Natural Resource Partners L.P. Announces 2015 Fourth-Quarter and Full-Year Results

2015 Full Year Highlights

- Net income attributable to the limited partners, excluding impairments, of $108.5 million, or $8.87 per unit on a split-adjusted basis

- Non-cash impairment charges attributable to the limited partners of $668.0 million

- Net loss attributable to the limited partners of $559.5 million, or $45.75 per unit on a split-adjusted basis

- Revenues of $488.8 million

- Distributable Cash Flow of $197.0 million

- Adjusted EBITDA of $292.1 million

Mar 11, 2016, 08:00 ET from Natural Resource Partners L.P.

HOUSTON, March 11, 2016 /PRNewswire/ -- Natural Resource Partners L.P. (NYSE: NRP) today reported a net loss attributable to the limited partners for the year ended December 31, 2015 of $559.5 million, or $45.75 per unit, compared with net income attributable to the limited partners of $106.7 million, or $9.42  per unit, a year earlier.  Results for the full year 2015 were negatively impacted by $668.0 million of non-cash impairment charges attributable to the limited partners, as the market value of certain of NRP's assets were impacted by continued deterioration of the coal markets and the significant decline in oil prices.  Excluding those impairments, net income attributable to the limited partners was $8.87 per unit.  Distributable Cash Flow for the year ended December 31, 2015 declined 5% to $197.0 million and Adjusted EBITDA remained relatively flat at $292.1 million.  All references to net income or loss per unit, as well as distributions per unit, included in this release have been adjusted to give effect to the one-for-ten reverse unit split effective February 17, 2016.

NRP's results for the quarter ended December 31, 2015 included net loss attributable to the limited partners of $21.3 million, or $1.74 per unit, compared to net income attributable to the limited partners of $8.5 million, or $0.70 per unit, for the fourth quarter 2014.  Both quarters were negatively impacted by impairments, with $51.0 million recorded in 2015 versus $20.6 million in 2014.  Excluding impairments, net income attributable to the limited partners for the fourth quarter 2015 was $2.34 per unit, compared to $2.36 per unit for the fourth quarter 2014.  Distributable Cash Flow for the fourth quarter 2015 declined 18% to $39.1 million and Adjusted EBITDA declined 12% to $70.2 million.

"Although our soda ash business performed well again in the fourth quarter and we exceeded the upper end of our 2015 guidance for Adjusted EBITDA and Distributable Cash Flow, low commodity prices and challenging markets continued to pressure our coal and oil and gas businesses and, to a lesser extent, our aggregates business," said Wyatt Hogan, President and Chief Operating Officer.  "In this difficult operating environment, NRP remains steadfastly focused on deleveraging.  We believe the actions taken over the last year have better positioned the partnership to navigate this difficult commodity price period."

NRP has taken the following steps to achieve the financial objectives outlined in the April 2015 strategic plan:

  • reduced quarterly unitholder distribution by 87% from $3.50 to $0.45 per common unit, which provides approximately $150 million of additional cash annually for debt repayment in future periods;
  • extended the maturity of Opco's revolving credit facility until October 1, 2017;
  • reduced net debt by $91 million;
  • closed two regional offices and reduced NRP's coal related workforce by 15%, and implemented other steps to reduce overhead costs; and
  • sold $47.5 million of  assets in order to raise cash to help NRP stay on track to achieve its deleveraging objectives.

Effective February 17, 2016, NRP completed a 1-for-10 reverse unit split, decreasing the number of units outstanding to 12.2 million in order to ensure continued compliance with New York Stock Exchange listing standards.

At December 31, 2015, NRP had $64.8 million of liquidity, consisting of $51.8 million in cash and $13.0 million available for borrowing under its revolving credit facilities.

As a result of acquisitions that diversified its natural resource asset base, effective for the quarter ended December 31, 2015, NRP changed the organizational structure of its financial information from a single operating segment to the four operating segments described below:

1)   Coal, Hard Mineral Royalty and Other—consists primarily of coal royalty, coal related transportation and processing assets, aggregate and industrial minerals royalty assets and timber. NRP's coal reserves are primarily located in Appalachia, the Illinois Basin and the Western United States. NRP's aggregates and industrial minerals are located in a number of states across the United States.  In February, NRP sold a portion of its aggregates royalties properties for $10 million.

2)   Soda Ash—consists of the NRP's 49% non-controlling equity interest in a trona ore mining operation and soda ash refinery in the Green River Basin, Wyoming. Ciner Resources LP, NRP's operating partner, mines the trona, processes it into soda ash, and distributes the soda ash both domestically and internationally into the glass and chemicals industries. NRP receives regular quarterly distributions from this business.

3)   VantaCore—consists of NRP's construction materials business that operates hard rock quarries, sand and gravel plants, asphalt plants and two marine terminals. VantaCore operates in Pennsylvania, West Virginia, Tennessee, Kentucky and Louisiana.

4)   Oil and Gas—consists of NRP's non-operated working interests, royalty interests and overriding royalty interests in oil and natural gas properties. NRP's primary interests in oil and natural gas producing properties are non-operated working interests located in the Williston Basin in North Dakota and Montana. During 2015, NRP also owned fee mineral, royalty or overriding royalty interests in oil and gas properties in several other regions, including the Appalachian Basin, Oklahoma and Louisiana.  In February, NRP sold royalty interests in several producing properties located in the Appalachian Basin, including its overriding royalty interests in the Marcellus Shale, for $37.5 million in cash. The effective date of the sale was January 1, 2016.

Direct segment costs and certain costs incurred at a corporate level that are identifiable and that benefit NRP's segments are allocated to them. These allocated costs include costs of: taxes, legal, information technology; human resources; and shared facilities services.

In reconciling items to consolidated operating income, the Corporate and Financing segment includes functional corporate departments that do not earn revenues. Costs incurred by this segment include corporate headquarters, acquisition, financing, centralized treasury and accounting and other corporate-level activity not specifically allocated to a segment.

Business Results and Outlook

The table below presents NRP's business results by segment for the three and twelve months ended December 31, 2015 and 2014:



Operating Business Segments






Coal, Hard Mineral Royalty and Other








Corporate and Financing






Soda Ash


VantaCore


Oil and Gas



Total



(In thousands)

Three Months Ended December 31, 2015













Total revenues and other income


$

59,825



$

13,179



$

31,979



$

11,080



$



$

116,063


Operating expenses excluding impairments (1)


21,486





29,368



9,688



2,525



63,067


Asset impairments


12,821





6,218



31,914





50,953


Net income (loss)


25,518



13,179



(3,607)



(30,522)



(26,354)



(21,786)


Adjusted EBITDA (1)


48,856



12,250



5,690



5,963



(2,402)



70,357


Distributable Cash Flow (1)


47,961



12,251



2,687



3,343



(33,448)



32,794















Three Months Ended December 31, 2014













Total revenues and other income


$

60,586



$

12,551



$

42,051



$

22,085



$



$

137,273


Operating expenses excluding impairments (1)


22,247





42,019



19,777



1,595



85,638


Asset impairments


20,585











20,585


Net income (loss)


17,754



12,551



32



2,308



(24,000)



8,645


Adjusted EBITDA (1)


53,249



10,780



3,328



14,360



(1,574)



80,143


Distributable Cash Flow (1)


63,131



10,776



1,884



(1,864)



(26,231)



47,696















Year Ended December 31, 2015













Total revenues and other income


$

246,353



$

49,918



$

139,013



$

53,565



$



$

488,849


Operating expenses excluding impairments (1)


76,941





132,523



63,354



12,348



285,166


Asset impairments


307,800





6,218



367,576





681,594


Net income (loss)


(138,388)



49,918



272



(377,365)



(106,157)



(571,720)


Adjusted EBITDA (1)


204,600



46,795



22,068



30,983



(12,330)



292,116


Distributable Cash Flow (1)


212,193



43,029



18,802



24,616



(101,659)



196,981















Year Ended December 31, 2014













Total revenues and other income


$

256,719



$

41,416



$

42,051



$

59,566



$



$

399,752


Operating expenses excluding impairments (1)


86,832





42,019



45,228



10,545



184,624


Asset impairments


26,209











26,209


Net income (loss)


143,678



41,416



32



14,338



(90,634)



108,830


Adjusted EBITDA (1)


216,842



46,638



3,328



38,273



(10,449)



294,632


Distributable Cash Flow (1)


234,965



46,149



1,884



17,030



(91,662)



208,366




1.

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

 

Coal, Hard Mineral Royalty and Other

The thermal and metallurgical coal markets remained severely challenged in 2015, leading to reduced production and coal royalty revenues for NRP.  The domestic and global coal markets continue to be over-supplied due to decreased coal demand resulting from increased government regulations, low natural gas prices (coal's competing fuel) and the strength of the United States dollar that materially impacted exports in 2015. NRP expects the markets to remain challenged in 2016 with additional production cuts and mines idled, but NRP does not know to what extent its properties will be impacted.

Revenues and other income decreased $10.4 million, or 4%, from $256.7 million in 2014 to $246.4 million in 2015. This decrease is primarily related to a 3.4 million ton decrease in coal production and a $0.59 per ton decline in average coal royalty revenue per ton, resulting in a $40.2 million reduction in coal royalty revenues.  Offsetting a significant portion of this decline was $21 million in revenues for lease assignment fees as well as a $3.7 million increase in gains from condemnation sales.

Net income decreased $282.1 million, from income of $143.7 million in 2014 to a $138.4 million loss in 2015.  This decrease is primarily related to the $281.6 million increase in asset impairment expense during the year ended December 31, 2015. The impairment expense resulted from facts and circumstances that indicated that the carrying value of certain mineral rights exceeded expected future cash flows from those assets. The decrease in revenues discussed above also contributed to the decrease in net income year-over-year.  These factors were partially offset by an $8.2 million decrease in depreciation, depletion and amortization as a result of the third quarter 2015 asset impairments in addition to a $1.7 million decrease in operating expenses mainly related to lower property taxes.

Adjusted EBITDA decreased $12.2 million, or 6%, from $216.8 million in 2014 to $204.6 million in 2015.  This decrease was primarily the result of decreased revenues.

Distributable cash flow decreased $22.8 million, or 10%, from $235.0 million in 2014 to $212.2 million in 2015.  This decrease was primarily the result of lower coal royalty revenues.

Soda Ash

Revenues and other income related to our Soda Ash segment increased $8.5 million, or 21%, from $41.4 million in 2014 to $49.9 million in 2015. For the year ended December 31, 2015, we received $46.8 million in cash distributions from Ciner Wyoming and for the year ended December 31, 2014, we received $46.6 million in cash distributions.

VantaCore

VantaCore's construction aggregates mining and production business is largely dependent on the strength of the local markets that it serves and is also seasonal, with lower production and sales expected during the first quarter of each year due to winter weather. VantaCore's Laurel Aggregates operation in southwestern Pennsylvania serves producers and oilfield service companies operating in the Marcellus and Utica Shales and was impacted during 2015 by the slowing pace of exploration and development of natural gas in those areas due to low natural gas prices. Increased local construction activity partially offset these declines during 2015, but we expect that Laurel's business will continue to be impacted by decreased natural gas development activities. VantaCore's operations based in Clarksville, Tennessee and Baton Rouge, Louisiana depend on the pace of commercial and residential construction in those areas. The Clarksville operation performed above expectations during 2015, while the Baton Rouge operation volumes were lower than expected. In June 2015, VantaCore purchased a hard rock quarry operation located on the Tennessee River near Grand Rivers, Kentucky from one of NRP's aggregates lessees. This operation leases reserves from NRP and sells its produced limestone aggregates in both the local market and downstream to river-based markets.

Tonnage sold increased 5.1 million tons, or 222%, from 2.3 million tons in 2014 to 7.4 million tons in 2015.  Revenues and other income related to our VantaCore segment increased $97.0 million, or 231%, from $42.1 million in 2014 to $139.0 million in 2015. Net income increased $0.2 million from less than $0.1 million in 2014 to $0.2 million in 2015.  Adjusted EBITDA increased $18.7 million from $3.3 million in 2014 to $22.1 million in 2015.  Distributable cash flow increased $16.9 million from $1.9 million in 2014 to $18.8 million. These increases are due to the fact that 2014 results only include three months of VantaCore results as compared to a full year of results for 2015.

Oil and Gas

Global oil prices continued to decline in 2015 and remained significantly lower than the same period in 2014. Although domestic crude oil production has also started to decline, oil is being imported into storage and inventories remain above the five year average indicating continued excessive global supply. Production of crude is estimated to continue to decline as a result of reduced development drilling activities. Natural gas prices have also shown recent declines due to reduced demand and increased inventories.

Revenues and other income decreased $6.0 million, or 10%, from $59.6 million in 2014 to $53.6 million in 2015. This decrease is due to lower commodity prices during the year, partially offset by increased production.

Net income decreased $392 million from income of $14.3 million in 2014 to a loss of $377.4 million in 2015. This decrease was primarily the result of the $367.6 million impairment expense in our Oil and Gas segment. Also contributing to this reduction in income was the decreased revenue discussed above, in addition to the increase in operating and maintenance expenses and depreciation, depletion and amortization expense as a result of a full year of operating expenses related to the fourth quarter 2014 Sanish Field acquisition.

Adjusted EBITDA decreased $7.3 million, or 19%, from $38.3 million in 2014 to $31.0 million in 2015.  This decrease was primarily the result of decreased revenues and increased operating expenses year-over-year.

Distributable cash flow increased $7.6 million, or 45%, from $17.0 million in 2014 to $24.6 million in 2015.  This increase was primarily the result of increased cash flow from operations offset somewhat by higher maintenance capital expenditures.

Corporate and Financing

General and administrative costs increased $1.8 million from $10.5 million in 2014 to $12.3 million in 2015 due to additional personnel and higher outsourcing costs.   Interest expense increased $13.6 million, or 17%, from $80.2 million in 2014 to $93.8 million in 2015. This increase was primarily the result of additional debt incurred to complete acquisitions in the fourth quarter of 2014.

2016 Market Outlook

NRP expects that its aggregates business will remain relatively flat and that distributions received from its soda ash business will increase in 2016.  However, NRP expects continued deterioration in both the coal and oil and gas businesses in 2016.  Given the extreme volatility in these markets, it is difficult for NRP to anticipate how much its properties will be affected at this time.  Accordingly, NRP is not issuing any financial guidance for 2016 at this time.

Company Profile

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

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

Non-GAAP Financial Measures

"Distributable Cash Flow" is a non-GAAP financial measure that represents net cash provided by operating activities, plus returns of unconsolidated equity investments, proceeds from sales of assets, and returns of long-term contract receivables—affiliate, less maintenance capital expenditures and distributions to non-controlling interest. Although distributable cash flow is a non-GAAP financial measure, we believe it is a useful adjunct to net cash provided by operating activities under GAAP. 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. A reconciliation of Distributable Cash Flow to net cash provided by operating activities is included in the tables attached to this release.

"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment, gain on reserve swaps and income to non-controlling interest; plus distributions from equity earnings in unconsolidated investment, interest expense, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA, 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. Adjusted EBITDA 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. Adjusted EBITDA provides no information regarding a partnership's capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax positions. Adjusted 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 Adjusted EBITDA is a useful measure because it is widely used by financial analysts, investors and rating agencies for comparative purposes. Adjusted EBITDA is also a financial measure widely used by investors in the high-yield bond market. 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. A reconciliation of Adjusted EBITDA to net income is included in the tables attached to this release.

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

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

Forward-Looking Statements

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission.  All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the partnership expects, believes or anticipates will or may occur in the future are forward-looking statements.  These statements are based on certain assumptions made by the partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.  Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the partnership.  These risks include, but are not limited to, commodity prices; decreases in demand for coal, trona and soda ash, construction aggregates, crude oil and natural gas, frac sand and other natural resources; changes in operating conditions and costs; production cuts by our lessees; the pace of development of our oil and natural gas properties; unanticipated geologic problems; our liquidity, leverage and access to capital and financing sources; changes in the legislative or regulatory environment and other factors detailed in Natural Resource Partners' Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.                           

-Financial Tables Follow-


 

Natural Resource Partners L.P.
Financial Tables


Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except per unit data)
















For the Three Months Ended,


For the Year Ended





December 31,


December 31,





2015


2014


2015


2014





(unaudited)



Revenues and other income:










Coal, hard mineral royalty and other


$

41,048



$

41,361



$

156,638



$

172,160



Coal, hard mineral royalty and other - affiliates


18,777



19,225



89,715



84,559



VantaCore


31,979



42,051



139,013



42,051



Oil and gas


11,080



22,085



53,565



59,566



Equity in earnings of Ciner Wyoming


13,179



12,551



49,918



41,416




Total revenues and other income


116,063



137,273



488,849



399,752













Operating expenses:










Operating and maintenance expenses


34,057



49,708



155,959



83,433



Operating and maintenance expenses - affiliates


8,334



4,077



16,031



10,770



Depreciation, depletion and amortization


18,152



30,258



100,828



79,876



General and administrative


1,022



821



7,036



7,287



General and administrative - affiliates


1,503



774



5,312



3,258



Asset impairments


50,953



20,585



681,594



26,209




Total operating expenses


114,021



106,223



966,760



210,833













Income (loss) from operations


2,042



31,050



(477,911)



188,919













Other income (expense)










Interest expense


(23,830)



(22,426)



(93,827)



(80,185)



Interest income


2



21



18



96




Other expense, net


(23,828)



(22,405)



(93,809)



(80,089)













Net Income (loss)


(21,786)



8,645



(571,720)



108,830













Net income (loss) attributable to partners:










Limited partners


(21,326)



8,472



(559,492)



106,653



General partner


(460)



173



(12,228)



2,177













Basic and diluted net income (loss) per common unit


$

(1.74)



$

0.70



$

(45.75)



$

9.42













Weighted average number of common units outstanding:


12,230



12,145



12,230



11,326













Net income (loss)


$

(21,786)



$

8,645



$

(571,720)



$

108,830


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


198



(187)



(1,693)



(81)


Comprehensive income (loss) attributable to NRP


$

(21,588)



$

8,458



$

(573,413)



$

108,749


 

Natural Resource Partners L.P.
Financial Tables


Consolidated Statements of Cash Flow

(in thousands)














For the Three Months Ended


For the Year Ended






December 31,


December 31,






2015


2014


2015


2014






(unaudited)



Cash flows from operating activities:










Net income (loss)


$

(21,786)



$

8,645



$

(571,720)



$

108,830



Adjustments to reconcile net income (loss) to net cash provided by operating activities:











Asset impairment


50,953



20,585



681,594



26,209




Depreciation, depletion and amortization


18,152



30,258



100,828



79,876




Distributions from equity earnings from unconsolidated investment


12,250



10,780



46,795



43,005




Equity earnings from unconsolidated investment


(13,179)



(12,551)



(49,918)



(41,416)




Gain on reserve swap






(9,290)



(5,690)




Other, net


1,738



(200)



(1,295)



1,942




Other, net - affiliates


434





(287)





Change in operating assets and liabilities:











Accounts receivable


4,567



(3,613)



16,486



(8,685)




Accounts receivable - affiliates


586



1,053



2,630



(1,828)




Accounts payable


(1,006)



(4,070)



(3,775)



(2,408)




Accounts payable - affiliates


(1,102)



465



514



559




Accrued liabilities


(7,735)



(2,814)



(4,676)



(1,821)




Deferred revenue


1,570



2,137



7,605



2,056




Deferred revenue - affiliates


(801)



4,192



(4,200)



15,618




Accrued incentive plan expenses


(606)



180



(7,023)



(5,265)




Other items, net


(2,780)



(797)



(1,030)



(47)




Other items, net - affiliates


819



(591)



186



(180)





Net cash provided by operating activities


42,074



53,659



203,424



210,755


Cash flows from investing activities:











Acquisition of mineral rights


(4,740)



(341,991)



(40,679)



(356,026)




Acquisition of plant and equipment and other


(1,594)



(2,247)



(10,175)



(2,454)




Acquisition of aggregates business




(168,978)





(168,978)




Proceeds from sale of plant and equipment and other


18



1,001



11,024



1,006




Proceeds from sale of mineral rights


155



412



7,096



412




Return of  equity  and other unconsolidated investments








3,633




Return of long-term contract receivables - affiliate


342



994



2,463



1,904





Net cash used in investing activities


(5,819)



(510,809)



(30,271)



(520,503)


Cash flows from financing activities:











Proceeds from loans




615,471



100,000



617,471




Proceeds from loans - affiliate




19,904





19,904




Proceeds from issuance of common units




102,376





127,202




Capital contribution by general partner




2,733





3,240




Repayments of loans


(39,808)



(258,808)



(190,983)



(327,983)




Distributions to partners


(5,616)



(43,670)



(71,758)



(162,042)




Distributions to non-controlling interest






(2,744)



(974)




Debt issue costs and other


(214)



(8,906)



(5,971)



(9,507)





Net cash provided by (used in) financing activities


(45,638)



429,100



(171,456)



267,311


Net increase (decrease) in cash and cash equivalents


(9,383)



(28,050)



1,697



(42,437)


Cash and cash equivalents at beginning of period


61,156



78,126



50,076



92,513


Cash and cash equivalents at end of period


$

51,773



$

50,076



$

51,773



$

50,076


Supplemental cash flow information:










Cash paid during the period for interest


$

30,576



$

23,889



$

88,493



$

76,155



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


1,484



11,879



5,949



11,879



Units issued for acquisition of aggregates operations








31,604


 

Natural Resource Partners L.P.
Financial Tables


Consolidated Balance Sheets

(in thousands)






December 31,






2015


2014

ASSETS




Current assets:






Cash and cash equivalents


$

51,773



$

50,076



Accounts receivable, net


50,167



66,455



Accounts receivable - affiliates


6,864



9,494



Inventory


7,835



5,814



Prepaid expenses and other


4,490



4,279




Total current assets


121,129



136,118










Land




25,022



25,243


Plant and equipment, net


61,239



60,093


Mineral rights, net


1,094,027



1,781,852


Intangible assets, net


56,927



60,733


Equity in unconsolidated investment


261,942



264,020


Long-term contracts receivable - affiliate


47,359



50,008


Goodwill





52,012


Other assets


15,306



14,645


Other assets - affiliate


1,124




Total assets


$

1,684,075



$

2,444,724


LIABILITIES AND CAPITAL





Current liabilities:






Accounts payable


$

8,465



$

22,465



Accounts payable - affiliates


1,464



950



Accrued liabilities


45,735



43,533



Current portion of long-term debt, net


80,983



80,983




Total current liabilities


136,647



147,931










Deferred revenue


80,812



73,207


Deferred revenue - affiliates


82,853



87,053


Long-term debt, net


1,284,083



1,374,336


Long-term debt, net - affiliate


19,930



19,904


Other non-current liabilities


6,808



22,138










Partners' capital:






Common unitholders' interest (12.2 million units outstanding)


79,094



709,019



General partner's interest


(606)



12,245



Accumulated other comprehensive loss


(2,152)



(459)




Total partners' capital


76,336



720,805


Non-controlling interest


(3,394)



(650)


Total capital


72,942



720,155


Total liabilities and capital


$

1,684,075



$

2,444,724


 

Natural Resource Partners L.P.
Financial Tables


Operating Statistics - Coal, Hard Mineral Royalty and Other

(in thousands except per ton data)
















For the Three Months Ended


For the Year Ended







December 31,


December 31,







2015


2014


2015


2014







(unaudited)


(unaudited)

Coal royalty production (tons)









Appalachia











Northern


1,981



2,802



9,562



9,339




Central


3,460



4,996



16,862



20,092




Southern


803



964



3,803



3,914




Total Appalachia



6,244



8,762



30,227



33,345



Illinois Basin


2,908



3,113



11,173



13,177



Northern Powder River Basin


1,408



738



4,905



2,844



Gulf Coast


(38)



373



740



1,093


Total coal royalty production


10,522



12,986



47,045


50,459


Average royalty revenue per ton:









Appalachia











Northern

$


0.29


$


0.96


$


0.28


$


0.92




Central


3.54



4.07



3.85



4.46




Southern


4.66



5.00



4.57



5.18



Total Appalachia


2.65



3.18



2.81



3.55



Illinois Basin


3.80



4.21



3.94



4.10



Northern Powder River Basin


2.29



2.39



2.54



2.74



Gulf Coast


11.21



3.54



3.47



3.47


Combined average royalty revenue per ton

$

2.89


$

3.39


$

3.06


$


3.65

Coal royalty revenues:









Appalachia











Northern

$


567



$

2,680


$


2,672


$


8,621




Central


12,261



20,338



64,877



89,627




Southern


3,744



4,823



17,390



20,292



Total Appalachia


16,572



27,841



84,939



118,540



Illinois Basin


11,043



13,093



44,063



54,049



Northern Powder River Basin


3,224



1,763



12,443



7,804



Gulf Coast


(426)



1,320



2,570



3,793


Total coal royalty revenues

$

30,413


$

44,017


$

144,015


$


184,186

Other coal related revenues:









Override revenue

$


725


$


1,085


$


2,920


$


4,601



Transportation and processing fees


5,633



5,366



22,033



22,048



Minimums recognized as revenue


3,009



2,455



15,489



6,659



Lease assignment fees


15,000





21,000





Coal bonus related revenues




98





98



Condemnation related revenues


363





3,669





Coal reserve swap






9,290



5,690



Wheelage


1,049



776



3,166



3,442


Total other coal related revenues

$

25,779


$

9,780


$

77,567


$

42,538

Total coal related revenues and coal related revenues - affiliates

$

56,192


$

53,797


$

221,582


$

226,724










Hard mineral royalty revenues

538


2,459



8,090


12,073










Property tax revenue

2,656


2,744



11,258


13,609


Other

11


1,586




5,423


4,313


Total coal, hard mineral royalty and other revenue

$

59,397


$

60,586


$


246,353


$

256,719

 

Natural Resource Partners L.P.
Financial Tables


Operating Statistics - Oil and Gas

(Revenues in thousands)








For the Three Months Ended


For the Year Ended



December 31,


December 31,



2015


2014


2015


2014



(unaudited)


(unaudited)

Williston Basin non-operated working interests:









Production volumes:









  Oil (MBbl)


259



294



1,108



578


  Natural gas (Mcf)


209



206



810



408


  NGL (MBbl)


29



33



138



53


Total Production (MBoe)


323



361



1,381



699


Average sales price per unit









  Oil ($/Bbl)


$

37.29



$

63.38



$

41.19



$

77.85


  Natural gas ($/Mcf)


1.47



3.66



2.28



5.04


  NGL ($/Bbl)


7.79



26.42



9.20



33.64


Revenues



  Oil


$

9,659



18,635



$

45,635



44,995


  Natural gas


307



753



1,847



2,056


  NGL


226



872



1,269



1,783


  Non-production revenue






450




    Total revenues


$

10,192



$

20,260



$

49,201



$

48,834











Other oil and gas related revenues









  Royalty and overriding royalty revenues


888



1,825



$

4,364



10,732











Total oil and gas revenues


$

11,080



$

22,085



$

53,565



$

59,566


 


 

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


Distributable Cash Flow

(in thousands)






Coal, Hard Mineral Royalty and Other








Corporate and Financing






Soda Ash


VantaCore


Oil and Gas



Total



(unaudited)

Three Months Ended December 31, 2015













Net cash provided by (used in) operating activities


$

52,498



$

12,251



$

3,822



$

6,951



$

(33,448)



$

42,074


Add: return on long-term contract receivables - affiliate


342











342


Add: proceeds from sale of PP&E






18







18


Add: proceeds from sale of mineral rights








155





155


Less: maintenance capital expenditures


(87)





(1,153)



(2,173)





(3,413)


Distributable Cash Flow


$

47,961



$

12,251



$

2,687



$

3,343



$

(33,448)



$

39,078















Three Months Ended December 31, 2014













Net cash provided by (used in) operating activities


$

61,078



$

10,776



$

2,746



$

5,290



$

(26,231)



$

53,659


Add: return on long-term contract receivables - affiliate


994











994


Add: proceeds from sale of PP&E


963





38







1,001


Add: proceeds from sale of mineral rights


412











412


Less: maintenance capital expenditures


(316)





(900)



(7,154)





(8,370)


     Distributable Cash Flow


$

63,131



$

10,776



$

1,884



$

(1,864)



$

(26,231)



$

47,696


Year Ended December 31, 2015













Net cash provided by (used in) operating activities


$

197,913



$

43,029



$

23,605



$

40,536



$

(101,659)



$

203,424


Add: return on long-term contract receivables - affiliate


2,463











2,463


Add: proceeds from sale of PP&E


10,100





924







11,024


Add: proceeds from sale of mineral rights


3,505







3,591





7,096


Less: maintenance capital expenditures


(416)





(5,727)



(18,139)





(24,282)


Less: distributions to non-controlling interest


(1,372)







(1,372)





(2,744)


     Distributable Cash Flow


$

212,193



$

43,029



$

18,802



$

24,616



$

(101,659)



$

196,981


Year Ended December 31, 2014













Net cash provided by (used in) operating activities


$

232,484



$

42,516



$

2,746



$

24,671



$

(91,662)



$

210,755


Add: return on long-term contract receivables - affiliate


1,904











1,904


Add: return of unconsolidated equity investment




3,633









3,633


Add: proceeds from sale of PP&E


968





38







1,006


Add: proceeds from sale of mineral rights


412











412


Less: maintenance capital expenditures


(316)





(900)



(7,154)





(8,370)


Less: distributions to non-controlling interest


(487)







(487)





(974)


     Distributable Cash Flow


$

234,965



$

46,149



$

1,884



$

17,030



$

(91,662)



$

208,366


 

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


Adjusted EBITDA

(in thousands)






Coal, Hard Mineral Royalty and Other








Corporate and Financing






Soda Ash


VantaCore


Oil and Gas



Total



(unaudited)

Three Months Ended December 31, 2015













Net income (loss)


$

25,518



$

13,179



$

(3,607)



$

(30,522)



$

(26,354)



$

(21,786)


Less: equity earnings from unconsolidated investment




(13,179)









(13,179)


Add: distributions from unconsolidated investment




12,250









12,250


Add: depreciation, depletion and amortization


10,517





3,079



4,556





18,152


Add: asset impairment


12,821





6,218



31,914





50,953


Add: interest expense










23,830



23,830


Adjusted EBITDA


$

48,856



$

12,250



$

5,690



$

5,963



$

(2,402)



$

70,220















Three Months Ended December 31, 2014













Net income (loss)


$

17,754



$

12,551



$

32



$

2,308



$

(24,000)



$

8,645


Less: equity earnings from unconsolidated investment




(12,551)









(12,551)


Add: distributions from unconsolidated investment




10,780









10,780


Add: depreciation, depletion and amortization


14,910





3,296



12,052





30,258


Add: asset impairment


20,585











20,585


Add: interest expense










22,426



22,426


Adjusted EBITDA


$

53,249



$

10,780



$

3,328



$

14,360



$

(1,574)



$

80,143















Year Ended December 31, 2015













Net income (loss)


$

(138,388)



$

49,918



$

272



$

(377,365)



$

(106,157)



$

(571,720)


Less: equity earnings from unconsolidated investment




(49,918)









(49,918)


Less: gain on reserve swap


(9,290)











(9,290)


Add: distributions from unconsolidated investment




46,795









46,795


Add: depreciation, depletion and amortization


44,478





15,578



40,772





100,828


Add: asset impairment


307,800





6,218



367,576





681,594


Add: interest expense










93,827



93,827


Adjusted EBITDA


$

204,600



$

46,795



$

22,068



$

30,983



$

(12,330)



$

292,116















Year Ended December 31, 2014













Net income (loss)


$

143,678



$

41,416



$

32



$

14,338



$

(90,634)



$

108,830


Less: equity earnings from unconsolidated investment




(41,416)









(41,416)


Less: gain on reserve swap


(5,690)











(5,690)


Add: distributions from unconsolidated investment




46,638









46,638


Add: depreciation, depletion and amortization


52,645





3,296



23,935





79,876


Add: asset impairment


26,209











26,209


Add: interest expense










80,185



80,185


Adjusted EBITDA


$

216,842



$

46,638



$

3,328



$

38,273



$

(10,449)



$

294,632


 

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


Operating Expenses Excluding Impairments

(in thousands)






Coal, Hard Mineral Royalty and Other








Corporate and Financing






Soda Ash


VantaCore


Oil and Gas



Total



(unaudited)

Three Months Ended December 31, 2015













Total operating expenses


$

34,307



$



$

35,586



$

41,602



$

2,525



$

114,020


Less: asset impairments


12,821





6,218



31,914





50,953


Operating expenses excluding impairments


$

21,486



$



$

29,368



$

9,688



$

2,525



$

63,067















Three Months Ended December 31, 2014













Total operating expenses


$

42,832



$



$

42,019



$

19,777



$

1,595



$

106,223


Less: asset impairments


20,585











20,585


Operating expenses excluding impairments


$

22,247



$



$

42,019



$

19,777



$

1,595



$

85,638















Year Ended December 31, 2015













Total operating expenses


$

384,741



$



$

138,741



$

430,930



$

12,348



$

966,760


Less: asset impairments


307,800





6,218



367,576





681,594


Operating expenses excluding impairments


$

76,941



$



$

132,523



$

63,354



$

12,348



$

285,166















Year Ended December 31, 2014













Total operating expenses


$

113,041



$



$

42,019



$

45,228



$

10,545



$

210,833


Less: asset impairments


26,209











26,209


Operating expenses excluding impairments


$

86,832



$



$

42,019



$

45,228



$

10,545



$

184,624


 

Non-cash impairment charges attributable to the limited partners

(in thousands)








For the Three Months Ended


For the Year Ended



December 31,


December 31,


December 31,


December 31,



2015


2014


2015


2014



(unaudited)


(unaudited)

Asset impairments, as reported


$

50,953



$

20,585



$

681,594



$

26,209


Asset impairments attributable to the limited partners


49,934



20,173



667,962



25,685


Asset impairments attributable to the general partners


1,019



412



13,632



524


 

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


Net Income and Net Income Per Unit Attributable to the Limited Partners Excluding Impairments

(in thousands)








For the Three Months Ended


For the Year Ended



December 31,


December 31,


December 31,


December 31,



2015


2014


2015


2014



(unaudited)


(unaudited)

Net income (loss) attributable to the limited partners, as reported


$

(21,326)



$

8,472



$

(559,492)



$

106,653


Asset impairments attributable to the limited partners


49,934



20,173



667,962



25,685


Net income attributable to the limited partners excluding impairments


$

28,608



$

28,645



$

108,470



$

132,338


Weighted average number of common units outstanding:


12,230



12,145



12,230



11,326


Net income per unit attributable to the limited partners excluding impairments


$

2.34



$

2.36



$

8.87



$

11.68


 

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SOURCE Natural Resource Partners L.P.



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