Natural resource partners l.p. reports third quarter 2018 results
Houston--(business wire)--natural resource partners l.p. (nyse:nrp) today reported third quarter of 2018 results as follows: (in thousands, except per unit data) _____________________ (1) net income from continuing operations during the nine months ended september 30, 2018 included income of $12.7 from a royalty dispute settlement in our soda ash business segment. (2) see "non-gaap financial measures" and reconciliation tables at the end of this release. "nrp delivered another solid quarter of operating results as we continued to see strong demand for metallurgical and thermal coal,” remarked nrp’s president and chief operating officer, craig nunez. “i would also like to highlight the favorable litigation settlement with foresight energy in october, which resulted in nrp receiving an initial payment of $25 million and a commitment from foresight to pay us $11 million annually for 15 years beginning in 2019. we are pleased with this mutually beneficial outcome and look forward to continuing our long-term partnership with foresight. these additional cash flows will assist in our commitment to strengthening our balance sheet." nrp improved its liquidity since the end of the second quarter of 2018 by $10.4 million to $118.4 million at september 30, 2018, consisting of $63.4 million of cash and $55.0 million of borrowing capacity available under its credit facility. nrp's consolidated debt-to-adjusted ebitda ratio at september 30, 2018 was 3.5x. with respect to the third quarter of 2018, nrp declared a cash distribution of $0.45 per common unit and a cash distribution of $7.5 million on nrp’s preferred units. nrp's distribution coverage ratio over the last twelve months was 6.9x before taking into account the $30 million annual distribution on nrp's preferred units, and 5.6x after taking into account this preferred unit distribution. segment results coal royalty and other construction aggregates corporate and financing (in thousands) _________________________ (1) see "non-gaap financial measures" and reconciliation tables at the end of this release. coal royalty and other during the third quarter of 2018, we continued to see strong coal pricing driven by robust export demand and stable domestic markets for metallurgical and thermal coal. while total coal production remained steady, our average coal royalty revenue per ton increased 12% driven primarily by a strong global demand for metallurgical coal. approximately 67% of nrp's coal royalty revenues and approximately 61% of its coal royalty production was derived from metallurgical coal during the three months ended september 30, 2018. net income and adjusted ebitda were consistent with prior year. free cash flow decreased slightly in the third quarter of 2018 compared to the third quarter of 2017 primarily as a result of the timing of payments. soda ash soda ash segment results were consistent with prior year. construction aggregates net income and adjusted ebitda results decreased slightly primarily due to higher operating expenses. free cash flow increased primarily due to the timing of certain operating payments, partially offset by increased capital expenditures. corporate and finance corporate and finance segment results improved for the third quarter of 2018, primarily due to lower interest as a result of continued repayment of debt. conference call a conference call will be held today at 10:00 a.m. et. to join the conference call, dial (844) 379-6938 and provide the conference code 55454890. 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. 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 a construction aggregates company and an equity investment in ciner wyoming, a trona/soda ash operation. 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. 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, litigation risk, 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 “distributable cash flow” is a non-gaap financial measure that we define as net cash provided by operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from sales of assets, including those included in discontinued operations, and return of long-term contract receivables (including affiliate); less maintenance capital expenditures and distributions to non-controlling interest. 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. distributable cash flow may not be calculated the same for us as for other companies. in addition, distributable cash flow presented below 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 the partnership's ability to make cash distributions to our common and preferred unitholders and our general partner and repay debt. “free cash flow” is a non-gaap financial measure that we define as net cash provided by operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivables (including affiliate); less maintenance and expansion capital expenditures, cash flow used in mitigation payments and acquisition costs classified as financing activities and distributions to non-controlling interest. free cash flow 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 the partnership's ability to make cash distributions to our common and preferred unitholders and our general partner and repay debt. "adjusted ebitda" is a non-gaap financial measure that we define as net income (loss) from continuing operations less equity earnings from unconsolidated investment; plus (minus) net loss (income) attributable to non-controlling interest; 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, 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. “adjusted net income attributable to nrp” is a non-gaap financial measure that we define as net income attributable to nrp plus restructuring transaction expenses that include debt modification expense, loss on extinguishment of debt and restructuring-related incentive compensation expense, asset impairments and income (loss) from discontinued operations; less gain on sale of assets. adjusted net income 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 adjusted net income is useful in evaluating our financial performance because restructuring transaction expenses are one time charges, gains on asset sales are not related to the operations of our business and asset impairments are non-cash charges. excluding these from net income allows us to better compare results from ongoing operations period-over-period. "return on capital employed" is a non-gaap financial measure that we define as net income from continuing operations plus interest expense divided by the sum of equity 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, 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. revision of previously issued first quarter and second quarter 2018 financial statements during the three months ended september 30, 2018, nrp identified an error related to the modified retrospective adoption of asc 606 on january 1, 2018 for certain coal royalty leases that impacted its financial statements as of and for the three-months ended march 31, 2018 and as of and for the three and six-months ended june 30, 2018. management concluded that the impact of the error was not material to the previously issued financial statements. in order to properly reflect the application of asc 606 retrospectively, financial information for the three months ended march 31, 2018 and for the three and six months ended june 30, 2018 in the following financial tables and reconciliation of non-gaap measures and recap of metrics have been revised to reflect the correction of this error. see note 2. revenue from contracts with customers of the partnership's third quarter 2018 form 10-q for additional information. -financial tables, reconciliation of non-gaap measures and recap of metrics follow- natural resource partners l.p. financial tables (in thousands, except per unit data) natural resource partners l.p. financial tables (in thousands) (in thousands) natural resource partners l.p. financial tables (in thousands, except unit data) natural resource partners l.p. financial tables common unitholders general partner warrant holders accumulatedother comprehensiveloss partners' capital excluding non-controlling interest non-controlling interest total capital (in thousands) units amounts ___________________ (1) net income includes $22.5 million attributable to preferred unitholders that accumulated during the period, of which $22.1 million is allocated to the common unitholders and $0.5 million is allocated to the general partner. natural resource partners l.p. financial tables the tables below presents nrp's unaudited business results by segment for the three and nine months ended september 30, 2018 and 2017 and the three months ended june 30, 2018: coal royalty and other construction aggregates corporate and financing (in thousands) __________________ (1) see "non-gaap financial measures" and reconciliation tables at the end of this release. natural resource partners l.p. financial tables (unaudited) coal royalty and other construction aggregates corporate and financing (in thousands) ____________________ (1) see "non-gaap financial measures" and reconciliation tables at the end of this release. natural resource partners l.p. financial tables (in thousands, except per ton data) natural resource partners l.p. reconciliation of non-gaap measures coalroyalty andother constructionaggregates corporateandfinancing (in thousands) natural resource partners l.p. reconciliation of non-gaap measures coalroyalty andother constructionaggregates corporateandfinancing (in thousands) natural resource partners l.p. reconciliation of non-gaap measures coalroyalty andother constructionaggregates corporateandfinancing (in thousands) natural resource partners l.p. reconciliation of non-gaap measures coalroyalty andother constructionaggregates corporateandfinancing (in thousands) (in thousands) natural resource partners l.p. reconciliation of non-gaap measures (in thousands) december 31,2017 march 31,2018 june 30,2018 september 30,2018 last 12months _______________________________ natural resource partners l.p. reconciliation of non-gaap measures (in thousands) december 31,2017 march 31,2018 june 30,2018 september 30,2018 last 12months _______________________________ coalroyalty andother constructionaggregates corporateandfinancing (in thousands) natural resource partners l.p. reconciliation of non-gaap measures coalroyalty andother constructionaggregates corporateandfinancing (in thousands) roce (1) _______________________________
