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): December 11, 2018
  _____________________________
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12597777&doc=3
NATURAL RESOURCE PARTNERS L.P.
(Exact name of registrant as specified in its charter) 
_____________________________
Delaware
001-31465
35-2164875
(State or other jurisdiction
of incorporation or organization)
(Commission File
Number)
(I.R.S. Employer
Identification No.)
 
1201 Louisiana St., Suite 3400
Houston, Texas 77002
 
(Address of principal executive office) (Zip Code)
 
(713) 751-7507
 
(Registrant’s telephone number, including area code)
_____________________________
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 ¨
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 2.01.
Completion of Acquisition or Disposition of Assets.
On December 11, 2018, NRP (Operating) LLC (“NRP Operating”), a wholly owned subsidiary of Natural Resource Partners L.P. (the “Partnership”), completed the previously announced sale of all of the outstanding equity interests in VantaCore Partners LLC (“VantaCore”), the Partnership's construction aggregates segment, for $197 million of estimated net proceeds after purchase price adjustments and transaction expenses.

Item 9.01.
Financial Statements and Exhibits
(b)
Pro Forma Financial Information.
Filed as Exhibit 99.1 to this Current Report on Form 8-K, and incorporated herein by reference, are the Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2018 and the Unaudited Pro Forma Condensed Consolidated Statements of Income for the nine months ended September 30, 2018 and the years ended December 31, 2017, 2016 and 2015. These pro forma financial statements have been prepared to give effect to the sale of VantaCore. The pro forma financial statements are presented for informational purposes only and do not purport to represent what the Partnership's consolidated results of operations or financial position would have been had the sale occurred on the dates indicated or to project the Partnership's consolidated financial position as of any future date or the Partnership's consolidated results of operations for any future period.

(d)
Exhibits.
Exhibit Number
 
Description
 







SIGNATURE

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

 
NATURAL RESOURCE PARTNERS L.P.
 
 
 
 
 
By:
 
NRP (GP) LP,
 
 
 
Its General Partner
 
 
 
 
 
By:
 
GP NATURAL RESOURCE PARTNERS LLC,
 
 
 
Its General Partner
 
 
 
 
Dated: December 14, 2018
By:
 
/s/ Kathryn S. Wilson    
 
Name:
 
Kathryn S. Wilson
 
Title:
 
Vice President and General Counsel



Exhibit
Exhibit 99.1

NATURAL RESOURCE PARTNERS L.P.

UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On December 11, 2018, NRP (Operating) LLC (“NRP Operating”), a wholly owned subsidiary of Natural Resource Partners L.P. (the “Partnership”), sold all of the outstanding equity interests in VantaCore Partners LLC (“VantaCore”), the Partnership's construction aggregates segment, to VantaCore Intermediate Holding, LLC, an affiliate of Sun Capital Partners, Inc. (the “Buyer”), for $197 million of estimated net proceeds after purchase price adjustments and transaction expenses.

The unaudited condensed consolidated pro forma financial statements presented in this exhibit are based on the Partnership's historical financial statements and are being presented to give effect to this sale of assets to the Buyer. The Unaudited Pro Forma Consolidated Balance Sheet reflects the sale as if it occurred on September 30, 2018. The Unaudited Pro Forma Condensed Consolidated Statements of Income give effect to the sale as if it occurred on January 1, 2015, the beginning of the earliest period presented.
    
The unaudited pro forma condensed consolidated financial statements, including notes thereto, should be read in conjunction with the Partnership's audited consolidated financial statements and notes thereto for the year ended December 31, 2017, 2016 and 2015 contained in its most recent Annual Report on Form 10-K, as well as in conjunction with the Partnership's unaudited consolidated financial statements and notes thereto for the three and nine months ended September 30, 2018 contained in its most recent Quarterly Report on Form 10-Q.
 
The pro forma adjustments, described in the related notes, are based upon presently available information and assumptions that management believes are reasonable under the circumstances as of the date of this filing. Actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial information presented is for informational purposes only and do not reflect what the Partnership's financial position and results of operations would have been had the sale occurred on the dates indicated and these statements are not indicative of the Partnership's future financial position and future results of operations.





NATURAL RESOURCE PARTNERS L.P.

TABLE OF CONTENTS

 
Page





NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2018
(In thousands, except unit data)
Historical
 
Pro Forma Adjustments (1)
 
Pro Forma
ASSETS
 
 
 
 
 
Current assets
 
 
 
 
 
Cash and cash equivalents
$
63,387

 
$
(4,780
)
(a)
$
58,607

Restricted cash

 
102,029

(b)
102,029

Accounts receivable, net
55,734

 
(23,558
)
(a)
32,176

Accounts receivable—affiliates
22

 

 
22

Inventory
9,572

 
(9,572
)
(a)

Prepaid expenses and other
4,665

 
(1,746
)
(a)
2,919

Current assets of discontinued operations
988

 

 
988

Total current assets
134,368

 
62,373

 
196,741

Land
24,809

 
(801
)
(a)
24,008

Plant and equipment, net
48,148

 
(47,073
)
(a)
1,075

Mineral rights, net
869,106

 
(103,690
)
(a)
765,416

Intangible assets, net
46,998

 
(2,515
)
(a)
44,483

Equity in unconsolidated investment
242,901

 

 
242,901

Long-term contracts receivable
39,416

 

 
39,416

Other assets
6,188

 
(5,391
)
(a) (c)
797

Total assets
$
1,411,934

 
$
(97,097
)

$
1,314,837

LIABILITIES AND CAPITAL
 
 
 
 

Current liabilities
 
 
 
 

Accounts payable
$
7,467

 
$
(6,700
)
(a)
$
767

Accounts payable—affiliates
608

 
(10
)
(a)
598

Accrued liabilities
14,005

 
(4,906
)
(a)
9,099

Accrued liabilities—affiliates

 

 

Accrued interest
5,540

 
(233
)
(d)
5,307

Current portion of deferred revenue
1,403

 

 
1,403

Current portion of long-term debt, net
75,201

 

 
75,201

Total current liabilities
104,224

 
(11,849
)
 
92,375

Deferred revenue
40,885

 

 
40,885

Long-term debt, net
716,514

 
(95,000
)
(e)
621,514

Other non-current liabilities
1,958

 
(1,854
)
(a)
104

Total liabilities
863,581

 
(108,703
)
 
754,878

Commitments and contingencies (see Note 15)
 
 
 
 

Class A Convertible Preferred Units (250,000 and 258,844 units issued and outstanding at September 30, 2018 and December 31, 2017, respectively, at $1,000 par value per unit; liquidation preference of $1,500 per unit)
164,587

 

 
164,587

Partners’ capital
 
 
 
 

Common unitholders’ interest (12,251,773 (f) and 12,232,006 units issued and outstanding at September 30, 2018 and December 31, 2017, respectively)
319,673

 
11,374

(g)
331,047

General partner’s interest
4,293

 
232

(g)
4,525

Warrant holders’ interest
66,816

 

 
66,816

Accumulated other comprehensive loss
(4,081
)
 

 
(4,081
)
Total partners’ capital
386,701

 
11,606

 
398,307

Non-controlling interest
(2,935
)
 

 
(2,935
)
Total capital
383,766

 
11,606

 
395,372

Total liabilities and capital
$
1,411,934

 
$
(97,097
)
 
$
1,314,837


See accompanying notes to unaudited pro forma condensed consolidated financial statements


1


NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2018
(In thousands, except per unit data)
Historical
 
Pro Forma Adjustments (1)
 
Pro Forma
Revenues and other income
 
 
 
 
 
Coal royalty and other
$
134,428

 
$

 
$
134,428

Coal royalty and other—affiliates
484

 

 
484

Transportation and processing services
17,238

 

 
17,238

Construction aggregates
91,055

 
91,055

(h)

Road construction and asphalt paving services
13,154

 
13,154

(h)

Equity in earnings of Ciner Wyoming
34,986

 

 
34,986

Gain on asset sales, net
1,033

 
214

(h)
819

Total revenues and other income
$
292,378

 
$
104,423

 
$
187,955

 
 
 
 
 
 
Operating expenses
 
 
 
 
 
Operating and maintenance expenses
$
103,403

 
$
90,450

(h)
$
12,953

Operating and maintenance expenses—affiliates
8,944

 
775

(h)
8,169

Depreciation, depletion and amortization
24,741

 
9,377

(h)
15,364

General and administrative
8,068

 

 
8,068

General and administrative—affiliates
2,714

 

 
2,714

Asset impairments
242

 

 
242

Total operating expenses
$
148,112

 
$
100,602

 
$
47,510

 
 
 
 
 
 
Income from operations
$
144,266

 
$
3,821

 
$
140,445

 
 
 
 
 
 
Other expense, net
 
 
 
 
 
Interest expense, net
$
(53,205
)
 
$
(2,218
)
(h) (i)
$
(50,987
)
Total other expense, net
$
(53,205
)
 
$
(2,218
)
 
$
(50,987
)
 
 
 
 
 
 
Net income from continuing operations
$
91,061

 
$
1,603

 
$
89,458

 
 
 
 
 
 
Income from continuing operations per common unit
 
 
 
 
 
Basic
$
5.45

 
 
 
$
5.32

Diluted
$
4.06

 
 
 
$
3.99

 
 
 
 
 
 
Weighted average common units—basic
12,243

 
 
 
12,243

Weighted average common units—diluted
21,841

 
 
 
21,841

See accompanying notes to unaudited pro forma condensed consolidated financial statements


2


NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2017
(In thousands, except per unit data)
Historical
 
Pro Forma Adjustments (1)
 
Pro Forma
Revenues and other income
 
 
 
 
 
Coal royalty and other
$
158,399

 
$

 
$
158,399

Coal royalty and other—affiliates
23,402

 

 
23,402

Transportation and processing services
14,510

 

 
14,510

Transportation and processing services—affiliate
6,012

 

 
6,012

Construction aggregates
112,970

 
112,970

(h)

Road construction and asphalt paving services
18,411

 
18,411

(h)

Equity in earnings of Ciner Wyoming
40,457

 

 
40,457

Gain on asset sales, net
3,856

 
311

(h)
3,545

Total revenues and other income
$
378,017

 
$
131,692

 
$
246,325

 
 
 
 
 
 
Operating expenses
 
 
 
 
 
Operating and maintenance expenses
$
126,982

 
$
110,211

(h)
$
16,771

Operating and maintenance expenses—affiliates
9,534

 
1,422

(h)
8,112

Depreciation, depletion and amortization
34,985

 
12,579

(h)
22,406

Amortization expense—affiliate
1,008

 

 
1,008

General and administrative
13,513

 

 
13,513

General and administrative—affiliates
4,989

 

 
4,989

Asset impairments
3,031

 
64

(h)
2,967

Total operating expenses
$
194,042

 
$
124,276

 
$
69,766

 
 
 
 
 
 
Income from operations
$
183,975

 
$
7,416

 
$
176,559

 
 
 
 
 
 
Other expense, net
 
 
 
 
 
Interest expense, net
$
(82,721
)
 
$
(4,849
)
(h) (i) (j)
$
(77,872
)
Debt modification expense
(7,939
)
 

 
(7,939
)
Loss on extinguishment of debt
(4,107
)
 

 
(4,107
)
Total other expense, net
$
(94,767
)
 
$
(4,849
)
 
$
(89,918
)
 
 
 
 
 
 
Net income from continuing operations
$
89,208

 
$
2,567

 
$
86,641

 
 
 
 
 
 
Income from continuing operations per common unit
 
 
 
 
 
Basic
$
5.11

 
 
 
$
4.90

Diluted
$
3.98

 
 
 
$
3.87

 
 
 
 
 
 
Weighted average common units—basic
12,232

 
 
 
12,232

Weighted average common units—diluted
21,950

 
 
 
21,950

See accompanying notes to unaudited pro forma condensed consolidated financial statements

3


NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2016
(In thousands, except per unit data)
Historical
 
Pro Forma Adjustments (1)
 
Pro Forma
Revenues and other income
 
 
 
 
 
Coal royalty and other
$
144,520

 
$

 
$
144,520

Coal royalty and other—affiliates
46,259

 

 
46,259

Transportation and processing services—affiliate
19,336

 

 
19,336

Construction aggregates
103,755

 
103,755

(h)

Road construction and asphalt paving services
17,047

 
17,047

(h)

Equity in earnings of Ciner Wyoming
40,061

 

 
40,061

Gain on asset sales, net
29,081

 
13

(h)
29,068

Total revenues and other income
$
400,059

 
$
120,815

 
$
279,244

 
 
 
 
 
 
Operating expenses
 
 
 
 
 
Operating and maintenance expenses
$
119,621

 
$
98,884

(h)
$
20,737

Operating and maintenance expenses—affiliates
10,925

 
1,772

(h)
9,153

Depreciation, depletion and amortization
43,087

 
14,506

(h)
28,581

Amortization expense—affiliate
3,185

 

 
3,185

General and administrative
16,979

 

 
16,979

General and administrative—affiliates
3,591

 

 
3,591

Asset impairments
16,926

 
1,065

(h)
15,861

Total operating expenses
$
214,314

 
$
116,227

 
$
98,087

 
 
 
 
 
 
Income from operations
$
185,745

 
$
4,588

 
$
181,157

 
 
 
 
 
 
Other expense, net
 
 
 
 
 
Interest expense, net
$
(90,008
)
 
$

 
$
(90,008
)
Interest expense—affiliate
(523
)
 

 
(523
)
Total other expense, net
$
(90,531
)
 
$

 
$
(90,531
)
 
 
 
 
 
 
Net income from continuing operations
$
95,214

 
$
4,588

 
$
90,626

 
 
 
 
 
 
Income from continuing operations per common unit
 
 
 
 
 
Basic
$
7.65

 


 
$
7.28

Diluted
$
7.65

 


 
$
7.28

 
 
 
 
 
 
Weighted average common units—basic
12,232

 
 
 
12,232

Weighted average common units—diluted
12,232

 
 
 
12,232

See accompanying notes to unaudited pro forma condensed consolidated financial statements

4


NATURAL RESOURCE PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF LOSS
YEAR ENDED DECEMBER 31, 2015
(In thousands, except per unit data)
Historical
 
Pro Forma Adjustments (1)
 
Pro Forma
Revenues and other income
 
 
 
 
 
Coal royalty and other
$
154,066

 
$

 
$
154,066

Coal royalty and other—affiliates
67,682

 

 
67,682

Transportation and processing services—affiliate
22,033

 

 
22,033

Construction aggregates
124,085

 
124,085

(h)

Road construction and asphalt paving services
14,964

 
14,964

(h)

Equity in earnings of Ciner Wyoming
49,918

 

 
49,918

Gain on asset sales, net
6,900

 
(36
)
(h)
6,936

Total revenues and other income
$
439,648

 
$
139,013

 
$
300,635

 
 
 
 
 
 
Operating expenses
 
 
 
 
 
Operating and maintenance expenses
$
136,943

 
$
115,643

(h)
$
21,300

Operating and maintenance expenses—affiliates
15,323

 
1,302

(h)
14,021

Depreciation, depletion and amortization
57,295

 
15,578

(h)
41,717

Amortization expense—affiliate
3,621

 

 
3,621

General and administrative
7,036

 

 
7,036

General and administrative—affiliates
5,312

 

 
5,312

Asset impairments
384,545

 
6,218

(h)
378,327

Total operating expenses
$
610,075

 
$
138,741

 
$
471,334

 
 
 
 
 
 
Income (loss) from operations
$
(170,427
)
 
$
272

 
$
(170,699
)
 
 
 
 
 
 
Other expense, net
 
 
 
 
 
Interest expense, net
$
(87,893
)
 
$

 
$
(87,893
)
Interest expense—affiliate
(1,851
)
 

 
(1,851
)
Total other expense, net
$
(89,744
)
 
$

 
$
(89,744
)
 
 
 
 
 
 
Net income (loss) continuing operations
$
(260,171
)
 
$
272

 
$
(260,443
)
 
 
 
 
 
 
Loss from continuing operations per common unit
 
 
 
 
 
Basic
$
(20.78
)
 
 
 
$
(20.80
)
Diluted
$
(20.78
)
 
 
 
$
(20.80
)
 
 
 
 
 
 
Weighted average common units—basic
12,232

 
 
 
12,232

Weighted average common units—diluted
12,232

 
 
 
12,232

See accompanying notes to unaudited pro forma condensed consolidated financial statements

5


NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

The historical information for the Partnership is derived from the historical financial statements of the Partnership. The Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2018 is presented to illustrate the estimated effects of selling VantaCore to the Buyer as if the transaction had occurred on September 30, 2018. The Unaudited Pro Forma Condensed Consolidated Statements of Income are presented for the nine months ended September 30, 2018 and the years ended December 31, 2017, 2016 and 2015 as if the sale transaction had occurred at January 1, 2015, the beginning of the earliest period presented.

The pro forma adjustments are based on available information and assumptions management believes are directly attributable to the transaction, factually supportable and for income statement purposes are expected to have a continuing impact. The pro forma adjustments to reflect the sale of VantaCore to the Buyer include:
the associated assets, liabilities, revenue and expenses associated with the business sold to the Buyer;
collection of anticipated cash proceeds in the unaudited pro forma consolidated balance sheet as if the sale had occurred on September 30, 2018, net of transaction expenses and customary purchase price adjustments.

 Note 2. Adjustments to Pro Forma Financial Statements
(1)
The following pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change:
 
(a)
Reflects the removal of the assets and liabilities of VantaCore sold to the Buyer.
 
(b)
Reflects the net cash proceeds less repayment of the outstanding principal and accrued interest on the Partnership's Opco Revolving Credit Facility (the "Revolver"). The Partnership's debt agreements stipulated that 75% of the net cash proceeds from certain asset sales be used to pay down the Revolver and 25% be offered to the holders of its Opco Senior Notes (the "Notes") on a pro-rata basis. $95 million was repaid on the Revolver, $49 million will be offered to the holders of the Notes and the remaining $53 million of net cash proceeds is restricted and expected to be used to make regular amortization payments on the Notes over the next twelve months.
 
(c)
Reflects the write-off of debt issue costs related to the Revolver.
 
(d)
Reflects accrued interest related to the Revolver paid using a portion of the proceeds from the asset sale.
 
(e)
Reflects the payment in full of the Revolver using a portion of asset sale proceeds.
 
(f)
Reflects the additional common units issued as a result of the transaction bonus paid in common units.
 
(g)
Reflects the estimated net gain on asset sale had the transaction closed on September 30, 2018 and the resulting impact of the write-off of debt issue costs related to the assumed repayment of the Revolver.
 
(h)
Reflects the removal of revenue and expenses directly associated with VantaCore.
 
(i)
Reflects the reduction in interest expense related to the repayment of the Notes in accordance with the terms of the Partnership's debt agreements at January 1, 2017, to give effect to the impact of the sale as if it had occurred on this date. At January 1, 2017, the Partnership's debt agreements stipulated that 75% of the net cash proceeds from certain asset sales be used to pay down the Revolver and 25% be offered to the holders of the Notes on a pro-rata basis. The Partnership assumed the holders of the Notes accepted the repayment offer made on January 1, 2017.
 
(j)
Reflects the reduction in interest expense related to the repayment of the Revolver in accordance with the terms of the Partnership's debt agreements at January 1, 2017, to give effect to the impact of the sale as if it had occurred on this date. At January 1, 2017, the Partnership's debt agreements stipulated that 75% of the net cash proceeds from certain asset sales be used to pay down the Revolver and 25% be offered to the holders of the Notes on a pro-rata basis. The Revolver was fully repaid in March of 2017 as part of the Partnership's recapitalization transactions; therefore, the Unaudited Pro Forma Condensed Consolidated Statements of Income for the year ended December 31, 2017 only removes approximately two months' worth of interest expense related to the Revolver.



6