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Natural Resource Partners L.P. Announces 2016 Fourth Quarter and Full Year Results and Completion of Recapitalization Transactions

HOUSTON, March 6, 2017 /PRNewswire/ --

2016 Highlights

  • Net income from continuing operations attributable to the limited partners of $93.6 million, or $7.65 per unit
  • Net cash provided by operating activities of continuing operations of $100.6 million
  • Adjusted EBITDA of $255.5 million

Fourth Quarter 2016 Highlights

  • Net income from continuing operations attributable to the limited partners of $3.8 million, or $0.31 per unit
  • Net cash provided by operating activities of continuing operations of $26.1 million
  • Adjusted EBITDA of $51.1 million

Closing of Recapitalization Transactions on March 2, 2017

  • $250 million preferred unit investment
  • Extended 2018 debt maturities
  • Substantial near-term debt reduction

 

Natural Resource Partners L.P. (NYSE:NRP) today reported net income from continuing operations attributable to the limited partners for the year ended December 31, 2016 of $93.6 million, or $7.65 per unit, an increase of $347.8 million from a loss of $254.2 million, or $(20.78) per unit, a year earlier.  Net cash provided by operating activities from continuing operations was $100.6 million for the year ended December 31, 2016, a decrease of $67.9 million compared to the prior year.  Adjusted EBITDA, a non-GAAP measure, was $255.5 million for the year ended December 31, 2016, a decrease of $7.1 million compared to the same period in 2015.  Excluding impairments and gains on sales of assets in both years, net income from continuing operations attributable to the limited partners was $81.7 million for the year ended December 31, 2016 compared to $115.9 million for the year ended December 31, 2015.  Reconciliations for all non-GAAP items are shown in tables at the end of the release.

NRP reported net income from continuing operations attributable to the limited partners for the quarter ended December 31, 2016 of $3.8 million, or $0.31 per unit, a $5.8 million decrease from the $9.6 million, or $0.79 per unit reported for the fourth quarter 2015.  This decline is primarily attributed to coal lease assignment fees of $15 million that were reported in the fourth quarter of 2015. Net cash provided by operating activities from continuing operations was $26.1 million in the fourth quarter of 2016 compared to $36.3 million for the fourth quarter of 2015.  Adjusted EBITDA for the fourth quarter of 2016 was $51.1 million compared to $64.6 million in the same quarter 2015. Excluding impairments and gains on sale of assets in both fourth quarters, net income from continuing operations attributable to the limited partners was $11.1 million for the quarter ended December 31, 2016 compared to $28.3 million for the quarter ended December 31, 2015.

"Although 2016 was a challenging year for the coal industry, NRP enters 2017 as a much stronger company," said Wyatt Hogan, President and Chief Operating Officer.  "The recent improvements in the markets for both metallurgical and thermal coal, combined with the continued balance and diversification of our soda ash and aggregates businesses, position NRP well for the new year."

"Our successful deleveraging efforts throughout the course of 2016 culminated in the recently announced investments in NRP by Blackstone and GoldenTree, as well as the extensions of our 2018 debt maturities," said Craig Nunez, Chief Financial Officer.  "We look forward to working with our new partners to continue to improve our balance sheet and explore new opportunities to grow and diversify the partnership."

Business Results and Outlook

The table below presents NRP's business results by segment for the year ended December 31, 2016 and 2015:



Operating Business Segments






Coal
Royalty 
and Other






Corporate
and
Financing






Soda Ash


VantaCore



Total



(In thousands)

Year Ended December 31, 2016











Total revenues and other income


$

239,183



$

40,061



$

120,815



$



$

400,059


Total operating expenses excluding impairments (1)


$

61,656



$



$

115,162



$

20,570



$

197,388


Asset impairments


$

15,861



$



$

1,065



$



$

16,926


Net income (loss) from continuing operations


$

161,816



$

40,061



$

4,438



$

(111,101)



$

95,214


Adjusted EBITDA (1)


$

209,443



$

46,550



$

20,009



$

(20,531)



$

255,471


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


$

134,490



$

46,550



$

20,400



$

(100,797)



$

100,643


Net cash provided by (used in) investing activities of continuing operations


$

65,057



$



$

(5,114)



$



$

59,943


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


$

16



$

(7,229)



$

(1,825)



$

(152,381)



$

(161,419)


Distributable Cash Flow (1)


$

199,547



$

46,550



$

16,243



$

(100,797)



$

271,415













Year Ended December 31, 2015











Total revenues and other income


$

250,717



$

49,918



$

139,013



$



$

439,648


Total operating expenses excluding impairments (1)


$

80,659



$



$

132,523



$

12,348



$

225,530


Asset impairments


$

378,327



$



$

6,218



$



$

384,545


Net income (loss) from continuing operations


$

(208,248)



$

49,918



$

251



$

(102,092)



$

(260,171)


Adjusted EBITDA (1)


$

206,127



$

46,795



$

22,047



$

(12,330)



$

262,639


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


$

204,934



$

43,029



$

23,605



$

(103,056)



$

168,512


Net cash provided by (used in) investing activities of continuing operations


$

15,805



$



$

(8,820)



$



$

6,985


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


$

(2,744)



$



$



$

(180,520)



$

(183,264)


Distributable Cash Flow (1)


$

217,842



$

43,029



$

18,802



$

(103,056)



$

176,617







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

 

The table below presents NRP's business results by segment for the three months ended December 31, 2016 and 2015:



Operating Business Segments






Coal
Royalty 
and Other






Corporate
and
Financing






Soda Ash


VantaCore



Total



(In thousands)

Three Months Ended December 31, 2016











Total revenues and other income


$

46,069



$

9,319



$

32,724



$



$

88,112


Total operating expenses excluding impairments (1)


$

13,928



$



$

30,609



$

7,224



$

51,761


Asset impairments


$

8,180



$



$

1,065



$



$

9,245


Net income (loss) from continuing operations


$

24,014



$

9,319



$

997



$

(30,519)



$

3,811


Adjusted EBITDA (1)


$

40,464



$

12,250



$

5,555



$

(7,214)



$

51,055


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


$

43,118



$

12,250



$

3,720



$

(32,992)



$

26,096


Net cash provided by (used in) investing activities of continuing operations


$

7,223



$



$

(790)



$



$

6,433


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


$

16



$



$

(232)



$

(84,334)



$

(84,550)


Distributable Cash Flow (1)


$

50,341



$

12,250



$

3,132



$

(32,992)



$

32,714













Three Months Ended December 31, 2015











Total revenues and other income


$

60,713



$

13,179



$

31,979



$



$

105,871


Total operating expenses excluding impairments (1)


$

22,358



$



$

29,368



$

2,525



$

54,251


Asset impairments


$

12,821



$



$

6,218



$



$

19,039


Net income (loss) from continuing operations


$

25,555



$

13,179



$

(3,628)



$

(25,309)



$

9,797


Adjusted EBITDA (1)


$

49,185



$

12,250



$

5,669



$

(2,523)



$

64,581


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


$

55,093



$

12,251



$

3,822



$

(34,845)



$

36,321


Net cash provided by (used in) investing activities of continuing operations


$

259



$



$

(1,403)



$



$

(1,144)


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


$



$



$



$

(43,638)



$

(43,638)


Distributable Cash Flow (1)


$

54,870



$

12,251



$

1,862



$

(34,845)



$

34,138







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

 

Coal Royalty and Other

In the fourth quarter, NRP began to realize the benefits of the significant increases in metallurgical coal prices during 2016.  A number of NRP's lessees were able to take advantage of the improved markets and lock in tonnage commitments for 2017 at substantially higher prices than they realized in 2016.  While spot metallurgical prices have recently retreated from the highs reached in the fourth quarter, NRP believes that the global supply/demand dynamic will support long-term metallurgical coal prices well above the lows hit in the first half of 2016.  NRP derived approximately 37% of its coal royalty revenues and approximately 35% of the related production from metallurgical coal during the year ended December 31, 2016.  The domestic thermal coal markets have also shown modest improvements, as production cuts over the last two years have rationalized coal stockpiles.  Although a mild winter has tempered demand for thermal coal, natural gas prices remain higher than 2016, causing thermal coal to be more competitive for electricity generation as compared to recent years.

Revenues and other income decreased $11.5 million, or 5%, from $250.7 million in the year ended December 31, 2015 to $239.2 million in the year ended December 31, 2016.  A $42.3 million reduction in total coal royalty revenues was caused by a 16.8 million ton reduction in sales.  While all regions experienced reduced revenue, the largest decrease occurred in Central Appalachia, which continues to face challenges with respect to thermal coal production.  Included in the 2016 total coal royalty and other segment revenues and other income was recognition of $40.5 million of deferred revenue associated with lease modifications and terminations and $29.1 million in gains on asset sales primarily from the sale of certain oil and gas and aggregates royalty properties. Included in the 2015 total coal royalty and other segment revenues and other income was $21.0 million in lease assignment fees and a $9.3 million gain on reserve swap. Revenues and other income for the fourth quarter of 2016 decreased $14.6 million to $46.1 million from the $60.7 million reported for the fourth quarter of 2015.  The decrease was primarily due to $15.0 million in lease assignment fees received in the fourth quarter of 2015.

Net income from continuing operations increased $370.0 million, from a loss of $208.2 million in the year ended December 31, 2015 to income of $161.8 million in the year ended December 31, 2016.  This increase is primarily related to $378.3 million of impairments taken in the year ended December 31, 2015.  Net income from continuing operations decreased $1.5 million to $24.0 million in the fourth quarter of 2016 from the same quarter in 2015.

Adjusted EBITDA increased $3.3 million, or 2%, from $206.1 million in the year ended December 31, 2015 to $209.4 million in the year ended December 31, 2016.  This increase was primarily the result of lower operating and maintenance expenses year-over-year, partially offset by lower revenues as discussed. Adjusted EBITDA of $40.5 million reported in the fourth quarter of 2016 decreased $8.7 million from 2015.

Net cash provided by operating activities of continuing operations decreased $70.4 million or 34% from $204.9 million in the year ended December 31, 2015 to $134.5 million in the year ended December 31, 2016. This decrease is primarily related to lower coal royalty production and less minimum payments received from our coal leases.  Net cash provided by operating activities of continuing operations decreased $12.0 million to $43.1 million in the fourth quarter of 2016 from 2015.  This decline was primarily associated with the $15.0 million of lease assignment fees received in the fourth quarter of 2015.

Net cash provided by investing activities increased $49.3 million to $65.1 million in the year ending December 31, 2016,  mainly due to the sale of certain oil and gas and aggregates royalty properties in 2016.  Net cash provided by financing activities increased $2.8 million from 2015 due to distributions to non-controlling interests in 2015.  For the quarter ending December 31, 2016, net cash provided by investing activities rose $7.0 million to $7.2 million mainly due to the proceeds from the sale of oil and gas royalty properties in the fourth quarter of 2016, while net cash provided by financing activities for the fourth quarter were virtually flat.

Distributable cash flow of $199.5 million for the calendar year 2016 declined $18.3 million from 2015 mainly due to the change in net cash provided by operating activities of continuing operations described above less the $48.5 million of increased proceeds from the sale of mineral rights and property plant and equipment in 2016 over that of 2015.  Distributable cash flow of $50.3 million in the fourth quarter of 2016 declined $4.5 million from the fourth quarter of 2015.  The $15.0 million of lease assignment fees reported in the fourth quarter of 2015 were partially offset by the $6.9 million of proceeds from the sale of mineral rights received in the fourth quarter of 2016.

Soda Ash

Revenues and other income related to our equity investment in Ciner Wyoming decreased $9.8 million, or 20%, from $49.9 million in the year ended December 31, 2015 to $40.1 million in the year ended December 31, 2016. This decrease is primarily related to lower international prices compared to the prior year, in addition to higher royalty and G&A costs. These decreases were partially offset by an increase in soda ash volumes sold compared to the prior year. For the year ended December 31, 2016, NRP received $46.6 million in cash distributions from Ciner Wyoming and for the year ended December 31, 2015, NRP received $46.8 million in cash distributions. For the fourth quarter of 2016 distributions of $12.3 million were flat with the fourth quarter of 2015.

VantaCore

VantaCore's construction aggregates mining business is largely dependent on the strength of the local markets that it serves and is seasonal.  The largest component of the VantaCore segment is the Laurel operation in southwestern Pennsylvania, which primarily serves producers and service companies operating in the Marcellus and Utica Shales.  Low natural gas prices led to a lower pace of exploration and development in those areas and had a material negative impact on Laurel's revenues as compared to 2015.  VantaCore's Winn operation experienced a modest decline in revenues relative to 2015, while the McIntosh Construction and Southern operations enjoyed improvements in revenues compared to the prior year and the new Grand Rivers operation continued to grow its sales over the course of 2016.

Revenues and other income related to our VantaCore segment decreased $18.2 million, or 13%, from $139.0 million in the year ended December 31, 2015 to $120.8 million in the year ended December 31, 2016. While VantaCore's production and revenues declined in 2016 compared to 2015, its cost management efforts have enabled the business to maintain its profitability. Tonnage sold declined 5% or 0.4 million tons year-over-year to 7.0 million tons.  Most metrics for the fourth quarter of 2016 were virtually flat with the fourth quarter of 2015 except for net income from continuing operations which improved $4.6 million mainly due to lower non-cash impairments booked in 2016 than in the fourth quarter of 2015.

Discontinued Operations

In July 2016, NRP Oil and Gas sold its non-operated oil and gas working interest assets in the Williston Basin and repaid the reserve-based revolving credit facility in full. The net proceeds of $109.9 million from the sale is included in the calculation of distributable cash flow and included in net cash provided by investing activities of discontinued operations on the Consolidated Statement of Cash Flows.

Corporate and Financing

Corporate and financing general and administrative expense (including affiliates) includes corporate headquarters, financing, legal and centralized treasury and accounting.  These costs increased $8.3 million, or 67%, from $12.3 million in the year ended December 31, 2015 to $20.6 million in the year ended December 31, 2016 primarily due to increased legal and consulting fees associated with the implementation of our long-term plan to strengthen our balance sheet, reduce debt and enhance our liquidity and increased LTIP expense as a result of our unit price increasing in 2016 compared to decreasing in 2015 and the accelerated recognition of our LTIP awards granted in 2016.  Interest expense, net was essentially flat from $89.7 million in the year ended December 31, 2015 to $90.5 million in the year ended December 31, 2016.

In 2016 NRP repaid $248.1 million of debt, including $85.0 million to repay the NRP Oil and Gas revolving credit facility in full, $82.9 million on the NRP Operating senior notes, and $80.0 million under the Opco Credit Facility.

Subsequent Events

On February 14, 2017, the Partnership paid a distribution of $0.45 per unit to unitholders of record on February 7, 2017.

On March 2, 2017, NRP completed its previously announced recapitalization transactions.

Company Profile

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns interests in coal, aggregates and industrial minerals across the United States.  A large percentage of NRP's revenues are generated from royalties and other passive income.  In addition, NRP owns an equity investment in Ciner Wyoming, a trona/soda ash operation, and owns VantaCore, making NRP one of the top 25 aggregates producers in the United States.

For additional information, please contact Kathy H. Roberts at 713-751-7555 or kroberts@nrplp.com.  Further information about NRP is available on the partnership's website at http://www.nrplp.com.

Non-GAAP Financial Measures

"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) from continuing operations less equity earnings from unconsolidated investment, gain on reserve swaps and income to non-controlling interest; plus distributions from equity earnings in unconsolidated investment, interest expense, 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, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income (loss), the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. 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" is a non-GAAP financial measure that we define as net cash provided by operating activities of continuing operations, plus returns of unconsolidated equity investments, proceeds from sales of assets including those included in discontinued operations, and returns of long-term contract receivables—affiliate, less maintenance capital expenditures and distributions to non-controlling interest. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. DCF 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 the Partnership's ability to make cash distributions to our unitholders and our general partner and repay debt.

"Operating expenses excluding impairments" is a non-GAAP financial measure that we define as total operating expenses less asset impairments. "Operating expenses excluding impairments," as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. Operating expenses excluding impairments should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Operating expenses excluding impairments provides no information regarding a company's capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax positions. Operating expenses excluding impairments does not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital and other commitments and obligations. Our management team believes Operating expenses excluding impairments is useful in evaluating our financial performance because asset impairments are one-time non-cash charges and excluding these from total operating expenses allows us to better compare results period-over-period. A reconciliation of Operating expenses excluding impairments to total operating expenses is included in the tables attached to this release.

"Net income excluding impairments" is a non-GAAP financial measure that we define as net income (loss) plus asset impairments. Net income excluding impairments, as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. Net income excluding impairments should not be considered in isolation or as a substitute for operating income (loss), net income (loss), cash flows provided by operating, investing and financial activities, or other income or cash flow statement data prepared in accordance with GAAP. Our management team believes net income excluding impairments is useful in evaluating our financial performance because asset impairments are irregular non-cash charges and excluding these from net income allows us to better compare results period-over-period. A reconciliation of Net income excluding impairments to net income is included in the tables attached to this release.

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, but are not limited to, commodity prices; decreases in demand for coal, aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; unanticipated geologic problems; our liquidity, leverage and access to capital and financing sources; changes in the legislative or regulatory environment, 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.

-Financial Tables Follow-

 

Natural Resource Partners L.P.
Financial Tables


Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except per unit data)






Three Months Ended


Year Ended


December 31,


December 31,


2016


2015


2016


2015

Revenues and other income:








Coal royalty and other

$

28,184



$

41,927



$

144,520



$

154,066


Coal royalty and other—affiliates

16,087



18,777



65,595



89,715


VantaCore

32,721



31,991



120,802



139,049


Equity in earnings of Ciner Wyoming

9,319



13,179



40,061



49,918


Gain (loss) on asset sales

1,801



(3)



29,081



6,900


Total revenues and other income

88,112



105,871



400,059



439,648










Operating expenses:








Operating and maintenance expenses

31,797



30,605



119,621



136,943


Operating and maintenance expenses—affiliates, net

977



7,233



10,925



15,323


Depreciation, depletion and amortization

10,906



12,783



43,087



57,295


Amortization expense—affiliate

857



1,105



3,185



3,621


General and administrative

6,303



1,022



16,979



7,036


General and administrative—affiliates

921



1,503



3,591



5,312


Asset impairments

9,245



19,039



16,926



384,545


Total operating expenses

61,006



73,290



214,314



610,075










Income (loss) from operations

27,106



32,581



185,745



(170,427)










Other income (expense)








Interest expense

(23,305)



(22,323)



(90,047)



(87,911)


Interest expense—affiliate



(463)



(523)



(1,851)


Interest income

10



2



39



18


Other expense, net

(23,295)



(22,784)



(90,531)



(89,744)










Net income (loss) from continuing operations

3,811



9,797



95,214



(260,171)


Income (loss) from discontinued operations

(323)



(31,583)



1,678



(311,549)


Net income (loss)

3,488



(21,786)



96,892



(571,720)










Net income (loss) attributable to limited partners:








Continuing operations

$

3,814



$

9,626



$

93,585



$

(254,173)


Discontinued operations

(317)



(30,952)



1,644



(305,319)


Total

3,497



(21,326)



95,229



(559,492)










Net income (loss) attributable to the general partner:








Continuing operations

$

(3)



$

171



$

1,629



$

(5,998)


Discontinued operations

(6)



(631)



34



(6,230)


Total

$

(9)



$

(460)



$

1,663



$

(12,228)










Basic and diluted net income (loss) per common unit:








Continuing operations

$

0.31



$

0.79



$

7.65



$

(20.78)


Discontinued operations

(0.03)



(2.53)



0.13



(24.97)


Total

$

0.28



$

(1.75)



$

7.78



$

(45.75)










Average number of common units outstanding

12,232



12,232



12,232



12,232










Net income (loss)

$

3,488



$

(21,786)



$

96,892



$

(571,720)


Add: comprehensive income (loss) from unconsolidated investment and other

1,178



198



486



(1,693)


Comprehensive income (loss)

$

4,666



$

(21,588)



$

97,378



$

(573,413)


 

 

Natural Resource Partners L.P.
Financial Tables


Consolidated Statements of Cash Flows

(in thousands)










Three Months Ended


Year Ended


December 31,


December 31,


2016


2015


2016


2015

Cash flows from operating activities:








Net income (loss)

$

3,488



$

(21,786)



$

96,892



$

(571,720)


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








Depreciation, depletion and amortization

10,906



12,783



43,087



57,295


Amortization expense—affiliates

857



1,105



3,185



3,621


Distributions from equity earnings from unconsolidated investment

12,250



12,250



46,550



46,795


Equity earnings from unconsolidated investment

(9,319)



(13,179)



(40,061)



(49,918)


(Gain) loss on asset sales

(1,801)



3



(29,081)



(6,900)


(Income) loss from discontinued operations

323



31,583



(1,678)



311,549


Asset impairments

9,245



19,039



16,926



384,545


Gain on reserve swap







(9,290)


Other, net

1,590



665



8,284



(7,109)


Other, net—affiliates

145



1,227



993



(912)


Change in operating assets and liabilities:








Accounts receivable

772



4,202



431



7,705


Accounts receivable—affiliates

399



1,105



(313)



3,149


Accounts payable

72



(1,462)



707



(3,625)


Accounts payable—affiliates

110



(1,595)



139



(32)


Accrued liabilities

(2,669)



(7,065)



4,618



1,420


Accrued liabilities—affiliates



(457)



(456)




Deferred revenue

4,881



1,570



(35,881)



7,605


Deferred revenue—affiliates

(3,032)



(801)



(11,222)



(4,200)


Other items, net

(2,121)



(2,866)



(2,477)



(1,466)


Other items, net—affiliates








Net cash provided by operating activities of continuing operations

26,096



36,321



100,643



168,512


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

(855)



5,753



7,318



34,912


Net cash provided by operating activities

25,241



42,074



107,961



203,424


Cash flows from investing activities:








Proceeds from sale of oil and gas royalty properties

6,880





42,844




Proceeds from sale of coal and aggregate royalty properties

(25)





18,189



3,505


Return of long-term contract receivables—affiliate

391



342



2,968



2,463


Proceeds from sale of plant and equipment and other

164



(460)



1,350



11,024


Acquisition of plant and equipment and other

(977)



(1,026)



(5,408)



(9,607)


Acquisition of mineral rights







(400)


Net cash provided by (used in) investing activities of continuing operations

6,433



(1,144)



59,943



6,985


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

51



(4,675)



106,872



(37,256)


Net cash provided by (used in) investing activities

6,484



(5,819)



166,815



(30,271)


Cash flows from financing activities:








Proceeds from loans





20,000



100,000


Repayments of loans

(76,967)



(24,808)



(183,141)



(165,983)


Distributions to unitholders

(5,616)



(5,616)



(22,465)



(71,758)


Distributions to non-controlling interest







(2,744)


Contributions from (to) discontinued operations

(805)



(13,000)



39,421



(36,725)


Debt issue costs and other

(1,162)



(214)



(15,234)



(6,054)


Net cash used in financing activities of continuing operations

(84,550)



(43,638)



(161,419)



(183,264)


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

805



(2,000)



(124,759)



11,808


Net cash used in financing activities

(83,745)



(45,638)



(286,178)



(171,456)










Net increase (decrease) in cash and cash equivalents

(52,020)



(9,383)



(11,402)



1,697










Cash and cash equivalents of continuing operations at beginning of period

92,391



49,665



41,204



48,971


Cash and cash equivalents of discontinued operations at beginning of period



11,491



10,569



1,105


Cash and cash equivalents at beginning of period

92,391



61,156



51,773



50,076










Cash and cash equivalents at end of period

40,371



51,773



40,371



51,773


Less: cash and cash equivalents of discontinued operations at end of period



10,569





10,569


Cash and cash equivalents of continuing operations at end of period

$

40,371



$

41,204



$

40,371



$

41,204










Supplemental cash flow information:








Cash paid during the period for interest

$

29,631



$

29,977



$

84,380



$

85,738


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



(161)





4,304


 

 

Natural Resource Partners L.P.
Financial Tables


Consolidated Balance Sheets

(in thousands, except unit data)


December 31,


2016


2015

ASSETS




Current assets:




Cash and cash equivalents

$

40,371



$

41,204


Accounts receivable, net

43,202



43,633


Accounts receivable—affiliates, net

6,658



6,345


Inventory

6,893



7,835


Prepaid expenses and other

6,137



4,268


Current assets of discontinued operations

991



17,844


Total current assets

104,252



121,129


Land

25,252



25,022


Plant and equipment, net

49,443



60,675


Mineral rights, net

908,192



984,522


Intangible assets, net

3,236



3,930


Intangible assets, net—affiliate

49,811



52,997


Equity in unconsolidated investment

255,901



261,942


Long-term contracts receivable—affiliate

43,785



47,359


Other assets

3,791



1,173


Other assets—affiliate

1,018



1,124


Non-current assets of discontinued operations



110,162


Total assets

$

1,444,681



$

1,670,035


LIABILITIES AND CAPITAL




Current liabilities:




Accounts payable

$

6,234



$

5,022


Accounts payable—affiliates

940



801


Accrued liabilities

41,587



44,997


Accrued liabilities—affiliates



456


Current portion of long-term debt, net

138,903



80,745


Current liabilities of discontinued operations

353



4,388


Total current liabilities

188,017



136,409


Deferred revenue

44,931



80,812


Deferred revenueaffiliates

71,632



82,853


Long-term debt, net

987,400



1,186,681


Long-term debt, netaffiliate



19,930


Other non-current liabilities

4,565



5,171


Non-current liabilities of discontinued operations



85,237


Commitments and contingencies




Partners' capital:




Common unitholders' interest (12,232,006 units outstanding)

152,309



79,094


General partner's interest

887



(606)


Accumulated other comprehensive loss

(1,666)



(2,152)


Total partners' capital

151,530



76,336


Non-controlling interest

(3,394)



(3,394)


Total capital

148,136



72,942


Total liabilities and capital

$

1,444,681



$

1,670,035


 

 

Natural Resource Partners L.P.
Financial Tables


Operating Statistics - Coal Royalty and Other

(in thousands except per ton data)






For the Three Months Ended

December 31,


For the Year Ended

December 31,


2016


2015


2016


2015


(Unaudited)

Coal production (tons)








Appalachia








Northern

1,833



1,981



2,312



9,562


Central

3,176



3,460



13,222



16,862


Southern

575



803



2,776



3,803


Total Appalachia

5,584



6,244



18,310



30,227


Illinois Basin

2,060



2,908



8,116



11,173


Northern Powder River Basin

1,047



1,408



3,781



4,905


Gulf Coast



(38)



0.4



740


Total coal production

8,691



10,522



30,207



47,045










Coal royalty revenue per ton








Appalachia








Northern

$

0.36



$

0.29



$

1.15



$

0.28


Central

4.97



3.54



3.64



3.85


Southern

5.64



4.66



3.84



4.57


Illinois Basin

3.92



3.80



3.66



3.94


Northern Powder River Basin

2.22



2.29



2.81



2.54


Gulf Coast



11.21



3.28



3.47










Coal royalty revenues








Appalachia








Northern

$

662



$

567



$

2,667



$

2,672


Central

15,788



12,261



48,119



64,877


Southern

3,241



3,744



10,660



17,390


Total Appalachia

19,691



16,572



61,446



84,939


Illinois Basin

8,069



11,043



29,680



44,063


Northern Powder River Basin

2,323



3,224



10,637



12,443


Gulf Coast

1



(426)



1



2,570


Total coal royalty revenue

$

30,084



$

30,413



$

101,764



$

144,015










Other revenues








Coal override revenue

$

799



$

725



$

2,281



$

2,920


Transportation and processing fees

3,673



5,633



19,336



22,033


Minimums recognized as revenue

4,136



3,009



64,591



15,489


Lease assignment fee



15,000





21,000


Gain on reserve swap







9,290


Wheelage

577



1,049



2,374



3,166


Hard mineral royalty revenues

969



538



3,163



8,090


Oil and gas royalty revenues

999



888



3,537



4,364


Property tax revenue

1,558



2,656



10,457



11,258


Other

1,476



793



2,612



2,156


Total other revenues

$

14,187



$

30,291



$

108,351



$

99,766


Coal royalty and other income

44,271



60,704



210,115



243,781


Gain on coal royalty and other segment asset sales

1,798



9



29,068



6,936


Total coal royalty and other segment revenues and other income

$

46,069



$

60,713



$

239,183



$

250,717


 

 

Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures


Distributable Cash Flow

(in thousands)






Coal
Royalty
and Other






Corporate
and
Financing






Soda Ash


VantaCore



Total



(Unaudited)

Three Months Ended December 31, 2016











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


$

43,118



$

12,250



$

3,720



$

(32,992)



$

26,096


Add: proceeds from sale of PP&E






164





164


Add: proceeds from sale of mineral rights


6,855









6,855


Add: proceeds from sale of assets included in discontinued operations










(17)


Add: return on long-term contract receivables—affiliate


391









391


Less: maintenance capital expenditures


(23)





(752)





(775)


DCF


$

50,341



$

12,250



$

3,132



$

(32,992)



$

32,714













Three Months Ended December 31, 2015











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


$

55,093



$

12,251



$

3,822



$

(34,845)



$

36,321


Add: proceeds from sale of PP&E


(478)





18





(460)


Add: proceeds from sale of mineral rights











Add: return on long-term contract receivables—affiliate


342









342


Less: maintenance capital expenditures


(87)





(1,978)





(2,065)


Less: distributions to non-controlling interest











DCF


$

54,870



$

12,251



$

1,862



$

(34,845)



$

34,138













Year Ended December 31, 2016











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


$

134,490



$

46,550



$

20,400



$

(100,797)



$

100,643


Add: proceeds from sale of PP&E


1,084





266





1,350


Add: proceeds from sale of mineral rights


61,033









61,033


Add: proceeds from sale of assets included in discontinued operations










109,872


Add: return on long-term contract receivables—affiliate


2,968









2,968


Less: maintenance capital expenditures


(28)





(4,423)





(4,451)


DCF


$

199,547



$

46,550



$

16,243



$

(100,797)



$

271,415













Year Ended December 31, 2015











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


$

204,934



$

43,029



$

23,605



$

(103,056)



$

168,512


Add: proceeds from sale of PP&E


10,100





924





11,024


Add: proceeds from sale of mineral rights


3,505









3,505


Add: return on long-term contract receivables—affiliate


2,463









2,463


Less: maintenance capital expenditures


(416)





(5,727)





(6,143)


Less: distributions to non-controlling interest


(2,744)









(2,744)


DCF


$

217,842



$

43,029



$

18,802



$

(103,056)



$

176,617


 

 

Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures


Adjusted EBITDA

(in thousands)






Coal
Royalty and
Other






Corporate
and
Financing






Soda Ash


VantaCore



Total



(Unaudited)

Three Months Ended December 31, 2016











Net income (loss) from continuing operations


$

24,014



$

9,319



$

997



$

(30,519)



$

3,811


Less: equity earnings from unconsolidated investment




(9,319)







(9,319)


Add: distributions from unconsolidated investment




12,250







12,250


Add: interest expense








23,305



23,305


Add: depreciation, depletion and amortization


8,270





3,493





11,763


Add: asset impairments


8,180





1,065





9,245


Adjusted EBITDA


$

40,464



$

12,250



$

5,555



$

(7,214)



$

51,055













Three Months Ended December 31, 2015











Net income (loss) from continuing operations


$

25,555



$

13,179



$

(3,628)



$

(25,309)



$

9,797


Less: equity earnings from unconsolidated investment




(13,179)







(13,179)


Less: gain on reserve swap











Add: distributions from unconsolidated investment




12,250







12,250


Add: interest expense








22,786



22,786


Add: depreciation, depletion and amortization


10,809





3,079





13,888


Add: asset impairments


12,821





6,218





19,039


Adjusted EBITDA


$

49,185



$

12,250



$

5,669



$

(2,523)



$

64,581