EX-99.1 2 ex_466591.htm EXHIBIT 99.1 ex_466591.htm
 

Exhibit 99.1

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Natural Resource Partners L.P.

1415 Louisiana St., Suite 3325, Houston, TX 77002

 

NEWS RELEASE

Natural Resource Partners L.P. Reports First Quarter 2023 Results and Declares First Quarter 2023 Distribution of $0.75 per Common Unit

 

HOUSTON, May 4, 2023 - Natural Resource Partners L.P. (NYSE:NRP) today reported first quarter 2023 results as follows:

 

   

For the Three Months Ended

    

Last Twelve Months Ended

  

(In thousands) (Unaudited)

  

March 31, 2023

  

Operating cash flow

   $ 72,900     $ 287,407  

Free cash flow (1)

     73,496       289,608  

Cash flow cushion (last twelve months) (1)

             102,516  
                 

Net income

   $ 79,275     $ 283,868  

Adjusted EBITDA (1)

     77,737       319,418  
         
 

(1)

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

 

 

Highlights:

 

• Generated $73 million of free cash flow, an increase of 40% from the prior year quarter

• Paid fourth quarter 2022 common unit distribution of $0.75 and special common unit distribution of $2.43

• Redeemed $47.5 million of preferred units, reducing preferred units outstanding to par value of $202.5 million

• Leverage ratio of 0.5x as of March 31, 2023

• Declares first quarter 2023 common unit distribution of $0.75 

 

"NRP's strong performance continued in the first quarter of 2023 driven by robust prices for metallurgical coal and soda ash," said Craig Nunez, NRP's president and chief operating officer. "In addition to generating $73 million of free cash flow, we redeemed $47.5 million of preferred units at par with cash and permanently retired $16.7 million of Opco Senior Notes. We will continue to aggressively pay off debt and preferred equity with internally generated cash while maintaining distributions to our common unitholders.”

 

NRP announced today that the board of directors of its general partner declared a first quarter 2023 cash distribution of $0.75 per common unit to be paid on May 23, 2023, to unitholders of record on May 16, 2023. In addition, the board declared a $6.1 million cash distribution on NRP's outstanding preferred units. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the board of directors. The board of directors considers numerous factors each quarter in determining cash distributions including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability, and the level of cash reserves that the board determines is necessary for future operating and capital needs.

 

NRP's liquidity was $56.5 million at March 31, 2023, consisting of $17.7 million of cash and $38.8 million of borrowing capacity available under its revolving credit facility. 

 

 

1
 

 

Segment Performance

 

Mineral Rights

 

Mineral Rights net income for the first quarter of 2023 increased $5.9 million as compared to the prior year period primarily due to increased metallurgical coal sales volumes and revenue from carbon neutral initiatives. Operating cash flow and free cash flow for the first quarter of 2023 increased $25.7 million and $26.3 million, respectively, as compared to the prior year period primarily due to the timing of minimum and royalty payments and prior year recoupments. Approximately 75% of coal royalty revenues and approximately 55% of coal royalty sales volumes were derived from metallurgical coal in the first quarter of 2023.

 

Metallurgical and thermal coal prices remain strong relative to historical norms, although pricing has declined from the record highs seen in 2022. Continued support for pricing is expected as operators are limited in their ability to increase production due to ongoing labor shortages, transportation and logistics challenges, difficulty of new mine permitting, and limited access to capital. 

 

NRP continues to explore and identify carbon neutral revenue opportunities across its large portfolio of land, mineral, and timber assets, including the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar, and wind energy. In the first quarter of 2023, NRP executed a new solar lease.

 

Soda Ash

 

Soda Ash net income in the first quarter of 2023 increased $4.3 million as compared to the prior year period primarily due to increased sales prices. Operating cash flow and free cash flow in the first quarter of 2023 decreased $2.6 million as compared to the prior year period due to a higher quarterly distribution from Sisecam Wyoming in the first quarter of 2022.

 

International prices remained strong in the first quarter of 2023 reflecting a continued supply constrained market for soda ash. Domestic soda ash prices were also strong during the first quarter of 2023 versus the prior year quarter due to negotiated 2023 domestic prices converging to international soda ash prices.

 

Corporate and Financing

 

Corporate and Financing costs in the first quarter of 2023 decreased $5.2 million as compared to the prior year period primarily due to lower interest expense resulting from less debt outstanding. Operating cash flow and free cash flow in the first quarter of 2023 decreased $2.5 million as compared to the prior year period primarily due to increased cash paid for incentive compensation in the first quarter of 2023 because of the improved business performance in 2022 and higher cash paid for interest on credit facility borrowings in 2023. 

 

In the first quarter of 2023, NRP received a notice from holders of the partnership's Class A Preferred Units exercising their right to either convert or redeem an aggregate of 47,499 Class A Preferred Units. NRP chose to redeem the preferred units for $47.5 million in cash rather than issuing common units. Of the originally issued 250,000 Class A Preferred Units, 202,501 Class A Preferred Units remain outstanding.

 

In February 2023, NRP declared and paid a fourth quarter 2022 cash distribution of $0.75 per common unit and a $7.5 million cash distribution on the preferred units. In March 2023, NRP declared and paid a special distribution of $2.43 per common unit to help cover unitholder tax liabilities associated with owning NRP's common units during 2022. Today, NRP declared a first quarter 2023 cash distribution of $0.75 per common unit and a $6.1 million cash distribution on its outstanding preferred units.  

 

NRP's consolidated leverage ratio was 0.5x at March 31, 2023. 

 

Conference Call

 

A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link: https://conferencingportals.com/event/WTRCwGdM. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full conference call we suggest registering at minimum 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website.

 

Withholding Information for Foreign Investors

 

Concurrent with this announcement, we are providing qualified notice to brokers and nominees that hold NRP units on behalf of non-U.S. investors under Treasury Regulation Section 1.1446-4(b) and (d) and Treasury Regulation Section 1.1446(f)-4(c)(2)(iii). Brokers and nominees should treat one hundred percent (100%) of NRP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. In addition, brokers and nominees should treat one hundred percent (100%) of the distribution as being in excess of cumulative net income for purposes of determining the amount to withhold. Accordingly, NRP's distributions to non-U.S. investors are subject to federal income tax withholding at a rate equal to the sum of the highest applicable rate plus ten percent (10%).

 

Company Profile

 

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of properties in the United States including coal, industrial minerals and other natural resources, as well as rights to conduct carbon sequestration and renewable energy activities. NRP also owns an equity investment in Sisecam Wyoming LLC, one of the world’s lowest-cost producers of soda ash.

 

For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com.

 

 

2
 

 

Forward-Looking Statements

 

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees; Sisecam Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

Non-GAAP Financial Measures

 

"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) 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 or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

 

“Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

 

“Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

 

"Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions, redemption of preferred units, redemption of PIK units, common unit distributions, and warrant cash settlements. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units.

 

"Leverage ratio" represents the outstanding principal of NRP's debt at the end of the period divided by the last twelve months' Adjusted EBITDA as defined above. NRP believes that leverage ratio is a useful measure to management and investors to evaluate and monitor the indebtedness of NRP relative to its ability to generate income to service such debt and in understanding trends in NRP’s overall financial condition. Leverage ratio may not be calculated the same for NRP as for other companies and is not a substitute for, and should not be used in conjunction with, GAAP financial ratios. 

 

 

-Financial Tables and Reconciliation of Non-GAAP Measures Follow-

 

 

3
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 
 

Consolidated Statements of Comprehensive Income 

 

   

For the Three Months Ended

  
   

March 31,

    

December 31,

  

(In thousands, except per unit data)

  

2023

    

2022

    

2022

  

Revenues and other income

                        

Royalty and other mineral rights

   $ 76,271     $ 71,083     $ 75,218  

Transportation and processing services

     3,598       3,796       5,695  

Equity in earnings of Sisecam Wyoming

     19,254       14,837       15,759  

Gain on asset sales and disposals

     96       —       383  

Total revenues and other income

   $ 99,219     $ 89,716     $ 97,055  
                         

Operating expenses

                        

Operating and maintenance expenses

   $ 7,163     $ 8,076     $ 8,914  

Depreciation, depletion and amortization

     4,083       3,868       5,954  

General and administrative expenses

     5,845       4,467       7,815  

Asset impairments

     —       19       3,583  

Total operating expenses

   $ 17,091     $ 16,430     $ 26,266  
                         

Income from operations

   $ 82,128     $ 73,286     $ 70,789  
                         

Other expenses, net

                        

Interest expense, net

   $ (2,853 )   $ (9,387 )   $ (3,638 )

Loss on extinguishment of debt

     —       —       (3,933 )

Total other expenses, net

   $ (2,853 )   $ (9,387 )   $ (7,571 )
                         

Net income

   $ 79,275     $ 63,899     $ 63,218  

Less: income attributable to preferred unitholders

     (6,661 )     (7,500 )     (7,500 )

Less: redemption of preferred units

     (16,228 )     —       —  

Net income attributable to common unitholders and the general partner

   $ 56,386     $ 56,399     $ 55,718  
                         

Net income attributable to common unitholders

   $ 55,258     $ 55,271     $ 54,603  

Net income attributable to the general partner

     1,128       1,128       1,115  
                         

Net income per common unit

                        

Basic

   $ 4.40     $ 4.45     $ 4.37  

Diluted

     3.44       3.11       3.13  
                         

Net income

   $ 79,275     $ 63,899     $ 63,218  

Comprehensive income (loss) from unconsolidated investment and other

     (19,583 )     2,545       16,685  

Comprehensive income

   $ 59,692     $ 66,444     $ 79,903  

 

 

4
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 

 

Consolidated Statements of Cash Flows

 

   

For the Three Months Ended

  
   

March 31,

    

December 31,

  

(In thousands)

  

2023

    

2022

    

2022

  

Cash flows from operating activities

                        

Net income

   $ 79,275     $ 63,899     $ 63,218  

Adjustments to reconcile net income to net cash provided by operating activities:

                        

Depreciation, depletion and amortization

     4,083       3,868       5,954  

Distributions from unconsolidated investment

     10,780       13,230       10,780  

Equity earnings from unconsolidated investment

     (19,254 )     (14,837 )     (15,759 )

Gain on asset sales and disposals

     (96 )     —       (383 )

Loss on extinguishment of debt

     —       —       3,933  

Asset impairments

     —       19       3,583  

Bad debt expense

     (610 )     1,028       421  

Unit-based compensation expense

     2,491       1,448       1,557  

Amortization of debt issuance costs and other

     25       375       523  

Change in operating assets and liabilities:

                        

Accounts receivable

     7,061       (7,579 )     (8,553 )

Accounts payable

     (541 )     (60 )     (186 )

Accrued liabilities

     (8,805 )     (7,156 )     5,766  

Accrued interest

     263       7,250       (3,238 )

Deferred revenue

     (154 )     (7,316 )     1,670  

Other items, net

     (1,618 )     (1,838 )     (398 )

Net cash provided by operating activities

   $ 72,900     $ 52,331     $ 68,888  
                         

Cash flows from investing activities

                        

Proceeds from asset sales and disposals

   $ 101     $ —     $ 384  

Return of long-term contract receivable

     598       —       585  

Capital expenditures

     (2 )     —       (59 )

Net cash provided by investing activities

   $ 697     $ —     $ 910  
                         

Cash flows from financing activities

                        

Debt borrowings

   $ 94,200     $ —     $ 70,000  

Debt repayments

     (89,696 )     (16,697 )     (141,731 )

Distributions to common unitholders and the general partner

     (40,900 )     (5,672 )     (9,571 )

Distributions to preferred unitholders

     (7,500 )     (7,500 )     (7,500 )

Redemption of preferred units

     (48,085 )     —       —  

Redemption of preferred units paid-in-kind

     —       (19,579 )     —  

Other items, net

     (3,052 )     (2,813 )     (2,842 )

Net cash used in financing activities

   $ (95,033 )   $ (52,261 )   $ (91,644 )
                         

Net increase (decrease) in cash and cash equivalents

   $ (21,436 )   $ 70     $ (21,846 )

Cash and cash equivalents at beginning of period

     39,091       135,520       60,937  

Cash and cash equivalents at end of period

   $ 17,655     $ 135,590     $ 39,091  
                         

Supplemental cash flow information:

                        

Cash paid for interest

   $ 2,474     $ 1,644     $ 6,764  

 

 

5
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 

 

Consolidated Balance Sheets

 

   

March 31,

    

December 31,

  
    2023     2022  

(In thousands, except unit data)

  

(Unaudited)

        

ASSETS

                

Current assets

                

Cash and cash equivalents

   $ 17,655     $ 39,091  

Accounts receivable, net

     36,513       42,701  

Other current assets, net

     3,216       1,822  

Total current assets

   $ 57,384     $ 83,614  

Land

     24,008       24,008  

Mineral rights, net

     408,371       412,312  

Intangible assets, net

     14,613       14,713  

Equity in unconsolidated investment

     295,361       306,470  

Long-term contract receivable, net

     28,309       28,946  

Other long-term assets, net

     7,622       7,068  

Total assets

   $ 835,668     $ 877,131  

LIABILITIES AND CAPITAL

                

Current liabilities

                

Accounts payable

   $ 1,452     $ 1,992  

Accrued liabilities

     3,466       11,916  

Accrued interest

     1,252       989  

Current portion of deferred revenue

     7,450       6,256  

Current portion of long-term debt, net

     39,055       39,076  

Total current liabilities

   $ 52,675     $ 60,229  

Deferred revenue

     38,833       40,181  

Long-term debt, net

     133,821       129,205  

Other non-current liabilities

     6,124       5,472  

Total liabilities

   $ 231,453     $ 235,087  

Commitments and contingencies

                

Class A Convertible Preferred Units (202,501 and 250,000 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at March 31, 2023 and December 31, 2022)

   $ 133,316     $ 164,587  

Partners’ capital

                

Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively)

   $ 417,401     $ 404,799  

General partner’s interest

     6,400       5,977  

Warrant holders’ interest

     47,964       47,964  

Accumulated other comprehensive income (loss)

     (866 )     18,717  

Total partners’ capital

   $ 470,899     $ 477,457  

Total liabilities and partners' capital

   $ 835,668     $ 877,131  

 

 

6
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 

 

Consolidated Statements of Partners' Capital

 

                                   

Accumulated

          
                                   

Other

    

Total

  
   

Common Unitholders

    

General

    

Warrant

    

Comprehensive

    

Partners'

  

(In thousands)

  

Units

    

Amounts

    

Partner

    

Holders

    

Income (Loss)

    

Capital

  

Balance at December 31, 2022

     12,506     $ 404,799     $ 5,977     $ 47,964     $ 18,717     $ 477,457  

Net income (1)

     —       77,690       1,585       —       —       79,275  

Redemption of preferred units

     —       (15,904 )     (324 )     —       —       (16,228 )

Distributions to common unitholders and the general partner

     —       (40,082 )     (818 )     —       —       (40,900 )

Distributions to preferred unitholders

     —       (7,924 )     (162 )     —       —       (8,086 )

Issuance of unit-based awards

     129       —       —       —       —       —  

Unit-based awards amortization and vesting, net

     —       (1,178 )     —       —       —       (1,178 )

Capital contribution

     —       —       142       —       —       142  

Comprehensive loss from unconsolidated investment and other

     —       —       —       —       (19,583 )     (19,583 )

Balance at March 31, 2023

     12,635     $ 417,401     $ 6,400     $ 47,964     $ (866 )   $ 470,899  
         

(1)

Net income includes $6.7 million of income attributable to preferred unitholders that accumulated during the period, of which $6.5 million is allocated to the common unitholders and $0.1 million is allocated to the general partner.

 

                                   

Accumulated

          
                                   

Other

    

Total

  
   

Common Unitholders

    

General

    

Warrant

    

Comprehensive

    

Partners'

  

(In thousands)

  

Units

    

Amounts

    

Partner

    

Holders

    

Income

    

Capital

  

Balance at December 31, 2021

     12,351     $ 203,062     $ 1,787     $ 47,964     $ 3,211     $ 256,024  

Net income (1)

     —       62,621       1,278       —       —       63,899  

Distributions to common unitholders and the general partner

     —       (5,559 )     (113 )     —       —       (5,672 )

Distributions to preferred unitholders

     —       (7,603 )     (155 )     —       —       (7,758 )

Issuance of unit-based awards

     155       —       —       —       —       —  

Unit-based awards amortization and vesting, net

     —       (1,754 )     —       —       —       (1,754 )

Capital contribution

     —       —       112       —       —       112  

Comprehensive income from unconsolidated investment and other

     —       —       —       —       2,545       2,545  

Balance at March 31, 2022

     12,506     $ 250,767     $ 2,909     $ 47,964     $ 5,756     $ 307,396  
         

(1)

Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

 

 

7
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 

 

The following table presents NRP's unaudited business results by segment for the three months ended March 31, 2023 and 2022 and December 31, 2022:

 

   

Operating Segments

                  
   

Mineral

            

Corporate and

          

(In thousands)

  

Rights

    

Soda Ash

    

Financing

    

Total

  

For the Three Months Ended March 31, 2023

                                

Revenues

   $ 79,869     $ 19,254     $ —     $ 99,123  

Gain on asset sales and disposals

     96       —       —       96  

Total revenues and other income

   $ 79,965     $ 19,254     $ —     $ 99,219  

Asset impairments

   $ —     $ —     $ —     $ —  

Net income (loss)

   $ 68,881     $ 19,096     $ (8,702 )   $ 79,275  

Adjusted EBITDA (1)

   $ 72,960     $ 10,622     $ (5,845 )   $ 77,737  

Cash flow provided by (used in) continuing operations:

                                

Operating activities

   $ 73,858     $ 10,617     $ (11,575 )   $ 72,900  

Investing activities

   $ 699     $ —     $ (2 )   $ 697  

Financing activities

   $ (583 )   $ —     $ (94,450 )   $ (95,033 )

Distributable cash flow (1)

   $ 74,557     $ 10,617     $ (11,577 )   $ 73,597  

Free cash flow (1)

   $ 74,456     $ 10,617     $ (11,577 )   $ 73,496  
                                 

For the Three Months Ended March 31, 2022

                                

Revenues

   $ 74,879     $ 14,837     $ —     $ 89,716  

Gain on asset sales and disposals

     —       —       —       —  

Total revenues and other income

   $ 74,879     $ 14,837     $ —     $ 89,716  

Asset impairments

   $ 19     $ —     $ —     $ 19  

Net income (loss)

   $ 62,967     $ 14,786     $ (13,854 )   $ 63,899  

Adjusted EBITDA (1)

   $ 66,854     $ 13,179     $ (4,467 )   $ 75,566  

Cash flow provided by (used in) continuing operations:

                                

Operating activities

   $ 48,176     $ 13,195     $ (9,040 )   $ 52,331  

Investing activities

   $ —     $ —     $ —     $ —  

Financing activities

   $ (614 )   $ —     $ (51,647 )   $ (52,261 )

Distributable cash flow (1)

   $ 48,176     $ 13,195     $ (9,040 )   $ 52,331  

Free cash flow (1)

   $ 48,176     $ 13,195     $ (9,040 )   $ 52,331  
                                 

For the Three Months Ended December 31, 2022

                                

Revenues

   $ 80,913     $ 15,759     $ —     $ 96,672  

Gain on asset sales and disposals

     383       —       —       383  

Total revenues and other income

   $ 81,296     $ 15,759     $ —     $ 97,055  

Asset impairments

   $ 3,583     $ —     $ —     $ 3,583  

Net income (loss)

   $ 62,900     $ 15,704     $ (15,386 )   $ 63,218  

Adjusted EBITDA (1)

   $ 72,437     $ 10,725     $ (7,815 )   $ 75,347  

Cash flow provided by (used in) continuing operations:

                                

Operating activities

   $ 68,332     $ 10,738     $ (10,182 )   $ 68,888  

Investing activities

   $ 969     $ —     $ (59 )   $ 910  

Financing activities

   $ —     $ —     $ (91,644 )   $ (91,644 )

Distributable cash flow (1)

   $ 69,301     $ 10,738     $ (10,241 )   $ 69,798  

Free cash flow (1)

   $ 68,917     $ 10,738     $ (10,241 )   $ 69,414  
         
 

(1)

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

 

 

8
Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 

 

Operating Statistics - Mineral Rights

 

   

For the Three Months Ended

  
   

March 31,

    

December 31,

  

(In thousands, except per ton data)

  

2023

    

2022

    

2022

  

Coal sales volumes (tons)

                        

Appalachia

                        

Northern

     379       428       436  

Central

     3,609       3,251       3,408  

Southern

     582       361       613  

Total Appalachia

     4,570       4,040       4,457  

Illinois Basin

     1,310       1,502       2,740  

Northern Powder River Basin

     1,085       1,238       1,516  

Gulf Coast

     58       69       61  

Total coal sales volumes

     7,023       6,849       8,774  
                         

Coal royalty revenue per ton

                        

Appalachia

                        

Northern

   $ 9.86     $ 10.14     $ 6.63  

Central

     9.92       11.37       9.33  

Southern

     14.94       17.56       11.99  

Illinois Basin

     3.57       2.20       3.11  

Northern Powder River Basin

     4.68       3.74       3.75  

Gulf Coast

     0.57       0.55       0.59  

Combined average coal royalty revenue per ton

     8.26       8.12       6.42  
                         

Coal royalty revenues

                        

Appalachia

                        

Northern

   $ 3,737     $ 4,341     $ 2,890  

Central

     35,806       36,980       31,809  

Southern

     8,697       6,340       7,351  

Total Appalachia

     48,240       47,661       42,050  

Illinois Basin

     4,675       3,303       8,525  

Northern Powder River Basin

     5,075       4,632       5,686  

Gulf Coast

     33       38       36  

Unadjusted coal royalty revenues

     58,023       55,634       56,297  

Coal royalty adjustment for minimum leases

     —       (185 )     (116 )

Total coal royalty revenues

   $ 58,023     $ 55,449     $ 56,181  
                         

Other revenues

                        

Production lease minimum revenues

   $ 613     $ 1,592     $ 2,312  

Minimum lease straight-line revenues

     4,503       4,783       4,557  

Carbon neutral initiative revenues

     2,118       —       —  

Wheelage revenues

     3,869       3,717       2,888  

Property tax revenues

     1,470       1,472       1,351  

Coal overriding royalty revenues

     188       258       1,127  

Lease amendment revenues

     851       880       751  

Aggregates royalty revenues

     753       770       608  

Oil and gas royalty revenues

     3,588       1,814       5,271  

Other revenues

     295       348       172  

Total other revenues

   $ 18,248     $ 15,634     $ 19,037  

Royalty and other mineral rights

   $ 76,271     $ 71,083     $ 75,218  

Transportation and processing services revenues

     3,598       3,796       5,695  

Gain on asset sales and disposals

     96       —       383  

Total Mineral Rights segment revenues and other income

   $ 79,965     $ 74,879     $ 81,296  
 

 

 
9
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
 

 

Adjusted EBITDA

 

   

Mineral

            

Corporate and

          

(In thousands)

  

Rights

    

Soda Ash

    

Financing

    

Total

  

For the Three Months Ended March 31, 2023

                                

Net income (loss)

   $ 68,881     $ 19,096     $ (8,702 )   $ 79,275  

Less: equity earnings from unconsolidated investment

     —       (19,254 )     —       (19,254 )

Add: total distributions from unconsolidated investment

     —       10,780       —       10,780  

Add: interest expense, net

     —       —       2,853       2,853  

Add: loss on extinguishment of debt

     —       —       —       —  

Add: depreciation, depletion and amortization

     4,079       —       4       4,083  

Add: asset impairments

     —       —       —       —  

Adjusted EBITDA

   $ 72,960     $ 10,622     $ (5,845 )   $ 77,737  
                                 

For the Three Months Ended March 31, 2022

                                

Net income (loss)

   $ 62,967     $ 14,786     $ (13,854 )   $ 63,899  

Less: equity earnings from unconsolidated investment

     —       (14,837 )     —       (14,837 )

Add: total distributions from unconsolidated investment

     —       13,230       —       13,230  

Add: interest expense, net

     —       —       9,387       9,387  

Add: loss on extinguishment of debt

     —       —       —       —  

Add: depreciation, depletion and amortization

     3,868       —       —       3,868  

Add: asset impairments

     19       —       —       19  

Adjusted EBITDA

   $ 66,854     $ 13,179     $ (4,467 )   $ 75,566  
                                 

For the Three Months Ended December 31, 2022

                                

Net income (loss)

   $ 62,900     $ 15,704     $ (15,386 )   $ 63,218  

Less: equity earnings from unconsolidated investment

     —       (15,759 )     —       (15,759 )

Add: total distributions from unconsolidated investment

     —       10,780       —       10,780  

Add: interest expense, net

     —       —       3,638       3,638  

Add: loss on extinguishment of debt

     —       —       3,933       3,933  

Add: depreciation, depletion and amortization

     5,954       —       —       5,954  

Add: asset impairments

     3,583       —       —       3,583  

Adjusted EBITDA

   $ 72,437     $ 10,725     $ (7,815 )   $ 75,347  

 

 

10
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
 

 

Distributable Cash Flow and Free Cash Flow

 

(In thousands)

  

Mineral Rights

    

Soda Ash

    

Corporate and Financing

    

Total

  

For the Three Months Ended March 31, 2023

                                

Net cash provided by (used in) operating activities

   $ 73,858     $ 10,617     $ (11,575 )   $ 72,900  

Add: proceeds from asset sales and disposals

     101       —       —       101  

Add: return of long-term contract receivable

     598       —       —       598  

Less: maintenance capital expenditures

     —       —       (2 )     (2 )

Distributable cash flow

   $ 74,557     $ 10,617     $ (11,577 )   $ 73,597  

Less: proceeds from asset sales and disposals

     (101 )     —       —       (101 )

Free cash flow

   $ 74,456     $ 10,617     $ (11,577 )   $ 73,496  
                                 

Net cash provided by (used in) investing activities

   $ 699     $ —     $ (2 )   $ 697  

Net cash used in financing activities

     (583 )     —       (94,450 )     (95,033 )
                                 

For the Three Months Ended March 31, 2022

                                

Net cash provided by (used in) operating activities

   $ 48,176     $ 13,195     $ (9,040 )   $ 52,331  

Add: proceeds from asset sales and disposals

     —       —       —       —  

Add: return of long-term contract receivable

     —       —       —       —  

Less: maintenance capital expenditures

     —       —       —       —  

Distributable cash flow

   $ 48,176     $ 13,195     $ (9,040 )   $ 52,331  

Less: proceeds from asset sales and disposals

     —       —       —       —  

Free cash flow

   $ 48,176     $ 13,195     $ (9,040 )   $ 52,331  
                                 

Net cash provided by investing activities

   $ —     $ —     $ —     $ —  

Net cash used in financing activities

     (614 )     —       (51,647 )     (52,261 )
                                 

For the Three Months Ended December 31, 2022

                                

Net cash provided by (used in) operating activities

   $ 68,332     $ 10,738     $ (10,182 )   $ 68,888  

Add: proceeds from asset sales and disposals

     384       —       —       384  

Add: return of long-term contract receivable

     585       —       —       585  

Less: maintenance capital expenditures

     —       —       (59 )     (59 )

Distributable cash flow

   $ 69,301     $ 10,738     $ (10,241 )   $ 69,798  

Less: proceeds from asset sales and disposals

     (384 )     —       —       (384 )

Free cash flow

   $ 68,917     $ 10,738     $ (10,241 )   $ 69,414  
                                 

Net cash provided by (used in) investing activities

   $ 969     $ —     $ (59 )   $ 910  

Net cash used in financing activities

     —       —       (91,644 )     (91,644 )

 

 

11
Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
 

 

Cash Flow Cushion

 

   

For the Three Months Ended

          

(In thousands)

  

June 30, 2022

    

September 30, 2022

    

December 31, 2022

    

March 31, 2023

    

Last 12 Months

  

Net cash provided by operating activities

   $ 63,123     $ 82,496     $ 68,888     $ 72,900     $ 287,407  

Add: proceeds from asset sales and disposals

     346       353       384       101       1,184  

Add: return of long-term contract receivable

     563       575       585       598       2,321  

Less: maintenance capital expenditures

     —       (59 )     (59 )     (2 )     (120 )

Distributable cash flow

   $ 64,032     $ 83,365     $ 69,798     $ 73,597     $ 290,792  

Less: proceeds from asset sales and disposals

     (346 )     (353 )     (384 )     (101 )     (1,184 )

Free cash flow

   $ 63,686     $ 83,012     $ 69,414     $ 73,496     $ 289,608  

Less: mandatory Opco debt repayments

     (2,365 )     —       (20,334 )     (16,696 )     (39,395 )

Less: preferred unit distributions

     (7,500 )     (7,500 )     (7,500 )     (7,500 )     (30,000 )

Less: redemption of preferred units

     —       —       —       (48,085 )     (48,085 )

Less: common unit distributions

     (9,570 )     (9,571 )     (9,571 )     (40,900 )     (69,612 )

Cash flow cushion

   $ 44,251     $ 65,941     $ 32,009     $ (39,685 )   $ 102,516  

 

 

Leverage Ratio

 

   

For the Three Months Ended

          

(In thousands)

  

June 30, 2022

    

September 30, 2022

    

December 31, 2022

    

March 31, 2023

    

Last 12 Months

  

Net income

   $ 66,820     $ 74,555     $ 63,218     $ 79,275     $ 283,868  

Less: equity earnings from unconsolidated investment

     (14,643 )     (14,556 )     (15,759 )     (19,254 )     (64,212 )

Add: total distributions from unconsolidated investment

     10,486       10,339       10,780       10,780       42,385  

Add: interest expense, net

     8,108       5,141       3,638       2,853       19,740  

Add: loss on extinguishment of debt

     4,048       2,484       3,933       —       10,465  

Add: depreciation, depletion and amortization

     5,847       6,850       5,954       4,083       22,734  

Add: asset impairments

     43       812       3,583       —       4,438  

Adjusted EBITDA

   $ 80,709     $ 85,625     $ 75,347     $ 77,737     $ 319,418  
                                         

Debt—at March 31, 2023

                                   $ 173,591  
                                         

Leverage Ratio

                                  

0.5 x

  
   

For the Three Months Ended

          

(In thousands)

  

June 30, 2021

    

September 30, 2021

    

December 31, 2021

    

March 31, 2022

    

Last 12 Months

  

Net income

   $ 15,382     $ 29,498     $ 55,641     $ 63,899     $ 164,420  

Less: equity earnings from unconsolidated investment

     (2,601 )     (6,672 )     (10,625 )     (14,837 )     (34,735 )

Add: total distributions from unconsolidated investment

     —       —       7,350       13,230       20,580  

Add: interest expense, net

     9,683       9,652       9,568       9,387       38,290  

Add: depreciation, depletion and amortization

     4,871       5,182       3,930       3,868       17,851  

Add: asset impairments

     16       57       986       19       1,078  

Adjusted EBITDA

   $ 27,351     $ 37,717     $ 66,850     $ 75,566     $ 207,484  
                                         

Debt—at March 31, 2022

                                   $ 421,787  
                                         

Leverage Ratio

                                  

2.0 x

  

 

-end-

 
12