Natural Resource Partners L.P.
1415 Louisiana St., Suite 2400, Houston, TX 77002
NEWS RELEASE
Natural Resource Partners L.P. Reports Third Quarter 2022 Results and
Declares Third Quarter 2022 Distribution of $0.75 per Unit
HOUSTON, November 3, 2022 - Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2022 results as follows:
| | | For the Three Months Ended | | | Last Twelve Months Ended | |
(In thousands) (Unaudited) | | September 30, 2022 | |
Operating cash flow (1) | | $ | 82,496 | | | $ | 253,111 | |
Free cash flow (2) | | | 83,012 | | | | 254,731 | |
Cash flow cushion (last twelve months) (2) | | | | | | | 129,607 | |
| | | | | | | | | |
Net income | | $ | 74,555 | | | $ | 260,915 | |
Adjusted EBITDA (2) | | | 85,625 | | | | 308,750 | |
| | (1) | Operating cash flow for the nine months ended September 30, 2022 was $197,950. |
| | (2) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Highlights:
•Generated record free cash flow of $83 million in the third quarter of 2022, and $199 million in the first nine months of 2022
•Closed new five-year, $130 million revolving credit facility
•Announced full repayment of outstanding 9.125% Senior Notes due 2025
•Executed second subsurface carbon dioxide ("CO2") sequestration lease
•Pro-forma leverage ratio of 0.6x following the repayment of 9.125% Senior Notes, down from 4.6x as of June 30, 2021
“NRP's record year continues with third quarter free cash flow generation of $83 million, bringing our year-to-date free cash flow to $199 million, primarily due to the strong results of our Mineral Rights segment," stated Craig Nunez, NRP’s president and chief operating officer. “It is fitting that the 20th anniversary of the Partnership's initial public offering coincides with the best operating performance in our history. Not only has this year been exceptional from a free cash flow perspective, but we continue to execute on our strategy to de-risk the capital structure and grow our carbon neutral portfolio. During the third quarter, we closed a new five-year revolving credit facility that increased our borrowing capacity from $100 million to $130 million. We also announced the redemption of our outstanding 9.125% Senior Notes due 2025 and fully repaid the Senior Notes in October. After giving effect to the redemption, NRP has permanently retired $249 million of debt this year. In the third quarter we also executed our second subsurface CO2 sequestration lease for an estimated carbon storage capacity of at least 500 million metric tons of CO2. NRP currently has approximately 140,000 acres of pore space under lease for carbon sequestration with estimated potential CO2 storage capacity of at least 800 million metric tons. We continue to believe that de-risking the Partnership and leveraging our asset footprint in this regard, while continuing to provide unitholder distributions, is the right strategy to maximize unitholder value.”
NRP announced today that the Board of Directors of its general partner declared a cash distribution of $0.75 per common unit to be paid on November 22, 2022 to unitholders of record on November 15, 2022. In addition, the board declared a $7.5 million cash distribution on its outstanding 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.
NRP's liquidity was $190.9 million at September 30, 2022, consisting of $60.9 million of cash and $130.0 million of borrowing capacity available under its recently amended revolving credit facility.
Segment Performance
Mineral Rights
Mineral Rights net income for the third quarter of 2022 increased $35.6 million as compared to the prior year period. Free cash flow for the third quarter increased $42.0 million as compared to the prior year period. These increases were primarily due to stronger metallurgical coal demand and pricing in 2022. Approximately 65% of coal royalty revenues and approximately 40% of coal royalty sales volumes were derived from metallurgical coal in the third quarter of 2022.
Metallurgical and thermal coal prices remain supported by ongoing tightness in the supply-demand balance for coal. Many operators are limited in their ability to increase production due to ongoing labor shortages, global supply chain interruptions, and access to capital. Thermal coal prices are further supported by the European Union's ban on Russian coal due to the war in Ukraine, as well as increased natural gas prices and demand for electricity. While metallurgical markets are seeing weakened demand for steel, and thermal markets continue to face ongoing environmental and political pressures, supply constraints should provide continued support for metallurgical and thermal coal prices for the foreseeable future.
NRP continues to identify alternative revenue opportunities across its large portfolio of land and mineral assets. NRP owns the rights to sequester CO2 on approximately 3.5 million acres of pore space in the southern United States. As announced previously, in the first quarter of 2022 NRP executed its first subsurface CO2 sequestration lease on 75,000 acres of underground pore space NRP owns in southwest Alabama with the potential to store over 300 million metric tons of CO2. In October of 2022, NRP announced its second subsurface CO2 transaction with the execution of a lease for approximately 65,000 acres of pore space controlled by NRP near southeast Texas with estimated storage capacity of at least 500 million metric tons of CO2. In total, NRP has approximately 140,000 acres of pore space under lease for carbon sequestration with estimated CO2 storage capacity of 800 million metric tons. While the timing and likelihood of additional cash flows being realized from these activities is uncertain, NRP believes its large ownership footprint throughout the United States will provide additional opportunities to create value in this regard and position NRP as a key beneficiary of the transitional energy economy with minimal capital investment.
Soda Ash
Soda Ash net income in the third quarter of 2022 increased $7.9 million as compared to the prior year period primarily as a result of increased international sales prices. Free cash flow in the third quarter of 2022 increased $10.3 million as compared to the prior year period due to Sisecam Wyoming reinstating its regular quarterly cash distributions beginning in the fourth quarter of 2021.
Supply interruptions in China and input cost inflation which significantly increased the global marginal cost of soda ash production led to historically high soda ash prices in the third quarter of 2022. Though soda ash demand weakened in many parts of the world during the third quarter due to slowing global economic growth and lower construction activity in China, Sisecam Wyoming remained sold-out as it took advantage of its low-cost position to profitably export soda ash. Consequently, Sisecam Wyoming delivered strong financial results in the third quarter of 2022.
Corporate and Financing
Corporate and Financing costs in the third quarter of 2022 decreased $1.6 million as compared to the prior year period primarily due to lower interest expense resulting from less debt outstanding, partially offset by the loss on early extinguishment of debt. Free cash flow in the third quarter of 2022 was relatively flat as compared to the prior year period.
During the third quarter of 2022, NRP repaid $60.5 million of debt and refinanced, upsized, and extended its credit facility to $130 million due 2027. In October of 2022, NRP fully retired its outstanding $121.4 million of 9.125% Senior Notes due 2025 at its redemption price of 102.281%, utilizing cash on hand and $70 million of borrowings under its new credit facility. After giving effect to this redemption, NRP's remaining total debt outstanding is $189.4 million.
Additionally, in August of 2022, NRP paid a second quarter 2022 cash distribution of $0.75 per common unit of NRP and a $7.5 million cash distribution on the preferred units.
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: https://conferencingportals.com/event/kfJdSHYP. 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 properties in the United States including coal, industrial minerals and other natural resources, as well as rights to conduct carbon sequestration and renewable energy activities. NRP also owns an equity investment in Sisecam Wyoming LLC, one of the world’s lowest-cost producers of soda ash.
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; Sisecam 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) less equity earnings from unconsolidated investment; 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, 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. 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 and cash flow used in acquisition costs classified as investing or financing activities. 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 redemption of PIK units, common unit distributions and warrant cash settlements. 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.
-Financial Tables and Reconciliation of Non-GAAP Measures Follow-
Natural Resource Partners L.P.
Consolidated Statements of Comprehensive Income |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | September 30, | | | June 30, | | | September 30, | |
(In thousands, except per unit data) | | 2022 | | | 2021 | | | 2022 | | | 2022 | | | 2021 | |
Revenues and other income | | | | | | | | | | | | | | | | | | | | |
Royalty and other mineral rights | | $ | 81,379 | | | $ | 47,884 | | | $ | 79,333 | | | $ | 231,795 | | | $ | 114,422 | |
Transportation and processing services | | | 5,969 | | | | 2,171 | | | | 5,612 | | | | 15,377 | | | | 6,545 | |
Equity in earnings of Sisecam Wyoming | | | 14,556 | | | | 6,672 | | | | 14,643 | | | | 44,036 | | | | 11,246 | |
Gain on asset sales and disposals | | | 354 | | | | 68 | | | | 345 | | | | 699 | | | | 243 | |
Total revenues and other income | | $ | 102,258 | | | $ | 56,795 | | | $ | 99,933 | | | $ | 291,907 | | | $ | 132,456 | |
| | | | | | | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | |
Operating and maintenance expenses | | $ | 7,898 | | | $ | 8,354 | | | $ | 10,015 | | | $ | 25,989 | | | $ | 19,076 | |
Depreciation, depletion and amortization | | | 6,850 | | | | 5,182 | | | | 5,847 | | | | 16,565 | | | | 15,145 | |
General and administrative expenses | | | 4,518 | | | | 4,052 | | | | 5,052 | | | | 14,037 | | | | 11,550 | |
Asset impairments | | | 812 | | | | 57 | | | | 43 | | | | 874 | | | | 4,116 | |
Total operating expenses | | $ | 20,078 | | | $ | 17,645 | | | $ | 20,957 | | | $ | 57,465 | | | $ | 49,887 | |
| | | | | | | | | | | | | | | | | | | | | |
Income from operations | | $ | 82,180 | | | $ | 39,150 | | | $ | 78,976 | | | $ | 234,442 | | | $ | 82,569 | |
| | | | | | | | | | | | | | | | | | | | | |
Other expenses, net | | | | | | | | | | | | | | | | | | | | |
Interest expense, net | | $ | (5,141 | ) | | $ | (9,652 | ) | | $ | (8,108 | ) | | $ | (22,636 | ) | | $ | (29,308 | ) |
Loss on extinguishment of debt | | | (2,484 | ) | | | — | | | | (4,048 | ) | | | (6,532 | ) | | | — | |
Total other expenses, net | | $ | (7,625 | ) | | $ | (9,652 | ) | | $ | (12,156 | ) | | $ | (29,168 | ) | | $ | (29,308 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 74,555 | | | $ | 29,498 | | | $ | 66,820 | | | $ | 205,274 | | | $ | 53,261 | |
Less: income attributable to preferred unitholders | | | (7,500 | ) | | | (7,961 | ) | | | (7,500 | ) | | | (22,500 | ) | | | (23,530 | ) |
Net income attributable to common unitholders and the general partner | | $ | 67,055 | | | $ | 21,537 | | | $ | 59,320 | | | $ | 182,774 | | | $ | 29,731 | |
| | | | | | | | | | | | | | | | | | | | | |
Net income attributable to common unitholders | | $ | 65,714 | | | $ | 21,106 | | | $ | 58,134 | | | $ | 179,119 | | | $ | 29,136 | |
Net income attributable to the general partner | | | 1,341 | | | | 431 | | | | 1,186 | | | | 3,655 | | | | 595 | |
| | | | | | | | | | | | | | | | | | | | | |
Net income per common unit | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 5.25 | | | $ | 1.71 | | | $ | 4.65 | | | $ | 14.36 | | | $ | 2.36 | |
Diluted | | | 3.71 | | | | 1.10 | | | | 3.29 | | | | 10.24 | | | | 1.98 | |
| | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 74,555 | | | $ | 29,498 | | | $ | 66,820 | | | $ | 205,274 | | | $ | 53,261 | |
Comprehensive income (loss) from unconsolidated investment and other | | | 289 | | | | 4,204 | | | | (4,013 | ) | | | (1,179 | ) | | | 7,469 | |
Comprehensive income | | $ | 74,844 | | | $ | 33,702 | | | $ | 62,807 | | | $ | 204,095 | | | $ | 60,730 | |
Natural Resource Partners L.P.
Consolidated Statements of Cash Flows |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | September 30, | | | June 30, | | | September 30, | |
(In thousands) | | 2022 | | | 2021 | | | 2022 | | | 2022 | | | 2021 | |
Cash flows from operating activities | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 74,555 | | | $ | 29,498 | | | $ | 66,820 | | | $ | 205,274 | | | $ | 53,261 | |
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | | | | | | | | | | | | | | | | | | | | |
Depreciation, depletion and amortization | | | 6,850 | | | | 5,182 | | | | 5,847 | | | | 16,565 | | | | 15,145 | |
Distributions from unconsolidated investment | | | 10,339 | | | | — | | | | 10,486 | | | | 34,055 | | | | 3,920 | |
Equity earnings from unconsolidated investment | | | (14,556 | ) | | | (6,672 | ) | | | (14,643 | ) | | | (44,036 | ) | | | (11,246 | ) |
Gain on asset sales and disposals | | | (354 | ) | | | (68 | ) | | | (345 | ) | | | (699 | ) | | | (243 | ) |
Loss on extinguishment of debt | | | 2,484 | | | | — | | | | 4,048 | | | | 6,532 | | | | — | |
Asset impairments | | | 812 | | | | 57 | | | | 43 | | | | 874 | | | | 4,116 | |
Bad debt expense | | | 1 | | | | 2,069 | | | | (388 | ) | | | 641 | | | | 1,715 | |
Unit-based compensation expense | | | 1,429 | | | | 1,118 | | | | 1,339 | | | | 4,216 | | | | 2,837 | |
Amortization of debt issuance costs and other | | | 215 | | | | 653 | | | | 1,297 | | | | 1,887 | | | | 1,899 | |
Change in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | | |
Accounts receivable | | | 2,494 | | | | (9,163 | ) | | | (5,033 | ) | | | (10,118 | ) | | | (12,332 | ) |
Accounts payable | | | 210 | | | | 182 | | | | 73 | | | | 223 | | | | 89 | |
Accrued liabilities | | | 278 | | | | 357 | | | | 2,047 | | | | (4,831 | ) | | | (839 | ) |
Accrued interest | | | 3,177 | | | | 7,262 | | | | (7,413 | ) | | | 3,014 | | | | 6,971 | |
Deferred revenue | | | (7,519 | ) | | | (2,652 | ) | | | (2,259 | ) | | | (17,094 | ) | | | (2,121 | ) |
Other items, net | | | 2,081 | | | | 2,236 | | | | 1,204 | | | | 1,447 | | | | 3,471 | |
Net cash provided by operating activities | | $ | 82,496 | | | $ | 30,059 | | | $ | 63,123 | | | $ | 197,950 | | | $ | 66,643 | |
| | | | | | | | | | | | | | | | | | | | | |
Cash flows from investing activities | | | | | | | | | | | | | | | | | | | | |
Proceeds from asset sales and disposals | | $ | 353 | | | $ | 74 | | | $ | 346 | | | $ | 699 | | | $ | 249 | |
Return of long-term contract receivable | | | 575 | | | | 540 | | | | 563 | | | | 1,138 | | | | 1,622 | |
Capital expenditures | | | (59 | ) | | | — | | | | — | | | | (59 | ) | | | — | |
Net cash provided by investing activities | | $ | 869 | | | $ | 614 | | | $ | 909 | | | $ | 1,778 | | | $ | 1,871 | |
| | | | | | | | | | | | | | | | | | | | | |
Cash flows from financing activities | | | | | | | | | | | | | | | | | | | | |
Debt repayments | | $ | (60,494 | ) | | $ | — | | | $ | (120,474 | ) | | $ | (197,665 | ) | | $ | (19,061 | ) |
Distributions to common unitholders and the general partner | | | (9,571 | ) | | | (5,671 | ) | | | (9,570 | ) | | | (24,813 | ) | | | (16,973 | ) |
Distributions to preferred unitholders | | | (7,500 | ) | | | (3,921 | ) | | | (7,500 | ) | | | (22,500 | ) | | | (11,591 | ) |
Acquisition of non-controlling interest in BRP | | | — | | | | — | | | | — | | | | — | | | | (1,000 | ) |
Redemption of preferred units paid-in-kind | | | — | | | | — | | | | — | | | | (19,579 | ) | | | — | |
Other items, net | | | (4,219 | ) | | | — | | | | (2,722 | ) | | | (9,754 | ) | | | (690 | ) |
Net cash used in financing activities | | $ | (81,784 | ) | | $ | (9,592 | ) | | $ | (140,266 | ) | | $ | (274,311 | ) | | $ | (49,315 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | $ | 1,581 | | | $ | 21,081 | | | $ | (76,234 | ) | | $ | (74,583 | ) | | $ | 19,199 | |
Cash and cash equivalents at beginning of period | | | 59,356 | | | | 97,908 | | | | 135,590 | | | | 135,520 | | | | 99,790 | |
Cash and cash equivalents at end of period | | $ | 60,937 | | | $ | 118,989 | | | $ | 59,356 | | | $ | 60,937 | | | $ | 118,989 | |
| | | | | | | | | | | | | | | | | | | | | |
Supplemental cash flow information: | | | | | | | | | | | | | | | | | | | | |
Cash paid for interest | | $ | 1,729 | | | $ | 1,898 | | | $ | 15,128 | | | $ | 18,501 | | | $ | 20,829 | |
Non-cash investing and financing activities: | | | | | | | | | | | | | | | | | | | | |
Preferred unit distributions paid-in-kind | | | — | | | | 3,921 | | | | — | | | | — | | | | 11,591 | |
Natural Resource Partners L.P.
Consolidated Balance Sheets |
| | | September 30, | | | December 31, | |
(In thousands, except unit data) | | 2022 | | | 2021 | |
| | | (Unaudited) | | | | | |
ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 60,937 | | | $ | 135,520 | |
Accounts receivable, net | | | 34,726 | | | | 24,538 | |
Other current assets, net | | | 1,228 | | | | 2,723 | |
Total current assets | | $ | 96,891 | | | $ | 162,781 | |
Land | | | 24,008 | | | | 24,008 | |
Mineral rights, net | | | 421,351 | | | | 437,697 | |
Intangible assets, net | | | 15,168 | | | | 16,130 | |
Equity in unconsolidated investment | | | 284,806 | | | | 276,004 | |
Long-term contract receivable, net | | | 29,570 | | | | 31,371 | |
Other long-term assets, net | | | 7,216 | | | | 5,832 | |
Total assets | | $ | 879,010 | | | $ | 953,823 | |
LIABILITIES AND CAPITAL | | | | | | | | |
Current liabilities | | | | | | | | |
Accounts payable | | $ | 2,179 | | | $ | 1,956 | |
Accrued liabilities | | | 5,913 | | | | 10,297 | |
Accrued interest | | | 4,227 | | | | 1,213 | |
Current portion of deferred revenue | | | 8,886 | | | | 11,817 | |
Current portion of long-term debt, net | | | 89,989 | | | | 39,102 | |
Total current liabilities | | $ | 111,194 | | | $ | 64,385 | |
Deferred revenue | | | 35,882 | | | | 50,045 | |
Long-term debt, net | | | 148,734 | | | | 394,443 | |
Other non-current liabilities | | | 5,231 | | | | 5,018 | |
Total liabilities | | $ | 301,041 | | | $ | 513,891 | |
Commitments and contingencies | | | | | | | | |
Class A Convertible Preferred Units (250,000 and 269,321 units issued and outstanding at September 30, 2022 and December 31, 2021, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at September 30, 2022 and December 31, 2021) | | $ | 164,587 | | | $ | 183,908 | |
Partners’ capital | | | | | | | | |
Common unitholders’ interest (12,505,996 and 12,351,306 units issued and outstanding at September 30, 2022 and December 31, 2021, respectively) | | $ | 358,332 | | | $ | 203,062 | |
General partner’s interest | | | 5,054 | | | | 1,787 | |
Warrant holders’ interest | | | 47,964 | | | | 47,964 | |
Accumulated other comprehensive income | | | 2,032 | | | | 3,211 | |
Total partners’ capital | | $ | 413,382 | | | $ | 256,024 | |
Total liabilities and partners' capital | | $ | 879,010 | | | $ | 953,823 | |
Natural Resource Partners L.P.
Consolidated Statements of Partners' Capital |
| | | | | | | | | | | | | | | | | | | Accumulated | | | | | |
| | | | | | | | | | | | | | | | | | | Other | | | Total | |
| | | Common Unitholders | | | General | | | Warrant | | | Comprehensive | | | Partners' | |
(In thousands) | | Units | | | Amounts | | | Partner | | | Holders | | | Income | | | Capital | |
Balance at December 31, 2021 | | | 12,351 | | | $ | 203,062 | | | $ | 1,787 | | | $ | 47,964 | | | $ | 3,211 | | | $ | 256,024 | |
Net income (1) | | | — | | | | 62,621 | | | | 1,278 | | | | — | | | | — | | | | 63,899 | |
Distributions to common unitholders and the general partner | | | — | | | | (5,559 | ) | | | (113 | ) | | | — | | | | — | | | | (5,672 | ) |
Distributions to preferred unitholders | | | — | | | | (7,603 | ) | | | (155 | ) | | | — | | | | — | | | | (7,758 | ) |
Issuance of unit-based awards | | | 155 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Unit-based awards amortization and vesting, net | | | — | | | | (1,754 | ) | | | — | | | | — | | | | — | | | | (1,754 | ) |
Capital contribution | | | — | | | | — | | | | 112 | | | | — | | | | — | | | | 112 | |
Comprehensive income from unconsolidated investment and other | | | — | | | | — | | | | — | | | | — | | | | 2,545 | | | | 2,545 | |
Balance at March 31, 2022 | | | 12,506 | | | $ | 250,767 | | | $ | 2,909 | | | $ | 47,964 | | | $ | 5,756 | | | $ | 307,396 | |
Net income (1) | | | — | | | | 65,484 | | | | 1,336 | | | | — | | | | — | | | | 66,820 | |
Distributions to common unitholders and the general partner | | | — | | | | (9,379 | ) | | | (191 | ) | | | — | | | | — | | | | (9,570 | ) |
Distributions to preferred unitholders | | | — | | | | (7,350 | ) | | | (150 | ) | | | — | | | | — | | | | (7,500 | ) |
Unit-based awards amortization and vesting | | | — | | | | 1,231 | | | | — | | | | — | | | | — | | | | 1,231 | |
Comprehensive loss from unconsolidated investment and other | | | — | | | | — | | | | — | | | | — | | | | (4,013 | ) | | | (4,013 | ) |
Balance at June 30, 2022 | | | 12,506 | | | $ | 300,753 | | | $ | 3,904 | | | $ | 47,964 | | | $ | 1,743 | | | $ | 354,364 | |
Net income (1) | | | — | | | | 73,064 | | | | 1,491 | | | | — | | | | — | | | | 74,555 | |
Distributions to common unitholders and the general partner | | | — | | | | (9,380 | ) | | | (191 | ) | | | — | | | | — | | | | (9,571 | ) |
Distributions to preferred unitholders | | | — | | | | (7,350 | ) | | | (150 | ) | | | — | | | | — | | | | (7,500 | ) |
Unit-based awards amortization and vesting | | | — | | | | 1,245 | | | | — | | | | — | | | | — | | | | 1,245 | |
Comprehensive income from unconsolidated investment and other | | | — | | | | — | | | | — | | | | — | | | | 289 | | | | 289 | |
Balance at September 30, 2022 | | | 12,506 | | | $ | 358,332 | | | $ | 5,054 | | | $ | 47,964 | | | $ | 2,032 | | | $ | 413,382 | |
(1) | Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. |
Natural Resource Partners L.P.
Consolidated Statements of Partners' Capital
| | | | | | | | | | | | | | | | | | | Accumulated | | | | | |
| | | | | | | | | | | | | | | | | | | Other | | | Total | |
| | | Common Unitholders | | | General | | | Warrant | | | Comprehensive | | | Partners' | |
(In thousands) | | Units | | | Amounts | | | Partner | | | Holders | | | Income | | | Capital | |
Balance at December 31, 2020 | | | 12,261 | | | $ | 136,927 | | | $ | 459 | | | $ | 66,816 | | | $ | 322 | | | $ | 204,524 | |
Net income (1) | | | — | | | | 8,213 | | | | 168 | | | | — | | | | — | | | | 8,381 | |
Distributions to common unitholders and the general partner | | | — | | | | (5,517 | ) | | | (113 | ) | | | — | | | | — | | | | (5,630 | ) |
Distributions to preferred unitholders | | | — | | | | (7,461 | ) | | | (152 | ) | | | — | | | | — | | | | (7,613 | ) |
Issuance of unit-based awards | | | 90 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Unit-based awards amortization and vesting, net | | | — | | | | 215 | | | | — | | | | — | | | | — | | | | 215 | |
Capital contribution | | | — | | | | — | | | | 32 | | | | — | | | | — | | | | 32 | |
Comprehensive income from unconsolidated investment and other | | | — | | | | — | | | | — | | | | — | | | | 732 | | | | 732 | |
Balance at March 31, 2021 | | | 12,351 | | | $ | 132,377 | | | $ | 394 | | | $ | 66,816 | | | $ | 1,054 | | | $ | 200,641 | |
Net income (2) | | | — | | | | 15,074 | | | | 308 | | | | — | | | | — | | | | 15,382 | |
Distributions to common unitholders and the general partner | | | — | | | | (5,559 | ) | | | (113 | ) | | | — | | | | — | | | | (5,672 | ) |
Distributions to preferred unitholders | | | — | | | | (7,571 | ) | | | (155 | ) | | | — | | | | — | | | | (7,726 | ) |
Unit-based awards amortization and vesting | | | — | | | | 515 | | | | — | | | | — | | | | — | | | | 515 | |
Comprehensive income from unconsolidated investment and other | | | — | | | | — | | | | — | | | | — | | | | 2,533 | | | | 2,533 | |
Balance at June 30, 2021 | | | 12,351 | | | $ | 134,836 | | | $ | 434 | | | $ | 66,816 | | | $ | 3,587 | | | $ | 205,673 | |
Net income (3) | | | — | | | | 28,909 | | | | 589 | | | | — | | | | — | | | | 29,498 | |
Distributions to common unitholders and the general partner | | | — | | | | (5,558 | ) | | | (113 | ) | | | — | | | | — | | | | (5,671 | ) |
Distributions to preferred unitholders | | | — | | | | (7,687 | ) | | | (156 | ) | | | — | | | | — | | | | (7,843 | ) |
Unit-based awards amortization and vesting | | | — | | | | 959 | | | | — | | | | — | | | | — | | | | 959 | |
Comprehensive income from unconsolidated investment and other | | | — | | | | — | | | | — | | | | — | | | | 4,204 | | | | 4,204 | |
Balance at September 30, 2021 | | | 12,351 | | | $ | 151,459 | | | $ | 754 | | | $ | 66,816 | | | $ | 7,791 | | | $ | 226,820 | |
(1) | Net income includes $7.7 million of income attributable to preferred unitholders that accumulated during the period, of which $7.6 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. |
| (2) | Net income includes $7.8 million of income attributable to preferred unitholders that accumulated during the period, of which $7.7 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. |
| (3) | Net income includes $8.0 million of income attributable to preferred unitholders that accumulated during the period, of which $7.8 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. |
Natural Resource Partners L.P.
The following table presents NRP's unaudited business results by segment for the three months ended September 30, 2022 and 2021 and June 30, 2022:
| | | Operating Segments | | | | | | | | | |
| | | Mineral | | | | | | | Corporate and | | | | | |
(In thousands) | | Rights | | | Soda Ash | | | Financing | | | Total | |
For the Three Months Ended September 30, 2022 | | | | | | | | | | | | | | | | |
Revenues | | $ | 87,348 | | | $ | 14,556 | | | $ | — | | | $ | 101,904 | |
Gain on asset sales and disposals | | | 354 | | | | — | | | | — | | | | 354 | |
Total revenues and other income | | $ | 87,702 | | | $ | 14,556 | | | $ | — | | | $ | 102,258 | |
Asset impairments | | $ | 812 | | | $ | — | | | $ | — | | | $ | 812 | |
Net income (loss) | | $ | 72,173 | | | $ | 14,525 | | | $ | (12,143 | ) | | $ | 74,555 | |
Adjusted EBITDA (1) | | $ | 79,835 | | | $ | 10,308 | | | $ | (4,518 | ) | | $ | 85,625 | |
Cash flow provided by (used in) continuing operations: | | | | | | | | | | | | | | | | |
Operating activities | | $ | 75,948 | | | $ | 10,309 | | | $ | (3,761 | ) | | $ | 82,496 | |
Investing activities | | $ | 928 | | | $ | — | | | $ | (59 | ) | | $ | 869 | |
Financing activities | | $ | — | | | $ | — | | | $ | (81,784 | ) | | $ | (81,784 | ) |
Distributable cash flow (1) | | $ | 76,876 | | | $ | 10,309 | | | $ | (3,820 | ) | | $ | 83,365 | |
Free cash flow (1) | | $ | 76,523 | | | $ | 10,309 | | | $ | (3,820 | ) | | $ | 83,012 | |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended September 30, 2021 | | | | | | | | | | | | | | | | |
Revenues | | $ | 50,055 | | | $ | 6,672 | | | $ | — | | | $ | 56,727 | |
Gain on asset sales and disposals | | | 68 | | | | — | | | | — | | | | 68 | |
Total revenues and other income | | $ | 50,123 | | | $ | 6,672 | | | $ | — | | | $ | 56,795 | |
Asset impairments | | $ | 57 | | | $ | — | | | $ | — | | | $ | 57 | |
Net income (loss) | | $ | 36,606 | | | $ | 6,596 | | | $ | (13,704 | ) | | $ | 29,498 | |
Adjusted EBITDA (1) | | $ | 41,845 | | | $ | (76 | ) | | $ | (4,052 | ) | | $ | 37,717 | |
Cash flow provided by (used in) continuing operations: | | | | | | | | | | | | | | | | |
Operating activities | | $ | 33,968 | | | $ | (36 | ) | | $ | (3,873 | ) | | $ | 30,059 | |
Investing activities | | $ | 614 | | | $ | — | | | $ | — | | | $ | 614 | |
Financing activities | | $ | — | | | $ | — | | | $ | (9,592 | ) | | $ | (9,592 | ) |
Distributable cash flow (1) | | $ | 34,582 | | | $ | (36 | ) | | $ | (3,873 | ) | | $ | 30,673 | |
Free cash flow (1) | | $ | 34,508 | | | $ | (36 | ) | | $ | (3,873 | ) | | $ | 30,599 | |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended June 30, 2022 | | | | | | | | | | | | | | | | |
Revenues | | $ | 84,945 | | | $ | 14,643 | | | $ | — | | | $ | 99,588 | |
Gain on asset sales and disposals | | | 345 | | | | — | | | | — | | | | 345 | |
Total revenues and other income | | $ | 85,290 | | | $ | 14,643 | | | $ | — | | | $ | 99,933 | |
Asset impairments | | $ | 43 | | | $ | — | | | $ | — | | | $ | 43 | |
Net income (loss) | | $ | 69,408 | | | $ | 14,620 | | | $ | (17,208 | ) | | $ | 66,820 | |
Adjusted EBITDA (1) | | $ | 75,298 | | | $ | 10,463 | | | $ | (5,052 | ) | | $ | 80,709 | |
Cash flow provided by (used in) continuing operations: | | | | | | | | | | | | | | | | |
Operating activities | | $ | 70,351 | | | $ | 10,430 | | | $ | (17,658 | ) | | $ | 63,123 | |
Investing activities | | $ | 909 | | | $ | — | | | $ | — | | | $ | 909 | |
Financing activities | | $ | — | | | $ | — | | | $ | (140,266 | ) | | $ | (140,266 | ) |
Distributable cash flow (1) | | $ | 71,260 | | | $ | 10,430 | | | $ | (17,658 | ) | | $ | 64,032 | |
Free cash flow (1) | | $ | 70,914 | | | $ | 10,430 | | | $ | (17,658 | ) | | $ | 63,686 | |
| | (1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Natural Resource Partners L.P.
The following table presents NRP's unaudited business results by segment for the nine months ended September 30, 2022 and 2021:
| | | Operating Segments | | | | | | | | | |
| | | Mineral | | | | | | | Corporate and | | | | | |
(In thousands) | | Rights | | | Soda Ash | | | Financing | | | Total | |
For the Nine Months Ended September 30, 2022 | | | | | | | | | | | | | | | | |
Revenues | | $ | 247,172 | | | $ | 44,036 | | | $ | — | | | $ | 291,208 | |
Gain on asset sales and disposals | | | 699 | | | | — | | | | — | | | | 699 | |
Total revenues and other income | | $ | 247,871 | | | $ | 44,036 | | | $ | — | | | $ | 291,907 | |
Asset impairments | | $ | 874 | | | $ | — | | | $ | — | | | $ | 874 | |
Net income (loss) | | $ | 204,548 | | | $ | 43,931 | | | $ | (43,205 | ) | | $ | 205,274 | |
Adjusted EBITDA (1) | | $ | 221,987 | | | $ | 33,950 | | | $ | (14,037 | ) | | $ | 241,900 | |
Cash flow provided by (used in) continuing operations: | | | | | | | | | | | | | | | | |
Operating activities | | $ | 194,475 | | | $ | 33,934 | | | $ | (30,459 | ) | | $ | 197,950 | |
Investing activities | | $ | 1,837 | | | $ | — | | | $ | (59 | ) | | $ | 1,778 | |
Financing activities | | $ | (614 | ) | | $ | — | | | $ | (273,697 | ) | | $ | (274,311 | ) |
Distributable cash flow (1) | | $ | 196,312 | | | $ | 33,934 | | | $ | (30,518 | ) | | $ | 199,728 | |
Free cash flow (1) | | $ | 195,613 | | | $ | 33,934 | | | $ | (30,518 | ) | | $ | 199,029 | |
| | | | | | | | | | | | | | | | | |
For the Nine Months Ended September 30, 2021 | | | | | | | | | | | | | | | | |
Revenues | | $ | 120,967 | | | $ | 11,246 | | | $ | — | | | $ | 132,213 | |
Gain on asset sales and disposals | | | 243 | | | | — | | | | — | | | | 243 | |
Total revenues and other income | | $ | 121,210 | | | $ | 11,246 | | | $ | — | | | $ | 132,456 | |
Asset impairments | | $ | 4,116 | | | $ | — | | | $ | — | | | $ | 4,116 | |
Net income (loss) | | $ | 82,980 | | | $ | 11,115 | | | $ | (40,834 | ) | | $ | 53,261 | |
Adjusted EBITDA (1) | | $ | 102,265 | | | $ | 3,789 | | | $ | (11,550 | ) | | $ | 94,504 | |
Cash flow provided by (used in) continuing operations: | | | | | | | | | | | | | | | | |
Operating activities | | $ | 91,958 | | | $ | 3,817 | | | $ | (29,132 | ) | | $ | 66,643 | |
Investing activities | | $ | 1,871 | | | $ | — | | | $ | — | | | $ | 1,871 | |
Financing activities | | $ | (1,132 | ) | | $ | — | | | $ | (48,183 | ) | | $ | (49,315 | ) |
Distributable cash flow (1) | | $ | 93,829 | | | $ | 3,817 | | | $ | (29,132 | ) | | $ | 68,514 | |
Free cash flow (1) | | $ | 92,580 | | | $ | 3,817 | | | $ | (29,132 | ) | | $ | 67,265 | |
| | (1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Natural Resource Partners L.P.
Operating Statistics - Mineral Rights |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | September 30, | | | June 30, | | | September 30, | |
(In thousands, except per ton data) | | 2022 | | | 2021 | | | 2022 | | | 2022 | | | 2021 | |
Coal sales volumes (tons) | | | | | | | | | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | | | | | | | | | |
Northern | | | 440 | | | | 422 | | | | 392 | | | | 1,260 | | | | 947 | |
Central | | | 3,503 | | | | 3,199 | | | | 3,484 | | | | 10,238 | | | | 8,824 | |
Southern | | | 498 | | | | 642 | | | | 312 | | | | 1,171 | | | | 1,058 | |
Total Appalachia | | | 4,441 | | | | 4,263 | | | | 4,188 | | | | 12,669 | | | | 10,829 | |
Illinois Basin | | | 3,490 | | | | 2,689 | | | | 3,403 | | | | 8,395 | | | | 7,987 | |
Northern Powder River Basin | | | 835 | | | | 1,047 | | | | 699 | | | | 2,772 | | | | 2,291 | |
Gulf Coast | | | 188 | | | | 13 | | | | 67 | | | | 324 | | | | 13 | |
Total coal sales volumes | | | 8,954 | | | | 8,012 | | | | 8,357 | | | | 24,160 | | | | 21,120 | |
| | | | | | | | | | | | | | | | | | | | | |
Coal royalty revenue per ton | | | | | | | | | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | | | | | | | | | |
Northern | | $ | 6.74 | | | $ | 7.18 | | | $ | 11.84 | | | $ | 9.48 | | | $ | 5.57 | |
Central | | | 9.04 | | | | 5.74 | | | | 12.19 | | | | 10.85 | | | | 4.91 | |
Southern | | | 9.78 | | | | 11.61 | | | | 17.67 | | | | 14.28 | | | | 9.82 | |
Illinois Basin | | | 2.57 | | | | 2.33 | | | | 2.07 | | | | 2.30 | | | | 2.13 | |
Northern Powder River Basin | | | 4.56 | | | | 3.71 | | | | 4.74 | | | | 4.24 | | | | 3.59 | |
Gulf Coast | | | 0.59 | | | | 0.54 | | | | 0.57 | | | | 0.58 | | | | 0.54 | |
Combined average coal royalty revenue per ton | | | 5.85 | | | | 4.87 | | | | 7.54 | | | | 7.08 | | | | 3.99 | |
| | | | | | | | | | | | | | | | | | | | | |
Coal royalty revenues | | | | | | | | | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | | | | | | | | | |
Northern | | $ | 2,965 | | | $ | 3,031 | | | $ | 4,640 | | | $ | 11,946 | | | $ | 5,272 | |
Central | | | 31,680 | | | | 18,357 | | | | 42,461 | | | | 111,121 | | | | 43,308 | |
Southern | | | 4,872 | | | | 7,452 | | | | 5,513 | | | | 16,725 | | | | 10,390 | |
Total Appalachia | | | 39,517 | | | | 28,840 | | | | 52,614 | | | | 139,792 | | | | 58,970 | |
Illinois Basin | | | 8,967 | | | | 6,261 | | | | 7,061 | | | | 19,331 | | | | 17,044 | |
Northern Powder River Basin | | | 3,805 | | | | 3,881 | | | | 3,314 | | | | 11,751 | | | | 8,222 | |
Gulf Coast | | | 111 | | | | 7 | | | | 38 | | | | 187 | | | | 7 | |
Unadjusted coal royalty revenues | | | 52,400 | | | | 38,989 | | | | 63,027 | | | | 171,061 | | | | 84,243 | |
Coal royalty adjustment for minimum leases | | | (19 | ) | | | (6,557 | ) | | | (82 | ) | | | (286 | ) | | | (18,148 | ) |
Total coal royalty revenues | | $ | 52,381 | | | $ | 32,432 | | | $ | 62,945 | | | | 170,775 | | | $ | 66,095 | |
| | | | | | | | | | | | | | | | | | | | | |
Other revenues | | | | | | | | | | | | | | | | | | | | |
Production lease minimum revenues | | $ | 1,885 | | | $ | 3,235 | | | $ | 65 | | | $ | 3,542 | | | $ | 10,241 | |
Minimum lease straight-line revenues | | | 4,778 | | | | 4,808 | | | | 4,674 | | | | 14,235 | | | | 15,773 | |
Carbon neutral initiative revenues | | | 8,600 | | | | — | | | | — | | | | 8,600 | | | | — | |
Wheelage revenues | | | 2,977 | | | | 1,964 | | | | 4,379 | | | | 11,073 | | | | 5,589 | |
Property tax revenues | | | 1,360 | | | | 1,466 | | | | 1,695 | | | | 4,527 | | | | 4,522 | |
Coal overriding royalty revenues | | | 1,367 | | | | 757 | | | | 682 | | | | 2,307 | | | | 3,592 | |
Lease amendment revenues | | | 759 | | | | 1,519 | | | | 811 | | | | 2,450 | | | | 3,159 | |
Aggregates royalty revenues | | | 884 | | | | 429 | | | | 1,037 | | | | 2,691 | | | | 1,339 | |
Oil and gas royalty revenues | | | 6,170 | | | | 1,154 | | | | 2,906 | | | | 10,890 | | | | 3,420 | |
Other revenues | | | 218 | | | | 120 | | | | 139 | | | | 705 | | | | 692 | |
Total other revenues | | $ | 28,998 | | | $ | 15,452 | | | $ | 16,388 | | | $ | 61,020 | | | $ | 48,327 | |
Royalty and other mineral rights | | $ | 81,379 | | | $ | 47,884 | | | $ | 79,333 | | | $ | 231,795 | | | $ | 114,422 | |
Transportation and processing services revenues | | | 5,969 | | | | 2,171 | | | | 5,612 | | | | 15,377 | | | | 6,545 | |
Gain on asset sales and disposals | | | 354 | | | | 68 | | | | 345 | | | | 699 | | | | 243 | |
Total Mineral Rights segment revenues and other income | | $ | 87,702 | | | $ | 50,123 | | | $ | 85,290 | | | $ | 247,871 | | | $ | 121,210 | |
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
| | | Mineral | | | | | | | Corporate and | | | | | |
(In thousands) | | Rights | | | Soda Ash | | | Financing | | | Total | |
For the Three Months Ended September 30, 2022 | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 72,173 | | | $ | 14,525 | | | $ | (12,143 | ) | | $ | 74,555 | |
Less: equity earnings from unconsolidated investment | | | — | | | | (14,556 | ) | | | — | | | | (14,556 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | 10,339 | | | | — | | | | 10,339 | |
Add: interest expense, net | | | — | | | | — | | | | 5,141 | | | | 5,141 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | 2,484 | | | | 2,484 | |
Add: depreciation, depletion and amortization | | | 6,850 | | | | — | | | | — | | | | 6,850 | |
Add: asset impairments | | | 812 | | | | — | | | | — | | | | 812 | |
Adjusted EBITDA | | $ | 79,835 | | | $ | 10,308 | | | $ | (4,518 | ) | | $ | 85,625 | |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended September 30, 2021 | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 36,606 | | | $ | 6,596 | | | $ | (13,704 | ) | | $ | 29,498 | |
Less: equity earnings from unconsolidated investment | | | — | | | | (6,672 | ) | | | — | | | | (6,672 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | — | | | | — | | | | — | |
Add: interest expense, net | | | — | | | | — | | | | 9,652 | | | | 9,652 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | — | | | | — | |
Add: depreciation, depletion and amortization | | | 5,182 | | | | — | | | | — | | | | 5,182 | |
Add: asset impairments | | | 57 | | | | — | | | | — | | | | 57 | |
Adjusted EBITDA | | $ | 41,845 | | | $ | (76 | ) | | $ | (4,052 | ) | | $ | 37,717 | |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended June 30, 2022 | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 69,408 | | | $ | 14,620 | | | $ | (17,208 | ) | | $ | 66,820 | |
Less: equity earnings from unconsolidated investment | | | — | | | | (14,643 | ) | | | — | | | | (14,643 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | 10,486 | | | | — | | | | 10,486 | |
Add: interest expense, net | | | — | | | | — | | | | 8,108 | | | | 8,108 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | 4,048 | | | | 4,048 | |
Add: depreciation, depletion and amortization | | | 5,847 | | | | — | | | | — | | | | 5,847 | |
Add: asset impairments | | | 43 | | | | — | | | | — | | | | 43 | |
Adjusted EBITDA | | $ | 75,298 | | | $ | 10,463 | | | $ | (5,052 | ) | | $ | 80,709 | |
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
| | | Mineral | | | | | | | Corporate and | | | | | |
(In thousands) | | Rights | | | Soda Ash | | | Financing | | | Total | |
For the Nine Months Ended September 30, 2022 | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 204,548 | | | $ | 43,931 | | | $ | (43,205 | ) | | $ | 205,274 | |
Less: equity earnings from unconsolidated investment | | | — | | | | (44,036 | ) | | | — | | | | (44,036 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | 34,055 | | | | — | | | | 34,055 | |
Add: interest expense, net | | | — | | | | — | | | | 22,636 | | | | 22,636 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | 6,532 | | | | 6,532 | |
Add: depreciation, depletion and amortization | | | 16,565 | | | | — | | | | — | | | | 16,565 | |
Add: asset impairments | | | 874 | | | | — | | | | — | | | | 874 | |
Adjusted EBITDA | | $ | 221,987 | | | $ | 33,950 | | | $ | (14,037 | ) | | $ | 241,900 | |
| | | | | | | | | | | | | | | | | |
For the Nine Months Ended September 30, 2021 | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 82,980 | | | $ | 11,115 | | | $ | (40,834 | ) | | $ | 53,261 | |
Less: equity earnings from unconsolidated investment | | | — | | | | (11,246 | ) | | | — | | | | (11,246 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | 3,920 | | | | — | | | | 3,920 | |
Add: interest expense, net | | | 24 | | | | — | | | | 29,284 | | | | 29,308 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | — | | | | — | |
Add: depreciation, depletion and amortization | | | 15,145 | | | | — | | | | — | | | | 15,145 | |
Add: asset impairments | | | 4,116 | | | | — | | | | — | | | | 4,116 | |
Adjusted EBITDA | | $ | 102,265 | | | $ | 3,789 | | | $ | (11,550 | ) | | $ | 94,504 | |
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Distributable Cash Flow and Free Cash Flow |
(In thousands) | | Mineral Rights | | | Soda Ash | | | Corporate and Financing | | | Total | |
For the Three Months Ended September 30, 2022 | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities of continuing operations | | $ | 75,948 | | | $ | 10,309 | | | $ | (3,761 | ) | | $ | 82,496 | |
Add: proceeds from asset sales and disposals | | | 353 | | | | — | | | | — | | | | 353 | |
Add: return of long-term contract receivable | | | 575 | | | | — | | | | — | | | | 575 | |
Less: maintenance capital expenditures | | | — | | | | — | | | | (59 | ) | | | (59 | ) |
Distributable cash flow | | $ | 76,876 | | | $ | 10,309 | | | $ | (3,820 | ) | | $ | 83,365 | |
Less: proceeds from asset sales and disposals | | | (353 | ) | | | — | | | | — | | | | (353 | ) |
Free cash flow | | $ | 76,523 | | | $ | 10,309 | | | $ | (3,820 | ) | | $ | 83,012 | |
| | | | | | | | | | | | | | | | | |
Net cash provided by (used in) investing activities | | $ | 928 | | | $ | — | | | $ | (59 | ) | | $ | 869 | |
Net cash used in financing activities | | | — | | | | — | | | | (81,784 | ) | | | (81,784 | ) |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended September 30, 2021 | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities of continuing operations | | $ | 33,968 | | | $ | (36 | ) | | $ | (3,873 | ) | | $ | 30,059 | |
Add: proceeds from asset sales and disposals | | | 74 | | | | — | | | | — | | | | 74 | |
Add: return of long-term contract receivable | | | 540 | | | | — | | | | — | | | | 540 | |
Less: maintenance capital expenditures | | | — | | | | — | | | | — | | | | — | |
Distributable cash flow | | $ | 34,582 | | | $ | (36 | ) | | $ | (3,873 | ) | | $ | 30,673 | |
Less: proceeds from asset sales and disposals | | | (74 | ) | | | — | | | | — | | | | (74 | ) |
Free cash flow | | $ | 34,508 | | | $ | (36 | ) | | $ | (3,873 | ) | | $ | 30,599 | |
| | | | | | | | | | | | | | | | | |
Net cash provided by investing activities | | $ | 614 | | | $ | — | | | $ | — | | | $ | 614 | |
Net cash used in financing activities | | | — | | | | — | | | | (9,592 | ) | | | (9,592 | ) |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended June 30, 2022 | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities of continuing operations | | $ | 70,351 | | | $ | 10,430 | | | $ | (17,658 | ) | | $ | 63,123 | |
Add: proceeds from asset sales and disposals | | | 346 | | | | — | | | | — | | | | 346 | |
Add: return of long-term contract receivable | | | 563 | | | | — | | | | — | | | | 563 | |
Less: maintenance capital expenditures | | | — | | | | — | | | | — | | | | — | |
Distributable cash flow | | $ | 71,260 | | | $ | 10,430 | | | $ | (17,658 | ) | | $ | 64,032 | |
Less: proceeds from asset sales and disposals | | | (346 | ) | | | — | | | | — | | | | (346 | ) |
Free cash flow | | $ | 70,914 | | | $ | 10,430 | | | $ | (17,658 | ) | | $ | 63,686 | |
| | | | | | | | | | | | | | | | | |
Net cash provided by investing activities | | $ | 909 | | | $ | — | | | $ | — | | | $ | 909 | |
Net cash used in financing activities | | | — | | | | — | | | | (140,266 | ) | | | (140,266 | ) |
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(In thousands) | | Mineral Rights | | | Soda Ash | | | Corporate and Financing | | | Total | |
For the Nine Months Ended September 30, 2022 | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities of continuing operations | | $ | 194,475 | | | $ | 33,934 | | | $ | (30,459 | ) | | $ | 197,950 | |
Add: proceeds from asset sales and disposals | | | 699 | | | | — | | | | — | | | | 699 | |
Add: return of long-term contract receivable | | | 1,138 | | | | — | | | | — | | | | 1,138 | |
Less: maintenance capital expenditures | | | — | | | | — | | | | (59 | ) | | | (59 | ) |
Distributable cash flow | | $ | 196,312 | | | $ | 33,934 | | | $ | (30,518 | ) | | $ | 199,728 | |
Less: proceeds from asset sales and disposals | | | (699 | ) | | | — | | | | — | | | | (699 | ) |
Less: acquisition costs | | | — | | | | — | | | | — | | | | — | |
Free cash flow | | $ | 195,613 | | | $ | 33,934 | | | $ | (30,518 | ) | | $ | 199,029 | |
| | | | | | | | | | | | | | | | | |
Net cash provided by (used in) investing activities | | $ | 1,837 | | | $ | — | | | $ | (59 | ) | | $ | 1,778 | |
Net cash used in financing activities | | | (614 | ) | | | — | | | | (273,697 | ) | | | (274,311 | ) |
| | | | | | | | | | | | | | | | | |
For the Nine Months Ended September 30, 2021 | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities of continuing operations | | $ | 91,958 | | | $ | 3,817 | | | $ | (29,132 | ) | | $ | 66,643 | |
Add: proceeds from asset sales and disposals | | | 249 | | | | — | | | | — | | | | 249 | |
Add: return of long-term contract receivable | | | 1,622 | | | | — | | | | — | | | | 1,622 | |
Less: maintenance capital expenditures | | | — | | | | — | | | | — | | | | — | |
Distributable cash flow | | $ | 93,829 | | | $ | 3,817 | | | $ | (29,132 | ) | | $ | 68,514 | |
Less: proceeds from asset sales and disposals | | | (249 | ) | | | — | | | | — | | | | (249 | ) |
Less: acquisition costs | | | (1,000 | ) | | | — | | | | — | | | | (1,000 | ) |
Free cash flow | | $ | 92,580 | | | $ | 3,817 | | | $ | (29,132 | ) | | $ | 67,265 | |
| | | | | | | | | | | | | | | | | |
Net cash provided by investing activities | | $ | 1,871 | | | $ | — | | | $ | — | | | $ | 1,871 | |
Net cash used in financing activities | | | (1,132 | ) | | | — | | | | (48,183 | ) | | | (49,315 | ) |
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
| | | For the Three Months Ended | | | | | |
(In thousands) | | December 31, 2021 | | | March 31, 2022 | | | June 30, 2022 | | | September 30, 2022 | | | Last 12 Months | |
Net cash provided by operating activities of continuing operations | | $ | 55,161 | | | $ | 52,331 | | | $ | 63,123 | | | $ | 82,496 | | | $ | 253,111 | |
Add: proceeds from asset sales and disposals | | | — | | | | — | | | | 346 | | | | 353 | | | | 699 | |
Add: return of long-term contract receivable | | | 541 | | | | — | | | | 563 | | | | 575 | | | | 1,679 | |
Less: maintenance capital expenditures | | | — | | | | — | | | | — | | | | (59 | ) | | | (59 | ) |
Distributable cash flow | | $ | 55,702 | | | $ | 52,331 | | | $ | 64,032 | | | $ | 83,365 | | | $ | 255,430 | |
Less: proceeds from asset sales and disposals | | | — | | | | — | | | | (346 | ) | | | (353 | ) | | | (699 | ) |
Free cash flow | | $ | 55,702 | | | $ | 52,331 | | | $ | 63,686 | | | $ | 83,012 | | | $ | 254,731 | |
Less: mandatory Opco debt repayments | | | (20,335 | ) | | | (16,697 | ) | | | (2,365 | ) | | | — | | | | (39,397 | ) |
Less: preferred unit distributions and redemption of PIK units | | | (3,980 | ) | | | (27,079 | ) | | | (7,500 | ) | | | (7,500 | ) | | | (46,059 | ) |
Less: common unit distributions | | | (5,672 | ) | | | (5,672 | ) | | | (9,570 | ) | | | (9,571 | ) | | | (30,485 | ) |
Less: warrant cash settlement | | | (9,183 | ) | | | — | | | | — | | | | — | | | | (9,183 | ) |
Cash flow cushion | | $ | 16,532 | | | $ | 2,883 | | | $ | 44,251 | | | $ | 65,941 | | | $ | 129,607 | |
| | | For the Three Months Ended | | | | | |
(In thousands) | | December 31, 2021 | | | March 31, 2022 | | | June 30, 2022 | | | September 30, 2022 | | | Last 12 Months | |
Net income | | $ | 55,641 | | | $ | 63,899 | | | $ | 66,820 | | | $ | 74,555 | | | $ | 260,915 | |
Less: equity earnings from unconsolidated investment | | | (10,625 | ) | | | (14,837 | ) | | | (14,643 | ) | | | (14,556 | ) | | | (54,661 | ) |
Add: total distributions from unconsolidated investment | | | 7,350 | | | | 13,230 | | | | 10,486 | | | | 10,339 | | | | 41,405 | |
Add: interest expense, net | | | 9,568 | | | | 9,387 | | | | 8,108 | | | | 5,141 | | | | 32,204 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | 4,048 | | | | 2,484 | | | | 6,532 | |
Add: depreciation, depletion and amortization | | | 3,930 | | | | 3,868 | | | | 5,847 | | | | 6,850 | | | | 20,495 | |
Add: asset impairments | | | 986 | | | | 19 | | | | 43 | | | | 812 | | | | 1,860 | |
Adjusted EBITDA | | $ | 66,850 | | | $ | 75,566 | | | $ | 80,709 | | | $ | 85,625 | | | $ | 308,750 | |
| | | | | | | | | | | | | | | | | | | | | |
Debt—at September 30, 2022 | | | | | | | | | | | | | | | | | | $ | 240,819 | |
Less: Redemption of 9.125% Senior Notes | | | | | | | | | | | | | | | | | | | (121,396 | ) |
Add: October 2022 draw on revolving credit facility | | | | | | | | | | | | | | | | | | | 70,000 | |
Pro-Forma Debt—at September 30, 2022 | | | | | | | | | | | | | | | | | | $ | 189,423 | |
| | | | | | | | | | | | | | | | | | | | | |
Leverage Ratio (1) | | | | | | | | | | | | | | | | | | 0.8 x | |
| | | | | | | | | | | | | | | | | | | | | |
Pro-Forma Leverage Ratio at September 30, 2022 | | | | | | | | | | | | | | | | | | 0.6 x | |
| | (1) | Leverage Ratio is calculated as the outstanding principal of NRP's debt as of September 30, 2022 divided by the last twelve months' Adjusted EBITDA. Note that Adjusted EBITDA under the indenture governing NRP's 2025 parent company notes may be different than the amount shown above. However, NRP's last twelve months Leverage ratio as of September 30, 2022, was 0.8x as calculated under the indenture governing NRP's 2025 parent company notes. |
| | | For the Three Months Ended | | | | | |
(In thousands) | | September 30, 2020 | | | December 31, 2020 | | | March 31, 2021 | | | June 30, 2021 | | | Last 12 Months | |
Net income | | $ | 7,216 | | | $ | 14,687 | | | $ | 8,381 | | | $ | 15,382 | | | $ | 45,666 | |
Less: equity earnings from unconsolidated investment | | | (1,986 | ) | | | (5,528 | ) | | | (1,973 | ) | | | (2,601 | ) | | | (12,088 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | — | | | | 3,920 | | | | — | | | | 3,920 | |
Add: interest expense, net | | | 10,254 | | | | 10,077 | | | | 9,973 | | | | 9,683 | | | | 39,987 | |
Add: depreciation, depletion and amortization | | | 2,111 | | | | 3,013 | | | | 5,092 | | | | 4,871 | | | | 15,087 | |
Add: asset impairments | | | 934 | | | | 2,668 | | | | 4,043 | | | | 16 | | | | 7,661 | |
Adjusted EBITDA | | $ | 18,529 | | | $ | 24,917 | | | $ | 29,436 | | | $ | 27,351 | | | $ | 100,233 | |
| | | | | | | | | | | | | | | | | | | | | |
Debt—at June 30, 2021 | | | | | | | | | | | | | | | | | | $ | 458,819 | |
| | | | | | | | | | | | | | | | | | | | | |
Leverage Ratio (1) | | | | | | | | | | | | | | | | | | 4.6 x | |
| | (1) | Leverage Ratio is calculated as the outstanding principal of NRP's debt as of June 30, 2021 divided by the last twelve months' Adjusted EBITDA. |
-end-
