Market Overview

Natural Resource Partners L.P. Reports Third Quarter 2020 Results and Declares Third Quarter 2020 Distributions

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Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2020 results as follows:

 

 

For the Three Months Ended

 

Last Twelve

Months

 

 

September 30,

 

September 30,

(In thousands) (Unaudited)

 

2020

 

2019

 

2020

Net income (loss) from continuing operations

 

$

7,216

 

 

$

39,163

 

 

$

(218,954

)

Asset impairments

 

934

 

 

484

 

 

280,947

 

Net income from continuing operations excluding asset impairments (1)

 

$

8,150

 

 

$

39,647

 

 

$

61,993

 

Adjusted EBITDA (1)

 

18,529

 

 

46,014

 

 

117,771

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

Operating activities

24,323

41,734

93,807

Investing activities

 

332

 

 

6,567

 

 

1,228

 

Financing activities

 

(19,910

)

 

(21,913

)

 

(91,625

)

Distributable cash flow (1)

 

24,655

 

 

48,179

 

 

95,918

 

Free cash flow (1)

 

24,655

 

 

42,193

 

 

94,639

 

Cash flow cushion (last twelve months) (1)

 

 

 

 

 

1,460

 

____________________

(1)

See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

"Demand for steel, electricity and glass began to rebound in the third quarter and the outlook for our coal and soda ash businesses has improved from the lows earlier this year. We continue to generate free cash flow and maintain strong liquidity, which provides us with significant financial flexibility to continue paying down debt and managing through challenging times," said Craig Nunez, NRP's President and Chief Operating Officer.

NRP's liquidity was $215.6 million at September 30, 2020, consisting of $115.6 million of cash and $100.0 million of borrowing capacity available under its revolving credit facility.

NRP announced today that the Board of Directors of its general partner declared a third quarter 2020 cash distribution of $0.45 per common unit of NRP to be paid on November 20, 2020 to unitholders of record on November 19, 2020. In addition, the Board declared a $7.5 million distribution on the preferred units, which will be paid one-half in cash and one-half in kind through the issuance of additional preferred units. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs.

Segment Performance

Coal Royalty and Other

Revenues and other income in the third quarter of 2020 were lower by $21.9 million and distributable cash flow and free cash flow were $18.8 million and $12.6 million lower, respectively, as compared to the prior year quarter. This decrease is primarily a result of a weakened market for metallurgical coal as compared to the prior year quarter due to a decline in global steel demand. As a result, both sales volumes and prices for metallurgical coal sold were lower in the third quarter of 2020 compared to the prior year quarter. Approximately 70% of coal royalty revenues and approximately 65% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, 2020. In addition, weaker domestic and export thermal coal markets compared to the prior year period resulted in lower revenue from NRP's thermal coal properties. Domestic and export thermal coal markets remained challenged by lower utility demand, continued low natural gas prices and the secular shift to renewable energy. Furthermore, the COVID-19 pandemic has compounded already weak coal pricing and demand, and NRP's coal lessees saw negative impacts on their businesses during 2020.

Soda Ash

Ciner Wyoming has also been negatively impacted by the COVID-19 pandemic as lower activity in the global auto, container and construction industries reduced demand for glass and soda ash. However, demand for glass began to rebound in the third quarter of 2020 and the outlook for the soda ash business has improved. Revenues and other income in the third quarter of 2020 were lower by $11.8 million compared to the prior year quarter primarily due to a combination of lower pricing and volumes sold. While Ciner has yet to recover to pre-COVID levels, overall sales volumes increased 26.7% and overall production volumes increased 1.5% over second quarter 2020 results. NRP believes Ciner Wyoming's facility is competitively positioned as one of the lowest cost producers of soda ash in the world, however, NRP expects the market to remain volatile as a result of ongoing uncertainties with the COVID-19 pandemic.

In order to have financial flexibility during the COVID-19 pandemic, Ciner Wyoming suspended its quarterly distribution in August 2020 and accordingly, did not pay quarterly distributions for the second or third quarters of 2020. Ciner Wyoming will continue to evaluate, on a quarterly basis, whether to reinstate the distribution. Ciner Wyoming's ability to pay future quarterly distributions will be dependent in part on its cash reserves, liquidity, total debt levels and anticipated capital expenditures.

Corporate and Financing

Corporate and financing costs were $0.8 million lower in the third quarter of 2020 compared to the prior year quarter. Distributable cash flow and free cash flow increased $1.3 million compared to the prior year quarter primarily due to lower cash paid for interest as a result of lower debt balances.

As noted above, the Board declared a third quarter $7.5 million distribution on NRP's preferred units, to be paid one-half in cash and one-half in kind. The indenture governing the 2025 parent company notes restricts NRP from paying more than one-half of the quarterly distribution on the preferred units in cash if NRP's consolidated leverage ratio exceeds 3.75x, and as of September 30, 2020, NRP's leverage ratio was 4.2x.

Conference Call

A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link http://www.directeventreg.com/registration/event/8267566. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes prior to the start of the call. 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.

Withholding Information for Foreign Investors

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of NRP's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, NRP's distributions to foreign investors are subject to federal income tax withholding at the highest applicable rate.

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 tsammis@nrplp.com. Further information about NRP is available on the Partnership's website at http://www.nrplp.com.

Forward-Looking Statements

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership's common and preferred units; 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 future performance by the Partnership's lessees, including Foresight Energy; 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.

"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 investing or 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-

 

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Comprehensive Income (Loss)

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

(In thousands, except per unit data)

2020

 

2019

 

2020

 

2020

 

2019

Revenues and other income

 

 

 

 

 

 

 

 

 

Coal royalty and other

$

25,740

 

 

$

39,919

 

 

$

31,666

 

 

$

88,839

 

 

$

154,037

 

Transportation and processing services

2,204

 

 

3,865

 

 

1,938

 

 

6,651

 

 

14,740

 

Equity in earnings (loss) of Ciner Wyoming

1,986

 

 

13,818

 

 

(3,058

)

 

5,200

 

 

36,833

 

Gain on asset sales and disposals

 

 

6,107

 

 

465

 

 

465

 

 

6,609

 

Total revenues and other income

$

29,930

 

 

$

63,709

 

 

$

31,011

 

 

$

101,155

 

 

$

212,219

 

Operating expenses

 

 

 

 

 

 

 

 

 

Operating and maintenance expenses

$

5,781

 

 

$

5,994

 

 

$

8,217

 

 

$

19,200

 

 

$

26,813

 

Depreciation, depletion and amortization

2,111

 

 

3,384

 

 

2,062

 

 

6,185

 

 

11,746

 

General and administrative expenses

3,634

 

 

4,253

 

 

3,621

 

 

11,168

 

 

12,799

 

Asset impairments

934

 

 

484

 

 

132,283

 

 

133,217

 

 

484

 

Total operating expenses

$

12,460

 

 

$

14,115

 

 

$

146,183

 

 

$

169,770

 

 

$

51,842

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

$

17,470

 

 

$

49,594

 

 

$

(115,172

)

 

$

(68,615

)

 

$

160,377

 

 

 

 

 

 

 

 

 

 

 

Other expenses, net

 

 

 

 

 

 

 

 

 

Interest expense, net

$

(10,254

)

 

$

(10,431

)

 

$

(10,329

)

 

$

(30,891

)

 

$

(37,061

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

(29,282

)

Total other expenses, net

$

(10,254

)

 

$

(10,431

)

 

$

(10,329

)

 

$

(30,891

)

 

$

(66,343

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

$

7,216

 

 

$

39,163

 

 

$

(125,501

)

 

$

(99,506

)

 

$

94,034

 

Income from discontinued operations

 

 

7

 

 

 

 

 

 

206

 

Net income (loss)

$

7,216

 

 

$

39,170

 

 

$

(125,501

)

 

$

(99,506

)

 

$

94,240

 

Less: income attributable to preferred unitholders

(7,500

)

 

(7,500

)

 

(7,613

)

 

(22,613

)

 

(22,500

)

Net income (loss) attributable to common unitholders and general partner

$

(284

)

 

$

31,670

 

 

$

(133,114

)

 

$

(122,119

)

 

$

71,740

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common unitholders

$

(279

)

 

$

31,036

 

 

$

(130,452

)

 

$

(119,677

)

 

$

70,305

 

Net income (loss) attributable to the general partner

(5

)

 

634

 

 

(2,662

)

 

(2,442

)

 

1,435

 

Income (loss) from continuing operations per common unit

 

 

 

 

 

 

 

 

 

Basic

$

(0.02

)

 

$

2.53

 

 

$

(10.64

)

 

$

(9.76

)

 

$

5.72

 

Diluted

(0.02

)

 

1.66

 

 

(10.64

)

 

(9.76

)

 

3.91

 

Net income (loss) per common unit

 

 

 

 

 

 

 

 

 

Basic

$

(0.02

)

 

$

2.53

 

 

$

(10.64

)

 

$

(9.76

)

 

$

5.73

 

Diluted

(0.02

)

 

1.66

 

 

(10.64

)

 

(9.76

)

 

3.92

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

7,216

 

 

$

39,170

 

 

$

(125,501

)

 

$

(99,506

)

 

$

94,240

 

Comprehensive income (loss) from unconsolidated investment and other

2,428

 

 

(520

)

 

1,359

 

 

2,764

 

 

(340

)

Comprehensive income (loss)

$

9,644

 

 

$

38,650

 

 

(124,142

)

 

$

(96,742

)

 

$

93,900

 

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Cash Flows

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

(In thousands)

2020

 

2019

 

2020

 

2020

 

2019

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Net income (loss)

$

7,216

 

 

$

39,170

 

 

$

(125,501

)

 

$

(99,506

)

 

$

94,240

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

2,111

 

 

3,384

 

 

2,062

 

 

6,185

 

 

11,746

 

Distributions from unconsolidated investment

 

 

6,370

 

 

7,105

 

 

14,210

 

 

25,480

 

Equity earnings from unconsolidated investment

(1,986

)

 

(13,818

)

 

3,058

 

 

(5,200

)

 

(36,833

)

Gain on asset sales and disposals

 

 

(6,107

)

 

(465

)

 

(465

)

 

(6,609

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

29,282

 

Income from discontinued operations

 

 

(7

)

 

 

 

 

 

(206

)

Asset impairments

934

 

 

484

 

 

132,283

 

 

133,217

 

 

484

 

Bad debt expense

258

 

 

151

 

 

3,847

 

 

3,915

 

 

6,842

 

Unit-based compensation expense

913

 

 

466

 

 

924

 

 

2,566

 

 

1,842

 

Amortization of debt issuance costs and other

1,577

 

 

1,072

 

 

(1,534

)

 

491

 

 

3,223

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

4,621

 

 

996

 

 

8,446

 

 

7,994

 

 

(2,111

)

Accounts payable

144

 

 

355

 

 

(44

)

 

193

 

 

(822

)

Accrued liabilities

791

 

 

439

 

 

(915

)

 

(2,985

)

 

(5,083

)

Accrued interest

7,248

 

 

7,163

 

 

(7,351

)

 

6,957

 

 

19

 

Deferred revenue

(273

)

 

(1,236

)

 

2,202

 

 

10,194

 

 

(3,920

)

Other items, net

769

 

 

2,852

 

 

(4,182

)

 

(3,353

)

 

351

 

Net cash provided by operating activities of continuing operations

$

24,323

 

 

$

41,734

 

 

$

19,935

 

 

$

74,413

 

 

$

117,925

 

Net cash provided by (used in) operating activities of discontinued operations

 

 

(359

)

 

 

 

1,706

 

 

(4

)

Net cash provided by operating activities

$

24,323

 

 

$

41,375

 

 

$

19,935

 

 

$

76,119

 

 

$

117,921

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Proceeds from asset sales and disposals

$

 

 

$

6,108

 

 

$

507

 

 

$

507

 

 

$

6,611

 

Return of long-term contract receivable

332

 

 

459

 

 

858

 

 

1,462

 

 

1,351

 

Acquisition of non-controlling interest in BRP

 

 

 

 

(1,000

)

 

(1,000

)

 

 

Net cash provided by investing activities of continuing operations

$

332

 

 

$

6,567

 

 

$

365

 

 

$

969

 

 

$

7,962

 

Net cash used in investing activities of discontinued operations

 

 

(122

)

 

 

 

(66

)

 

(556

)

Net cash provided by investing activities

$

332

 

 

$

6,445

 

 

$

365

 

 

$

903

 

 

$

7,406

 

 

 

 

 

 

 

 

 

 

 

Debt borrowings

$

 

 

$

 

 

$

 

 

$

 

 

$

300,000

 

Debt repayments

(6,780

)

 

(8,277

)

 

(2,365

)

 

(25,841

)

 

(442,747

)

Distributions to common unitholders and general partner

(5,630

)

 

(5,630

)

 

 

 

(11,260

)

 

(27,520

)

Distributions to preferred unitholders

(7,500

)

 

(7,500

)

 

(7,613

)

 

(22,613

)

 

(22,500

)

Contributions from (to) discontinued operations

 

 

(481

)

 

 

 

1,640

 

 

(560

)

Debt issuance costs and other

 

 

(25

)

 

 

 

 

 

(26,427

)

Net cash used in financing activities of continuing operations

$

(19,910

)

 

$

(21,913

)

 

$

(9,978

)

 

$

(58,074

)

 

$

(219,754

)

Net cash provided by (used in) financing activities of discontinued operations

 

 

481

 

 

 

 

(1,640

)

 

560

 

Net cash used in financing activities

$

(19,910

)

 

$

(21,432

)

 

$

(9,978

)

 

$

(59,714

)

 

$

(219,194

)

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

$

4,745

 

 

$

26,388

 

 

$

10,322

 

 

$

17,308

 

 

$

(93,867

)

Cash and cash equivalents at beginning of period

110,828

 

 

85,775

 

 

100,506

 

 

98,265

 

 

206,030

 

Cash and cash equivalents at end of period

$

115,573

 

 

$

112,163

 

 

$

110,828

 

 

$

115,573

 

 

$

112,163

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid during the period for interest

$

2,490

 

 

$

3,225

 

 

$

17,183

 

 

$

22,712

 

 

$

36,270

 

Plant, equipment and mineral rights funded with accounts payable or accrued liabilities

$

23

 

 

$

 

 

$

924

 

 

$

947

 

 

$

 

Natural Resource Partners L.P.

Financial Tables

Consolidated Balance Sheets

 

 

September 30,

 

December 31,

(In thousands, except unit data)

2020

 

2019

ASSETS

(unaudited)

 

 

Current assets

 

 

 

Cash and cash equivalents

$

115,573

 

 

$

98,265

 

Accounts receivable, net

17,462

 

 

30,869

 

Other current assets, net

3,972

 

 

1,244

 

Current assets of discontinued operations

 

 

1,706

 

Total current assets

$

137,007

 

 

$

132,084

 

Land

24,008

 

 

24,008

 

Mineral rights, net

465,870

 

 

605,096

 

Intangible assets, net

17,601

 

 

17,687

 

Equity in unconsolidated investment

256,834

 

 

263,080

 

Long-term contract receivable, net

33,791

 

 

36,963

 

Other long-term assets, net

7,447

 

 

6,989

 

Total assets

$

942,558

 

 

$

1,085,907

 

LIABILITIES AND CAPITAL

 

 

 

Current liabilities

 

 

 

Accounts payable

$

1,372

 

 

$

1,179

 

Accrued liabilities

6,859

 

 

8,764

 

Accrued interest

9,273

 

 

2,316

 

Current portion of deferred revenue

11,035

 

 

4,608

 

Current portion of long-term debt, net

39,072

 

 

45,776

 

Current liabilities of discontinued operations

 

 

65

 

Total current liabilities

$

67,611

 

 

$

62,708

 

Deferred revenue

50,980

 

 

47,213

 

Long-term debt, net

452,401

 

 

470,422

 

Other non-current liabilities

5,020

 

 

4,949

 

Total liabilities

$

576,012

 

 

$

585,292

 

Commitments and contingencies

 

 

 

Class A Convertible Preferred Units (250,000 units issued and outstanding at September 30, 2020 and

December 31, 2019, at $1,000 par value per unit; liquidation preference of $1,700 per unit at September

30, 2020 and $1,500 per unit at December 31, 2019)

$

164,587

 

 

$

164,587

 

Partners' capital:

 

 

 

Common unitholders' interest (12,261,199 units issued and outstanding at September 30, 2020 and December 31, 2019)

$

134,545

 

 

$

271,471

 

General partner's interest

428

 

 

3,270

 

Warrant holders' interest

66,816

 

 

66,816

 

Accumulated other comprehensive income (loss)

170

 

 

(2,594

)

Total partners' capital

$

201,959

 

 

$

338,963

 

Non-controlling interest

 

 

(2,935

)

Total capital

$

201,959

 

 

$

336,028

 

Total liabilities and capital

$

942,558

 

 

$

1,085,907

 

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Partners' Capital

 

Common Unitholders

 

General

Partner

 

Warrant Holders

 

Accumulated

Other

Comprehensive

Income (Loss)

 

Partners'

Capital

Excluding

Non-

Controlling

Interest

 

Non-

Controlling

Interest

 

Total

Capital

 

(In thousands)

Units

 

Amounts

 

Balance at December 31, 2019

12,261

 

 

$

271,471

 

 

$

3,270

 

 

$

66,816

 

 

$

(2,594

)

 

$

338,963

 

 

$

(2,935

)

 

$

336,028

 

Cumulative effect of adoption of accounting standard

 

 

(3,833

)

 

(78

)

 

 

 

 

 

(3,911

)

 

 

 

(3,911

)

Net income (1)

 

 

18,403

 

 

376

 

 

 

 

 

 

18,779

 

 

 

 

18,779

 

Distributions to common unitholders and general partner

 

 

(5,517

)

 

(113

)

 

 

 

 

 

(5,630

)

 

 

 

(5,630

)

Distributions to preferred unitholders

 

 

(7,350

)

 

(150

)

 

 

 

 

 

(7,500

)

 

 

 

(7,500

)

Unit-based awards amortization and vesting

 

 

673

 

 

 

 

 

 

 

 

673

 

 

 

 

673

 

Comprehensive loss from unconsolidated investment and other

 

 

 

 

 

 

 

 

(1,023

)

 

(1,023

)

 

 

 

(1,023

)

Balance at March 31, 2020

12,261

 

 

$

273,847

 

 

$

3,305

 

 

$

66,816

 

 

$

(3,617

)

 

$

340,351

 

 

$

(2,935

)

 

$

337,416

 

Net loss (2)

 

 

(122,991

)

 

(2,510

)

 

 

 

 

 

(125,501

)

 

 

 

(125,501

)

Distributions to preferred unitholders

 

 

(7,461

)

 

(152

)

 

 

 

 

 

(7,613

)

 

 

 

(7,613

)

Purchase of non-controlling interest in BRP

 

 

(4,747

)

 

(97

)

 

 

 

 

 

(4,844

)

 

2,935

 

 

(1,909

)

Unit-based awards amortization and vesting

 

 

869

 

 

 

 

 

 

 

 

869

 

 

 

 

869

 

Comprehensive income from unconsolidated investment and other

 

 

 

 

 

 

 

 

1,359

 

 

1,359

 

 

 

 

1,359

 

Balance at June 30, 2020

12,261

 

 

$

139,517

 

 

$

546

 

 

$

66,816

 

 

$

(2,258

)

 

$

204,621

 

 

$

 

 

$

204,621

 

Net income (1)

 

 

7,072

 

 

144

 

 

 

 

 

 

7,216

 

 

 

 

7,216

 

Distributions to common unitholders and general partner

 

 

(5,518

)

 

(112

)

 

 

 

 

 

(5,630

)

 

 

 

(5,630

)

Distributions to preferred unitholders

 

 

(7,350

)

 

(150

)

 

 

 

 

 

(7,500

)

 

 

 

(7,500

)

Unit-based awards amortization and vesting

 

 

824

 

 

 

 

 

 

 

 

824

 

 

 

 

824

 

Comprehensive income from unconsolidated investment and other

 

 

 

 

 

 

 

 

2,428

 

 

2,428

 

 

 

 

2,428

 

Balance at September 30, 2020

12,261

 

 

$

134,545

 

 

$

428

 

 

$

66,816

 

 

$

170

 

 

$

201,959

 

 

$

 

 

$

201,959

 

____________________

(1)

Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.

(2)

Net loss includes $7.6 million attributable to preferred unitholders that accumulated during the period, of which $7.46 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.

Common Unitholders

 

General

Partner

 

Warrant

Holders

 

Accumulated

Other

Comprehensive

Loss

 

Partners'

Capital

Excluding

Non-

Controlling

Interest

 

Non-

Controlling Interest

 

Total

Capital

 

(In thousands)

Units

 

Amounts

 

Balance at December 31, 2018

12,249

 

 

$

355,113

 

 

$

5,014

 

 

$

66,816

 

 

$

(3,462

)

 

$

423,481

 

 

$

(2,935

)

 

$

420,546

 

Net income (1)

 

 

35,005

 

 

714

 

 

 

 

 

 

35,719

 

 

 

 

35,719

 

Distributions to common unitholders and general partner

 

 

(5,513

)

 

(112

)

 

 

 

 

 

(5,625

)

 

 

 

(5,625

)

Distributions to preferred unitholders

 

 

(7,350

)

 

(150

)

 

 

 

 

 

(7,500

)

 

 

 

(7,500

)

Issuance of unit-based awards

12

 

 

486

 

 

 

 

 

 

 

 

486

 

 

 

 

486

 

Unit-based awards amortization and vesting

 

 

399

 

 

 

 

 

 

 

 

399

 

 

 

 

399

 

Comprehensive income from unconsolidated investment and other

 

 

 

 

10

 

 

 

 

1,005

 

 

1,015

 

 

 

 

1,015

 

Balance at March 31, 2019

12,261

 

 

$

378,140

 

 

$

5,476

 

 

$

66,816

 

 

$

(2,457

)

 

$

447,975

 

 

$

(2,935

)

 

$

445,040

 

Net income (1)

 

 

18,964

 

 

387

 

 

 

 

 

 

19,351

 

 

 

 

19,351

 

Distributions to common unitholders and general partner

 

 

(15,939

)

 

(326

)

 

 

 

 

 

(16,265

)

 

 

 

(16,265

)

Distributions to preferred unitholders

 

 

(7,350

)

 

(150

)

 

 

 

 

 

(7,500

)

 

 

 

(7,500

)

Unit-based awards amortization and vesting

 

 

460

 

 

 

 

 

 

 

 

460

 

 

 

 

460

 

Comprehensive loss from unconsolidated investment and other

 

 

 

 

 

 

 

 

(825

)

 

(825

)

 

 

 

(825

)

Balance at June 30, 2019

12,261

 

 

$

374,275

 

 

$

5,387

 

 

$

66,816

 

 

$

(3,282

)

 

$

443,196

 

 

$

(2,935

)

 

$

440,261

 

Net income (1)

 

 

38,386

 

 

784

 

 

 

 

 

 

39,170

 

 

 

 

39,170

 

Distributions to common unitholders and general partner

 

 

(5,518

)

 

(112

)

 

 

 

 

 

(5,630

)

 

 

 

(5,630

)

Distributions to preferred unitholders

 

 

(7,350

)

 

(150

)

 

 

 

 

 

(7,500

)

 

 

 

(7,500

)

Unit-based awards amortization and vesting

 

 

473

 

 

 

 

 

 

 

 

473

 

 

 

 

473

 

Comprehensive loss from unconsolidated investment and other

 

 

 

 

 

 

 

 

(520

)

 

(520

)

 

 

 

(520

)

Balance at September 30, 2019

12,261

 

 

$

400,266

 

 

$

5,909

 

 

$

66,816

 

 

$

(3,802

)

 

$

469,189

 

 

$

(2,935

)

 

$

466,254

 

____________________

(1)

Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

The following tables present NRP's unaudited business results by segment for the three months ended September 30, 2020 and 2019 and June 30, 2020:

 

 

 

Operating Segments

 

 

 

 

 

 

Coal Royalty

and Other

 

 

 

Corporate and

Financing

 

 

(In thousands)

 

 

Soda Ash

 

 

Total

For the Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Revenues

 

$

27,944

 

 

$

1,986

 

 

$

 

 

$

29,930

 

Gain on asset sales and disposals

 

 

 

 

 

 

 

 

Total revenues and other income

 

$

27,944

 

 

$

1,986

 

 

$

 

 

$

29,930

 

Asset impairments

 

934

 

 

$

 

 

$

 

 

$

934

 

Net income (loss) from continuing operations

 

19,173

 

 

1,890

 

 

(13,847

)

 

$

7,216

 

Adjusted EBITDA (1)

 

$

22,259

 

 

$

(96

)

 

$

(3,634

)

 

$

18,529

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

28,573

 

 

$

(75

)

 

$

(4,175

)

 

$

24,323

 

Investing activities

 

$

332

 

 

$

 

 

$

 

 

$

332

 

Financing activities

 

$

 

 

$

 

 

$

(19,910

)

 

$

(19,910

)

Distributable cash flow (1)

 

$

28,905

 

 

$

(75

)

 

$

(4,175

)

 

$

24,655

 

Free cash flow (1)

 

$

28,905

 

 

$

(75

)

 

$

(4,175

)

 

$

24,655

 

 

 

 

 

 

 

 

 

 

For the 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

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2020

 

 

 

 

 

 

 

 

Revenues

 

$

33,604

 

 

$

(3,058

)

 

$

 

 

$

30,546

 

Gain on asset sales and disposals

 

465

 

 

 

 

 

 

465

 

Total revenues and other income (loss)

 

$

34,069

 

 

$

(3,058

)

 

$

 

 

$

31,011

 

Asset impairments

 

$

132,283

 

 

$

 

 

$

 

 

$

132,283

 

Net loss from continuing operations

 

(108,479

)

 

$

(3,087

)

 

$

(13,935

)

 

$

(125,501

)

Adjusted EBITDA (1)

 

$

25,881

 

 

$

7,076

 

 

$

(3,621

)

 

$

29,336

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

31,953

 

 

$

7,077

 

 

$

(19,095

)

 

$

19,935

 

Investing activities

 

$

365

 

 

$

 

 

$

 

 

$

365

 

Financing activities

 

$

 

 

$

 

 

$

(9,978

)

 

$

(9,978

)

Distributable cash flow (1)

 

$

33,318

 

 

$

7,077

 

 

$

(19,095

)

 

$

21,300

 

Free cash flow (1)

 

$

31,811

 

 

$

7,077

 

 

$

(19,095

)

 

$

19,793

 

____________________

(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.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

The following tables present NRP's unaudited business results by segment for the nine months ended September 30, 2020 and 2019:

 

 

 

Operating Business Segments

 

 

 

 

 

 

Coal Royalty

and Other

 

 

 

Corporate and

Financing

 

 

(In thousands)

 

 

Soda Ash

 

 

Total

For the Nine Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Revenues

 

$

95,490

 

 

$

5,200

 

 

$

 

 

$

100,690

 

Gain on asset sales and disposals

 

465

 

 

 

 

 

 

465

 

Total revenues and other income

 

$

95,955

 

 

$

5,200

 

 

$

 

 

$

101,155

 

Asset impairments

 

$

133,217

 

 

$

 

 

$

 

 

$

133,217

 

Net income (loss) from continuing operations

 

$

(62,562

)

 

$

5,059

 

 

$

(42,003

)

 

$

(99,506

)

Adjusted EBITDA (1)

 

$

76,896

 

 

$

14,069

 

 

$

(11,168

)

 

$

79,797

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

91,082

 

 

$

14,091

 

 

$

(30,760

)

 

$

74,413

 

Investing activities

 

$

969

 

 

$

 

 

$

 

 

$

969

 

Financing activities

 

$

 

 

$

 

 

$

(58,074

)

 

$

(58,074

)

Distributable cash flow (1) (2)

 

$

93,051

 

 

$

14,091

 

 

$

(30,760

)

 

$

76,316

 

Free cash flow (1)

 

$

91,544

 

 

$

14,091

 

 

$

(30,760

)

 

$

74,875

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

Revenues

 

$

168,777

 

 

$

36,833

 

 

$

 

 

$

205,610

 

Gain on asset sales and disposals

 

6,609

 

 

 

 

 

 

6,609

 

Total revenues and other income

 

$

175,386

 

 

$

36,833

 

 

$

 

 

$

212,219

 

Asset impairments

 

$

484

 

 

$

 

 

$

 

 

$

484

 

Net income (loss) from continuing operations

 

$

136,566

 

 

$

36,610

 

 

$

(79,142

)

 

$

94,034

 

Adjusted EBITDA (1)

 

$

148,796

 

 

$

25,257

 

 

$

(12,799

)

 

$

161,254

 

Cash flow provided by (used in) continuing operations:

 

 

 

 

 

 

 

 

Operating activities

 

$

139,821

 

 

$

25,257

 

 

$

(47,153

)

 

$

117,925

 

Investing activities

 

$

7,962

 

 

$

 

 

$

 

 

$

7,962

 

Financing activities

 

$

 

 

$

 

 

$

(219,754

)

 

$

(219,754

)

Distributable cash flow (1) (2)

 

$

147,783

 

 

$

25,257

 

 

$

(47,153

)

 

$

125,331

 

Free cash flow (1)

 

$

141,172

 

 

$

25,257

 

 

$

(47,153

)

 

$

119,276

 

____________________

(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.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Operating Statistics - Coal Royalty and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

(In thousands, except per ton data)

 

2020

 

2019

 

2020

 

2020

 

2019

Coal sales volumes (tons)

 

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

 

Northern (1)

 

102

 

 

290

 

 

87

 

 

516

 

 

2,774

 

Central

 

2,247

 

 

3,222

 

 

2,463

 

 

7,643

 

 

10,469

 

Southern

 

172

 

 

438

 

 

426

 

 

820

 

 

1,172

 

Total Appalachia

 

2,521

 

 

3,950

 

 

2,976

 

 

8,979

 

 

14,415

 

Illinois Basin

 

758

 

 

551

 

 

578

 

 

1,841

 

 

1,646

 

Northern Powder River Basin

 

365

 

 

532

 

 

340

 

 

1,232

 

 

1,979

 

Total coal sales volumes

 

3,644

 

 

5,033

 

 

3,894

 

 

12,052

 

 

18,040

 

Coal royalty revenue per ton

 

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

 

Northern (1)

 

$

3.06

 

 

$

2.54

 

 

$

2.74

 

 

$

2.22

 

 

$

2.23

 

Central

 

3.83

 

 

5.25

 

 

4.04

 

 

4.28

 

 

5.79

 

Southern

 

4.78

 

 

5.99

 

 

4.96

 

 

4.70

 

 

7.00

 

Illinois Basin

 

1.63

 

 

4.82

 

 

1.97

 

 

2.48

 

 

4.70

 

Northern Powder River Basin

 

3.46

 

 

4.69

 

 

3.15

 

 

3.66

 

 

3.21

 

Combined average coal royalty revenue per ton

 

3.36

 

 

5.05

 

 

3.73

 

 

3.88

 

 

4.94

 

Coal royalty revenues

 

 

 

 

 

 

 

 

 

 

Appalachia

 

 

 

 

 

 

 

 

 

 

Northern (1)

 

$

312

 

 

$

735

 

 

$

238

 

 

$

1,143

 

 

$

6,173

 

Central

 

8,602

 

 

16,929

 

 

9,951

 

 

32,726

 

 

60,628

 

Southern

 

823

 

 

2,626

 

 

2,111

 

 

3,857

 

 

8,204

 

Total Appalachia

 

9,737

 

 

20,290

 

 

12,300

 

 

37,726

 

 

75,005

 

Illinois Basin

 

1,234

 

 

2,658

 

 

1,137

 

 

4,570

 

 

7,739

 

Northern Powder River Basin

 

1,262

 

 

2,492

 

 

1,071

 

 

4,510

 

 

6,347

 

Unadjusted coal royalty revenues

 

12,233

 

 

25,440

 

 

14,508

 

 

46,806

 

 

89,091

 

Coal royalty adjustment for minimum leases (2)

 

(1,623

)

 

(713

)

 

(3,661

)

 

(6,247

)

 

(1,530

)

Total coal royalty revenues

 

$

10,610

 

 

$

24,727

 

 

$

10,847

 

 

$

40,559

 

 

$

87,561

 

Other revenues

 

 

 

 

 

 

 

 

 

 

Production lease minimum revenues (2)

 

$

4,267

 

 

$

2,752

 

 

$

8,485

 

 

$

13,554

 

 

$

21,331

 

Minimum lease straight-line revenues (2)

 

3,553

 

 

3,982

 

 

4,987

 

 

12,349

 

 

11,152

 

Property tax revenues

 

1,896

 

 

1,606

 

 

761

 

 

4,256

 

 

4,416

 

Wheelage revenues

 

1,680

 

 

1,675

 

 

1,584

 

 

5,468

 

 

5,035

 

Coal overriding royalty revenues

 

1,314

 

 

2,189

 

 

683

 

 

3,319

 

 

10,163

 

Lease amendment revenues

 

858

 

 

1,535

 

 

890

 

 

2,591

 

 

6,720

 

Aggregates royalty revenues

 

221

 

 

954

 

 

271

 

 

1,068

 

 

3,655

 

Oil and gas royalty revenues

 

1,078

 

 

374

 

 

2,742

 

 

4,923

 

 

2,575

 

Other revenues

 

263

 

 

125

 

 

416

 

 

752

 

 

1,429

 

Total other revenues

 

$

15,130

 

 

$

15,192

 

 

$

20,819

 

 

$

48,280

 

 

$

66,476

 

Coal royalty and other

 

$

25,740

 

 

$

39,919

 

 

$

31,666

 

 

$

88,839

 

 

$

154,037

 

Transportation and processing services revenues

 

2,204

 

 

3,865

 

 

1,938

 

 

6,651

 

 

14,740

 

Gain on asset sales and disposals

 

 

 

6,107

 

 

465

 

 

465

 

 

6,609

 

Total Coal Royalty and Other segment revenues and other income

 

$

27,944

 

 

$

49,891

 

 

$

34,069

 

 

$

95,955

 

 

$

175,386

 

____________________

(1)

Northern Appalachia includes NRP's Hibbs Run property that has significant sales volumes, but a low fixed rate per ton.

(2)

Beginning April 1, 2020 and effective January 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications that fixed consideration paid to us over a two-year period.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Adjusted EBITDA

 

 

 

 

 

Coal Royalty

and Other

 

 

 

Corporate and

Financing

 

 

(In thousands)

 

 

Soda Ash

 

 

Total

For the Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

19,173

 

 

1,890

 

 

(13,847

)

 

$

7,216

 

Less: equity earnings from unconsolidated investment

 

 

 

(1,986

)

 

 

 

(1,986

)

Add: total distributions from unconsolidated investment

 

 

 

 

 

 

 

 

Add: interest expense, net

 

41

 

 

 

 

10,213

 

 

10,254

 

Add: loss on extinguishment of debt

 

 

 

 

 

 

 

 

Add: depreciation, depletion and amortization

 

2,111

 

 

 

 

 

 

2,111

 

Add: asset impairments

 

934

 

 

 

 

 

 

934

 

Adjusted EBITDA

 

$

22,259

 

 

$

(96

)

 

$

(3,634

)

 

$

18,529

 

 

 

 

 

 

 

 

 

 

For the 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: loss on extinguishment of debt

 

 

 

 

 

 

 

 

Add: depreciation, depletion and amortization

 

3,384

 

 

 

 

 

3,384

 

Add: asset impairments

 

484

 

 

 

 

 

 

484

 

Adjusted EBITDA

 

$

44,120

 

 

$

6,147

 

 

$

(4,253

)