Natural resource partners l.p. reports third quarter 2020 results and declares third quarter 2020 distributions
Houston--(business wire)--natural resource partners l.p. (nyse:nrp) today reported third quarter 2020 results as follows: for the three months ended last twelve months september 30, september 30, (in thousands) (unaudited) 2020 2019 2020 net income (loss) from continuing operations $ 7,216 $ 39,163 $ (218,954 ) asset impairments 934 484 280,947 net income from continuing operations excluding asset impairments (1) $ 8,150 $ 39,647 $ 61,993 adjusted ebitda (1) 18,529 46,014 117,771 cash flow provided by (used in) continuing operations: operating activities 24,323 41,734 93,807 investing activities 332 6,567 1,228 financing activities (19,910 ) (21,913 ) (91,625 ) distributable cash flow (1) 24,655 48,179 95,918 free cash flow (1) 24,655 42,193 94,639 cash flow cushion (last twelve months) (1) 1,460 ____________________ (1) see "non-gaap financial measures" and reconciliation tables at the end of this release. "demand for steel, electricity and glass began to rebound in the third quarter and the outlook for our coal and soda ash businesses has improved from the lows earlier this year. we continue to generate free cash flow and maintain strong liquidity, which provides us with significant financial flexibility to continue paying down debt and managing through challenging times," said craig nunez, nrp's president and chief operating officer. nrp's liquidity was $215.6 million at september 30, 2020, consisting of $115.6 million of cash and $100.0 million of borrowing capacity available under its revolving credit facility. nrp announced today that the board of directors of its general partner declared a third quarter 2020 cash distribution of $0.45 per common unit of nrp to be paid on november 20, 2020 to unitholders of record on november 19, 2020. in addition, the board declared a $7.5 million distribution on the preferred units, which will be paid one-half in cash and one-half in kind through the issuance of additional preferred units. future distributions on nrp's common and preferred units will be determined on a quarterly basis by the board of directors. the board of directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the board determines is necessary for future operating and capital needs. segment performance coal royalty and other revenues and other income in the third quarter of 2020 were lower by $21.9 million and distributable cash flow and free cash flow were $18.8 million and $12.6 million lower, respectively, as compared to the prior year quarter. this decrease is primarily a result of a weakened market for metallurgical coal as compared to the prior year quarter due to a decline in global steel demand. as a result, both sales volumes and prices for metallurgical coal sold were lower in the third quarter of 2020 compared to the prior year quarter. approximately 70% of coal royalty revenues and approximately 65% of coal royalty sales volumes were derived from metallurgical coal during the three months ended september 30, 2020. in addition, weaker domestic and export thermal coal markets compared to the prior year period resulted in lower revenue from nrp's thermal coal properties. domestic and export thermal coal markets remained challenged by lower utility demand, continued low natural gas prices and the secular shift to renewable energy. furthermore, the covid-19 pandemic has compounded already weak coal pricing and demand, and nrp's coal lessees saw negative impacts on their businesses during 2020. soda ash ciner wyoming has also been negatively impacted by the covid-19 pandemic as lower activity in the global auto, container and construction industries reduced demand for glass and soda ash. however, demand for glass began to rebound in the third quarter of 2020 and the outlook for the soda ash business has improved. revenues and other income in the third quarter of 2020 were lower by $11.8 million compared to the prior year quarter primarily due to a combination of lower pricing and volumes sold. while ciner has yet to recover to pre-covid levels, overall sales volumes increased 26.7% and overall production volumes increased 1.5% over second quarter 2020 results. nrp believes ciner wyoming's facility is competitively positioned as one of the lowest cost producers of soda ash in the world, however, nrp expects the market to remain volatile as a result of ongoing uncertainties with the covid-19 pandemic. in order to have financial flexibility during the covid-19 pandemic, ciner wyoming suspended its quarterly distribution in august 2020 and accordingly, did not pay quarterly distributions for the second or third quarters of 2020. ciner wyoming will continue to evaluate, on a quarterly basis, whether to reinstate the distribution. ciner wyoming’s ability to pay future quarterly distributions will be dependent in part on its cash reserves, liquidity, total debt levels and anticipated capital expenditures. corporate and financing corporate and financing costs were $0.8 million lower in the third quarter of 2020 compared to the prior year quarter. distributable cash flow and free cash flow increased $1.3 million compared to the prior year quarter primarily due to lower cash paid for interest as a result of lower debt balances. as noted above, the board declared a third quarter $7.5 million distribution on nrp's preferred units, to be paid one-half in cash and one-half in kind. the indenture governing the 2025 parent company notes restricts nrp from paying more than one-half of the quarterly distribution on the preferred units in cash if nrp's consolidated leverage ratio exceeds 3.75x, and as of september 30, 2020, nrp's leverage ratio was 4.2x. conference call a conference call will be held today at 9:00 a.m. et. to register for the conference call, please use this link http://www.directeventreg.com/registration/event/8267566. after registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. registration is open through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes prior to the start of the call. investors may also listen to the call via the investor relations section of the nrp website at www.nrplp.com. to access the replay, please visit the investor relations section of nrp’s website. withholding information for foreign investors this release is intended to be a qualified notice under treasury regulation section 1.1446-4(b). brokers and nominees should treat one hundred percent (100.0%) of nrp's distributions to foreign investors as being attributable to income that is effectively connected with a united states trade or business. accordingly, nrp's distributions to foreign investors are subject to federal income tax withholding at the highest applicable rate. company profile natural resource partners l.p., a master limited partnership headquartered in houston, tx, is a diversified natural resource company that owns, manages and leases a diversified portfolio of mineral properties in the united states including interests in coal, industrial minerals and other natural resources. in addition, nrp owns an equity investment in ciner wyoming llc, a trona ore mining and soda ash production business. for additional information, please contact tiffany sammis at 713-751-7515 or tsammis@nrplp.com. further information about nrp is available on the partnership’s website at http://www.nrplp.com. forward-looking statements this press release includes “forward-looking statements” as defined by the securities and exchange commission. all statements, other than statements of historical facts, included in this press release that address activities, events or developments that the partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. these statements are based on certain assumptions made by the partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the partnership. these risks include, among other things, statements regarding: the effects of the global covid-19 pandemic; future distributions on the partnership’s common and preferred units; the partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the partnership's lessees, including foresight energy; ciner wyoming llc’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the partnership, and of scheduled or potential regulatory or legal changes; global and u.s. economic conditions; and other factors detailed in natural resource partners’ securities and exchange commission filings. natural resource partners l.p. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. non-gaap financial measures "adjusted ebitda" is a non-gaap financial measure that we define as net income (loss) from continuing operations less equity earnings from unconsolidated investment, net income attributable to non-controlling interest and gain on reserve swap; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. adjusted ebitda should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with gaap as measures of operating performance, liquidity or ability to service debt obligations. there are significant limitations to using adjusted ebitda as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income (loss), the lack of comparability of results of operations of different companies and the different methods of calculating adjusted ebitda reported by different companies. in addition, adjusted ebitda presented below is not calculated or presented on the same basis as consolidated ebitda as defined in our partnership agreement or consolidated ebitdda as defined in opco's debt agreements. adjusted ebitda is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis. “distributable cash flow” or "dcf" is a non-gaap financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures and distributions to non-controlling interest. dcf is not a measure of financial performance under gaap and should not be considered as an alternative to cash flows from operating, investing or financing activities. dcf may not be calculated the same for us as for other companies. in addition, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. “free cash flow” or "fcf" is a non-gaap financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as investing or financing activities and distributions to non-controlling interest. fcf is calculated before mandatory debt repayments. free cash flow is not a measure of financial performance under gaap and should not be considered as an alternative to cash flows from operating, investing or financing activities. free cash flow may not be calculated the same for us as for other companies. free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. "cash flow cushion" is a non-gaap financial measure that we define as free cash flow less one-time beneficial items, mandatory opco debt repayments, preferred unit distributions and common unit distributions. cash flow cushion is not a measure of financial performance under gaap and should not be considered as an alternative to cash flows from operating, investing or financing activities. cash flow cushion is a supplemental liquidity measure used by our management to assess the partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units. "return on capital employed" or "roce" is a non-gaap financial measure that we define as net income (loss) from continuing operations plus financing costs (interest expense plus loss on extinguishment of debt) divided by the sum of equity excluding equity of discontinued operations, and debt. return on capital employed should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with gaap as measures of operating performance, liquidity or ability to service debt obligations. return on capital employed is a supplemental performance measure used by our management team that measures our profitability and efficiency with which our capital is employed. the measure provides an indication of operating performance before the impact of leverage in the capital structure. -financial tables and reconciliation of non-gaap measures follow- natural resource partners l.p. financial tables (unaudited) consolidated statements of comprehensive income (loss) for the three months ended for the nine months ended september 30, june 30, september 30, (in thousands, except per unit data) 2020 2019 2020 2020 2019 revenues and other income coal royalty and other $ 25,740 $ 39,919 $ 31,666 $ 88,839 $ 154,037 transportation and processing services 2,204 3,865 1,938 6,651 14,740 equity in earnings (loss) of ciner wyoming 1,986 13,818 (3,058 ) 5,200 36,833 gain on asset sales and disposals — 6,107 465 465 6,609 total revenues and other income $ 29,930 $ 63,709 $ 31,011 $ 101,155 $ 212,219 operating expenses operating and maintenance expenses $ 5,781 $ 5,994 $ 8,217 $ 19,200 $ 26,813 depreciation, depletion and amortization 2,111 3,384 2,062 6,185 11,746 general and administrative expenses 3,634 4,253 3,621 11,168 12,799 asset impairments 934 484 132,283 133,217 484 total operating expenses $ 12,460 $ 14,115 $ 146,183 $ 169,770 $ 51,842 income (loss) from operations $ 17,470 $ 49,594 $ (115,172 ) $ (68,615 ) $ 160,377 other expenses, net interest expense, net $ (10,254 ) $ (10,431 ) $ (10,329 ) $ (30,891 ) $ (37,061 ) loss on extinguishment of debt — — — — (29,282 ) total other expenses, net $ (10,254 ) $ (10,431 ) $ (10,329 ) $ (30,891 ) $ (66,343 ) net income (loss) from continuing operations $ 7,216 $ 39,163 $ (125,501 ) $ (99,506 ) $ 94,034 income from discontinued operations — 7 — — 206 net income (loss) $ 7,216 $ 39,170 $ (125,501 ) $ (99,506 ) $ 94,240 less: income attributable to preferred unitholders (7,500 ) (7,500 ) (7,613 ) (22,613 ) (22,500 ) net income (loss) attributable to common unitholders and general partner $ (284 ) $ 31,670 $ (133,114 ) $ (122,119 ) $ 71,740 net income (loss) attributable to common unitholders $ (279 ) $ 31,036 $ (130,452 ) $ (119,677 ) $ 70,305 net income (loss) attributable to the general partner (5 ) 634 (2,662 ) (2,442 ) 1,435 income (loss) from continuing operations per common unit basic $ (0.02 ) $ 2.53 $ (10.64 ) $ (9.76 ) $ 5.72 diluted (0.02 ) 1.66 (10.64 ) (9.76 ) 3.91 net income (loss) per common unit basic $ (0.02 ) $ 2.53 $ (10.64 ) $ (9.76 ) $ 5.73 diluted (0.02 ) 1.66 (10.64 ) (9.76 ) 3.92 net income (loss) $ 7,216 $ 39,170 $ (125,501 ) $ (99,506 ) $ 94,240 comprehensive income (loss) from unconsolidated investment and other 2,428 (520 ) 1,359 2,764 (340 ) comprehensive income (loss) $ 9,644 $ 38,650 (124,142 ) $ (96,742 ) $ 93,900 natural resource partners l.p. financial tables (unaudited) consolidated statements of cash flows for the three months ended for the nine months ended september 30, june 30, september 30, (in thousands) 2020 2019 2020 2020 2019 cash flows from operating activities net income (loss) $ 7,216 $ 39,170 $ (125,501 ) $ (99,506 ) $ 94,240 adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations: depreciation, depletion and amortization 2,111 3,384 2,062 6,185 11,746 distributions from unconsolidated investment — 6,370 7,105 14,210 25,480 equity earnings from unconsolidated investment (1,986 ) (13,818 ) 3,058 (5,200 ) (36,833 ) gain on asset sales and disposals — (6,107 ) (465 ) (465 ) (6,609 ) loss on extinguishment of debt — — — — 29,282 income from discontinued operations — (7 ) — — (206 ) asset impairments 934 484 132,283 133,217 484 bad debt expense 258 151 3,847 3,915 6,842 unit-based compensation expense 913 466 924 2,566 1,842 amortization of debt issuance costs and other 1,577 1,072 (1,534 ) 491 3,223 change in operating assets and liabilities: accounts receivable 4,621 996 8,446 7,994 (2,111 ) accounts payable 144 355 (44 ) 193 (822 ) accrued liabilities 791 439 (915 ) (2,985 ) (5,083 ) accrued interest 7,248 7,163 (7,351 ) 6,957 19 deferred revenue (273 ) (1,236 ) 2,202 10,194 (3,920 ) other items, net 769 2,852 (4,182 ) (3,353 ) 351 net cash provided by operating activities of continuing operations $ 24,323 $ 41,734 $ 19,935 $ 74,413 $ 117,925 net cash provided by (used in) operating activities of discontinued operations — (359 ) — 1,706 (4 ) net cash provided by operating activities $ 24,323 $ 41,375 $ 19,935 $ 76,119 $ 117,921 cash flows from investing activities proceeds from asset sales and disposals $ — $ 6,108 $ 507 $ 507 $ 6,611 return of long-term contract receivable 332 459 858 1,462 1,351 acquisition of non-controlling interest in brp — — (1,000 ) (1,000 ) — net cash provided by investing activities of continuing operations $ 332 $ 6,567 $ 365 $ 969 $ 7,962 net cash used in investing activities of discontinued operations — (122 ) — (66 ) (556 ) net cash provided by investing activities $ 332 $ 6,445 $ 365 $ 903 $ 7,406 debt borrowings $ — $ — $ — $ — $ 300,000 debt repayments (6,780 ) (8,277 ) (2,365 ) (25,841 ) (442,747 ) distributions to common unitholders and general partner (5,630 ) (5,630 ) — (11,260 ) (27,520 ) distributions to preferred unitholders (7,500 ) (7,500 ) (7,613 ) (22,613 ) (22,500 ) contributions from (to) discontinued operations — (481 ) — 1,640 (560 ) debt issuance costs and other — (25 ) — — (26,427 ) net cash used in financing activities of continuing operations $ (19,910 ) $ (21,913 ) $ (9,978 ) $ (58,074 ) $ (219,754 ) net cash provided by (used in) financing activities of discontinued operations — 481 — (1,640 ) 560 net cash used in financing activities $ (19,910 ) $ (21,432 ) $ (9,978 ) $ (59,714 ) $ (219,194 ) net increase (decrease) in cash and cash equivalents $ 4,745 $ 26,388 $ 10,322 $ 17,308 $ (93,867 ) cash and cash equivalents at beginning of period 110,828 85,775 100,506 98,265 206,030 cash and cash equivalents at end of period $ 115,573 $ 112,163 $ 110,828 $ 115,573 $ 112,163 supplemental cash flow information: cash paid during the period for interest $ 2,490 $ 3,225 $ 17,183 $ 22,712 $ 36,270 plant, equipment and mineral rights funded with accounts payable or accrued liabilities $ 23 $ — $ 924 $ 947 $ — natural resource partners l.p. financial tables consolidated balance sheets september 30, december 31, (in thousands, except unit data) 2020 2019 assets (unaudited) current assets cash and cash equivalents $ 115,573 $ 98,265 accounts receivable, net 17,462 30,869 other current assets, net 3,972 1,244 current assets of discontinued operations — 1,706 total current assets $ 137,007 $ 132,084 land 24,008 24,008 mineral rights, net 465,870 605,096 intangible assets, net 17,601 17,687 equity in unconsolidated investment 256,834 263,080 long-term contract receivable, net 33,791 36,963 other long-term assets, net 7,447 6,989 total assets $ 942,558 $ 1,085,907 liabilities and capital current liabilities accounts payable $ 1,372 $ 1,179 accrued liabilities 6,859 8,764 accrued interest 9,273 2,316 current portion of deferred revenue 11,035 4,608 current portion of long-term debt, net 39,072 45,776 current liabilities of discontinued operations — 65 total current liabilities $ 67,611 $ 62,708 deferred revenue 50,980 47,213 long-term debt, net 452,401 470,422 other non-current liabilities 5,020 4,949 total liabilities $ 576,012 $ 585,292 commitments and contingencies class a convertible preferred units (250,000 units issued and outstanding at september 30, 2020 and december 31, 2019, at $1,000 par value per unit; liquidation preference of $1,700 per unit at september 30, 2020 and $1,500 per unit at december 31, 2019) $ 164,587 $ 164,587 partners’ capital: common unitholders’ interest (12,261,199 units issued and outstanding at september 30, 2020 and december 31, 2019) $ 134,545 $ 271,471 general partner’s interest 428 3,270 warrant holders' interest 66,816 66,816 accumulated other comprehensive income (loss) 170 (2,594 ) total partners’ capital $ 201,959 $ 338,963 non-controlling interest — (2,935 ) total capital $ 201,959 $ 336,028 total liabilities and capital $ 942,558 $ 1,085,907 natural resource partners l.p. financial tables (unaudited) consolidated statements of partners' capital common unitholders general partner warrant holders accumulated other comprehensive income (loss) partners' capital excluding non- controlling interest non- controlling interest total capital (in thousands) units amounts balance at december 31, 2019 12,261 $ 271,471 $ 3,270 $ 66,816 $ (2,594 ) $ 338,963 $ (2,935 ) $ 336,028 cumulative effect of adoption of accounting standard — (3,833 ) (78 ) — — (3,911 ) — (3,911 ) net income (1) — 18,403 376 — — 18,779 — 18,779 distributions to common unitholders and general partner — (5,517 ) (113 ) — — (5,630 ) — (5,630 ) distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) — (7,500 ) unit-based awards amortization and vesting — 673 — — — 673 — 673 comprehensive loss from unconsolidated investment and other — — — — (1,023 ) (1,023 ) — (1,023 ) balance at march 31, 2020 12,261 $ 273,847 $ 3,305 $ 66,816 $ (3,617 ) $ 340,351 $ (2,935 ) $ 337,416 net loss (2) — (122,991 ) (2,510 ) — — (125,501 ) — (125,501 ) distributions to preferred unitholders — (7,461 ) (152 ) — — (7,613 ) — (7,613 ) purchase of non-controlling interest in brp — (4,747 ) (97 ) — (4,844 ) 2,935 (1,909 ) unit-based awards amortization and vesting — 869 — — — 869 — 869 comprehensive income from unconsolidated investment and other — — — — 1,359 1,359 — 1,359 balance at june 30, 2020 12,261 $ 139,517 $ 546 $ 66,816 $ (2,258 ) $ 204,621 $ — $ 204,621 net income (1) — 7,072 144 — — 7,216 — 7,216 distributions to common unitholders and general partner — (5,518 ) (112 ) — — (5,630 ) — (5,630 ) distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) — (7,500 ) unit-based awards amortization and vesting — 824 — — — 824 — 824 comprehensive income from unconsolidated investment and other — — — — 2,428 2,428 — 2,428 balance at september 30, 2020 12,261 $ 134,545 $ 428 $ 66,816 $ 170 $ 201,959 $ — $ 201,959 ____________________ net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner. (2) net loss includes $7.6 million attributable to preferred unitholders that accumulated during the period, of which $7.46 million is allocated to the common unitholders and $0.15 million is allocated to the general partner. common unitholders general partner warrant holders accumulated other comprehensive loss partners' capital excluding non- controlling interest non- controlling interest total capital (in thousands) units amounts balance at december 31, 2018 12,249 $ 355,113 $ 5,014 $ 66,816 $ (3,462 ) $ 423,481 $ (2,935 ) $ 420,546 net income (1) — 35,005 714 — — 35,719 — 35,719 distributions to common unitholders and general partner — (5,513 ) (112 ) — — (5,625 ) — (5,625 ) distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) — (7,500 ) issuance of unit-based awards 12 486 — — — 486 — 486 unit-based awards amortization and vesting — 399 — — — 399 — 399 comprehensive income from unconsolidated investment and other — — 10 — 1,005 1,015 — 1,015 balance at march 31, 2019 12,261 $ 378,140 $ 5,476 $ 66,816 $ (2,457 ) $ 447,975 $ (2,935 ) $ 445,040 net income (1) — 18,964 387 — — 19,351 — 19,351 distributions to common unitholders and general partner — (15,939 ) (326 ) — — (16,265 ) — (16,265 ) distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) — (7,500 ) unit-based awards amortization and vesting — 460 — — — 460 — 460 comprehensive loss from unconsolidated investment and other — — — — (825 ) (825 ) — (825 ) balance at june 30, 2019 12,261 $ 374,275 $ 5,387 $ 66,816 $ (3,282 ) $ 443,196 $ (2,935 ) $ 440,261 net income (1) — 38,386 784 — — 39,170 — 39,170 distributions to common unitholders and general partner — (5,518 ) (112 ) — — (5,630 ) — (5,630 ) distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) — (7,500 ) unit-based awards amortization and vesting — 473 — — — 473 — 473 comprehensive loss from unconsolidated investment and other — — — — (520 ) (520 ) — (520 ) balance at september 30, 2019 12,261 $ 400,266 $ 5,909 $ 66,816 $ (3,802 ) $ 469,189 $ (2,935 ) $ 466,254 ____________________ net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner. natural resource partners l.p. financial tables (unaudited) the following tables present nrp's unaudited business results by segment for the three months ended september 30, 2020 and 2019 and june 30, 2020: operating segments coal royalty and other corporate and financing (in thousands) soda ash total for the three months ended september 30, 2020 revenues $ 27,944 $ 1,986 $ — $ 29,930 gain on asset sales and disposals — — — — total revenues and other income $ 27,944 $ 1,986 $ — $ 29,930 asset impairments 934 $ — $ — $ 934 net income (loss) from continuing operations 19,173 1,890 (13,847 ) $ 7,216 adjusted ebitda (1) $ 22,259 $ (96 ) $ (3,634 ) $ 18,529 cash flow provided by (used in) continuing operations: operating activities $ 28,573 $ (75 ) $ (4,175 ) $ 24,323 investing activities $ 332 $ — $ — $ 332 financing activities $ — $ — $ (19,910 ) $ (19,910 ) distributable cash flow (1) $ 28,905 $ (75 ) $ (4,175 ) $ 24,655 free cash flow (1) $ 28,905 $ (75 ) $ (4,175 ) $ 24,655 for the three months ended september 30, 2019 revenues $ 43,784 $ 13,818 $ — $ 57,602 gain on asset sales and disposals 6,107 — — 6,107 total revenues and other income $ 49,891 $ 13,818 $ — $ 63,709 asset impairments $ 484 $ — $ — $ 484 net income (loss) from continuing operations $ 40,252 $ 13,595 $ (14,684 ) $ 39,163 adjusted ebitda (1) $ 44,120 $ 6,147 $ (4,253 ) $ 46,014 cash flow provided by (used in) continuing operations: operating activities $ 41,094 $ 6,147 $ (5,507 ) $ 41,734 investing activities $ 6,567 $ — $ — $ 6,567 financing activities $ — $ — $ (21,913 ) $ (21,913 ) distributable cash flow (1) (2) $ 47,661 $ 6,147 $ (5,507 ) $ 48,179 free cash flow (1) $ 41,553 $ 6,147 $ (5,507 ) $ 42,193 for the three months ended june 30, 2020 revenues $ 33,604 $ (3,058 ) $ — $ 30,546 gain on asset sales and disposals 465 — — 465 total revenues and other income (loss) $ 34,069 $ (3,058 ) $ — $ 31,011 asset impairments $ 132,283 $ — $ — $ 132,283 net loss from continuing operations (108,479 ) $ (3,087 ) $ (13,935 ) $ (125,501 ) adjusted ebitda (1) $ 25,881 $ 7,076 $ (3,621 ) $ 29,336 cash flow provided by (used in) continuing operations: operating activities $ 31,953 $ 7,077 $ (19,095 ) $ 19,935 investing activities $ 365 $ — $ — $ 365 financing activities $ — $ — $ (9,978 ) $ (9,978 ) distributable cash flow (1) $ 33,318 $ 7,077 $ (19,095 ) $ 21,300 free cash flow (1) $ 31,811 $ 7,077 $ (19,095 ) $ 19,793 ____________________ (1) see "non-gaap financial measures" and reconciliation tables at the end of this release. (2) includes net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations. natural resource partners l.p. financial tables (unaudited) the following tables present nrp's unaudited business results by segment for the nine months ended september 30, 2020 and 2019: operating business segments coal royalty and other corporate and financing (in thousands) soda ash total for the nine months ended september 30, 2020 revenues $ 95,490 $ 5,200 $ — $ 100,690 gain on asset sales and disposals 465 — — 465 total revenues and other income $ 95,955 $ 5,200 $ — $ 101,155 asset impairments $ 133,217 $ — $ — $ 133,217 net income (loss) from continuing operations $ (62,562 ) $ 5,059 $ (42,003 ) $ (99,506 ) adjusted ebitda (1) $ 76,896 $ 14,069 $ (11,168 ) $ 79,797 cash flow provided by (used in) continuing operations: operating activities $ 91,082 $ 14,091 $ (30,760 ) $ 74,413 investing activities $ 969 $ — $ — $ 969 financing activities $ — $ — $ (58,074 ) $ (58,074 ) distributable cash flow (1) (2) $ 93,051 $ 14,091 $ (30,760 ) $ 76,316 free cash flow (1) $ 91,544 $ 14,091 $ (30,760 ) $ 74,875 for the nine months ended september 30, 2019 revenues $ 168,777 $ 36,833 $ — $ 205,610 gain on asset sales and disposals 6,609 — — 6,609 total revenues and other income $ 175,386 $ 36,833 $ — $ 212,219 asset impairments $ 484 $ — $ — $ 484 net income (loss) from continuing operations $ 136,566 $ 36,610 $ (79,142 ) $ 94,034 adjusted ebitda (1) $ 148,796 $ 25,257 $ (12,799 ) $ 161,254 cash flow provided by (used in) continuing operations: operating activities $ 139,821 $ 25,257 $ (47,153 ) $ 117,925 investing activities $ 7,962 $ — $ — $ 7,962 financing activities $ — $ — $ (219,754 ) $ (219,754 ) distributable cash flow (1) (2) $ 147,783 $ 25,257 $ (47,153 ) $ 125,331 free cash flow (1) $ 141,172 $ 25,257 $ (47,153 ) $ 119,276 ____________________ (1) see "non-gaap financial measures" and reconciliation tables at the end of this release. (2) includes net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations. natural resource partners l.p. financial tables (unaudited) operating statistics - coal royalty and other for the three months ended for the nine months ended september 30, june 30, september 30, (in thousands, except per ton data) 2020 2019 2020 2020 2019 coal sales volumes (tons) appalachia northern (1) 102 290 87 516 2,774 central 2,247 3,222 2,463 7,643 10,469 southern 172 438 426 820 1,172 total appalachia 2,521 3,950 2,976 8,979 14,415 illinois basin 758 551 578 1,841 1,646 northern powder river basin 365 532 340 1,232 1,979 total coal sales volumes 3,644 5,033 3,894 12,052 18,040 coal royalty revenue per ton appalachia northern (1) $ 3.06 $ 2.54 $ 2.74 $ 2.22 $ 2.23 central 3.83 5.25 4.04 4.28 5.79 southern 4.78 5.99 4.96 4.70 7.00 illinois basin 1.63 4.82 1.97 2.48 4.70 northern powder river basin 3.46 4.69 3.15 3.66 3.21 combined average coal royalty revenue per ton 3.36 5.05 3.73 3.88 4.94 coal royalty revenues appalachia northern (1) $ 312 $ 735 $ 238 $ 1,143 $ 6,173 central 8,602 16,929 9,951 32,726 60,628 southern 823 2,626 2,111 3,857 8,204 total appalachia 9,737 20,290 12,300 37,726 75,005 illinois basin 1,234 2,658 1,137 4,570 7,739 northern powder river basin 1,262 2,492 1,071 4,510 6,347 unadjusted coal royalty revenues 12,233 25,440 14,508 46,806 89,091 coal royalty adjustment for minimum leases (2) (1,623 ) (713 ) (3,661 ) (6,247 ) (1,530 ) total coal royalty revenues $ 10,610 $ 24,727 $ 10,847 $ 40,559 $ 87,561 other revenues production lease minimum revenues (2) $ 4,267 $ 2,752 $ 8,485 $ 13,554 $ 21,331 minimum lease straight-line revenues (2) 3,553 3,982 4,987 12,349 11,152 property tax revenues 1,896 1,606 761 4,256 4,416 wheelage revenues 1,680 1,675 1,584 5,468 5,035 coal overriding royalty revenues 1,314 2,189 683 3,319 10,163 lease amendment revenues 858 1,535 890 2,591 6,720 aggregates royalty revenues 221 954 271 1,068 3,655 oil and gas royalty revenues 1,078 374 2,742 4,923 2,575 other revenues 263 125 416 752 1,429 total other revenues $ 15,130 $ 15,192 $ 20,819 $ 48,280 $ 66,476 coal royalty and other $ 25,740 $ 39,919 $ 31,666 $ 88,839 $ 154,037 transportation and processing services revenues 2,204 3,865 1,938 6,651 14,740 gain on asset sales and disposals — 6,107 465 465 6,609 total coal royalty and other segment revenues and other income $ 27,944 $ 49,891 $ 34,069 $ 95,955 $ 175,386 ____________________ (1) northern appalachia includes nrp's hibbs run property that has significant sales volumes, but a low fixed rate per ton. (2) beginning april 1, 2020 and effective january 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications that fixed consideration paid to us over a two-year period. natural resource partners l.p. financial tables (unaudited) adjusted ebitda coal royalty and other corporate and financing (in thousands) soda ash total for the three months ended september 30, 2020 net income (loss) from continuing operations 19,173 1,890 (13,847 ) $ 7,216 less: equity earnings from unconsolidated investment — (1,986 ) — (1,986 ) add: total distributions from unconsolidated investment — — — — add: interest expense, net 41 — 10,213 10,254 add: loss on extinguishment of debt — — — — add: depreciation, depletion and amortization 2,111 — — 2,111 add: asset impairments 934 — — 934 adjusted ebitda $ 22,259 $ (96 ) $ (3,634 ) $ 18,529 for the three months ended september 30, 2019 net income (loss) from continuing operations $ 40,252 $ 13,595 $ (14,684 ) $ 39,163 less: equity earnings from unconsolidated investment — (13,818 ) — (13,818 ) add: total distributions from unconsolidated investment — 6,370 — 6,370 add: interest expense, net — — 10,431 10,431 add: loss on extinguishment of debt — — — — add: depreciation, depletion and amortization 3,384 — — 3,384 add: asset impairments 484 — — 484 adjusted ebitda $ 44,120 $ 6,147 $ (4,253 ) $ 46,014 for the three months ended june 30, 2020 net loss from continuing operations $ (108,479 ) $ (3,087 ) (13,935 ) $ (125,501 ) less: equity earnings from unconsolidated investment — 3,058 — 3,058 add: total distributions from unconsolidated investment — 7,105 — 7,105 add: interest expense, net 15 — 10,314 10,329 add: loss on extinguishment of debt — — — — add: depreciation, depletion and amortization 2,062 — — 2,062 add: asset impairments 132,283 — — 132,283 adjusted ebitda $ 25,881 $ 7,076 $ (3,621 ) $ 29,336 natural resource partners l.p. reconciliation of non-gaap measures (unaudited) adjusted ebitda coal royalty and other corporate and financing (in thousands) soda ash total for the nine months ended september 30, 2020 net income (loss) from continuing operations $ (62,562 ) $ 5,059 $ (42,003 ) $ (99,506 ) less: equity earnings from unconsolidated investment — (5,200 ) — (5,200 ) add: total distributions from unconsolidated investment — 14,210 — 14,210 add: interest expense, net 56 — 30,835 30,891 add: loss on extinguishment of debt — — — — add: depreciation, depletion and amortization 6,185 — — 6,185 add: asset impairments 133,217 — — 133,217 adjusted ebitda $ 76,896 $ 14,069 $ (11,168 ) $ 79,797 for the nine months ended september 30, 2019 net income (loss) from continuing operations $ 136,566 $ 36,610 $ (79,142 ) $ 94,034 less: equity earnings from unconsolidated investment — (36,833 ) — (36,833 ) add: total distributions from unconsolidated investment — 25,480 — 25,480 add: interest expense, net — — 37,061 37,061 add: loss on extinguishment of debt — — 29,282 29,282 add: depreciation, depletion and amortization 11,746 — — 11,746 add: asset impairments 484 — — 484 adjusted ebitda $ 148,796 $ 25,257 $ (12,799 ) $ 161,254 natural resource partners l.p. reconciliation of non-gaap measures (unaudited) distributable cash flow and free cash flow coal royalty and other corporate and financing (in thousands) soda ash total for the three months ended september 30, 2020 net cash provided by (used in) operating activities of continuing operations $ 28,573 $ (75 ) $ (4,175 ) 24,323 add: proceeds from asset sales and disposals — — — — add: proceeds from sale of discontinued operations — — — — add: return of long-term contract receivable 332 — — 332 distributable cash flow $ 28,905 $ (75 ) $ (4,175 ) $ 24,655 less: proceeds from asset sales and disposals — — — — less: proceeds from sale of discontinued operations — — — — less: acquisition costs — — — — free cash flow $ 28,905 $ (75 ) $ (4,175 ) $ 24,655 for the three months ended september 30, 2019 net cash provided by (used in) operating activities of continuing operations $ 41,094 $ 6,147 $ (5,507 ) $ 41,734 add: proceeds from asset sales and disposals 6,108 — — 6,108 add: proceeds from sale of discontinued operations — — — (122 ) add: return of long-term contract receivable 459 — — 459 distributable cash flow $ 47,661 $ 6,147 $ (5,507 ) $ 48,179 less: proceeds from asset sales and disposals (6,108 ) — — (6,108 ) less: proceeds from sale of discontinued operations — — — 122 less: acquisition costs — — — — free cash flow $ 41,553 $ 6,147 $ (5,507 ) $ 42,193 for the three months ended june 30, 2020 net cash provided by (used in) operating activities of continuing operations $ 31,953 $ 7,077 $ (19,095 ) $ 19,935 add: proceeds from asset sales and disposals 507 — — 507 add: proceeds from sale of discontinued operations — — — — add: return of long-term contract receivable 858 — — 858 distributable cash flow $ 33,318 $ 7,077 $ (19,095 ) $ 21,300 less: proceeds from asset sales and disposals (507 ) — — (507 ) less: proceeds from sale of discontinued operations — — — — less: acquisition costs (1,000 ) — — (1,000 ) free cash flow $ 31,811 $ 7,077 $ (19,095 ) $ 19,793 natural resource partners l.p. reconciliation of non-gaap measures (unaudited) distributable cash flow and free cash flow coal royalty and other corporate and financing (in thousands) soda ash total for the nine months ended september 30, 2020 net cash provided by (used in) operating activities of continuing operations $ 91,082 $ 14,091 $ (30,760 ) $ 74,413 add: proceeds from asset sales and disposals 507 — — 507 add: proceeds from sale of discontinued operations — — — (66 ) add: return of long-term contract receivable 1,462 — — 1,462 distributable cash flow $ 93,051 $ 14,091 $ (30,760 ) $ 76,316 less: proceeds from asset sales and disposals (507 ) — — (507 ) less: proceeds from sale of discontinued operations — — — 66 less: acquisition costs (1,000 ) — — (1,000 ) free cash flow $ 91,544 $ 14,091 $ (30,760 ) $ 74,875 for the nine months ended september 30, 2019 net cash provided by (used in) operating activities of continuing operations $ 139,821 $ 25,257 $ (47,153 ) $ 117,925 add: proceeds from asset sales and disposals 6,611 — — 6,611 add: proceeds from sale of discontinued operations — — — (556 ) add: return of long-term contract receivable 1,351 — — 1,351 distributable cash flow $ 147,783 $ 25,257 $ (47,153 ) $ 125,331 less: proceeds from asset sales and disposals (6,611 ) — — (6,611 ) less: proceeds from sale of discontinued operations — — — 556 less: acquisition costs — — — — free cash flow $ 141,172 $ 25,257 $ (47,153 ) $ 119,276 natural resource partners l.p. reconciliation of non-gaap measures (unaudited) ltm free cash flow and cash flow cushion for the three months ended (in thousands) december 31, 2019 march 31, 2020 june 30, 2020 september 30, 2020 last 12 months net cash provided by operating activities of continuing operations $ 19,394 $ 30,155 $ 19,935 $ 24,323 $ 93,807 add: proceeds from asset sales and disposals (111 ) — 507 — 396 add: proceeds from sale of discontinued operations (73 ) (66 ) — — (139 ) add: return of long-term contract receivable 392 272 858 332 1,854 distributable cash flow $ 19,602 $ 30,361 $ 21,300 $ 24,655 $ 95,918 less: proceeds from asset sales and disposals 111 — (507 ) — (396 ) less: proceeds from sale of discontinued operations 73 66 — — 139 less: acquisition costs (22 ) — (1,000 ) — (1,022 ) free cash flow $ 19,764 $ 30,427 $ 19,793 $ 24,655 $ 94,639 add (less): free cash flow provided by (used by) discontinued operations (4 ) 1,706 — — 1,702 free cash flow including discontinued operations $ 19,760 $ 32,133 $ 19,793 $ 24,655 $ 96,341 add (less): free cash flow used by (provided by) discontinued operations 4 (1,706 ) — — (1,702 ) free cash flow excluding discontinued operations $ 19,764 $ 30,427 $ 19,793 $ 24,655 $ 94,639 less: mandatory opco debt repayments (20,335 ) (16,696 ) (2,365 ) (6,780 ) (46,176 ) less: preferred unit distributions (7,500 ) (7,500 ) (7,613 ) (7,500 ) (30,113 ) less: common unit distributions (5,630 ) (5,630 ) — (5,630 ) (16,890 ) cash flow cushion $ (13,701 ) $ 601 $ 9,815 $ 4,745 $ 1,460 leverage ratio for the three months ended (in thousands) december 31, 2019 march 31, 2020 june 30, 2020 september 30, 2020 last 12 months net income (loss) from continuing operations $ (119,448 ) $ 18,779 $ (125,501 ) $ 7,216 $ (218,954 ) less: equity earnings from unconsolidated investment (10,256 ) (6,272 ) 3,058 (1,986 ) (15,456 ) add: total distributions from unconsolidated investment 6,370 7,105 7,105 — 20,580 add: interest expense, net 10,392 10,308 10,329 10,254 41,283 add: depreciation, depletion and amortization 3,186 2,012 2,062 2,111 9,371 add: asset impairments 147,730 — 132,283 934 280,947 adjusted ebitda $ 37,974 $ 31,932 $ 29,336 $ 18,529 $ 117,771 debt—at september 30, 2020 $ 498,215 leverage ratio (1) 4.2 x ____________________ (1) leverage ratio is calculated as the outstanding principal of nrp's debt as of september 30, 2020 divided by the last twelve months' adjusted ebitda. note that adjusted ebitda under the indenture governing nrp's 2025 parent company notes may be different than the amount shown above. however, nrp's last twelve months leverage ratio as of september 30, 2020, was 4.2x as calculated under the indenture governing nrp's 2025 parent company notes. natural resource partners l.p. reconciliation of non-gaap measures (unaudited) return on capital employed ("roce") coal royalty and other corporate and financing (in thousands) soda ash total ltm ended september 30, 2020 net income (loss) from continuing operations $ (177,917 ) $ 15,289 $ (56,326 ) $ (218,954 ) financing costs 56 — 42,010 42,066 return $ (177,861 ) $ 15,289 $ (14,316 ) $ (176,888 ) as of september 30, 2019 total assets of continuing operations $ 969,425 $ 258,063 $ 15,428 $ 1,242,916 less: total current liabilities of continuing operations excluding current debt (10,867 ) — (17,425 ) (28,292 ) less: total long-term liabilities of continuing operations excluding long-term debt (48,017 ) — (413 ) (48,430 ) capital employed excluding discontinued operations $ 910,541 $ 258,063 $ (2,410 ) $ 1,166,194 total partners' capital (1) $ 913,476 $ 258,063 $ (703,164 ) $ 469,189 less: non-controlling interest (2,935 ) — — (2,935 ) less: partners' capital from discontinued operations — — — (814 ) total partners' capital excluding discontinued operations $ 910,541 $ 258,063 $ (703,164 ) $ 465,440 class a convertible preferred units — — 164,587 164,587 debt — — 536,167 536,167 capital employed excluding discontinued operations $ 910,541 $ 258,063 $ (2,410 ) $ 1,166,194 roce excluding discontinued operations (19.5 )% 5.9 % n/a (15.2 )% excluding asset impairments: return $ (177,861 ) $ 15,289 $ (14,316 ) $ (176,888 ) add: asset impairments 280,947 — — 280,947 return excluding asset impairments $ 103,086 $ 15,289 $ (14,316 ) $ 104,059 roce excluding discontinued operations and asset impairments 11.3 % 5.9 % n/a 8.9 % ____________________ (1) total partners' capital includes $0.8 million from discontinued operations. change in common unitholders' equity excluding asset impairments attributable to common unitholders (in thousands) q3 2020 common unitholders' equity $ 134,545 q3 2019 common unitholders' equity 400,266 ltm change in common unitholders' equity $ (265,721 ) ltm asset impairments $ 280,947 ltm asset impairments attributable to common unitholders $ 275,328 ltm change in common unitholders' equity excluding asset impairments attributable to common unitholders $ 9,607
