Natural Resource Partners L.P.
1415 Louisiana St., Suite 3325, Houston, TX 77002
NEWS RELEASE
Natural Resource Partners L.P. Reports First Quarter 2023 Results and Declares First Quarter 2023 Distribution of $0.75 per Common Unit
HOUSTON, May 4, 2023 - Natural Resource Partners L.P. (NYSE:NRP) today reported first quarter 2023 results as follows:
| | | For the Three Months Ended | | | Last Twelve Months Ended | |
(In thousands) (Unaudited) | | March 31, 2023 | |
Operating cash flow | | $ | 72,900 | | | $ | 287,407 | |
Free cash flow (1) | | | 73,496 | | | | 289,608 | |
Cash flow cushion (last twelve months) (1) | | | | | | | 102,516 | |
| | | | | | | | | |
Net income | | $ | 79,275 | | | $ | 283,868 | |
Adjusted EBITDA (1) | | | 77,737 | | | | 319,418 | |
| | (1) | See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. |
Highlights:
• Generated $73 million of free cash flow, an increase of 40% from the prior year quarter
• Paid fourth quarter 2022 common unit distribution of $0.75 and special common unit distribution of $2.43
• Redeemed $47.5 million of preferred units, reducing preferred units outstanding to par value of $202.5 million
• Leverage ratio of 0.5x as of March 31, 2023
• Declares first quarter 2023 common unit distribution of $0.75
"NRP's strong performance continued in the first quarter of 2023 driven by robust prices for metallurgical coal and soda ash," said Craig Nunez, NRP's president and chief operating officer. "In addition to generating $73 million of free cash flow, we redeemed $47.5 million of preferred units at par with cash and permanently retired $16.7 million of Opco Senior Notes. We will continue to aggressively pay off debt and preferred equity with internally generated cash while maintaining distributions to our common unitholders.”
NRP announced today that the board of directors of its general partner declared a first quarter 2023 cash distribution of $0.75 per common unit to be paid on May 23, 2023, to unitholders of record on May 16, 2023. In addition, the board declared a $6.1 million cash distribution on NRP's 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 $56.5 million at March 31, 2023, consisting of $17.7 million of cash and $38.8 million of borrowing capacity available under its revolving credit facility.
Segment Performance
Mineral Rights
Mineral Rights net income for the first quarter of 2023 increased $5.9 million as compared to the prior year period primarily due to increased metallurgical coal sales volumes and revenue from carbon neutral initiatives. Operating cash flow and free cash flow for the first quarter of 2023 increased $25.7 million and $26.3 million, respectively, as compared to the prior year period primarily due to the timing of minimum and royalty payments and prior year recoupments. Approximately 75% of coal royalty revenues and approximately 55% of coal royalty sales volumes were derived from metallurgical coal in the first quarter of 2023.
Metallurgical and thermal coal prices remain strong relative to historical norms, although pricing has declined from the record highs seen in 2022. Continued support for pricing is expected as operators are limited in their ability to increase production due to ongoing labor shortages, transportation and logistics challenges, difficulty of new mine permitting, and limited access to capital.
NRP continues to explore and identify carbon neutral revenue opportunities across its large portfolio of land, mineral, and timber assets, including the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar, and wind energy. In the first quarter of 2023, NRP executed a new solar lease.
Soda Ash
Soda Ash net income in the first quarter of 2023 increased $4.3 million as compared to the prior year period primarily due to increased sales prices. Operating cash flow and free cash flow in the first quarter of 2023 decreased $2.6 million as compared to the prior year period due to a higher quarterly distribution from Sisecam Wyoming in the first quarter of 2022.
International prices remained strong in the first quarter of 2023 reflecting a continued supply constrained market for soda ash. Domestic soda ash prices were also strong during the first quarter of 2023 versus the prior year quarter due to negotiated 2023 domestic prices converging to international soda ash prices.
Corporate and Financing
Corporate and Financing costs in the first quarter of 2023 decreased $5.2 million as compared to the prior year period primarily due to lower interest expense resulting from less debt outstanding. Operating cash flow and free cash flow in the first quarter of 2023 decreased $2.5 million as compared to the prior year period primarily due to increased cash paid for incentive compensation in the first quarter of 2023 because of the improved business performance in 2022 and higher cash paid for interest on credit facility borrowings in 2023.
In the first quarter of 2023, NRP received a notice from holders of the partnership's Class A Preferred Units exercising their right to either convert or redeem an aggregate of 47,499 Class A Preferred Units. NRP chose to redeem the preferred units for $47.5 million in cash rather than issuing common units. Of the originally issued 250,000 Class A Preferred Units, 202,501 Class A Preferred Units remain outstanding.
In February 2023, NRP declared and paid a fourth quarter 2022 cash distribution of $0.75 per common unit and a $7.5 million cash distribution on the preferred units. In March 2023, NRP declared and paid a special distribution of $2.43 per common unit to help cover unitholder tax liabilities associated with owning NRP's common units during 2022. Today, NRP declared a first quarter 2023 cash distribution of $0.75 per common unit and a $6.1 million cash distribution on its outstanding preferred units.
NRP's consolidated leverage ratio was 0.5x at March 31, 2023.
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/WTRCwGdM. 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 conference call we suggest registering at minimum 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
Concurrent with this announcement, we are providing qualified notice to brokers and nominees that hold NRP units on behalf of non-U.S. investors under Treasury Regulation Section 1.1446-4(b) and (d) and Treasury Regulation Section 1.1446(f)-4(c)(2)(iii). Brokers and nominees should treat one hundred percent (100%) of NRP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. In addition, brokers and nominees should treat one hundred percent (100%) of the distribution as being in excess of cumulative net income for purposes of determining the amount to withhold. Accordingly, NRP's distributions to non-U.S. investors are subject to federal income tax withholding at a rate equal to the sum of the highest applicable rate plus ten percent (10%).
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 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 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, redemption of preferred units, 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.
"Leverage ratio" represents the outstanding principal of NRP's debt at the end of the period divided by the last twelve months' Adjusted EBITDA as defined above. NRP believes that leverage ratio is a useful measure to management and investors to evaluate and monitor the indebtedness of NRP relative to its ability to generate income to service such debt and in understanding trends in NRP’s overall financial condition. Leverage ratio may not be calculated the same for NRP as for other companies and is not a substitute for, and should not be used in conjunction with, GAAP financial ratios.
-Financial Tables and Reconciliation of Non-GAAP Measures Follow-
Natural Resource Partners L.P.
Consolidated Statements of Comprehensive Income |
| | | For the Three Months Ended | |
| | | March 31, | | | December 31, | |
(In thousands, except per unit data) | | 2023 | | | 2022 | | | 2022 | |
Revenues and other income | | | | | | | | | | | | |
Royalty and other mineral rights | | $ | 76,271 | | | $ | 71,083 | | | $ | 75,218 | |
Transportation and processing services | | | 3,598 | | | | 3,796 | | | | 5,695 | |
Equity in earnings of Sisecam Wyoming | | | 19,254 | | | | 14,837 | | | | 15,759 | |
Gain on asset sales and disposals | | | 96 | | | | — | | | | 383 | |
Total revenues and other income | | $ | 99,219 | | | $ | 89,716 | | | $ | 97,055 | |
| | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | |
Operating and maintenance expenses | | $ | 7,163 | | | $ | 8,076 | | | $ | 8,914 | |
Depreciation, depletion and amortization | | | 4,083 | | | | 3,868 | | | | 5,954 | |
General and administrative expenses | | | 5,845 | | | | 4,467 | | | | 7,815 | |
Asset impairments | | | — | | | | 19 | | | | 3,583 | |
Total operating expenses | | $ | 17,091 | | | $ | 16,430 | | | $ | 26,266 | |
| | | | | | | | | | | | | |
Income from operations | | $ | 82,128 | | | $ | 73,286 | | | $ | 70,789 | |
| | | | | | | | | | | | | |
Other expenses, net | | | | | | | | | | | | |
Interest expense, net | | $ | (2,853 | ) | | $ | (9,387 | ) | | $ | (3,638 | ) |
Loss on extinguishment of debt | | | — | | | | — | | | | (3,933 | ) |
Total other expenses, net | | $ | (2,853 | ) | | $ | (9,387 | ) | | $ | (7,571 | ) |
| | | | | | | | | | | | | |
Net income | | $ | 79,275 | | | $ | 63,899 | | | $ | 63,218 | |
Less: income attributable to preferred unitholders | | | (6,661 | ) | | | (7,500 | ) | | | (7,500 | ) |
Less: redemption of preferred units | | | (16,228 | ) | | | — | | | | — | |
Net income attributable to common unitholders and the general partner | | $ | 56,386 | | | $ | 56,399 | | | $ | 55,718 | |
| | | | | | | | | | | | | |
Net income attributable to common unitholders | | $ | 55,258 | | | $ | 55,271 | | | $ | 54,603 | |
Net income attributable to the general partner | | | 1,128 | | | | 1,128 | | | | 1,115 | |
| | | | | | | | | | | | | |
Net income per common unit | | | | | | | | | | | | |
Basic | | $ | 4.40 | | | $ | 4.45 | | | $ | 4.37 | |
Diluted | | | 3.44 | | | | 3.11 | | | | 3.13 | |
| | | | | | | | | | | | | |
Net income | | $ | 79,275 | | | $ | 63,899 | | | $ | 63,218 | |
Comprehensive income (loss) from unconsolidated investment and other | | | (19,583 | ) | | | 2,545 | | | | 16,685 | |
Comprehensive income | | $ | 59,692 | | | $ | 66,444 | | | $ | 79,903 | |
Natural Resource Partners L.P.
Consolidated Statements of Cash Flows |
| | | For the Three Months Ended | |
| | | March 31, | | | December 31, | |
(In thousands) | | 2023 | | | 2022 | | | 2022 | |
Cash flows from operating activities | | | | | | | | | | | | |
Net income | | $ | 79,275 | | | $ | 63,899 | | | $ | 63,218 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | |
Depreciation, depletion and amortization | | | 4,083 | | | | 3,868 | | | | 5,954 | |
Distributions from unconsolidated investment | | | 10,780 | | | | 13,230 | | | | 10,780 | |
Equity earnings from unconsolidated investment | | | (19,254 | ) | | | (14,837 | ) | | | (15,759 | ) |
Gain on asset sales and disposals | | | (96 | ) | | | — | | | | (383 | ) |
Loss on extinguishment of debt | | | — | | | | — | | | | 3,933 | |
Asset impairments | | | — | | | | 19 | | | | 3,583 | |
Bad debt expense | | | (610 | ) | | | 1,028 | | | | 421 | |
Unit-based compensation expense | | | 2,491 | | | | 1,448 | | | | 1,557 | |
Amortization of debt issuance costs and other | | | 25 | | | | 375 | | | | 523 | |
Change in operating assets and liabilities: | | | | | | | | | | | | |
Accounts receivable | | | 7,061 | | | | (7,579 | ) | | | (8,553 | ) |
Accounts payable | | | (541 | ) | | | (60 | ) | | | (186 | ) |
Accrued liabilities | | | (8,805 | ) | | | (7,156 | ) | | | 5,766 | |
Accrued interest | | | 263 | | | | 7,250 | | | | (3,238 | ) |
Deferred revenue | | | (154 | ) | | | (7,316 | ) | | | 1,670 | |
Other items, net | | | (1,618 | ) | | | (1,838 | ) | | | (398 | ) |
Net cash provided by operating activities | | $ | 72,900 | | | $ | 52,331 | | | $ | 68,888 | |
| | | | | | | | | | | | | |
Cash flows from investing activities | | | | | | | | | | | | |
Proceeds from asset sales and disposals | | $ | 101 | | | $ | — | | | $ | 384 | |
Return of long-term contract receivable | | | 598 | | | | — | | | | 585 | |
Capital expenditures | | | (2 | ) | | | — | | | | (59 | ) |
Net cash provided by investing activities | | $ | 697 | | | $ | — | | | $ | 910 | |
| | | | | | | | | | | | | |
Cash flows from financing activities | | | | | | | | | | | | |
Debt borrowings | | $ | 94,200 | | | $ | — | | | $ | 70,000 | |
Debt repayments | | | (89,696 | ) | | | (16,697 | ) | | | (141,731 | ) |
Distributions to common unitholders and the general partner | | | (40,900 | ) | | | (5,672 | ) | | | (9,571 | ) |
Distributions to preferred unitholders | | | (7,500 | ) | | | (7,500 | ) | | | (7,500 | ) |
Redemption of preferred units | | | (48,085 | ) | | | — | | | | — | |
Redemption of preferred units paid-in-kind | | | — | | | | (19,579 | ) | | | — | |
Other items, net | | | (3,052 | ) | | | (2,813 | ) | | | (2,842 | ) |
Net cash used in financing activities | | $ | (95,033 | ) | | $ | (52,261 | ) | | $ | (91,644 | ) |
| | | | | | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | $ | (21,436 | ) | | $ | 70 | | | $ | (21,846 | ) |
Cash and cash equivalents at beginning of period | | | 39,091 | | | | 135,520 | | | | 60,937 | |
Cash and cash equivalents at end of period | | $ | 17,655 | | | $ | 135,590 | | | $ | 39,091 | |
| | | | | | | | | | | | | |
Supplemental cash flow information: | | | | | | | | | | | | |
Cash paid for interest | | $ | 2,474 | | | $ | 1,644 | | | $ | 6,764 | |
Natural Resource Partners L.P.
Consolidated Balance Sheets |
| | | March 31, | | | December 31, | |
| | | 2023 | | | 2022 | |
(In thousands, except unit data) | | (Unaudited) | | | | |
ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 17,655 | | | $ | 39,091 | |
Accounts receivable, net | | | 36,513 | | | | 42,701 | |
Other current assets, net | | | 3,216 | | | | 1,822 | |
Total current assets | | $ | 57,384 | | | $ | 83,614 | |
Land | | | 24,008 | | | | 24,008 | |
Mineral rights, net | | | 408,371 | | | | 412,312 | |
Intangible assets, net | | | 14,613 | | | | 14,713 | |
Equity in unconsolidated investment | | | 295,361 | | | | 306,470 | |
Long-term contract receivable, net | | | 28,309 | | | | 28,946 | |
Other long-term assets, net | | | 7,622 | | | | 7,068 | |
Total assets | | $ | 835,668 | | | $ | 877,131 | |
LIABILITIES AND CAPITAL | | | | | | | | |
Current liabilities | | | | | | | | |
Accounts payable | | $ | 1,452 | | | $ | 1,992 | |
Accrued liabilities | | | 3,466 | | | | 11,916 | |
Accrued interest | | | 1,252 | | | | 989 | |
Current portion of deferred revenue | | | 7,450 | | | | 6,256 | |
Current portion of long-term debt, net | | | 39,055 | | | | 39,076 | |
Total current liabilities | | $ | 52,675 | | | $ | 60,229 | |
Deferred revenue | | | 38,833 | | | | 40,181 | |
Long-term debt, net | | | 133,821 | | | | 129,205 | |
Other non-current liabilities | | | 6,124 | | | | 5,472 | |
Total liabilities | | $ | 231,453 | | | $ | 235,087 | |
Commitments and contingencies | | | | | | | | |
Class A Convertible Preferred Units (202,501 and 250,000 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at March 31, 2023 and December 31, 2022) | | $ | 133,316 | | | $ | 164,587 | |
Partners’ capital | | | | | | | | |
Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively) | | $ | 417,401 | | | $ | 404,799 | |
General partner’s interest | | | 6,400 | | | | 5,977 | |
Warrant holders’ interest | | | 47,964 | | | | 47,964 | |
Accumulated other comprehensive income (loss) | | | (866 | ) | | | 18,717 | |
Total partners’ capital | | $ | 470,899 | | | $ | 477,457 | |
Total liabilities and partners' capital | | $ | 835,668 | | | $ | 877,131 | |
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 (Loss) | | | Capital | |
Balance at December 31, 2022 | | | 12,506 | | | $ | 404,799 | | | $ | 5,977 | | | $ | 47,964 | | | $ | 18,717 | | | $ | 477,457 | |
Net income (1) | | | — | | | | 77,690 | | | | 1,585 | | | | — | | | | — | | | | 79,275 | |
Redemption of preferred units | | | — | | | | (15,904 | ) | | | (324 | ) | | | — | | | | — | | | | (16,228 | ) |
Distributions to common unitholders and the general partner | | | — | | | | (40,082 | ) | | | (818 | ) | | | — | | | | — | | | | (40,900 | ) |
Distributions to preferred unitholders | | | — | | | | (7,924 | ) | | | (162 | ) | | | — | | | | — | | | | (8,086 | ) |
Issuance of unit-based awards | | | 129 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Unit-based awards amortization and vesting, net | | | — | | | | (1,178 | ) | | | — | | | | — | | | | — | | | | (1,178 | ) |
Capital contribution | | | — | | | | — | | | | 142 | | | | — | | | | — | | | | 142 | |
Comprehensive loss from unconsolidated investment and other | | | — | | | | — | | | | — | | | | — | | | | (19,583 | ) | | | (19,583 | ) |
Balance at March 31, 2023 | | | 12,635 | | | $ | 417,401 | | | $ | 6,400 | | | $ | 47,964 | | | $ | (866 | ) | | $ | 470,899 | |
(1) | Net income includes $6.7 million of income attributable to preferred unitholders that accumulated during the period, of which $6.5 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. |
| | | | | | | | | | | | | | | | | | | 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 | |
(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.
The following table presents NRP's unaudited business results by segment for the three months ended March 31, 2023 and 2022 and December 31, 2022:
| | | Operating Segments | | | | | | | | | |
| | | Mineral | | | | | | | Corporate and | | | | | |
(In thousands) | | Rights | | | Soda Ash | | | Financing | | | Total | |
For the Three Months Ended March 31, 2023 | | | | | | | | | | | | | | | | |
Revenues | | $ | 79,869 | | | $ | 19,254 | | | $ | — | | | $ | 99,123 | |
Gain on asset sales and disposals | | | 96 | | | | — | | | | — | | | | 96 | |
Total revenues and other income | | $ | 79,965 | | | $ | 19,254 | | | $ | — | | | $ | 99,219 | |
Asset impairments | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Net income (loss) | | $ | 68,881 | | | $ | 19,096 | | | $ | (8,702 | ) | | $ | 79,275 | |
Adjusted EBITDA (1) | | $ | 72,960 | | | $ | 10,622 | | | $ | (5,845 | ) | | $ | 77,737 | |
Cash flow provided by (used in) continuing operations: | | | | | | | | | | | | | | | | |
Operating activities | | $ | 73,858 | | | $ | 10,617 | | | $ | (11,575 | ) | | $ | 72,900 | |
Investing activities | | $ | 699 | | | $ | — | | | $ | (2 | ) | | $ | 697 | |
Financing activities | | $ | (583 | ) | | $ | — | | | $ | (94,450 | ) | | $ | (95,033 | ) |
Distributable cash flow (1) | | $ | 74,557 | | | $ | 10,617 | | | $ | (11,577 | ) | | $ | 73,597 | |
Free cash flow (1) | | $ | 74,456 | | | $ | 10,617 | | | $ | (11,577 | ) | | $ | 73,496 | |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended March 31, 2022 | | | | | | | | | | | | | | | | |
Revenues | | $ | 74,879 | | | $ | 14,837 | | | $ | — | | | $ | 89,716 | |
Gain on asset sales and disposals | | | — | | | | — | | | | — | | | | — | |
Total revenues and other income | | $ | 74,879 | | | $ | 14,837 | | | $ | — | | | $ | 89,716 | |
Asset impairments | | $ | 19 | | | $ | — | | | $ | — | | | $ | 19 | |
Net income (loss) | | $ | 62,967 | | | $ | 14,786 | | | $ | (13,854 | ) | | $ | 63,899 | |
Adjusted EBITDA (1) | | $ | 66,854 | | | $ | 13,179 | | | $ | (4,467 | ) | | $ | 75,566 | |
Cash flow provided by (used in) continuing operations: | | | | | | | | | | | | | | | | |
Operating activities | | $ | 48,176 | | | $ | 13,195 | | | $ | (9,040 | ) | | $ | 52,331 | |
Investing activities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Financing activities | | $ | (614 | ) | | $ | — | | | $ | (51,647 | ) | | $ | (52,261 | ) |
Distributable cash flow (1) | | $ | 48,176 | | | $ | 13,195 | | | $ | (9,040 | ) | | $ | 52,331 | |
Free cash flow (1) | | $ | 48,176 | | | $ | 13,195 | | | $ | (9,040 | ) | | $ | 52,331 | |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended December 31, 2022 | | | | | | | | | | | | | | | | |
Revenues | | $ | 80,913 | | | $ | 15,759 | | | $ | — | | | $ | 96,672 | |
Gain on asset sales and disposals | | | 383 | | | | — | | | | — | | | | 383 | |
Total revenues and other income | | $ | 81,296 | | | $ | 15,759 | | | $ | — | | | $ | 97,055 | |
Asset impairments | | $ | 3,583 | | | $ | — | | | $ | — | | | $ | 3,583 | |
Net income (loss) | | $ | 62,900 | | | $ | 15,704 | | | $ | (15,386 | ) | | $ | 63,218 | |
Adjusted EBITDA (1) | | $ | 72,437 | | | $ | 10,725 | | | $ | (7,815 | ) | | $ | 75,347 | |
Cash flow provided by (used in) continuing operations: | | | | | | | | | | | | | | | | |
Operating activities | | $ | 68,332 | | | $ | 10,738 | | | $ | (10,182 | ) | | $ | 68,888 | |
Investing activities | | $ | 969 | | | $ | — | | | $ | (59 | ) | | $ | 910 | |
Financing activities | | $ | — | | | $ | — | | | $ | (91,644 | ) | | $ | (91,644 | ) |
Distributable cash flow (1) | | $ | 69,301 | | | $ | 10,738 | | | $ | (10,241 | ) | | $ | 69,798 | |
Free cash flow (1) | | $ | 68,917 | | | $ | 10,738 | | | $ | (10,241 | ) | | $ | 69,414 | |
| | (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 | |
| | | March 31, | | | December 31, | |
(In thousands, except per ton data) | | 2023 | | | 2022 | | | 2022 | |
Coal sales volumes (tons) | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | |
Northern | | | 379 | | | | 428 | | | | 436 | |
Central | | | 3,609 | | | | 3,251 | | | | 3,408 | |
Southern | | | 582 | | | | 361 | | | | 613 | |
Total Appalachia | | | 4,570 | | | | 4,040 | | | | 4,457 | |
Illinois Basin | | | 1,310 | | | | 1,502 | | | | 2,740 | |
Northern Powder River Basin | | | 1,085 | | | | 1,238 | | | | 1,516 | |
Gulf Coast | | | 58 | | | | 69 | | | | 61 | |
Total coal sales volumes | | | 7,023 | | | | 6,849 | | | | 8,774 | |
| | | | | | | | | | | | | |
Coal royalty revenue per ton | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | |
Northern | | $ | 9.86 | | | $ | 10.14 | | | $ | 6.63 | |
Central | | | 9.92 | | | | 11.37 | | | | 9.33 | |
Southern | | | 14.94 | | | | 17.56 | | | | 11.99 | |
Illinois Basin | | | 3.57 | | | | 2.20 | | | | 3.11 | |
Northern Powder River Basin | | | 4.68 | | | | 3.74 | | | | 3.75 | |
Gulf Coast | | | 0.57 | | | | 0.55 | | | | 0.59 | |
Combined average coal royalty revenue per ton | | | 8.26 | | | | 8.12 | | | | 6.42 | |
| | | | | | | | | | | | | |
Coal royalty revenues | | | | | | | | | | | | |
Appalachia | | | | | | | | | | | | |
Northern | | $ | 3,737 | | | $ | 4,341 | | | $ | 2,890 | |
Central | | | 35,806 | | | | 36,980 | | | | 31,809 | |
Southern | | | 8,697 | | | | 6,340 | | | | 7,351 | |
Total Appalachia | | | 48,240 | | | | 47,661 | | | | 42,050 | |
Illinois Basin | | | 4,675 | | | | 3,303 | | | | 8,525 | |
Northern Powder River Basin | | | 5,075 | | | | 4,632 | | | | 5,686 | |
Gulf Coast | | | 33 | | | | 38 | | | | 36 | |
Unadjusted coal royalty revenues | | | 58,023 | | | | 55,634 | | | | 56,297 | |
Coal royalty adjustment for minimum leases | | | — | | | | (185 | ) | | | (116 | ) |
Total coal royalty revenues | | $ | 58,023 | | | $ | 55,449 | | | $ | 56,181 | |
| | | | | | | | | | | | | |
Other revenues | | | | | | | | | | | | |
Production lease minimum revenues | | $ | 613 | | | $ | 1,592 | | | $ | 2,312 | |
Minimum lease straight-line revenues | | | 4,503 | | | | 4,783 | | | | 4,557 | |
Carbon neutral initiative revenues | | | 2,118 | | | | — | | | | — | |
Wheelage revenues | | | 3,869 | | | | 3,717 | | | | 2,888 | |
Property tax revenues | | | 1,470 | | | | 1,472 | | | | 1,351 | |
Coal overriding royalty revenues | | | 188 | | | | 258 | | | | 1,127 | |
Lease amendment revenues | | | 851 | | | | 880 | | | | 751 | |
Aggregates royalty revenues | | | 753 | | | | 770 | | | | 608 | |
Oil and gas royalty revenues | | | 3,588 | | | | 1,814 | | | | 5,271 | |
Other revenues | | | 295 | | | | 348 | | | | 172 | |
Total other revenues | | $ | 18,248 | | | $ | 15,634 | | | $ | 19,037 | |
Royalty and other mineral rights | | $ | 76,271 | | | $ | 71,083 | | | $ | 75,218 | |
Transportation and processing services revenues | | | 3,598 | | | | 3,796 | | | | 5,695 | |
Gain on asset sales and disposals | | | 96 | | | | — | | | | 383 | |
Total Mineral Rights segment revenues and other income | | $ | 79,965 | | | $ | 74,879 | | | $ | 81,296 | |
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 March 31, 2023 | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 68,881 | | | $ | 19,096 | | | $ | (8,702 | ) | | $ | 79,275 | |
Less: equity earnings from unconsolidated investment | | | — | | | | (19,254 | ) | | | — | | | | (19,254 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | 10,780 | | | | — | | | | 10,780 | |
Add: interest expense, net | | | — | | | | — | | | | 2,853 | | | | 2,853 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | — | | | | — | |
Add: depreciation, depletion and amortization | | | 4,079 | | | | — | | | | 4 | | | | 4,083 | |
Add: asset impairments | | | — | | | | — | | | | — | | | | — | |
Adjusted EBITDA | | $ | 72,960 | | | $ | 10,622 | | | $ | (5,845 | ) | | $ | 77,737 | |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended March 31, 2022 | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 62,967 | | | $ | 14,786 | | | $ | (13,854 | ) | | $ | 63,899 | |
Less: equity earnings from unconsolidated investment | | | — | | | | (14,837 | ) | | | — | | | | (14,837 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | 13,230 | | | | — | | | | 13,230 | |
Add: interest expense, net | | | — | | | | — | | | | 9,387 | | | | 9,387 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | — | | | | — | |
Add: depreciation, depletion and amortization | | | 3,868 | | | | — | | | | — | | | | 3,868 | |
Add: asset impairments | | | 19 | | | | — | | | | — | | | | 19 | |
Adjusted EBITDA | | $ | 66,854 | | | $ | 13,179 | | | $ | (4,467 | ) | | $ | 75,566 | |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended December 31, 2022 | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 62,900 | | | $ | 15,704 | | | $ | (15,386 | ) | | $ | 63,218 | |
Less: equity earnings from unconsolidated investment | | | — | | | | (15,759 | ) | | | — | | | | (15,759 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | 10,780 | | | | — | | | | 10,780 | |
Add: interest expense, net | | | — | | | | — | | | | 3,638 | | | | 3,638 | |
Add: loss on extinguishment of debt | | | — | | | | — | | | | 3,933 | | | | 3,933 | |
Add: depreciation, depletion and amortization | | | 5,954 | | | | — | | | | — | | | | 5,954 | |
Add: asset impairments | | | 3,583 | | | | — | | | | — | | | | 3,583 | |
Adjusted EBITDA | | $ | 72,437 | | | $ | 10,725 | | | $ | (7,815 | ) | | $ | 75,347 | |
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 March 31, 2023 | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | | $ | 73,858 | | | $ | 10,617 | | | $ | (11,575 | ) | | $ | 72,900 | |
Add: proceeds from asset sales and disposals | | | 101 | | | | — | | | | — | | | | 101 | |
Add: return of long-term contract receivable | | | 598 | | | | — | | | | — | | | | 598 | |
Less: maintenance capital expenditures | | | — | | | | — | | | | (2 | ) | | | (2 | ) |
Distributable cash flow | | $ | 74,557 | | | $ | 10,617 | | | $ | (11,577 | ) | | $ | 73,597 | |
Less: proceeds from asset sales and disposals | | | (101 | ) | | | — | | | | — | | | | (101 | ) |
Free cash flow | | $ | 74,456 | | | $ | 10,617 | | | $ | (11,577 | ) | | $ | 73,496 | |
| | | | | | | | | | | | | | | | | |
Net cash provided by (used in) investing activities | | $ | 699 | | | $ | — | | | $ | (2 | ) | | $ | 697 | |
Net cash used in financing activities | | | (583 | ) | | | — | | | | (94,450 | ) | | | (95,033 | ) |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended March 31, 2022 | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | | $ | 48,176 | | | $ | 13,195 | | | $ | (9,040 | ) | | $ | 52,331 | |
Add: proceeds from asset sales and disposals | | | — | | | | — | | | | — | | | | — | |
Add: return of long-term contract receivable | | | — | | | | — | | | | — | | | | — | |
Less: maintenance capital expenditures | | | — | | | | — | | | | — | | | | — | |
Distributable cash flow | | $ | 48,176 | | | $ | 13,195 | | | $ | (9,040 | ) | | $ | 52,331 | |
Less: proceeds from asset sales and disposals | | | — | | | | — | | | | — | | | | — | |
Free cash flow | | $ | 48,176 | | | $ | 13,195 | | | $ | (9,040 | ) | | $ | 52,331 | |
| | | | | | | | | | | | | | | | | |
Net cash provided by investing activities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Net cash used in financing activities | | | (614 | ) | | | — | | | | (51,647 | ) | | | (52,261 | ) |
| | | | | | | | | | | | | | | | | |
For the Three Months Ended December 31, 2022 | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | | $ | 68,332 | | | $ | 10,738 | | | $ | (10,182 | ) | | $ | 68,888 | |
Add: proceeds from asset sales and disposals | | | 384 | | | | — | | | | — | | | | 384 | |
Add: return of long-term contract receivable | | | 585 | | | | — | | | | — | | | | 585 | |
Less: maintenance capital expenditures | | | — | | | | — | | | | (59 | ) | | | (59 | ) |
Distributable cash flow | | $ | 69,301 | | | $ | 10,738 | | | $ | (10,241 | ) | | $ | 69,798 | |
Less: proceeds from asset sales and disposals | | | (384 | ) | | | — | | | | — | | | | (384 | ) |
Free cash flow | | $ | 68,917 | | | $ | 10,738 | | | $ | (10,241 | ) | | $ | 69,414 | |
| | | | | | | | | | | | | | | | | |
Net cash provided by (used in) investing activities | | $ | 969 | | | $ | — | | | $ | (59 | ) | | $ | 910 | |
Net cash used in financing activities | | | — | | | | — | | | | (91,644 | ) | | | (91,644 | ) |
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
| | | For the Three Months Ended | | | | | |
(In thousands) | | June 30, 2022 | | | September 30, 2022 | | | December 31, 2022 | | | March 31, 2023 | | | Last 12 Months | |
Net cash provided by operating activities | | $ | 63,123 | | | $ | 82,496 | | | $ | 68,888 | | | $ | 72,900 | | | $ | 287,407 | |
Add: proceeds from asset sales and disposals | | | 346 | | | | 353 | | | | 384 | | | | 101 | | | | 1,184 | |
Add: return of long-term contract receivable | | | 563 | | | | 575 | | | | 585 | | | | 598 | | | | 2,321 | |
Less: maintenance capital expenditures | | | — | | | | (59 | ) | | | (59 | ) | | | (2 | ) | | | (120 | ) |
Distributable cash flow | | $ | 64,032 | | | $ | 83,365 | | | $ | 69,798 | | | $ | 73,597 | | | $ | 290,792 | |
Less: proceeds from asset sales and disposals | | | (346 | ) | | | (353 | ) | | | (384 | ) | | | (101 | ) | | | (1,184 | ) |
Free cash flow | | $ | 63,686 | | | $ | 83,012 | | | $ | 69,414 | | | $ | 73,496 | | | $ | 289,608 | |
Less: mandatory Opco debt repayments | | | (2,365 | ) | | | — | | | | (20,334 | ) | | | (16,696 | ) | | | (39,395 | ) |
Less: preferred unit distributions | | | (7,500 | ) | | | (7,500 | ) | | | (7,500 | ) | | | (7,500 | ) | | | (30,000 | ) |
Less: redemption of preferred units | | | — | | | | — | | | | — | | | | (48,085 | ) | | | (48,085 | ) |
Less: common unit distributions | | | (9,570 | ) | | | (9,571 | ) | | | (9,571 | ) | | | (40,900 | ) | | | (69,612 | ) |
Cash flow cushion | | $ | 44,251 | | | $ | 65,941 | | | $ | 32,009 | | | $ | (39,685 | ) | | $ | 102,516 | |
| | | For the Three Months Ended | | | | | |
(In thousands) | | June 30, 2022 | | | September 30, 2022 | | | December 31, 2022 | | | March 31, 2023 | | | Last 12 Months | |
Net income | | $ | 66,820 | | | $ | 74,555 | | | $ | 63,218 | | | $ | 79,275 | | | $ | 283,868 | |
Less: equity earnings from unconsolidated investment | | | (14,643 | ) | | | (14,556 | ) | | | (15,759 | ) | | | (19,254 | ) | | | (64,212 | ) |
Add: total distributions from unconsolidated investment | | | 10,486 | | | | 10,339 | | | | 10,780 | | | | 10,780 | | | | 42,385 | |
Add: interest expense, net | | | 8,108 | | | | 5,141 | | | | 3,638 | | | | 2,853 | | | | 19,740 | |
Add: loss on extinguishment of debt | | | 4,048 | | | | 2,484 | | | | 3,933 | | | | — | | | | 10,465 | |
Add: depreciation, depletion and amortization | | | 5,847 | | | | 6,850 | | | | 5,954 | | | | 4,083 | | | | 22,734 | |
Add: asset impairments | | | 43 | | | | 812 | | | | 3,583 | | | | — | | | | 4,438 | |
Adjusted EBITDA | | $ | 80,709 | | | $ | 85,625 | | | $ | 75,347 | | | $ | 77,737 | | | $ | 319,418 | |
| | | | | | | | | | | | | | | | | | | | | |
Debt—at March 31, 2023 | | | | | | | | | | | | | | | | | | $ | 173,591 | |
| | | | | | | | | | | | | | | | | | | | | |
Leverage Ratio | | | | | | | | | | | | | | | | | | 0.5 x | |
| | | For the Three Months Ended | | | | | |
(In thousands) | | June 30, 2021 | | | September 30, 2021 | | | December 31, 2021 | | | March 31, 2022 | | | Last 12 Months | |
Net income | | $ | 15,382 | | | $ | 29,498 | | | $ | 55,641 | | | $ | 63,899 | | | $ | 164,420 | |
Less: equity earnings from unconsolidated investment | | | (2,601 | ) | | | (6,672 | ) | | | (10,625 | ) | | | (14,837 | ) | | | (34,735 | ) |
Add: total distributions from unconsolidated investment | | | — | | | | — | | | | 7,350 | | | | 13,230 | | | | 20,580 | |
Add: interest expense, net | | | 9,683 | | | | 9,652 | | | | 9,568 | | | | 9,387 | | | | 38,290 | |
Add: depreciation, depletion and amortization | | | 4,871 | | | | 5,182 | | | | 3,930 | | | | 3,868 | | | | 17,851 | |
Add: asset impairments | | | 16 | | | | 57 | | | | 986 | | | | 19 | | | | 1,078 | |
Adjusted EBITDA | | $ | 27,351 | | | $ | 37,717 | | | $ | 66,850 | | | $ | 75,566 | | | $ | 207,484 | |
| | | | | | | | | | | | | | | | | | | | | |
Debt—at March 31, 2022 | | | | | | | | | | | | | | | | | | $ | 421,787 | |
| | | | | | | | | | | | | | | | | | | | | |
Leverage Ratio | | | | | | | | | | | | | | | | | | 2.0 x | |
-end-
