Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________________________________
FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): May 9, 2018
  ______________________________________________________
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NATURAL RESOURCE PARTNERS L.P.
(Exact name of registrant as specified in its charter)
  ______________________________________________________
Delaware
(State or other jurisdiction
of incorporation or organization)
001-31465
(Commission File
Number)
35-2164875
(I.R.S. Employer
Identification No.)
 
 
 
1201 Louisiana St., Suite 3400 Houston, Texas
(Address of principal executive offices)
 

77002
(Zip code)

Registrant’s telephone number, including area code: (713) 751-7507
 ______________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company
o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨
 





Item 2.02.
Results of Operations and Financial Condition

In accordance with General Instruction B.2. of Form 8-K, the following information and the exhibit referenced therein are being furnished pursuant to Item 2.02 of Form 8-K and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, are not subject to the liabilities of that section and are not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
 
On May 9, 2018, Natural Resource Partners L.P. announced via press release its earnings and operating results for the first quarter of 2018. A copy of NRP’s press release is attached hereto as Exhibit 99.1.

Item 9.01.
Financial Statements and Exhibits
 
(d)
Exhibits.
 
 







SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
NATURAL RESOURCE PARTNERS L.P.
 
(Registrant)
 
 
 
 
 
By:
 
NRP (GP) LP
 
 
 
its General Partner
 
 
 
 
 
By:
 
GP Natural Resource Partners LLC
 
 
 
its General Partner
 
 
 
 
Date: May 9, 2018
 
 
/s/ Kathryn S. Wilson    
 
 
 
Kathryn S. Wilson
 
 
 
Vice President and General Counsel



Exhibit
Exhibit 99.1

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Natural Resource Partners L.P.
1201 Louisiana St., Suite 3400, Houston, TX 77002


NEWS RELEASE
Natural Resource Partners L.P.
Announces First Quarter 2018 Results

HOUSTON, May 9, 2018 - Natural Resource Partners L.P. (NYSE:NRP) today reported first quarter of 2018 results as follows:
 
Three Months Ended
March 31,
 
Increase
(Decrease)
 
Percentage
Change
(In thousands, except per unit data)
2018
 
2017
 
Net income from continuing operations
$
26,088

 
$
6,111

 
$
19,977

 
327
 %
Net income
26,074

 
5,904

 
20,170

 
342
 %
Net income attributable to common unitholders and general partner
18,574

 
3,404

 
15,170

 
446
 %
Basic net income per common unit
1.49

 
0.28

 
1.21

 
432
 %
Diluted net income per common unit
1.15

 
0.28

 
0.87

 
311
 %
Adjusted EBITDA (1)
54,886

 
51,285

 
3,601

 
7
 %
Net cash provided by operating activities of continuing operations
20,211

 
20,489

 
(278
)
 
(1
)%
Net cash used in investing activities of continuing operations
(173
)
 
(2,068
)
 
1,895

 
92
 %
Net cash provided by (used in) financing activities of continuing operations
(28,713
)
 
54,153

 
(82,866
)
 
(153
)%
Distributable Cash Flow (1)
20,845

 
18,547

 
2,298

 
12
 %
Free Cash Flow (1)
19,302

 
18,712

 
590

 
3
 %
  
Craig Nunez, President and Chief Operating Officer, commented: "We delivered solid operating performance and continued to generate significant amounts of cash during the first quarter. As our leverage profile continues to improve, we remain focused on maximizing cash generation, strengthening our balance sheet and increasing our liquidity."
 
At the end of the first quarter of 2018, NRP had liquidity of $76.2 million, consisting of $21.2 million in cash and $55.0 million of borrowing capacity available under its credit facility. NRP's consolidated Debt-to-Adjusted EBITDA ratio at March 31, 2018 was 3.5x.

NRP continues to focus on reducing its debt while maintaining sufficient liquidity to operate its business. NRP's goal is to achieve a leverage ratio, defined as Debt-to-Adjusted EBITDA, of less than 3.0x, while maintaining minimum liquidity of $100 million, which may consist of a combination of cash and/or available borrowing capacity.

With respect to the first quarter of 2018, NRP declared a cash distribution of $0.45 per common unit and a distribution of $7.5 million in cash on NRP’s preferred units. NRP's distribution coverage ratio over the last twelve months was 6.0x before taking into account the $30 million annual distribution on NRP's preferred units, and 4.6x after taking into account the preferred unit distribution.
 
 
 
 
 
(1) 
See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.


1


Segment Information

Coal Royalty and Other
 
Three Months Ended
March 31,
 
Increase
(Decrease)
 
Percentage
Change
(In thousands)
2018
 
2017
 
Net income
$
40,728

 
$
35,094

 
$
5,634

 
16
 %
Adjusted EBITDA (1)
46,070

 
43,845

 
2,225

 
5
 %
Net cash provided by operating activities of continuing operations
38,793

 
37,932

 
861

 
2
 %
Net cash provided by investing activities of continuing operations
1,143

 
6

 
1,137

 
18,950
 %
Net cash provided by financing activities of continuing operations

 
16

 
(16
)
 
(100
)%
Distributable Cash Flow (1)
39,936

 
37,937

 
1,999

 
5
 %
Free Cash Flow (1)
39,280

 
38,346

 
934

 
2
 %
 
 
 
 
 
(1)
See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

Net income from the Coal Royalty and Other segment increased primarily due to lower depletion expense as a result of lower production and prior year asset impairment. Overall coal related revenues were essentially flat, as the impact of lower production was offset by higher coal prices. Distributable cash flow increased during the period primarily as a result of increased cash flow from our natural gas royalty properties.

Soda Ash
 
Three Months Ended
March 31,
 
Increase
(Decrease)
 
Percentage
Change
(In thousands)
2018
 
2017
 
Net income
$
9,621

 
$
10,294

 
$
(673
)
 
(7
)%
Adjusted EBITDA (1)
12,250

 
12,250

 

 
 %
Net cash provided by operating activities of continuing operations
10,153

 
12,250

 
(2,097
)
 
(17
)%
Net cash provided by investing activities of continuing operations
2,097

 

 
2,097

 
100
 %
Distributable Cash Flow (1)
12,250

 
12,250

 

 
 %
Free Cash Flow (1)
12,250

 
12,250

 

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

Net income from the Soda Ash segment decreased primarily as a result of lower international sales and higher selling, general and administrative costs.
 


2


Construction Aggregates
 
Three Months Ended
March 31,
 
Increase
(Decrease)
 
Percentage
Change
(In thousands)
2018
 
2017
 
Net loss
$
(1,975
)
 
$
(1,539
)
 
$
(436
)
 
(28
)%
Adjusted EBITDA (1)
902

 
2,375

 
(1,473
)
 
(62
)%
Net cash provided by operating activities of continuing operations
2,797

 
4,046

 
(1,249
)
 
(31
)%
Net cash used in investing activities of continuing operations
(3,413
)
 
(2,074
)
 
(1,339
)
 
(65
)%
Net cash used in financing activities of continuing operations
(49
)
 
(96
)
 
47

 
49
 %
Distributable Cash Flow (1)
191

 
2,099

 
(1,908
)
 
(91
)%
Free Cash Flow (1)
(696
)
 
1,855

 
(2,551
)
 
(138
)%
 
 
 
 
 
(1)
See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

Net loss from the Construction Aggregates segment increased primarily due to unfavorable weather and higher repair and maintenance and fuel costs. Distributable cash flow decreased as a result of these factors as well as increased capital expenditures.

Corporate and Finance
 
Three Months Ended
March 31,
 
Increase
(Decrease)
 
Percentage
Change
(In thousands)
2018
 
2017
 
Net loss
$
(22,286
)
 
$
(37,738
)
 
$
15,452

 
41
 %
Adjusted EBITDA (1)
(4,336
)
 
(7,185
)
 
2,849

 
40
 %
Net cash used in operating activities of continuing operations
(31,532
)
 
(33,739
)
 
2,207

 
7
 %
Net cash provided by (used in) financing activities of continuing operations
(28,664
)
 
54,233

 
(82,897
)
 
(153
)%
Distributable Cash Flow (1)
(31,532
)
 
(33,739
)
 
2,207

 
7
 %
Free Cash Flow (1)
(31,532
)
 
(33,739
)
 
2,207

 
7
 %
 
 
 
 
 
(1)
See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

Net loss from corporate and financing activities decreased primarily due to prior year debt modification expense and performance based awards related to the completion of our recapitalization transactions in March 2017. In addition, interest expense decreased as a result of debt reduction. Distributable cash flow increased primarily as a result of prior year payment of performance based awards related to the completion of our recapitalization transactions and lower G&A costs, partially offset by the timing of interest payments on NRP's 2022 Senior Notes.

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 55454888. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. Audio replays of the conference call will be available for approximately one week. To access the replay, dial (855) 859-2056 and provide the conference code 55454888 or 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.


3


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. 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, DCF 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. DCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the Partnership's ability to make cash distributions to our 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. FCF 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. FCF may not be calculated the same for us as for other companies. FCF 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 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.


4


“Adjusted Net Income” is a non-GAAP financial measure that we define as Net income attributable to common unitholders and general partner 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.

-Financial Tables, Reconciliation of Non-GAAP Measures and Recap of Metrics Follow-


5




Natural Resource Partners L.P.
Financial Tables
Consolidated Statements of Comprehensive Income
(Unaudited)
 
 
Three Months Ended
 
March 31,
 
December 31,
(In thousands, except per unit data)
2018
 
2017
 
2017
Revenues and other income:
 
 
 
 
 
Coal royalty and other
$
45,973

 
$
34,994

 
$
47,130

Coal royalty and other—affiliates
237

 
11,505

 
223

Transportation and processing services
5,383

 

 
4,793

Transportation and processing services—affiliates

 
4,639

 

Construction aggregates
26,424

 
25,483

 
30,571

Road construction and asphalt paving services
728

 
1,738

 
5,324

Equity in earnings of Ciner Wyoming
9,621

 
10,294

 
12,781

Gain on asset sales, net
660

 
44

 
280

Total revenues and other income
$
89,026

 
$
88,697

 
$
101,102

 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
Operating and maintenance expenses
$
29,968

 
$
29,628

 
$
33,893

Operating and maintenance expenses—affiliates, net
2,465

 
2,555

 
2,606

Depreciation, depletion and amortization
7,957

 
9,724

 
8,790

Amortization expense—affiliate

 
768

 

General and administrative
3,405

 
6,078

 
2,756

General and administrative—affiliates
931

 
1,124

 
1,806

Asset impairments
242

 
1,778

 
1,253

Total operating expenses
$
44,968

 
$
51,655

 
$
51,104

 
 
 
 
 
 
Income from operations
$
44,058

 
$
37,042

 
$
49,998

 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
Interest expense
$
(18,006
)
 
$
(23,141
)
 
$
(19,304
)
Debt modification expense

 
(7,807
)
 

Interest income
36

 
17

 
47

Other expense, net
$
(17,970
)
 
$
(30,931
)
 
$
(19,257
)
 
 
 
 
 
 
Net income from continuing operations
$
26,088

 
$
6,111

 
$
30,741

Loss from discontinued operations
(14
)
 
(207
)
 
(34
)
Net income
$
26,074

 
$
5,904

 
$
30,707

Less: income attributable to preferred unitholders
(7,500
)
 
(2,500
)
 
(7,765
)
Net income attributable to common unitholders and general partner
$
18,574

 
$
3,404

 
$
22,942

 
 
 
 
 
 
Net income attributable to common unitholders
18,203

 
3,404

 
22,483

Net income attributable to the general partner
371

 

 
459

 
 
 
 
 
 
Income from continuing operations per common unit
 
 
 
 
 
Basic
$
1.49

 
$
0.30

 
$
1.84

Diluted
$
1.16

 
$
0.30

 
$
1.26

 
 
 
 
 
 
Net income per common unit
 
 
 
 
 
Basic
$
1.49

 
$
0.28

 
$
1.84

Diluted
$
1.15

 
$
0.28

 
$
1.26

 
 
 
 
 
 
Net income
$
26,074

 
$
5,904

 
$
30,707

Add: comprehensive loss from unconsolidated investment and other
(1,125
)
 
(1,132
)
 
(234
)
Comprehensive income
$
24,949

 
$
4,772

 
$
30,473


6




Natural Resource Partners L.P.
Financial Tables
Consolidated Statements of Cash Flows
(Unaudited)
 
 
 
Three Months Ended
 
 
March 31,
 
December 31,
(In thousands)
 
2018
 
2017
 
2017
Cash flows from operating activities:
 
 
 
 
 
 
Net income
 
$
26,074

 
$
5,904

 
$
30,707

Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
 
 
 
 
 
 
Depreciation, depletion and amortization
 
7,957

 
9,724

 
8,790

Amortization expense—affiliates
 

 
768

 

Distributions from unconsolidated investment
 
10,153

 
12,250

 
12,250

Equity earnings from unconsolidated investment
 
(9,621
)
 
(10,294
)
 
(12,781
)
Gain on asset sales, net
 
(660
)
 
(44
)
 
(280
)
Debt modification expense
 

 
7,807

 

Loss from discontinued operations
 
14

 
207

 
34

Asset impairments
 
242

 
1,778

 
1,253

Unit-based compensation expense
 
792

 
257

 
106

Amortization of debt issuance costs and other
 
771

 
973

 
2,490

Other, net—affiliates
 
(190
)
 
135

 
1,119

Change in operating assets and liabilities:
 
 
 
 
 
 
Accounts receivable
 
(5,189
)
 
(1,267
)
 
698

Accounts receivable—affiliates
 
67

 
(196
)
 
1,144

Accounts payable
 
(845
)
 
986

 
631

Accounts payable—affiliates
 
1,531

 
256

 
(107
)
Accrued liabilities
 
(5,169
)
 
(7,948
)
 
(1,363
)
Accrued liabilities—affiliates
 
(515
)
 

 
515

Accrued interest
 
(9,777
)
 
(271
)
 
5,217

Deferred revenue
 
2,346

 
1,077

 
(5,786
)
Deferred revenue—affiliates
 

 
(2,897
)
 

Other items, net
 
2,230

 
1,284

 
1,807

Net cash provided by operating activities of continuing operations
 
$
20,211

 
$
20,489

 
$
46,444

Net cash used in operating activities of discontinued operations
 
(412
)
 
(284
)
 
(92
)
Net cash provided by operating activities
 
$
19,799

 
$
20,205

 
$
46,352

 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
Distributions from unconsolidated investment in excess of cumulative earnings
 
$
2,097

 
$

 
$

Proceeds from sale of assets
 
687

 
(387
)
 
563

Return of long-term contract receivables
 
487

 

 
399

Return of long-term contract receivables—affiliate
 

 
414

 

Acquisition of plant and equipment and other
 
(3,444
)
 
(2,095
)
 
(1,065
)
Net cash used in investing activities of continuing operations
 
$
(173
)
 
$
(2,068
)
 
$
(103
)
Net cash provided by investing activities of discontinued operations
 

 
29

 

Net cash used in investing activities
 
$
(173
)
 
$
(2,039
)
 
$
(103
)
 
 
 
 
 
 
 

7




Consolidated Statements of Cash Flows—Continued
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
December 31,
(In thousands)
 
2018
 
2017
 
2017
Cash flows from financing activities:
 
 
 
 
 
 
Proceeds from issuance of preferred units and warrants, net
 
$

 
$
242,100

 
$

Proceeds from issuance of 2022 Senior Notes, net
 

 
103,688

 

Proceeds from loans
 
35,000

 

 
8,000

Repayments of loans
 
(40,800
)
 
(251,010
)
 
(136,027
)
Redemption of preferred units paid in kind
 
(8,844
)
 

 

Distributions to common unitholders and general partner
 
(5,617
)
 
(5,615
)
 
(5,617
)
Distributions to preferred unitholders
 
(7,765
)
 

 
(3,825
)
Contributions to discontinued operations
 
(412
)
 
(255
)
 
(92
)
Debt issue costs and other
 
(275
)
 
(34,755
)
 
(197
)
Net cash provided by (used in) financing activities of continuing operations
 
$
(28,713
)
 
$
54,153

 
$
(137,758
)
Net cash provided by financing activities of discontinued operations
 
412

 
255

 
92

Net cash provided by (used in) financing activities
 
$
(28,301
)
 
$
54,408

 
$
(137,666
)
 
 
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
$
(8,675
)
 
$
72,574

 
$
(91,417
)
Cash and cash equivalents at beginning of period
 
29,827

 
40,371

 
121,244

Cash and cash equivalents at end of period
 
$
21,152

 
$
112,945

 
$
29,827

 
 
 
 
 
 
 
Supplemental cash flow information:
 
 
 
 
 
 
Cash paid during the period for interest from continuing operations
 
$
26,023

 
$
19,851

 
$
10,993

Non-cash investing and financing activities:
 
 
 
 
 
 
Issuance of 2022 Senior Notes in exchange for 2018 Senior Notes
 
$

 
$
240,638

 
$

Plant, equipment and mineral rights funded with accounts payable or accrued liabilities
 
$
24

 
$

 
$
294





8




Natural Resource Partners L.P.
Financial Tables
Consolidated Balance Sheets
 
March 31,
 
December 31,
(In thousands, except unit data)
2018
 
2017
 
(Unaudited)
 
 
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
21,152

 
$
29,827

Accounts receivable, net
55,651

 
47,026

Accounts receivable—affiliates
94

 
161

Inventory
8,071

 
7,553

Prepaid expenses and other
3,088

 
5,838

Current assets of discontinued operations
991

 
991

Total current assets
$
89,047

 
$
91,396

Land
24,809

 
25,247

Plant and equipment, net
47,237

 
46,170

Mineral rights, net
878,845

 
883,885

Intangible assets, net
48,769

 
49,554

Equity in unconsolidated investment
241,679

 
245,433

Long-term contracts receivable
40,331

 
40,776

Other assets
6,489

 
6,547

Other assets—affiliate

 
156

Total assets
$
1,377,206

 
$
1,389,164

LIABILITIES AND CAPITAL
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
5,911

 
$
6,957

Accounts payable—affiliates
2,093

 
562

Accrued liabilities
11,409

 
16,890

Accrued liabilities—affiliates

 
515

Accrued interest
5,706

 
15,484

Current portion of deferred revenue
1,554

 

Current portion of long-term debt, net
79,723

 
79,740

Current liabilities of discontinued operations
3

 
401

Total current liabilities
$
106,399

 
$
120,549

Deferred revenue
14,622

 
100,605

Long-term debt, net
724,854

 
729,608

Other non-current liabilities
2,492

 
2,808

Other non-current liabilities—affiliate

 
346

Total liabilities
$
848,367

 
$
953,916

Commitments and contingencies

 
 
Class A Convertible Preferred Units (250,000 and 258,844 units issued and outstanding at March 31, 2018 and December 31, 2017, respectively, at $1,000 par value per unit; liquidation preference of $1,500 per unit)
$
164,587

 
$
173,431

Partners’ capital:
 
 
 
Common unitholders’ interest (12,245,920 and 12,232,006 units issued and outstanding at March 31, 2018 and December 31, 2017, respectively)
$
301,344

 
$
199,851

General partner’s interest
3,924

 
1,857

Warrant holders interest
66,816

 
66,816

Accumulated other comprehensive loss
(4,438
)
 
(3,313
)
Total partners’ capital
$
367,646

 
$
265,211

Non-controlling interest
(3,394
)
 
(3,394
)
Total capital
364,252

 
261,817

Total liabilities and capital
$
1,377,206

 
$
1,389,164


9




Natural Resource Partners L.P.
Financial Tables
Consolidated Statement of Partners' Capital
(Unaudited)
 
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, 2017
12,232

 
$
199,851

 
$
1,857

 
$
66,816

 
$
(3,313
)
 
$
265,211

 
$
(3,394
)
 
$
261,817

Cumulative effect of adoption of accounting standard

 
88,448

 
1,805

 

 

 
90,253

 

 
90,253

Net income

 
25,553

 
521

 

 

 
26,074

 

 
26,074

Distributions to common unitholders and general partner

 
(5,505
)
 
(112
)
 

 

 
(5,617
)
 

 
(5,617
)
Distributions to preferred unitholders

 
(7,610
)
 
(155
)
 

 

 
(7,765
)
 

 
(7,765
)
Issuance of unit-based awards
14

 
410

 

 

 

 
410

 

 
410

Unit-based awards amortization and vesting

 
197

 

 

 

 
197

 

 
197

Comprehensive loss from unconsolidated investment and other

 

 
8

 

 
(1,125
)
 
(1,117
)
 

 
(1,117
)
Balance at March 31, 2018
12,246

 
$
301,344

 
$
3,924

 
$
66,816

 
$
(4,438
)
 
$
367,646

 
$
(3,394
)
 
$
364,252



10




Natural Resource Partners L.P.
Financial Tables (Unaudited)

The table below presents NRP's unaudited business results by segment for three months ended March 31, 2018 and 2017:
 
 
Operating Business Segments
 
 
 
 
 
Coal Royalty and Other
 
 
 
Construction Aggregates
 
Corporate and Financing
 
 
(In thousands)
 
 
Soda Ash
 
 
 
Total
Three Months Ended March 31, 2018
 
 
 
 
 
 
 
 
 
 
Revenues and other income
 
$
51,593

 
$
9,621

 
$
27,152

 
$

 
$
88,366

Gains on asset sales
 
651

 

 
9

 

 
660

Total revenues and other income
 
$
52,244

 
$
9,621

 
$
27,161

 
$

 
$
89,026

Asset impairments
 
$
242

 
$

 
$

 
$

 
$
242

Net income (loss) from continuing operations
 
$
40,728

 
$
9,621

 
$
(1,975
)
 
$
(22,286
)
 
$
26,088

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2017
 
 
 
 
 
 
 
 
 
 
Revenues and other income
 
$
51,138

 
$
10,294

 
$
27,221

 
$

 
$
88,653

Gains on asset sales
 
29

 

 
15

 

 
44

Total revenues and other income
 
$
51,167

 
$
10,294

 
$
27,236

 
$

 
$
88,697

Asset impairments
 
$
1,778

 
$

 
$

 
$

 
$
1,778

Net income (loss) from continuing operations
 
$
35,094

 
$
10,294

 
$
(1,539
)
 
$
(37,738
)
 
$
6,111

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
Revenues and other income
 
$
52,146

 
$
12,781

 
$
35,895

 
$

 
$
100,822

Gains on asset sales
 
178

 

 
102

 

 
280

Total revenues and other income
 
$
52,324

 
$
12,781

 
$
35,997

 
$

 
$
101,102

Asset impairments
 
$
1,189

 
$

 
$
64

 
$

 
$
1,253

Net income (loss) from continuing operations
 
$
39,729

 
$
12,781

 
$
1,989

 
$
(23,758
)
 
$
30,741

Adjusted EBITDA (1)
 
$
46,679

 
$
12,250

 
$
5,143

 
$
(4,696
)
 
$
59,376

Net cash provided by (used in) operating activities of continuing operations
 
$
45,550

 
$
12,250

 
$
4,010

 
$
(15,366
)
 
$
46,444

Net cash provided by (used in) investing activities of continuing operations
 
$
591

 
$

 
$
(694
)
 
$

 
$
(103
)
Net cash provided by financing activities of continuing operations
 
$

 
$

 
$
(197
)
 
$
(137,561
)
 
$
(137,758
)


11




Natural Resource Partners L.P.
Financial Tables (Unaudited)
Operating Statistics - Coal Royalty and Other
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
December 31,
($ in thousands, except tons and per ton amounts)
 
2018
 
2017
 
2017
Coal production (tons)
 
 
 
 
 
 
Appalachia
 
 
 
 
 
 
Northern
 
225

 
1,206

 
464

Central
 
3,545

 
3,699

 
3,542

Southern
 
546

 
562

 
535

Total Appalachia
 
4,316

 
5,467

 
4,541

Illinois Basin
 
743

 
2,017

 
828

Northern Powder River Basin
 
1,233

 
950

 
1,678

Total coal production
 
6,292

 
8,434

 
7,047

 
 
 
 
 
 
 
Coal royalty revenue per ton
 
 
 
 
 
 
Appalachia
 
 
 
 
 
 
Northern
 
$
4.73

 
$
0.50

 
$
2.14

Central
 
$
5.71

 
$
5.46

 
$
5.21

Southern
 
$
7.16

 
$
6.46

 
$
5.90

Illinois Basin
 
$
4.14

 
$
3.30

 
$
4.75

Northern Powder River Basin
 
$
2.24

 
$
2.63

 
$
2.27

Combined average coal royalty revenue per ton
 
$
4.93

 
$
3.98

 
$
4.31

 
 
 
 
 
 
 
Coal royalty revenues
 
 
 
 
 
 
Appalachia
 
 
 
 
 
 
Northern
 
$
1,066

 
$
607

 
$
992

Central
 
20,232

 
20,184

 
18,462

Southern
 
3,914

 
3,632

 
3,157

Total Appalachia
 
$
25,212

 
$
24,423

 
$
22,611

Illinois Basin
 
3,075

 
6,646

 
3,934

Northern Powder River Basin
 
2,765

 
2,498

 
3,815

Unadjusted coal royalty revenue
 
$
31,052

 
$
33,567

 
$
30,360

Coal royalty adjustment for minimum leases
 
(2,361
)
 

 

Total coal royalty revenue
 
$
28,691

 
$
33,567

 
$
30,360

Other revenues
 
 
 
 
 
 
Production lease minimum revenue
 
$
425

 
$
5,196

 
$
8,266

Minimum lease straight line revenue
 
6,760

 

 

Property tax revenue
 
1,182

 
2,698

 
813

Wheelage
 
1,974

 
1,267

 
1,224

Coal overriding royalty revenue
 
2,872

 
824

 
4,067

Aggregates royalty revenue
 
1,091

 
1,244

 
728

Oil and gas royalty revenues
 
2,898

 
1,491

 
1,693

Other
 
317

 
212

 
202

Total other revenues
 
$
17,519


$
12,932

 
$
16,993

Coal royalty and other income
 
46,210


46,499

 
47,353

Transportation and processing services fees
 
5,383

 
4,639

 
4,793

Gain on coal royalty and other segment asset sales
 
651

 
29

 
178

Total coal royalty and other segment revenues and other income
 
$
52,244


$
51,167

 
$
52,324



12




Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Distributable Cash Flow and Free Cash Flow
(Unaudited)
 
 
 
 
 
Coal Royalty and Other
 
 
 
Construction Aggregates
 
Corporate and Financing
 
 
(In thousands)
 
 
Soda Ash
 
 
 
Total
Three Months Ended March 31, 2018
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities of continuing operations
 
$
38,793

 
$
10,153

 
$
2,797

 
$
(31,532
)
 
$
20,211

Add: distributions from unconsolidated investment in excess of cumulative earnings
 

 
2,097

 

 

 
2,097

Add: proceeds from the sale of assets
 
656

 

 
31

 

 
687

Add: return of long-term contract receivables
 
487

 

 

 

 
487

Less: maintenance capital expenditures
 

 

 
(2,637
)
 

 
(2,637
)
Distributable cash flow
 
$
39,936

 
$
12,250

 
$
191

 
$
(31,532
)
 
$
20,845

Less: proceeds from the sale of assets
 
656

 

 
31

 

 
687

Less: expansion capital expenditures
 

 

 
807

 

 
807

Less: mitigation payments and acquisition costs classified as financing activities
 

 

 
49

 

 
49

Free cash flow
 
$
39,280

 
$
12,250

 
$
(696
)
 
$
(31,532
)
 
$
19,302

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2017
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities of continuing operations
 
$
37,932

 
$
12,250

 
$
4,046

 
$
(33,739
)
 
$
20,489

Add: Proceeds from the sale of assets
 
(409
)
 

 
22

 

 
(387
)
Add: return of long-term contract receivables—affiliate
 
414

 

 

 

 
414

Less: maintenance capital expenditures
 

 

 
(1,969
)
 

 
(1,969
)
Distributable cash flow
 
$
37,937

 
$
12,250

 
$
2,099

 
$
(33,739
)
 
$
18,547

Less: proceeds from the sale of assets
 
(409
)
 

 
22

 

 
(387
)
Less: expansion capital expenditures
 

 

 
126

 

 
126

Less: mitigation payments and acquisition costs classified as financing activities
 

 

 
96

 

 
96

Free cash flow
 
$
38,346

 
$
12,250

 
$
1,855

 
$
(33,739
)
 
$
18,712

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities of continuing operations
 
$
45,550

 
$
12,250

 
$
4,010

 
$
(15,366
)
 
$
46,444

Add: proceeds from sale of assets
 
192

 

 
371

 

 
563

Add: return of long-term contract receivable
 
399

 

 

 

 
399

Less: maintenance capital expenditures
 

 

 
(1,025
)
 

 
(1,025
)
Distributable cash flow
 
$
46,141

 
$
12,250

 
$
3,356

 
$
(15,366
)
 
$
46,381

Less: proceeds from the sale of assets
 
192

 

 
371

 

 
563

Less: expansion capital expenditures
 

 

 
39

 

 
39

Less: mitigation payments and acquisition costs classified as financing activities
 

 

 
197

 

 
197

Free cash flow
 
$
45,949

 
$
12,250

 
$
2,749

 
$
(15,366
)
 
$
45,582



13




Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
Adjusted EBITDA
(Unaudited)
 
 
 
 
 
Coal Royalty and Other
 
 
 
Construction Aggregates
 
Corporate and Financing
 
 
(In thousands)
 
 
Soda Ash
 
 
 
Total
Three Months Ended March 31, 2018
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
 
40,728

 
$
9,621

 
$
(1,975
)
 
$
(22,286
)
 
$
26,088

Less: equity earnings from unconsolidated investment
 

 
(9,621
)
 

 

 
(9,621
)
Add: total distributions from unconsolidated investment
 

 
12,250

 

 

 
12,250

Add: interest expense, net
 

 

 
20

 
17,950

 
17,970

Add: depreciation, depletion and amortization
 
5,100

 

 
2,857

 

 
7,957

Add: asset impairments
 
242

 

 

 

 
242

Adjusted EBITDA
 
$
46,070

 
$
12,250

 
$
902

 
$
(4,336
)
 
$
54,886

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2017
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
 
$
35,094

 
$
10,294

 
$
(1,539
)
 
$
(37,738
)
 
$
6,111

Less: equity earnings from unconsolidated investment
 

 
(10,294
)
 

 

 
(10,294
)
Add: total distributions from unconsolidated investment
 

 
12,250

 

 

 
12,250

Add: interest expense, net
 

 

 
395

 
22,746

 
23,141

Add: debt modification expense
 

 

 

 
7,807

 
7,807

Add: depreciation, depletion and amortization
 
6,973

 

 
3,519

 

 
10,492

Add: asset impairments
 
1,778

 

 

 

 
1,778

Adjusted EBITDA
 
$
43,845

 
$
12,250

 
$
2,375

 
$
(7,185
)
 
$
51,285

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
 
$
39,729

 
$
12,781

 
$
1,989

 
$
(23,758
)
 
$
30,741

Less: equity earnings from unconsolidated investment
 

 
(12,781
)
 

 

 
(12,781
)
Add: total distributions from unconsolidated investment
 

 
12,250

 

 

 
12,250

Add: interest expense, net
 

 

 
61

 
19,062

 
19,123

Add: depreciation, depletion and amortization
 
5,761

 

 
3,029

 

 
8,790

Add: asset impairments
 
1,189

 

 
64

 

 
1,253

Adjusted EBITDA
 
$
46,679

 
$
12,250

 
$
5,143

 
$
(4,696
)
 
$
59,376






14




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

Adjusted Net Income
(Unaudited)
 
 
Three Months Ended
 
 
March 31,
 
December 31,
(In thousands)
 
2018
 
2017
 
2017
Net income
 
$
26,074

 
$
5,904

 
$
30,707