SYS-CON MEDIA Authors: Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel, Peter Silva

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Natural Resource Partners L.P. Reports Second Quarter 2014 Results

- Revenues of $90.6 million

HOUSTON, Aug. 6, 2014 /PRNewswire/ -- Natural Resource Partners L.P. (NYSE:NRP) today reported revenues of $90.6 million for the second quarter of 2014 compared to $86.8 million for the second quarter of 2013, and distributable cash flow, a non-GAAP measure, of $64.9 million compared to $90.7 million for the second quarter of 2013.  Net income per unit was $0.28 in the second quarter of 2014 versus $0.37 per unit in the second quarter of 2013.  Before considering an asset impairment expense of $5.6 million for an intangible asset related to an aggregates property, net income per unit for the second quarter 2014 was $0.33.  NRP reported EBITDA, a non-GAAP measure, of $77.2 million in the second quarter 2014 compared to $76.1 million for the second quarter 2013.  Reconciliations of the non-GAAP measures of distributable cash flow and EBITDA are included in the tables at the end of this release.

Natural Resource Partners LP logo

"Strong performances in the first half of the year from our oil and gas, soda ash and Illinois coal businesses offset the challenges that we continue to face in the Appalachian coalfields," said Nick Carter, President and COO.  "Our diversification efforts have provided significant benefits to NRP and consequently our combined operating results for the first six months were in line with our expectations."

At the end of the second quarter, NRP had approximately $373 million in liquidity, consisting of $70 million in cash and $303 million available under its revolving credit facilities.  During the second quarter of 2014, NRP reduced its debt by $12.3 million bringing the total net reduction for the first half of the year to $51.5 million.

"Following through on our stated goal earlier this year, we have used the excess cash generated by our substantial distribution coverage to reduce our leverage," said Dwight Dunlap, Chief Financial Officer.  "We intend to continue to pay down our debt over the remainder of the year and use our liquidity and improved credit to fund the growth and continued diversification of NRP." 

Reaffirmed Guidance and Market Outlook

Excluding a $5.6 million impairment charge taken in the second quarter, NRP is reaffirming its initial guidance for 2014.  While NRP anticipates that coal related revenues may be lower than the initial guidance, revenues from other sources are expected to increase, offsetting those declines.

"We are pleased that our first half results matched our expectations, and anticipate continued strong performance in the second half of the year from our soda ash, oil and gas and Illinois Basin coal operations," said Wyatt Hogan, Executive Vice President.

NRP's Williston Basin assets are benefitting from strong oil markets and production growth from new wells coming on line in the Bakken/Three Forks play.  In addition, NRP's soda ash business continues to perform well, and is on pace to distribute approximately $46 million to NRP in 2014.  The domestic soda ash market remains steady, while the international market for soda ash continues to improve, as global production capacity for high-cost synthetic soda ash continues to be reduced.

While the thermal coal market was starting to show signs of recovery earlier this year aided by the cold winter and higher natural gas prices, the cooler than anticipated summer so far has dampened some of the optimism around thermal coal prices.  The global metallurgical coal market continues to suffer from oversupply in addition to reduced demand from China, and NRP does not anticipate metallurgical coal prices recovering in 2014.  NRP has exposure to three mines included in Alpha's recent WARN notice issued in West Virginia, but even if these mines are ultimately idled, it would not have a material impact on NRP's 2014 forecast as the mines are projected to continue full operations through the third quarter.  While other lessees have also announced potential idling of mines through WARN notices, NRP does not anticipate a material impact on its 2014 results.  In contrast, NRP believes that thermal coal production from its low-cost Illinois Basin properties will continue to remain strong. 

Second Quarter 2014 compared to Second Quarter 2013

Highlights

Quarter Ended


For the Six Months Ended


June

June

%


June 

June

%


2014

2013

Change


2014

2013

Change


(in thousands except per unit and per ton)



(in thousands except per unit and per ton)


Revenues








Total revenues and other income

$ 90,561

$ 86,804

4%


$ 170,870

$ 181,136

-6%

Coal production (tons)

11,851

14,894

-20%


24,103

28,727

-16%

Average coal royalty revenue per ton

$     3.86

$     3.91

-1%


$       3.70

$       3.92

-6%

Coal royalty revenues

$ 45,763

$ 58,210

-21%


$   89,298

$ 112,652

-21%

Other coal related revenue

$   9,598

$   9,197

4%


$   18,436

$   32,598

-43%

Total coal related revenues

$ 55,361

$ 67,407

-18%


$ 107,734

$ 145,250

-26%

Aggregates and industrial minerals related revenue(1)

$ 12,964

$ 10,781

20%


$   26,139

$   20,785

26%

Oil and gas related revenue

$ 17,822

$   4,093

335%


$   27,880

$     5,856

376%









Operating Expenses

$ 40,158

$ 31,472

28%


$   68,028

$   63,276

8%









Net income 








Net income to limited partners

$ 30,779

$ 40,244

-24%


$   62,732

$   87,192

-28%

Net income per unit

$     0.28

$     0.37

-24%


$       0.57

$       0.80

-29%

Average units outstanding

110,403

109,812

1%


110,127

109,352

1%









Net income before considering the impairment(1)








Net income to limited partners

36,290

40,678

-11%


68,243

87,911

-22%

Net income per unit

$     0.33

$     0.37

-11%


$       0.62

$       0.80

-23%









Distributable cash flow(2)

$ 64,944

$ 90,650

-28%


$ 103,871

$ 135,135

-23%









EBITDA(2)

$ 77,178

$ 76,068

1%


148,898

156,683

-5%

EBITDA margin(2)

85%

88%

-3%


87%

87%

0%



(1)

Aggregates and industrial minerals include the equity and other unconsolidated investment income associated with the OCI Wyoming soda ash business.

(2)

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

 

Revenues and other income
Second quarter 2014 total revenues and other income increased 4% from the same period of 2013.  NRP benefitted from its diversification into other asset classes, as revenues other than coal related revenues more than offset the declines experienced in coal related revenues.  Coal production volumes decreased 20% to 11.9 million tons, while average coal royalty revenue per ton decreased 1% to $3.86 per ton, which led to a 21% reduction in coal royalty revenues to $45.8 million from the second quarter 2013.  The reductions in production and price realizations were primarily related to NRP's Appalachian properties.

Metallurgical coal accounted for 36% of NRP's coal production and 43% of its coal royalty revenues for the second quarter of 2014 compared to 28% of production and 40% of coal royalty revenues in the second quarter of 2013.    

Revenues other than coal related revenues nearly doubled from the second quarter 2013 primarily due to increased oil and gas revenues and our investment in the soda ash business.

Oil and gas revenues increased nearly six-fold over the second quarter of 2013 to $10.1 million, primarily due to the revenues generated by NRP's Williston Basin properties acquired in the second half of 2013.  NRP also recognized a 19% increase in the equity income associated with NRP's investment in the soda ash business due to both an increase in net income for the business as well as 23 additional days of income in 2014 over 2013.

Operating expenses
Total operating expenses for the second quarter 2014 rose $8.7 million to $40.2 million from the second quarter 2013.  The increase was mainly due to $2.3 million of operating expenses associated with NRP's Williston Basin oil and gas properties acquired in the second half of 2013, and a $5.6 million asset impairment expense recorded in 2014.  

Net income attributable to the limited partners
Net income attributable to the limited partners and net income per unit decreased in the second quarter of 2014 compared to the 2013 period to $30.8 million, or $0.28 per unit, from $40.2 million or $0.37 per unit.  Approximately half of the decrease was associated with the non-cash impairment charge.  Before considering the impairment, net income attributable to the limited partners and net income per unit were $36.3 million and $0.33 per unit, respectively.

Distributable cash flow
Distributable cash flow decreased by 28% to $64.9 from $90.7 million mainly due to $12.1 million less in distributions from OCI and increased interest expense. 

EBITDA
EBITDA for the second quarter 2014 remained relatively flat at $77.2 million compared to the EBITDA generated in the second quarter 2013 of $76.1 million

Second Quarter 2014 compared to First Quarter 2014

Highlights

Quarter Ended


June 2014

March 2014

% Change


(in thousands, except per ton and per unit)


Revenues and other income




Total revenues and other income

$   90,561

$      80,309

13%

Coal production (tons)

11,851

12,252

-3%

Average coal royalty revenue per ton

$       3.86

$          3.55

9%

Coal royalty revenues

$   45,763

$      43,536

5%

Other coal related revenue

$     9,598

$        8,837

9%

Total coal related revenue

$   55,361

$      52,373

6%

Aggregates and industrial minerals related revenue(1)

$   12,964

$      13,175

-2%

Oil and gas related revenue

$   17,822

$      10,058

77%





Operating expenses

$   40,158

$      27,870

44%





Net income




Net income to limited partners

$   30,779

$      31,953

-4%

Net income to the limited partners, before considering the impairment(1)

$   36,290

$      31,953

14%

Net income per unit

$       0.28

$          0.29

-4%

Net income per unit, before considering the impairment(1)

$       0.33

$          0.29

13%

Average units outstanding

110,403

109,848

1%





Distributable cash flow(2)

$   64,944

$      38,927

67%





EBITDA(2)

$   77,178

$      71,720

8%

EBITDA margin(2)

85%

89%

-5%



(1)

Aggregates and industrial minerals include the equity and other unconsolidated investment income associated with the OCI Wyoming soda ash business.

(2)

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

 

Revenues and other income
Total revenues and other income for the second quarter increased $10.3 million or 13% from the first quarter, predominantly due to a $3.0 million increase in coal related revenues and a $7.8 million increase in oil and gas revenues. In the second quarter, NRP realized increased coal royalty revenues due to increased average realizations per ton of coal, relative to the first quarter, and increased oil and gas revenue due to increased oil and gas activity.  The increased realizations were mainly due to the mix of coal properties.

Operating expenses
Operating expenses increased $12.3 million over the previous quarter predominantly due to the following:

  • Increased depreciation, depletion and amortization (non-cash) of $1.7 million due to production from higher cost properties in this quarter versus the previous quarter
  • Impairment charge (non-cash) of $5.6 million
  • Increased general and administrative expenses of $3.2 million were mainly due to a negative accrual for the long term incentive plan in the first quarter due to the drop in unit price.   The second quarter reflects more of a normal accrual.
  • Increased property, franchise and other taxes of $1.3 million predominantly due to severance taxes on oil and gas income

Net income attributable to the limited partners
Net income attributable to the limited partners and net income per unit decreased in the second quarter from the previous quarter by $1.2 million and $0.01 per unit, respectively.  Before considering the non-cash impairment charge taken in the second quarter, net income attributable to the limited partners would have increased by $4.3 million to $36.3 million while net income per unit would have increased by $0.04 to $0.33 per unit.

Distributable cash flow
Distributable cash flow increased to $64.9 million, up from $38.9 million reported in the first quarter mainly due to changes in the balance sheet included in net cash provided by operating activities, as well as additional distributions received from OCI in the second quarter.

EBITDA
EBITDA for the second quarter 2014 increased over the first quarter by $5.5 million due to increased revenues. 

Distributions
As reported on July 22, 2014, the Board of Directors of NRP's general partner declared a quarterly distribution of $0.35 per unit for the second quarter 2014.  

Company Profile
Natural Resource Partners L.P. is a master limited partnership headquartered in Houston, TX, with its operations headquarters in Huntington, WV.  NRP is principally engaged in the business of owning and managing mineral reserve properties.  NRP owns interests in coal, aggregates and industrial minerals and oil and gas across the United States that generate royalty and other income for the partnership.  In addition, NRP owns an equity investment in OCI Wyoming, a trona/soda ash operation, and owns non-operated working interests in oil and gas properties.

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

Non-GAAP Financial Measures

"Distributable cash flow" represents cash flow from operations plus any proceeds from the sale of assets plus the return on direct financing lease and contractual overrides shown in the cash flows from investing activities section of the cash flow statement.  Distributable cash flow is a "non-GAAP financial measure" that is presented because management believes it is a useful adjunct to net cash provided by operating activities under GAAP. Distributable cash flow is a significant liquidity metric that is an indicator of NRP's ability to make quarterly cash distributions to its partners. Distributable cash flow is also the quantitative standard used throughout the investment community with respect to publicly traded partnerships. Distributable 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. A reconciliation of distributable cash flow to net cash provided by operating activities is included in the tables attached to this release.  Distributable cash flow may not be calculated the same for NRP as other companies.

"EBITDA" is a non-GAAP financial measure that we define as earnings before interest, taxes, depreciation, depletion and amortization and asset impairment. "EBITDA," 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. EBITDA 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. EBITDA provides no information regarding a company's capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax positions. EBITDA 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 EBITDA is useful in evaluating our financial performance because this measure is widely used by analysts and investors for comparative purposes. EBITDA is a financial measure widely used by investors in the high-yield bond market.  There are significant limitations to using EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect our net income or loss, the lack of comparability of results of operations of different companies and the different methods of calculating EBITDA reported by different companies.

"EBITDA margin" represents NRP's EBITDA as a percentage of total revenues and other income.

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, decreases in demand for coal, oil and gas, and aggregates and industrial minerals, including trona/soda ash; changes in operating conditions and costs; production cuts by our lessees; commodity prices; unanticipated geologic problems; 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 statements follow-

 

Natural Resource Partners L.P.

Operating Statistics - Coal Related Revenue

(in thousands except per ton data)







Quarter Ended


For the Six Months Ended







June


June


June


June







2014


2013


2014


2013







(unaudited)


(unaudited)














Coal Royalties:










Coal royalty production (tons):










Appalachia












Northern



1,826


3,531


4,477


7,272



Central



5,288


5,826


9,664


10,946



Southern



949


1,163


1,933


2,267




Total Appalachia


8,063


10,520


16,074


20,485


Illinois Basin



3,416


3,012


6,538


5,906


Northern Powder River Basin


173


969


1,052


1,764


Gulf Coast 



199


393


439


572

Total





11,851


14,894


24,103


28,727

Average royalty revenue per ton:










Appalachia












Northern



$     1.07


$     1.20


$       0.91


$       1.25



Central



4.50


5.18


4.53


5.17



Southern



5.14


6.32


5.35


6.64




Total Appalachia


3.80


3.97


3.62


3.94


Illinois Basin



4.12


4.26


4.06


4.32


Northern Powder River Basin


2.09


2.37


2.83


2.51


Gulf Coast 



3.54


3.29


3.46


3.42

Combined average royalty revenue per ton


$     3.86


$     3.91


$       3.70


$       3.92

Coal royalty revenues:











Appalachia












Northern



$   1,958


$   4,242


$     4,096


$     9,126



Central



23,781


30,185


43,818


56,591



Southern



4,875


7,352


10,339


15,052




Total Appalachia


$ 30,614


$ 41,779


$   58,253


$   80,769


Illinois Basin



14,083


12,843


26,553


25,500


Northern Powder River Basin


362


2,295


2,972


4,424


Gulf Coast 



704


1,293


1,520


1,959

Total





$ 45,763


$ 58,210


$   89,298


$ 112,652














Other coal related revenues:










Override revenue



1,402


2,582


2,746


6,444


Transportation and processing fees


5,996


5,030


11,093


11,005


Minimums recognized as revenue


1,338


549


2,808


5,005


Reserve swap



-


-


-


8,149


Wheelage



862


1,036


1,789


1,995



Total other coal related revenues


$   9,598


$   9,197


$   18,436


$   32,598














Total coal revenues



$ 55,361


$ 67,407


$ 107,734


$ 145,250

 

Natural Resource Partners L.P.

Operating Statistics - Aggregates and Industrial Minerals

(in thousands except per ton data)


Quarter Ended


For the Six Months Ended


June


June


June


June


2014


2013


2014


2013


(unaudited)


(unaudited)









Aggregate royalty revenues and production








Tonnage

927


1,463


2,142


2,746

Average royalty per ton

$     0.69


$     1.20


$     0.99


$     1.20

  Total aggregate royalty revenues

$      644


$   1,751


$   2,125


$   3,303









  Other aggregate related revenue

$   2,919


$   1,148


$   4,834


$   2,552









Total aggregate related revenues

$   3,563


$   2,899


$   6,959


$   5,855









Equity and other unconsolidated investment earnings

$   9,401


$   7,882


$ 19,180


$ 14,930









Total aggregates and industrial minerals related revenue

$ 12,964


$ 10,781


$ 26,139


$ 20,785









Cash distributions received from OCI Wyoming

$ 13,923


$ 26,702


$ 25,568


$ 26,939

 

Natural Resource Partners L.P.

Operating Statistics - Oil and Gas

(in thousands except per unit data)


Quarter Ended


Six Months Ended


June


June


June


June


2014


2013


2014


2013


(unaudited)


(unaudited)

Williston Basin non-operated working interests








Production volumes








Oil (MBbls)

139


 N/A 


207


 N/A 

Natural gas (Mcf)

97


 N/A 


112


 N/A 

NGL (MBoe)

10


 N/A 


12


 N/A 









Average sales price per unit








Oil ($/Bbl)

$   93.40


 N/A 


$   95.86


 N/A 

Natural gas ($/Mcf)

$     5.71


 N/A 


$     7.54


 N/A 

NGL ($/Boe)

$   35.40


 N/A 


$   48.50


 N/A 









Revenues








Oil 

$ 12,982


 N/A 


$ 19,842


 N/A 

Natural gas 

$      554


 N/A 


$      844


 N/A 

NGL

$      354


 N/A 


$      582


 N/A 

  Total

$ 13,890


 N/A 


$ 21,268


 N/A 









Other oil and gas related revenues

$   3,932


$ 4,093


$   6,612


$ 5,856









Total oil and gas revenues

$ 17,822


$ 4,093


$ 27,880


$ 5,856

 

Natural Resource Partners L.P.

Consolidated Statements of Comprehensive Income

(in thousands, except per unit data)




















Quarter Ended


For the Six Months Ended







June


June


June


June







2014


2013


2014


2013







(unaudited)


(unaudited)
















Revenues and other income:












Coal related revenues




$ 55,361


$ 67,407


$    107,734


$ 145,250


Aggregate related revenues




3,563


2,899


6,959


5,855


Oil and gas related revenues



17,822


4,093


27,880


5,856


Equity and other unconsolidated investment income


9,401


7,882


19,180


14,930


Property taxes




3,378


3,849


7,345


7,796


Other




1,036


674


1,772


1,449



Total revenues and other income



90,561


86,804


170,870


181,136

Operating expenses:












Depreciation, depletion and amortization


16,350


17,411


30,997


32,173


Asset impairments




5,624


443


5,624


734


General and administrative




9,029


8,878


14,886


20,464


Property, franchise and other taxes



6,201


4,225


11,069


8,576


Oil and gas lease operating expenses



2,291


-


4,212


-


Transportation costs




462


328


884


787


Royalty payments




201


187


356


542



Total operating expenses



40,158


31,472


68,028


63,276

Income from operations




50,403


55,332


102,842


117,860

Other income (expense)










-


Interest expense




(19,037)


(14,440)


(38,897)


(29,103)


Interest income




41


173


67


214

Income before non-controlling interest



$ 31,407


$ 41,065


$      64,012


$   88,971


Non-controlling interest




-


-


-


-

Net income 




$ 31,407


$ 41,065


$      64,012


$   88,971

Net income attributable to:












General partner




$      628


$      821


$        1,280


$     1,779


Limited partners




$ 30,779


$ 40,244


$      62,732


$   87,192














Basic and diluted net income per











limited partner unit:




$     0.28


$     0.37


$          0.57


$       0.80














Weighted average number of units outstanding:


110,403


109,812


110,127


109,352














Comprehensive income 




$ 31,243


$ 41,116


$      63,748


$   89,076

 

Natural Resource Partners L.P.

Consolidated Statements of Cash Flow

(in thousands, except per unit data)






Quarter Ended


For the Six Months Ended






June


June


June


June 






2014


2013


2014


2013






(unaudited)


(unaudited)

Cash flows from operating activities:










Net income 


$ 31,407


$   41,065


$  64,012


$   88,971


Adjustments to reconcile net income to 











net cash provided by operating activities:











Depreciation, depletion and amortization


16,350


17,411


30,997


32,173



Gain on reserve swap


-


-


-


(8,149)



Equity and other unconsolidated investment income


(9,401)


(7,882)


(19,180)


(14,930)



Distributions of earnings from unconsolidated investments


10,290


15,925


21,935


16,162



Non-cash interest charge, net


721


279


1,468


555



Gain on sale of assets


-


-


-


(150)



Asset impairment


5,624


443


5,624


734


Change in operating assets and liabilities:











Accounts receivable


3,375


4,781


(3,685)


4,250



Other assets


336


(3,251)


318


(2,985)



Accounts payable and accrued liabilities


1,257


1,094


(413)


221



Accrued interest


(6,145)


1,349


(1,772)


(576)



Deferred revenue


3,357


5,445


7,099


9,951



Accrued incentive plan expenses


2,149


2,036


(5,916)


(1,219)



Property, franchise and other taxes payable


1,688


1,041


(849)


(1,359)




Net cash provided by operating activities:


61,008


79,736


99,638


123,649

Cash flows from investing activities:











Oil and gas capital expenditures


(6,319)


-


(8,123)





Acquisition of land, coal, other mineral rights, and related intangibles

(768)


-


(768)


-



Acquisition or construction of plant and equipment


(135)


-


(135)


-



Acquisition of equity interests


-


(40)


-


(292,979)



Distributions from unconsolidated investments


3,633


10,777


3,633


10,777



Proceeds from sale of assets


-


-


-


154



Return on direct financing lease and contractual override


303


137


600


555




Net cash used in investing activities


(3,286)


10,874


(4,793)


(281,493)

Cash flows from financing activities:











Proceeds from loans


-


43,000


2,000


243,000



Repayment of loans


(12,317)


(42,916)


(53,483)


(79,538)



Deferred financing costs


-


-


-


(1,621)



Proceeds from issuance of common units


9,329


-


13,842


75,000



Capital contribution by general partner


255


-


347


1,531



Costs associated with equity transactions


(381)


(13)


(438)


(60)



Distributions to partners


(39,421)


(61,630)


(79,613)


(124,688)




Net cash provided by (used in) financing activities


(42,535)


(61,559)


(117,345)


113,624

Net (decrease)  in cash and cash equivalents


15,187


29,051


(22,500)


(44,220)

Cash and cash equivalents at beginning of period


54,826


76,153


92,513


149,424

Cash and cash equivalents at end of period


$ 70,013


$ 105,204


$  70,013


$ 105,204

Supplemental cash flow information:











Cash paid during the period for interest


$ 24,432


$   12,784


$  39,135


$   29,085

 

Natural Resource Partners L.P.

Consolidated Balance Sheets

(in thousands, except for unit information)













ASSETS










June 


December 31,










2014


2013










(unaudited)



Current assets:










Cash and cash equivalents






$      70,013


$         92,513


Accounts receivable, net of allowance for doubtful accounts



34,718


33,737


Accounts receivable - affiliates





9,018


7,666


Other







1,291


1,691



Total current assets






115,040


135,607

Land








24,340


24,340

Plant and equipment, net






24,035


26,435

Mineral rights, net






1,391,439


1,405,455

Intangible assets, net






59,549


66,950

Equity and other unconsolidated investments





262,661


269,338

Loan financing costs, net






10,357


11,502

Long-term contracts receivable - affiliate





50,787


51,732

Other assets, net






600


497



Total assets






$ 1,938,808


$    1,991,856













LIABILITIES AND PARTNERS' CAPITAL













Current liabilities:










Accounts payable and accrued liabilities





$      11,765


$           8,659


Accounts payable - affiliates






445


391


Current portion of long-term debt





80,983


80,983


Accrued incentive plan expenses - current portion




6,880


8,341


Property, franchise and other taxes payable




6,981


7,830


Accrued interest






15,412


17,184



Total current liabilities






122,466


123,388

Deferred revenue






149,685


142,586

Accrued incentive plan expenses






6,071


10,526

Other non-current liabilities






9,712


14,341

Long-term debt






1,033,041


1,084,226

Partners' capital:










Common units outstanding ( 110,869,513 and 109,812,408)



609,001


606,774


General partner's interest






10,124


10,069


Non-controlling interest






(650)


324


Accumulated other comprehensive loss





(642)


(378)



Total partners' capital






617,833


616,789



Total liabilities and partners' capital





$ 1,938,808


$    1,991,856

 

Natural Resource Partners L.P.

Reconciliation of GAAP Financial Measures

to Non-GAAP Financial Measures

(in thousands)

Reconciliation of GAAP "Net cash provided by operating activities"

to Non-GAAP "Distributable cash flow"





Quarter Ended


For the Six Months Ended





June


June


June


June





2014


2013


2014


2013





(unaudited)


(unaudited)












Net cash provided by operating activities




$ 61,008


$ 79,736


$   99,638


$ 123,649

Return on direct financing lease and contractual override




303


137


600


555

Distributions from unconsolidated investments(1)




3,633


10,777


3,633


10,777

Proceeds from sale of assets




-


-


-


154

Distributable cash flow




$ 64,944


$ 90,650


$ 103,871


$ 135,135













































Reconciliation of GAAP "Net cash provided by operating activities"

to Non-GAAP "Distributable cash flow"
















Quarter Ended







June


March









2014


2013









(unaudited)














Net cash provided by operating activities




$ 61,008


$ 38,630





Return on direct financing lease and contractual override




303


297





Distributions from unconsolidated investments(1)




3,633


-





Proceeds from sale of assets




-


-





Distributable cash flow




$ 64,944


$ 38,927
















 

Natural Resource Partners L.P.

Reconciliation of GAAP Financial Measures

to Non-GAAP Financial Measures

(in thousands)












Reconciliation of GAAP "Net income"

to Non-GAAP "EBITDA"
















Quarter Ended


For the Six Months Ended





June


June


June


June





2014


2013


2014


2013





(unaudited)


(unaudited)












Net income




$ 31,407


$ 41,065


$      64,012


$   88,971

Add depreciation, depletion and amortization




16,350


17,411


30,997


32,173

Add asset impairments




5,624


443


5,624


734

Add interest expense, gross




19,037


14,440


38,897


29,103

Add depreciation, depletion and amortization and interest relating to OCI Wyoming


4,760


2,709


9,368


5,702

EBITDA




$ 77,178


$ 76,068


$    148,898


$ 156,683












EBITDA margin











EBITDA




$ 77,178


$ 76,068


$    148,898


$ 156,683

Total revenues




$ 90,561


$ 86,804


$    170,870


$ 181,136

EBITDA margin




85%


88%


87%


87%























Reconciliation of GAAP "Net income"

to Non-GAAP "EBITDA"
















Quarter Ended







June


March 









2014


2014









(unaudited)














Net income




$ 31,407


$ 32,605





Add depreciation, depletion and amortization




16,350


14,647





Add asset impairments




5,624


-





Add interest expense, gross




19,037


19,860





Add depreciation, depletion and amortization and interest relating to OCI Wyoming


4,760


4,608





EBITDA




$ 77,178


$ 71,720
















EBITDA margin











EBITDA




$ 77,178


$ 71,720





Total revenues




$ 90,561


$ 80,309





EBITDA margin




85%


89%





 

Reconciliation of GAAP "Total operating costs and expenses"

to Non-GAAP "Total operating expenses before considering the impairment"







Quarter Ended



June 


June



2014


2013



(unaudited)


Operating expenses





Total operating expenses as reported

$ 40,158


$ 31,472


Impairments

$ (5,624)


$    (443)


Total operating costs before considering the impairment

$ 34,534


$ 31,029







Reconciliation of GAAP "Net income attributable to the limited partners"

to Non-GAAP "Net income attributable to the limited partners before considering the impairment"







Quarter Ended



June 


June



2014


2013



(unaudited)


Net income attributable to the limited partners





Net income as reported

$ 31,407


$ 41,065


Impairments

5,624


443


Net income before considering the impairment

$ 37,031


$ 41,508


Net income, before considering the impairment, attributable to:





  General partner

$      741


$      830


  Limited partners

$ 36,290


$ 40,678









Reconciliation of GAAP "Basic and diluted net income per unit"

to Non-GAAP "Net income per unit before considering the impairment"







Quarter Ended



June 


June



2014


2013



(unaudited)


Net income per unit





Net income per unit as reported

$     0.28


$     0.37


Adjustment for impairments

0.05


0.00


Net income per limited partner unit, before considering the impairment

$     0.33


$     0.37







Weighted number of units outstanding

110,403


109,812







* Numbers may not add due to rounding





 

Reconciliation of GAAP "Total operating costs and expenses"

to Non-GAAP "Total operating expenses before considering the impairment"






Quarter Ended


June 


March


2014


2014


(unaudited)

Operating expenses




Total operating expenses as reported

$ 40,158


$ 27,870

Impairments

(5,624)


-

Total operating costs before considering the impairment

$ 34,534


$ 27,870







Reconciliation of GAAP "Net income attributable to the limited partners"

to Non-GAAP "Net income attributable to the limited partners before considering the impairment"




Quarter Ended


June 


March


2014


2014


(unaudited)

Net income attributable to the limited partners




Net income as reported

$ 31,407


$ 32,605

Impairments

5,624


-

Net income before considering the impairment

$ 37,031


$ 32,605

Net income, before considering the impairment, attributable to:




  General partner

$      741


$      652

  Limited partners

$ 36,290


$ 31,953







Reconciliation of GAAP "Basic and diluted net income per unit"

to Non-GAAP "Net income per unit before considering the impairment"


Quarter Ended


June


March


2014


2014


(unaudited)

Net income per unit




Net income per unit as reported

$     0.28


$     0.29

Adjustment for impairments

0.05


-

Net income per limited partner unit, before considering the impairment

$     0.33


$     0.29





Weighted number of units outstanding

110,403


109,848





* Numbers may not add due to rounding




 

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SOURCE Natural Resource Partners L.P.

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