | 41,734 | $ | 137,319 | $ | 178,282 | |||||
| Net cash provided by (used in) operating activities of discontinued operations | (4 | ) | 886 | (359 | ) | (8 | ) | 10,641 | |||||||
| Net cash provided by operating activities | $ | 19,390 | $ | 81,375 | $ | 41,375 | $ | 137,311 | $ | 188,923 | |||||
| Cash flows from investing activities | |||||||||||||||
| Distributions from unconsolidated investment in excess of cumulative earnings | $ | — | $ | — | $ | — | $ | — | $ | 2,097 | |||||
| Proceeds from asset sales and disposals | (111 | ) | 1,623 | 6,108 | 6,500 | 2,449 | |||||||||
| Return of long-term contract receivable | 392 | 455 | 459 | 1,743 | 3,061 | ||||||||||
| Acquisition of mineral rights | (22 | ) | — | — | (22 | ) | — | ||||||||
| Net cash provided by investing activities of continuing operations | $ | 259 | $ | 2,078 | $ | 6,567 | $ | 8,221 | $ | 7,607 | |||||
| Net cash provided by (used in) investing activities of discontinued operations | (73 | ) | 192,364 | (122 | ) | (629 | ) | 183,021 | |||||||
| Net cash provided by investing activities | $ | 186 | $ | 194,442 | $ | 6,445 | $ | 7,592 | $ | 190,628 |
6
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
| Cash flows from financing activities | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt borrowings | — | — | — | 300,000 | 35,000 | ||||||||||
| Debt repayments | (20,335 | ) | (119,986 | ) | (8,277 | ) | (463,082 | ) | (175,706 | ) | |||||
| Redemption of preferred units paid-in-kind | — | — | — | — | (8,844 | ) | |||||||||
| Distributions to common unitholders and general partner | (5,630 | ) | (5,623 | ) | (5,630 | ) | (33,150 | ) | (22,486 | ) | |||||
| Distributions to preferred unitholders | (7,500 | ) | (7,500 | ) | (7,500 | ) | (30,000 | ) | (30,265 | ) | |||||
| Contributions from (to) discontinued operations | (77 | ) | 197,965 | (481 | ) | (637 | ) | 195,690 | |||||||
| Debt issuance costs and other | (9 | ) | — | (25 | ) | (26,436 | ) | (228 | ) | ||||||
| Net cash provided by (used in) financing activities of continuing operations | $ | (33,551 | ) | $ | 64,856 | $ | (21,913 | ) | $ | (253,305 | ) | $ | (6,839 | ) | |
| Net cash provided by (used in) financing activities of discontinued operations | 77 | (198,030 | ) | 481 | 637 | (196,509 | ) | ||||||||
| Net cash used in financing activities | $ | (33,474 | ) | $ | (133,174 | ) | $ | (21,432 | ) | $ | (252,668 | ) | $ | (203,348 | ) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (13,898 | ) | $ | 142,643 | $ | 26,388 | $ | (107,765 | ) | $ | 176,203 | |||
| Cash, cash equivalents and restricted cash of continuing operations at beginning of period | $ | 112,163 | $ | 58,607 | $ | 85,775 | $ | 206,030 | $ | 26,980 | |||||
| Cash and cash equivalents of discontinued operations at beginning of period | — | 4,780 | — | — | 2,847 | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | $ | 112,163 | $ | 63,387 | $ | 85,775 | $ | 206,030 | $ | 29,827 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 98,265 | $ | 206,030 | $ | 112,163 | $ | 98,265 | $ | 206,030 | |||||
| Less: cash and cash equivalents of discontinued operations at end of period | — | — | — | — | — | ||||||||||
| Cash, cash equivalents and restricted cash of continuing operations at end of period | $ | 98,265 | $ | 206,030 | $ | 112,163 | $ | 98,265 | $ | 206,030 | |||||
| Supplemental cash flow information: | |||||||||||||||
| Cash paid during the period for interest of continuing operations | $ | 22,327 | $ | 6,838 | $ | 3,225 | $ | 58,597 | $ | 64,991 |
7
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
| Consolidated Balance Sheets | ||||||
|---|---|---|---|---|---|---|
| December 31, | ||||||
| (In thousands, except unit data) | 2019 | 2018 | ||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 98,265 | $ | 101,839 | ||
| Restricted cash | — | 104,191 | ||||
| Accounts receivable, net | 30,869 | 32,058 | ||||
| Prepaid expenses and other, net | 1,244 | 3,462 | ||||
| Current assets of discontinued operations | 1,706 | 993 | ||||
| Total current assets | $ | 132,084 | $ | 242,543 | ||
| Land | 24,008 | 24,008 | ||||
| Mineral rights, net | 605,096 | 743,112 | ||||
| Intangible assets, net | 17,687 | 42,513 | ||||
| Equity in unconsolidated investment | 263,080 | 247,051 | ||||
| Long-term contract receivable | 36,963 | 38,945 | ||||
| Other assets, net | 6,989 | 3,475 | ||||
| Total assets | $ | 1,085,907 | $ | 1,341,647 | ||
| LIABILITIES AND CAPITAL | ||||||
| Current liabilities | ||||||
| Accounts payable | $ | 1,179 | $ | 2,414 | ||
| Accrued liabilities | 8,764 | 12,347 | ||||
| Accrued interest | 2,316 | 14,345 | ||||
| Current portion of deferred revenue | 4,608 | 3,509 | ||||
| Current portion of long-term debt, net | 45,776 | 115,184 | ||||
| Current liabilities of discontinued operations | 65 | 947 | ||||
| Total current liabilities | $ | 62,708 | $ | 148,746 | ||
| Deferred revenue | 47,213 | 49,044 | ||||
| Long-term debt, net | 470,422 | 557,574 | ||||
| Other non-current liabilities | 4,949 | 1,150 | ||||
| Total liabilities | $ | 585,292 | $ | 756,514 | ||
| Commitments and contingencies | ||||||
| Class A Convertible Preferred Units (250,000 units issued and outstanding at $1,000 par value per unit; liquidation preference of $1,500 per unit) | $ | 164,587 | $ | 164,587 | ||
| Partners’ capital: | ||||||
| Common unitholders’ interest (12,261,199 and 12,249,469 units issued and outstanding at December 31, 2019 and 2018, respectively) | $ | 271,471 | $ | 355,113 | ||
| General partner’s interest | 3,270 | 5,014 | ||||
| Warrant holders' interest | 66,816 | 66,816 | ||||
| Accumulated other comprehensive loss | (2,594 | ) | (3,462 | ) | ||
| Total partners’ capital | $ | 338,963 | $ | 423,481 | ||
| Non-controlling interest | (2,935 | ) | (2,935 | ) | ||
| Total capital | $ | 336,028 | $ | 420,546 | ||
| Total liabilities and capital | $ | 1,085,907 | $ | 1,341,647 |
8
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
| Consolidated Statements of Partners' Capital | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Unitholders | General Partner | Warrant Holders | Accumulated<br>Other<br>Comprehensive<br>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)^ | — | 136,746 | 2,791 | — | — | 139,537 | 510 | 140,047 | |||||||||||||
| Distributions to common unitholders and general partner | — | (22,036 | ) | (450 | ) | — | — | (22,486 | ) | — | (22,486 | ) | |||||||||
| Distributions to preferred unitholders | — | (29,660 | ) | (605 | ) | — | — | (30,265 | ) | — | (30,265 | ) | |||||||||
| Issuance of unit-based awards | 17 | 546 | — | — | — | 546 | — | 546 | |||||||||||||
| Unit-based awards amortization and vesting | — | 560 | — | — | — | 560 | — | 560 | |||||||||||||
| Comprehensive income (loss) from unconsolidated investment and other | — | 49 | 12 | — | (149 | ) | (88 | ) | (51 | ) | (139 | ) | |||||||||
| Balance at December 31, 2018 | 12,249 | $ | 355,113 | $ | 5,014 | $ | 66,816 | $ | (3,462 | ) | $ | 423,481 | $ | (2,935 | ) | $ | 420,546 | ||||
| Net loss ^(1)^ | — | (23,969 | ) | (489 | ) | — | — | (24,458 | ) | — | (24,458 | ) | |||||||||
| Distributions to common unitholders and general partner | — | (32,487 | ) | (663 | ) | — | — | (33,150 | ) | — | (33,150 | ) | |||||||||
| Distributions to preferred unitholders | — | (29,400 | ) | (600 | ) | — | — | (30,000 | ) | — | (30,000 | ) | |||||||||
| Issuance of unit-based awards | 12 | 486 | — | — | — | 486 | — | 486 | |||||||||||||
| Unit-based awards amortization and vesting | — | 1,804 | — | — | — | 1,804 | — | 1,804 | |||||||||||||
| Comprehensive income (loss) from unconsolidated investment and other | — | (76 | ) | 8 | — | 868 | 800 | — | 800 | ||||||||||||
| Balance at December 31, 2019 | 12,261 | $ | 271,471 | $ | 3,270 | $ | 66,816 | $ | (2,594 | ) | $ | 338,963 | $ | (2,935 | ) | $ | 336,028 | ||||
| (1) | Net income (loss) includes $30.0 million attributable to preferred unitholders that accumulated during the period, of which $29.4 million is allocated to the common unitholders and $0.6 million is allocated to the general partner. | ||||||||||||||||||||
| --- | --- |
9
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
The following tables present NRP's unaudited business results by segment for the three months ended December 31, 2019 and 2018 and September 30, 2019:
| Operating Business Segments | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Coal Royalty and Other | Corporate and Financing | |||||||||||
| (In thousands) | Soda Ash | Total | ||||||||||
| Three Months Ended December 31, 2019 | ||||||||||||
| Revenues | $ | 41,571 | $ | 10,256 | $ | — | $ | 51,827 | ||||
| Loss on asset sales and disposals | (111 | ) | — | — | (111 | ) | ||||||
| Total revenues and other income | $ | 41,460 | $ | 10,256 | $ | — | $ | 51,716 | ||||
| Asset impairments | $ | 147,730 | $ | — | $ | — | $ | 147,730 | ||||
| Net income (loss) from continuing operations | $ | (115,355 | ) | $ | 10,230 | $ | (14,323 | ) | $ | (119,448 | ) | |
| Adjusted EBITDA ^(1)^ | $ | 35,561 | $ | 6,344 | $ | (3,931 | ) | $ | 37,974 | |||
| Cash flow provided by (used in) continuing operations: | ||||||||||||
| Operating activities | $ | 39,042 | $ | 6,344 | $ | (25,992 | ) | $ | 19,394 | |||
| Investing activities | $ | 259 | $ | — | $ | — | $ | 259 | ||||
| Financing activities | $ | — | $ | — | $ | (33,551 | ) | $ | (33,551 | ) | ||
| Distributable cash flow ^(1) (2)^ | $ | 39,323 | $ | 6,344 | $ | (25,992 | ) | $ | 19,602 | |||
| Free cash flow^(1)^ | $ | 39,412 | $ | 6,344 | $ | (25,992 | ) | $ | 19,764 | |||
| Three Months Ended December 31, 2018 | ||||||||||||
| Revenues | $ | 50,615 | $ | 13,320 | $ | — | $ | 63,935 | ||||
| Gain on litigation settlement | 25,000 | — | — | 25,000 | ||||||||
| Gain on asset sales and disposals | 1,622 | — | — | 1,622 | ||||||||
| Total revenues and other income | $ | 77,237 | $ | 13,320 | $ | — | $ | 90,557 | ||||
| Asset impairments | $ | 18,038 | $ | — | $ | — | $ | 18,038 | ||||
| Net income (loss) from continuing operations | $ | 44,487 | $ | 13,320 | $ | (22,715 | ) | $ | 35,092 | |||
| Adjusted EBITDA ^(1)^ | $ | 68,850 | $ | 9,800 | $ | (5,714 | ) | $ | 72,936 | |||
| Cash flow provided by (used in) continuing operations: | ||||||||||||
| Operating activities | $ | 80,272 | $ | 9,800 | $ | (9,583 | ) | $ | 80,489 | |||
| Investing activities | $ | 2,078 | $ | — | $ | — | $ | 2,078 | ||||
| Financing activities | $ | — | $ | — | $ | 64,856 | $ | 64,856 | ||||
| Distributable cash flow^(1) (2)^ | $ | 82,350 | $ | 9,800 | $ | (9,583 | ) | $ | 280,658 | |||
| Free cash flow^(1)^ | $ | 80,727 | $ | 9,800 | $ | (9,583 | ) | $ | 80,944 | |||
| Three Months Ended September 30, 2019 | ||||||||||||
| Revenues | $ | 43,784 | $ | 13,818 | $ | — | $ | 57,602 | ||||
| Gain on asset sales and disposals | 6,107 | — | — | 6,107 | ||||||||
| Total revenues and other income | $ | 49,891 | $ | 13,818 | $ | — | $ | 63,709 | ||||
| Asset impairments | $ | 484 | $ | — | $ | — | $ | 484 | ||||
| Net income (loss) from continuing operations | $ | 40,252 | $ | 13,595 | $ | (14,684 | ) | $ | 39,163 | |||
| Adjusted EBITDA ^(1)^ | $ | 44,120 | $ | 6,147 | $ | (4,253 | ) | $ | 46,014 | |||
| Cash flow provided by (used in) continuing operations: | ||||||||||||
| Operating activities | $ | 41,094 | $ | 6,147 | $ | (5,507 | ) | $ | 41,734 | |||
| Investing activities | $ | 6,567 | $ | — | $ | — | $ | 6,567 | ||||
| Financing activities | $ | — | $ | — | $ | (21,913 | ) | $ | (21,913 | ) | ||
| Distributable cash flow ^(1) (2)^ | $ | 47,661 | $ | 6,147 | $ | (5,507 | ) | $ | 48,179 | |||
| Free cash flow ^(1)^ | $ | 41,553 | $ | 6,147 | $ | (5,507 | ) | $ | 42,193 | |||
| (1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. | |||||||||||
| --- | --- | |||||||||||
| (2) | Includes net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations. | |||||||||||
| --- | --- |
10
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
The following tables present NRP's unaudited business results by segment for the year ended December 31, 2019 and 2018:
| Operating Business Segments | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Coal Royalty and Other | Corporate and Financing | |||||||||||
| (In thousands) | Soda Ash | Total | ||||||||||
| Year Ended December 31, 2019 | ||||||||||||
| Revenues | $ | 210,348 | $ | 47,089 | $ | — | $ | 257,437 | ||||
| Gain on asset sales and disposals | 6,498 | — | — | 6,498 | ||||||||
| Total revenues and other income | $ | 216,846 | $ | 47,089 | $ | — | $ | 263,935 | ||||
| Asset impairments | $ | 148,214 | $ | — | $ | — | $ | 148,214 | ||||
| Net income (loss) from continuing operations | $ | 21,211 | $ | 46,840 | $ | (93,465 | ) | $ | (25,414 | ) | ||
| Adjusted EBITDA ^(1)^ | $ | 184,357 | $ | 31,601 | $ | (16,730 | ) | $ | 199,228 | |||
| Cash flow provided by (used in) continuing operations: | ||||||||||||
| Operating activities | $ | 178,863 | $ | 31,601 | $ | (73,145 | ) | $ | 137,319 | |||
| Investing activities | $ | 8,221 | $ | — | $ | — | $ | 8,221 | ||||
| Financing activities | $ | — | $ | — | $ | (253,305 | ) | $ | (253,305 | ) | ||
| Distributable cash flow ^(1) (2)^ | $ | 187,106 | $ | 31,601 | $ | (73,145 | ) | $ | 144,933 | |||
| Free cash flow ^(1)^ | $ | 180,584 | $ | 31,601 | $ | (73,145 | ) | $ | 139,040 | |||
| Year Ended December 31, 2018 | ||||||||||||
| Revenues | $ | 202,765 | $ | 48,306 | $ | — | $ | 251,071 | ||||
| Gain on litigation settlement | 25,000 | — | — | 25,000 | ||||||||
| Gain on asset sales and disposals | 2,441 | — | — | 2,441 | ||||||||
| Total revenues and other income | $ | 230,206 | $ | 48,306 | $ | — | $ | 278,512 | ||||
| Asset impairments | $ | 18,280 | $ | — | $ | — | $ | 18,280 | ||||
| Net income (loss) from continuing operations | $ | 160,728 | $ | 48,306 | $ | (86,674 | ) | $ | 122,360 | |||
| Adjusted EBITDA ^(1)^ | $ | 200,187 | $ | 46,550 | $ | (16,496 | ) | $ | 230,241 | |||
| Cash flow provided by (used in) continuing operations: | ||||||||||||
| Operating activities | $ | 212,394 | $ | 44,453 | $ | (78,565 | ) | $ | 178,282 | |||
| Investing activities | $ | 5,510 | $ | 2,097 | $ | — | $ | 7,607 | ||||
| Financing activities | $ | — | $ | — | $ | (6,839 | ) | $ | (6,839 | ) | ||
| Distributable cash flow ^(1) (2)^ | $ | 217,904 | $ | 46,550 | $ | (78,565 | ) | $ | 383,980 | |||
| Free cash flow ^(1)^ | $ | 215,455 | $ | 46,550 | $ | (78,565 | ) | $ | 183,440 | |||
| (1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. | |||||||||||
| --- | --- | |||||||||||
| (2) | Includes net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations. | |||||||||||
| --- | --- |
11
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
| Operating Statistics - Coal Royalty and Other | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | September 30, | December 31, | |||||||||||||
| (In thousands, except per ton data) | 2019 | 2018 | 2019 | 2019 | 2018 | ||||||||||
| Coal sales volumes (tons) | |||||||||||||||
| Appalachia | |||||||||||||||
| Northern ^(1)^ | 686 | 1,697 | 290 | 3,460 | 3,187 | ||||||||||
| Central | 2,908 | 3,415 | 3,222 | 13,377 | 14,997 | ||||||||||
| Southern | 498 | 422 | 438 | 1,670 | 1,710 | ||||||||||
| Total Appalachia | 4,092 | 5,534 | 3,950 | 18,507 | 19,894 | ||||||||||
| Illinois Basin | 555 | 648 | 551 | 2,201 | 2,739 | ||||||||||
| Northern Powder River Basin | 1,057 | 1,417 | 532 | 3,036 | 4,313 | ||||||||||
| Total coal sales volumes | 5,704 | 7,599 | 5,033 | 23,744 | 26,946 | ||||||||||
| Coal royalty revenue per ton | |||||||||||||||
| Appalachia | |||||||||||||||
| Northern ^(1)^ | $ | 0.88 | $ | 1.78 | $ | 2.54 | $ | 1.96 | $ | 2.74 | |||||
| Central | 4.58 | 5.79 | 5.25 | 5.53 | 5.62 | ||||||||||
| Southern | 5.96 | 7.89 | 5.99 | 6.69 | 7.20 | ||||||||||
| Illinois Basin | 4.53 | 4.84 | 4.82 | 4.66 | 4.63 | ||||||||||
| Northern Powder River Basin | 2.33 | 2.56 | 4.69 | 2.90 | 2.65 | ||||||||||
| Combined average coal royalty revenue per ton | 3.84 | 4.33 | 5.05 | 4.67 | 4.80 | ||||||||||
| Coal royalty revenues | |||||||||||||||
| Appalachia | |||||||||||||||
| Northern ^(1)^ | $ | 602 | $ | 3,021 | $ | 735 | $ | 6,775 | $ | 8,719 | |||||
| Central | 13,332 | 19,764 | 16,929 | 73,960 | 84,302 | ||||||||||
| Southern | 2,965 | 3,327 | 2,626 | 11,169 | 12,312 | ||||||||||
| Total Appalachia | 16,899 | 26,112 | 20,290 | 91,904 | 105,333 | ||||||||||
| Illinois Basin | 2,516 | 3,140 | 2,658 | 10,255 | 12,673 | ||||||||||
| Northern Powder River Basin | 2,462 | 3,628 | 2,492 | 8,809 | 11,445 | ||||||||||
| Unadjusted coal royalty revenues | 21,877 | 32,880 | 25,440 | 110,968 | 129,451 | ||||||||||
| Coal royalty adjustment for minimum leases | 174 | (12 | ) | (713 | ) | (1,356 | ) | (110 | ) | ||||||
| Total coal royalty revenues | $ | 22,051 | $ | 32,868 | $ | 24,727 | $ | 109,612 | $ | 129,341 | |||||
| Other revenues | |||||||||||||||
| Production lease minimum revenues | $ | 2,737 | $ | 1,897 | $ | 2,752 | $ | 24,068 | $ | 8,207 | |||||
| Minimum lease straight-line revenues | 3,758 | 623 | 3,982 | 14,910 | 2,362 | ||||||||||
| Property tax revenues | 1,871 | 1,454 | 1,606 | 6,287 | 5,422 | ||||||||||
| Wheelage revenues | 845 | 1,329 | 1,675 | 5,880 | 6,484 | ||||||||||
| Coal overriding royalty revenues | 3,333 | 3,386 | 2,189 | 13,496 | 13,878 | ||||||||||
| Lease amendment revenues | 1,271 | — | 1,535 | 7,991 | — | ||||||||||
| Aggregates royalty revenues | 610 | 1,188 | 954 | 4,265 | 4,739 | ||||||||||
| Oil and gas royalty revenues | 456 | 929 | 374 | 3,031 | 6,608 | ||||||||||
| Other revenues | 100 | 292 | 125 | 1,529 | 1,837 | ||||||||||
| Total other revenues | $ | 14,981 | $ | 11,098 | $ | 15,192 | $ | 81,457 | $ | 49,537 | |||||
| Coal royalty and other | $ | 37,032 | $ | 43,966 | $ | 39,919 | $ | 191,069 | $ | 178,878 | |||||
| Transportation and processing services revenues | 4,539 | 6,649 | 3,865 | 19,279 | 23,887 | ||||||||||
| Gain on litigation settlement | — | 25,000 | — | — | 25,000 | ||||||||||
| Gain (loss) on asset sales and disposals | (111 | ) | 1,622 | 6,107 | 6,498 | 2,441 | |||||||||
| Total Coal Royalty and Other segment revenues and other income | $ | 41,460 | $ | 77,237 | $ | 49,891 | $ | 216,846 | $ | 230,206 | |||||
| (1) | Northern Appalachia includes NRP's Hibbs Run property that has significant sales volumes, but a low fixed rate per ton. | ||||||||||||||
| --- | --- |
12
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures^^
(Unaudited)
| Adjusted EBITDA | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Coal Royalty and Other | Corporate and Financing | ||||||||||||
| (In thousands) | Soda Ash | Total | |||||||||||
| Three Months Ended December 31, 2019 | |||||||||||||
| Net income (loss) from continuing operations | $ | (115,355 | ) | $ | 10,230 | $ | (14,323 | ) | $ | (119,448 | ) | ||
| Less: equity earnings from unconsolidated investment | — | (10,256 | ) | — | (10,256 | ) | |||||||
| Add: total distributions from unconsolidated investment | — | 6,370 | — | 6,370 | |||||||||
| Add: interest expense, net | — | — | 10,392 | 10,392 | |||||||||
| Add: depreciation, depletion and amortization | 3,186 | — | — | 3,186 | |||||||||
| Add: asset impairments | 147,730 | — | — | 147,730 | |||||||||
| Adjusted EBITDA | $ | 35,561 | $ | 6,344 | $ | (3,931 | ) | $ | 37,974 | ||||
| Three Months Ended December 31, 2018 | |||||||||||||
| Net income (loss) from continuing operations | $ | 44,487 | $ | 13,320 | $ | (22,715 | ) | $ | 35,092 | ||||
| Less: equity earnings from unconsolidated investment | — | (13,320 | ) | — | (13,320 | ) | |||||||
| Add: total distributions from unconsolidated investment | — | 9,800 | — | 9,800 | |||||||||
| Add: interest expense, net | — | — | 17,001 | 17,001 | |||||||||
| Add: depreciation, depletion and amortization | 6,325 | — | — | 6,325 | |||||||||
| Add: asset impairments | 18,038 | — | — | 18,038 | |||||||||
| Adjusted EBITDA | $ | 68,850 | $ | 9,800 | $ | (5,714 | ) | $ | 72,936 | ||||
| Three Months Ended September 30, 2019 | |||||||||||||
| Net income (loss) from continuing operations | $ | 40,252 | $ | 13,595 | $ | (14,684 | ) | $ | 39,163 | ||||
| Less: equity earnings from unconsolidated investment | — | (13,818 | ) | — | (13,818 | ) | |||||||
| Add: total distributions from unconsolidated investment | — | 6,370 | — | 6,370 | |||||||||
| Add: interest expense, net | — | — | 10,431 | 10,431 | |||||||||
| Add: depreciation, depletion and amortization | 3,384 | — | — | 3,384 | |||||||||
| Add: asset impairments | 484 | — | — | 484 | |||||||||
| Adjusted EBITDA | $ | 44,120 | $ | 6,147 | $ | (4,253 | ) | $ | 46,014 |
13
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
| Adjusted EBITDA | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Coal Royalty and Other | Corporate and Financing | ||||||||||||
| (In thousands) | Soda Ash | Total | |||||||||||
| Year Ended December 31, 2019 | |||||||||||||
| Net income (loss) from continuing operations | $ | 21,211 | $ | 46,840 | $ | (93,465 | ) | $ | (25,414 | ) | |||
| Less: equity earnings from unconsolidated investment | — | (47,089 | ) | — | (47,089 | ) | |||||||
| Less: net income attributable to non-controlling interest | — | — | — | — | |||||||||
| Add: total distributions from unconsolidated investment | — | 31,850 | — | 31,850 | |||||||||
| Add: interest expense, net | — | — | 47,453 | 47,453 | |||||||||
| Add: loss on extinguishment of debt | — | — | 29,282 | 29,282 | |||||||||
| Add: depreciation, depletion and amortization | 14,932 | — | — | 14,932 | |||||||||
| Add: asset impairments | 148,214 | — | — | 148,214 | |||||||||
| Adjusted EBITDA | $ | 184,357 | $ | 31,601 | $ | (16,730 | ) | $ | 199,228 | ||||
| Year Ended December 31, 2018 | |||||||||||||
| Net income (loss) from continuing operations | $ | 160,728 | $ | 48,306 | $ | (86,674 | ) | $ | 122,360 | ||||
| Less: equity earnings from unconsolidated investment | — | (48,306 | ) | — | (48,306 | ) | |||||||
| Less: net income attributable to non-controlling interest | (510 | ) | — | — | (510 | ) | |||||||
| Add: total distributions from unconsolidated investment | — | 46,550 | — | 46,550 | |||||||||
| Add: interest expense, net | — | — | 70,178 | 70,178 | |||||||||
| Add: loss on extinguishment of debt | — | — | — | — | |||||||||
| Add: depreciation, depletion and amortization | 21,689 | — | — | 21,689 | |||||||||
| Add: asset impairments | 18,280 | — | — | 18,280 | |||||||||
| Adjusted EBITDA | $ | 200,187 | $ | 46,550 | $ | (16,496 | ) | $ | 230,241 |
14
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
| Distributable Cash Flow and Free Cash Flow | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Coal Royalty and Other | Corporate and Financing | |||||||||||
| (In thousands) | Soda Ash | Total | ||||||||||
| Three Months Ended December 31, 2019 | ||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 39,042 | $ | 6,344 | $ | (25,992 | ) | 19,394 | ||||
| Add: proceeds from asset sales and disposals | (111 | ) | — | — | (111 | ) | ||||||
| Add: proceeds from sale of discontinued operations | — | — | — | (73 | ) | |||||||
| Add: return of long-term contract receivable | 392 | — | — | 392 | ||||||||
| Distributable cash flow | $ | 39,323 | $ | 6,344 | $ | (25,992 | ) | $ | 19,602 | |||
| Less: proceeds from asset sales and disposals | 111 | — | — | 111 | ||||||||
| Less: proceeds from sale of discontinued operations | — | — | — | 73 | ||||||||
| Less: expansion capital expenditures | (22 | ) | — | — | (22 | ) | ||||||
| Free cash flow | $ | 39,412 | $ | 6,344 | $ | (25,992 | ) | $ | 19,764 | |||
| Three Months Ended December 31, 2018 | ||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 80,272 | $ | 9,800 | $ | (9,583 | ) | $ | 80,489 | |||
| Add: proceeds from asset sales and disposals | 1,623 | — | — | 1,623 | ||||||||
| Add: proceeds from sale of discontinued operations | — | — | — | 198,091 | ||||||||
| Add: return of long-term contract receivable | 455 | — | — | 455 | ||||||||
| Distributable cash flow | $ | 82,350 | $ | 9,800 | $ | (9,583 | ) | $ | 280,658 | |||
| Less: proceeds from asset sales and disposals | (1,623 | ) | — | — | (1,623 | ) | ||||||
| Less: proceeds from sale of discontinued operations | — | — | — | (198,091 | ) | |||||||
| Less: expansion capital expenditures | — | — | — | — | ||||||||
| Free cash flow | $ | 80,727 | $ | 9,800 | $ | (9,583 | ) | $ | 80,944 | |||
| Three Months Ended September 30, 2019 | ||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 41,094 | $ | 6,147 | $ | (5,507 | ) | $ | 41,734 | |||
| Add: proceeds from asset sales and disposals | 6,108 | — | — | 6,108 | ||||||||
| Add: proceeds from sale of discontinued operations | — | — | — | (122 | ) | |||||||
| Add: return of long-term contract receivable | 459 | — | — | 459 | ||||||||
| Distributable cash flow | $ | 47,661 | $ | 6,147 | $ | (5,507 | ) | $ | 48,179 | |||
| Less: proceeds from asset sales and disposals | (6,108 | ) | — | — | (6,108 | ) | ||||||
| Less: proceeds from sale of discontinued operations | — | — | — | 122 | ||||||||
| Less: expansion capital expenditures | — | — | — | — | ||||||||
| Free cash flow | $ | 41,553 | $ | 6,147 | $ | (5,507 | ) | $ | 42,193 |
15
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
| Distributable Cash Flow and Free Cash Flow | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Coal Royalty and Other | Corporate and Financing | |||||||||||
| (In thousands) | Soda Ash | Total | ||||||||||
| Year Ended December 31, 2019 | ||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 178,863 | $ | 31,601 | $ | (73,145 | ) | $ | 137,319 | |||
| Add: distributions from unconsolidated investment in excess of cumulative earnings | — | — | — | — | ||||||||
| Add: proceeds from asset sales and disposals | 6,500 | — | — | 6,500 | ||||||||
| Add: proceeds from sale of discontinued operations | — | — | — | (629 | ) | |||||||
| Add: return of long-term contract receivable | 1,743 | — | — | 1,743 | ||||||||
| Distributable cash flow | $ | 187,106 | $ | 31,601 | $ | (73,145 | ) | $ | 144,933 | |||
| Less: proceeds from asset sales and disposals | (6,500 | ) | — | — | (6,500 | ) | ||||||
| Less: proceeds from sale of discontinued operations | — | — | — | 629 | ||||||||
| Less: expansion capital expenditures | (22 | ) | — | — | (22 | ) | ||||||
| Free cash flow | $ | 180,584 | $ | 31,601 | $ | (73,145 | ) | $ | 139,040 | |||
| Year Ended December 31, 2018 | ||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 212,394 | $ | 44,453 | $ | (78,565 | ) | $ | 178,282 | |||
| Add: distributions from unconsolidated investment in excess of cumulative earnings | — | 2,097 | — | 2,097 | ||||||||
| Add: proceeds from asset sales and disposals | 2,449 | — | — | 2,449 | ||||||||
| Add: proceeds from sale of discontinued operations | — | — | — | 198,091 | ||||||||
| Add: return of long-term contract receivable | 3,061 | — | — | 3,061 | ||||||||
| Distributable cash flow | $ | 217,904 | $ | 46,550 | $ | (78,565 | ) | $ | 383,980 | |||
| Less: proceeds from asset sales and disposals | (2,449 | ) | — | — | (2,449 | ) | ||||||
| Less: proceeds from sale of discontinued operations | — | — | — | (198,091 | ) | |||||||
| Less: expansion capital expenditures | — | — | — | — | ||||||||
| Free cash flow | $ | 215,455 | $ | 46,550 | $ | (78,565 | ) | $ | 183,440 | |||
| Free Cash Flow Excluding Discontinued Operations and One-Time Beneficial Items and Cash Flow Cushion | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| Year Ended December 31, | ||||||||||||
| (In thousands) | 2019 | 2018 | ||||||||||
| Free cash flow | $ | 139,040 | $ | 183,440 | ||||||||
| Less: free cash flow used by discontinued operations | (8 | ) | (540 | ) | ||||||||
| Free cash flow including discontinued operations | $ | 139,032 | $ | 182,900 | ||||||||
| Add: free cash flow used by discontinued operations | 8 | 540 | ||||||||||
| Less: cash flow from one-time Hillsboro litigation settlement | — | (25,000 | ) | |||||||||
| Free cash flow excluding discontinued operations | $ | 139,040 | $ | 158,440 | ||||||||
| Less: mandatory Opco debt repayments | (68,128 | ) | (80,765 | ) | ||||||||
| Less: preferred unit distributions and redemption of PIK units | (30,000 | ) | (39,109 | ) | ||||||||
| Less: common unit distributions | (33,150 | ) | (22,486 | ) | ||||||||
| Cash flow cushion | $ | 7,762 | $ | 16,080 |
16
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
| Leverage Ratio | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands) | Year Ended December 31, 2019 | |||||||||||
| Adjusted EBITDA | $ | 199,228 | ||||||||||
| Debt—at December 31, 2019 | $ | 524,056 | ||||||||||
| Leverage Ratio ^(1)^ | 2.6 | x | ||||||||||
| (1) | Leverage Ratio is calculated as the outstanding principal of NRP's debt as of December 31, 2019 divided by the last twelve months' Adjusted EBITDA. | |||||||||||
| --- | --- | |||||||||||
| Return on Capital Employed ("ROCE") | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Coal Royalty and Other | Corporate and Financing | |||||||||||
| (In thousands) | Soda Ash | Total | ||||||||||
| LTM Ended December 31, 2019 | ||||||||||||
| Net income (loss) from continuing operations | $ | 21,211 | $ | 46,840 | $ | (93,465 | ) | $ | (25,414 | ) | ||
| Financing costs | — | — | 79,361 | 79,361 | ||||||||
| Return | $ | 21,211 | $ | 46,840 | $ | (14,104 | ) | $ | 53,947 | |||
| As of December 31, 2018 | ||||||||||||
| Total assets of continuing operations | $ | 986,680 | $ | 247,051 | $ | 106,923 | $ | 1,340,654 | ||||
| Less: total current liabilities of continuing operations excluding current debt | (12,604 | ) | — | (20,011 | ) | (32,615 | ) | |||||
| Less: total long-term liabilities of continuing operations excluding long-term debt | (50,119 | ) | — | (75 | ) | (50,194 | ) | |||||
| Capital employed excluding discontinued operations | $ | 923,957 | $ | 247,051 | $ | 86,837 | $ | 1,257,845 | ||||
| Total partners' capital ^(1)^ | $ | 926,892 | $ | 247,051 | $ | (750,508 | ) | $ | 423,481 | |||
| Less: non-controlling interest | (2,935 | ) | — | — | (2,935 | ) | ||||||
| Less: partners' capital from discontinued operations | — | — | — | (46 | ) | |||||||
| Total partners' capital excluding discontinued operations | $ | 923,957 | $ | 247,051 | $ | (750,508 | ) | $ | 420,500 | |||
| Class A convertible preferred units | — | — | 164,587 | 164,587 | ||||||||
| Debt | — | — | 672,758 | 672,758 | ||||||||
| Capital employed excluding discontinued operations | $ | 923,957 | $ | 247,051 | $ | 86,837 | $ | 1,257,845 | ||||
| ROCE excluding discontinued operations | 2.3% | 19.0% | N/A | 4.3% | ||||||||
| Excluding asset impairments: | ||||||||||||
| Return | $ | 21,211 | $ | 46,840 | $ | (14,104 | ) | $ | 53,947 | |||
| Add: asset impairments | 148,214 | — | — | 148,214 | ||||||||
| Return excluding asset impairments | $ | 169,425 | $ | 46,840 | $ | (14,104 | ) | $ | 202,161 | |||
| ROCE excluding discontinued operations and asset impairments | 18.3% | 19.0% | N/A | 16.1% | ||||||||
| (1) | Total Partners' Capital includes $0.05 million from discontinued operations. | |||||||||||
| --- | --- |
17
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
| Change in Common Unitholders' Equity Excluding Asset Impairments Attributable to Common Unitholders | |||
|---|---|---|---|
| (In thousands) | |||
| 2019 Common unitholders' equity | $ | 271,471 | |
| 2018 Common unitholders' equity | 355,113 | ||
| 2019 Change in common unitholders' equity | $ | (83,642 | ) |
| 2019 Asset impairments | $ | 148,214 | |
| 2019 Asset impairments attributable to common unitholders | $ | 145,250 | |
| 2019 Change in common unitholders' equity excluding asset impairments attributable to common unitholders | $ | 61,608 |
-end-
18