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Natural Resource Partners L.P. Reports 2012 Results and Issues 2013 Guidance



 Natural Resource Partners L.P. Reports 2012 Results and Issues 2013 Guidance

Full Year 2012 Highlights

- Record revenues of $379.1 million, up slightly from 2011

- Distributable cash flow of $246.7 million, down 12% from 2011

- Net income per unit of $1.97, up from $0.50 in 2011, after impairments in
both periods

- Before considering the impairments, net income per unit of $2.00 versus
$1.99 in 2011

- Metallurgical production accounted for 32% of production and 44% of coal
royalty revenues

Fourth Quarter 2012 Highlights:

- Revenues of $102.4 million, a 10% increase over 4Q2011

- Net income per unit of $0.56 in 2012, up from ($0.16) in 2011, after
impairments in both quarters

- Before considering the impairments, net income per unit of $0.58, an 18%
increase from $0.49 in 2011

- Distributable cash flow of $74.5 million, a 6% decrease from 4Q2011

- Distribution of $0.55 per unit

PR Newswire

HOUSTON, Feb. 13, 2013

HOUSTON, Feb. 13, 2013 /PRNewswire/ -- Natural Resource Partners L.P.
(NYSE:NRP) today reported record revenues of $379.1 million for the full year
2012 and distributable cash flow, a non-GAAP measure, of $246.7 million.  Net
income per unit was $1.97 in 2012 versus $0.50 per unit in 2011.  Before
considering non-cash impairments in both 2012 and 2011, net income per unit
was $2.00 per unit in 2012 versus $1.99 per unit in 2011. Reconciliations of
all non-GAAP numbers are included in the tables at the end of the release.

(Logo: http://photos.prnewswire.com/prnh/20060109/NRPLOGO)

For the quarter ended December 31, 2012, NRP reported revenues of $102.4
million, an increase of 10% over the fourth quarter 2011. Distributable cash
flow of $74.5 million declined 6% from that of 2011. NRP reported net income
per unit of $0.56 for the fourth quarter 2012 compared to a loss of $0.16 per
unit in 2011.  Each of 2012 and 2011 had impairment charges of $2.6 million
and $70.4 million, respectively.  Before considering the non-cash impairments,
net income would have been $0.58 per unit for 2012, up 18% from the $0.49 per
unit recorded for the fourth quarter 2011.

"NRP had record revenue in 2012 in spite of one of the worst coal markets many
of us have seen in decades. Although many of our lessees made decisions to
lower their coal production, most of the reduced production occurred at mines
not located on our properties. However, we also benefited from our
diversification, our strength in metallurgical coal, which remained stronger
than steam coal throughout the year, and our growing presence in the Illinois
Basin, which is not impacted as much by low natural gas prices as the Central
Appalachian region," said Nick Carter, President and Chief Operating Officer.

Highlights              Quarter Ended               Year Ended
                        December  December  %       December  December  %
                        2012      2011      Change  2012      2011      Change
                        (in thousands except per unit, per ton and %)
Revenues
Total revenues          $         $         10%     $         $         0%
                         102,436   93,135            379,147   377,683
Coal production         17,012    12,042    41%     54,444    49,151    11%
Coal royalty revenues   $         $         0%      $         $         -7%
                         67,681    67,638            260,734   279,221
Average coal royalty    $         $         -29%    $         $         -16%
revenue per ton          3.98      5.62              4.79      5.68
Revenues other than     $         $         36%     $         $         20%
coal royalties           34,755    25,497            118,413   98,462
Net income (loss)
Net income (loss) to    $         $         NM      $         $         295%
limited partners         58,905   (16,565)           209,088   52,945
Net income (loss) per   $         $         NM      $         $         295%
unit                     0.56     (0.16)             1.97      0.50
Average units           106,028   106,028   0%      106,028   106,028   0%
outstanding
Net income before
considering the
impairment^(1)
Net income to limited   61,422    52,431    17%     211,605   211,055   0%
partners
Net income per unit     $         $         18%     $         $         0%
                         0.58      0.49              2.00      1.99
Distributable cash      $         $         -6%     $         $         -12%
flow^(1)                 74,522    79,552            246,665   280,015
(1) See Non-GAAP reconciliation

 

Revenues

Full Year

Total revenues for the year were up slightly from 2011 at $379.1 million in
spite of a very weak coal market in 2012. Coal royalty revenues declined 7% to
$260.7 million, predominantly due to a decrease of 16% in the combined average
royalty revenue per ton to $4.79 per ton, offset by an 11% increase in total
tonnage to 54.4 million tons.  Production increases resulted primarily from a
10% increase in Appalachian production and a 20% increase in the Illinois
Basin production. Production in 2012 in both Northern and Southern Appalachia
doubled, more than offsetting the 12% decline in production in Central
Appalachia.  Metallurgical coal accounted for 32% of NRP's production and 44%
of its coal royalty revenues for 2012 compared to 34% of production and 45% of
coal royalty revenues in 2011.

Revenues other than coal royalty revenues increased $20.0 million, or 20%, to
$118.4 million in 2012, predominantly due to increases in transportation fees,
minimums recognized as revenue and other revenue.  Following is a discussion
of the major components generating the changes:

  o Minimums recognized as revenue increased $14.8 million due to the
    expiration of the minimum recoupment period on certain properties.
  o Other revenue increased $8.9 million mainly due to condemnation payments
    from the West Virginia Department of Highways for highway rights-of-way
    and the sale of a preparation plant.
  o Revenues from transportation fees increased $2.8 million due to additional
    throughput and acquisitions of transportation assets.  Oil and gas
    revenues decreased $4.9 million mainly due to decreases in both price and
    volume on BRP's gas properties in Louisiana, offset by a significant lease
    bonus in the Marcellus from a BRP property and additional production in
    Oklahoma.
  o Coal processing fees declined by $5.2 million due to the sale in the third
    quarter 2012 of a processing plant and lower throughput volumes.

Fourth Quarter

Increases in revenues other than coal royalty drove total revenues for the
fourth quarter 2012 to rise 10% over the 2011 fourth quarter to $102.4
million.  A nearly 5 million ton increase in coal production offset lower coal
royalty revenue per ton, leaving coal royalty revenues flat at $67.7 million. 
A significant portion of the additional production related to an old lease in
Northern Appalachia that receives a very low royalty rate.  Southern
Appalachia also rose significantly mainly due to sales that were idled for
much of last year due to the destruction of a preparation plant. Also included
in the increase is the beginning of the ramp in production for the Hillsboro
property in the Illinois Basin.

Revenues other than coal royalty increased $9.3 million, or 36%, over the
fourth quarter 2011 to $34.8 million due mainly to an additional $6.5 million
for minimums recognized as revenue and an additional $4.6 million associated
with a right-of-way sale to the West Virginia Department of Highways, offset
by a decrease of $1.5 million in oil and gas revenues due to lower price
realization and production from BRP's gas properties in Louisiana.

Operating Expenses

Full Year

Total operating expenses for 2012 were $112.0 million.  Before considering
impairment charges of $2.6 million and $161.3 million in 2012 and 2011,
respectively, total operating expenses for 2012 decreased $2.8 million to
$109.4 million mainly due to a $6.9 million decrease in depreciation,
depletion and amortization from properties with lower basis partially offset
by a $3.2 million increase in property taxes.   Substantially all of the
property taxes paid by NRP are reimbursed by NRP's lessees, and the
reimbursements are recorded in revenues when received. 

Fourth Quarter

Total operating expenses for the fourth quarter totaled $29.2 million,
including an impairment charge of $2.6 million for a further write down of the
Gatling West Virginia property.  The fourth quarter of 2011 included an
impairment of $70.4 million for the Gatling Ohio property.  Before considering
impairments in both years, operating expenses increased $1.3 million over 2011
to $26.7 million mainly due to increased depreciation, depletion and
amortization as a result of increased production partially offset by a $1.9
million decrease in general and administrative expenses.

Net income (loss)

Full Year

Net income attributable to the limited partners for 2012 was $209.1 million
compared to $52.9 million in 2011. Before considering the impairments in both
years, net income to the limited partners was virtually flat at $211.6 million
for 2012 versus $211.1 million for 2011. 

Net income per unit for 2012, before considering impairments, rose $0.01 to
$2.00 per unit. 

Fourth Quarter

Net income to the limited partners totaled $58.9 million for the fourth
quarter 2012.  Net income to the limited partners, before considering the
impairments, increased 17% over fourth quarter 2011 to $61.4 million in the
fourth quarter 2012. The increase was solely related to increased revenues. 

Net income per unit for the fourth quarter 2012 was $0.56 versus ($0.16) in
2011.  Before considering the impairments in both quarters, net income per
unit increased 18% to $0.58 per unit from $0.49 per unit in 2011.

Distributable cash flow

Full Year

Distributable cash flow decreased 12% from 2011, to $246.7 million for 2012
mainly due to: (1) a $21.1 million decrease from increased reserves for future
principal payments; (2) a $24.0 million decrease in cash flows due to balance
sheet changes; partially offset by, (3) a $9.7 million increase in gains on
property sales; and (4) an additional $2.7 million in cash received from the
lease of NRP's newly acquired Sugar Camp infrastructure asset that is not
included in cash flow from operations.

Fourth Quarter

Distributable cash flow declined $5.0 million over the fourth quarter of 2011
to $74.5 million for the fourth quarter of 2012 due to increased reserves for
future principal payments.

Fourth Quarter 2012 compared to Third Quarter 2012

Highlights                          4Q12             3Q12             % Change
                                    (in thousands, except per ton and
                                    per unit)
Total revenues                      $     102,436    $                9%
                                                     94,175
Coal production                     17,012           13,340           28%
Coal royalty revenues               $       67,681   $                -4%
                                                     70,259
Average coal royalty revenue per    $           3.98 $                -24%
ton                                                  5.27
Revenues other than coal royalty    $       34,755   $                45%
                                                     23,916
Net income to limited partners      $       58,905   $                16%
                                                     50,961
Net income to the limited partners,                  $          
before considering the              $       61,422   50,961           21%
impairment^(1)
Net income per unit                 $           0.56 $                17%
                                                     0.48
Net income per unit, before         $           0.58 $                21%
considering the impairment^(1)                       0.48
Average units outstanding           106,028          106,028          0%
Distributable cash flow^(1)         $       74,522   $                15%
                                                     65,063
^(1)See Non-GAAP reconciliation

Revenues

Total revenues for the fourth quarter increased 9% over the prior quarter to
$102.4 million, predominantly due to an increase of $9.1 million in minimums
recognized as revenue and a $1.2 million increase in oil and gas revenues,
offset by a $2.6 million decrease in coal royalty revenues.  Coal royalty
revenues decreased to $67.7 million due to realizing lower royalty revenue per
ton across all regions that more than offset additional tons sold in all
regions except Central Appalachia.

Operating Expenses

Before considering impairments, total operating expenses declined $1.9 million
from the third quarter mainly due to decreases general and administrative
expenses offset by higher depreciation, depletion and amortization as a result
of increased production in the fourth quarter.

Net income

Net income to the limited partners, before considering the impairment,
increased $10.5 million in the fourth quarter from the previous quarter due to
increased revenues.  Net income per unit, before considering the impairment,
was $0.58 for the fourth quarter of 2012 compared to $0.48 per unit for the
third quarter.

Distributable cash flow

Distributable cash flow increased $9.5 million, or 15%, to $74.5 million, due
to increased revenues and improvements in the balance sheet.

Acquisitions and Liquidity

In 2012, NRP invested $240.2 million in acquisitions, $46.1 million of which
occurred in the fourth quarter and related to the acquisition of oil and gas
interests in the Marcellus and an overriding royalty on frac sand reserves in
Wisconsin. 

In January 2013, NRP announced the acquisition of (1) a 48.51% general partner
interest in OCI Wyoming L.P. and (2) 20% of the common shares and all of the
preferred shares of OCI Wyoming Co. from subsidiaries of Anadarko Petroleum
Corporation (NYSE:APC).  NRP paid a net $292.5 million for the interests.  The
agreement also contains an earn-out provision, which would require NRP to pay
Anadarko up to $50 million, on a net present value basis, over a three-year
period if OCI Wyoming L.P. achieves specified revenue targets during that
period.  The acquisition was funded through a $200 million term loan, the
issuance of $76.5 million in equity, including a general partner contribution
of $1.5 million, and $16 million in cash.  After the associated equity
issuance, NRP now has 109,812,408 common units outstanding.

Following the acquisition and associated financing, NRP has approximately $285
million in liquidity, consisting of $133 million in cash (at December 31, 2012
pro-forma for the transaction) and $152 million available under its credit
facility.

Distributions

As reported on January 22, 2013, the Board of Directors of NRP's general
partner declared a quarterly distribution of $0.55 per unit for the fourth
quarter 2012.  

2013 Guidance

"Even though coal production from our properties held up remarkably well
during 2012, we began hearing from our lessees near the end of last year that
they were planning to idle some mines and reduce production at other mines
that will likely impact tonnage from NRP properties in 2013 and possibly
beyond.  These changes are due to the severely depressed prices for both steam
and met coal caused by the following:

  o the lack of demand for steam coal due primarily to coal-to-gas switching
    and moderate weather has led to higher than normal stockpile levels
    affecting primarily Central Appalachian steam markets;
  o a slowing Chinese economy; and
  o a weak European economy impacting the demand primarily for metallurgical
    but also steam coal.

"These actions by our lessees, including many of our large publicly traded
producers as well as numerous small independent operators, have caused us to
reduce our forecast for production from NRP's properties in Central Appalachia
by approximately 9 million tons. Further, the lower production forecast,
coupled with lower projected prices for both met and steam coal, results in
NRP lowering its coal royalty revenue forecast by $25 million to $50 million
compared to the 2012 actuals," said Nick Carter.  "The reduced coal royalty
revenue also leads to lower projected NRP total revenues for 2013 of $330
million to $375 million.  The recent acquisition of the Anadarko interest in
the OCI soda ash operations will help to offset some of the loss of revenues
from coal that we anticipate in 2013 due to the factors stated above."

"We have historically reduced our distributable cash flow by the amount of
cash we have reserved for principal payments due on our senior notes in the
next calendar year.  However, to present our distributable cash flow more in
line with MLP practice and because we intend to refinance some or all of the
principal payments that are due in 2013 and 2014, we are no longer going to
reduce distributable cash flow by reserves for future principal payments. 
This change in our reporting of distributable cash flow does not change our
long-term intention to pay down our debt," said Carter.

"Although we anticipate a difficult year for our coal business, we have ample
liquidity to maintain our distribution at the full $2.20 for 2013," said
Corbin J. Robertson, Jr., Chairman and CEO of Natural Resource Partners.

Following is a table containing the 2013 guidance.

                                   2013 Guidance
                                  (Range)
                                  (in millions except per unit)
Coal royalty revenues             $        210.0  - $        235.0
Coal production tonnage (mm tons) 48.0            - 56.0
Total revenues                    $        330.0  - $        375.0
Distributable cash flow           $        250.0  - $        280.0
Net income per unit               $          1.60 - $          1.80
Average units outstanding         109.6           - 109.6

 

Company Profile

Natural Resource Partners L.P. is a master limited partnership headquartered
in Houston, TX, with its operations headquarters in Huntington, WV.  NRP is
principally engaged in the business of owning and managing mineral reserve
properties.  NRP primarily owns coal, aggregate and oil and gas reserves
across the United States that generate royalty income for the partnership.

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.

Disclosure of Non-GAAP Financial Measures

Distributable cash flow represents cash flow from operations less actual
principal payments and cash reserves set aside for scheduled principal
payments on the senior notes.  Distributable cash flow is a "non-GAAP
financial measure" that is presented because management believes it is a
useful adjunct to net cash provided by operating activities under GAAP.
Distributable cash flow is a significant liquidity metric that is an indicator
of NRP's ability to generate cash flows at a level that can sustain or support
an increase in quarterly cash distributions paid to its partners.
Distributable cash flow is also the quantitative standard used throughout the
investment community with respect to publicly traded partnerships.
Distributable cash flow is not a measure of financial performance under GAAP
and should not be considered as an alternative to cash flows from operating,
investing or financing activities. A reconciliation of distributable cash flow
to net cash provided by operating activities is included in the tables
attached to this release.  Distributable cash flow may not be calculated the
same for NRP as other companies.

Forward-Looking Statements

This press release may include "forward-looking statements" as defined by the
Securities and Exchange Commission.  Such statements include the 2013 guidance
and maintaining the distribution for 2013.  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, decreases in
demand for coal; changes in operating conditions and costs; production cuts by
our lessees; commodity prices; unanticipated geologic problems; changes in the
legislative or regulatory environment and other factors detailed in Natural
Resource Partners' Securities and Exchange Commission filings. In addition,
there are significant risks and uncertainties relating to our ownership of OCI
Wyoming including (a) the ownership of a general partner interest in OCI
Wyoming could expose us to additional unknown and contingent liabilities, and
(b) we will not own 100 percent of, and only have limited approval rights with
respect to OCI Wyoming and our partner will be able to control most business
decisions relative to OCI Wyoming. Natural Resource Partners L.P. has no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.

-Financial statements follow-

Natural Resource Partners L.P.
Operating Statistics
(in thousands except per ton data)
                              Quarter Ended              Year Ended
                              December    December      December    December
                              2012        2011          2012        2011
                              (unaudited)               (unaudited)
                                          (restated)
Coal Royalties:
Coal royalty revenues:
      Appalachia
             Northern         $           $     5,986   $   15,768  $   20,578
                              4,772
             Central          36,510      45,633        156,390     196,789
             Southern         8,631       1,975         29,325      11,717
                 Total        $   49,913  $   53,594    $ 201,483   $ 229,084
                 Appalachia
      Illinois Basin          14,652      11,726        49,538      41,324
      Northern Powder River   2,237       1,523         8,501       7,658
      Basin
      Gulf Coast Lignite      879         795           1,212       1,155
Total                         $   67,681  $   67,638    $ 260,734   $ 279,221
Coal royalty production
(tons):
      Appalachia
             Northern         4,620       1,721         10,486      5,251
             Central          6,466       6,799         26,098      29,555
             Southern         1,171       285           3,718       1,695
                 Total        12,257      8,805         40,302      36,501
                 Appalachia
      Illinois Basin          3,391       2,327         11,299      9,445
      Northern Powder River   930         658           2,377       2,682
      Basin
      Gulf Coast Lignite      434         252           466         523
Total                         17,012      12,042        54,444      49,151
Average royalty revenue per
ton:
      Appalachia
             Northern         $           $       3.48  $           $      
                              1.03                      1.50        3.92
             Central          5.65        6.71          5.99        6.66
             Southern         7.37        6.93          7.89        6.91
                 Total        4.07        6.09          5.00        6.28
                 Appalachia
      Illinois Basin          4.32        5.04          4.38        4.38
      Northern Powder River   2.41        2.31          3.58        2.86
      Basin
      Gulf Coast Lignite      2.03        3.15          2.60        2.21
Combined average royalty 
      revenue per ton         $           $       5.62  $           $      
                              3.98                      4.79        5.68
Aggregates:
Royalty revenues              $           $     1,610   $           $    
                              1,537                     6,598       6,640
Aggregate royalty bonus       -           -             -           94
Production                    1,234       1,312         5,287       5,930
Average base royalty per ton  $           $       1.23  $           $      
                              1.25                      1.25        1.12
Oil and gas:
Royalty revenues              $           $     3,970   $           $   14,017
                              2,448                     9,160

Natural Resource Partners L.P
Consolidated Statements of Comprehensive Income
(in thousands, except per unit data)
                            Quarter Ended             Year Ended
                            December    December      December      December
                            2012        2011          2012          2011
                            (unaudited)               (unaudited)
                                        (restated)
Revenues:
    Coal royalties          $   67,681  $   67,638    $    260,734  $ 279,221
    Aggregate royalties     1,537       1,610         6,598         6,734
    Processing fees         1,394       3,246         8,299         13,475
    Transportation fees     5,152       4,080         19,513        16,688
    Oil and gas royalties   2,448       3,970         9,160         14,017
    Property taxes          3,852       3,077         15,273        12,640
    Minimums recognized as  10,208      3,692         23,956        9,148
    revenue
    Override royalties      3,529       3,857         15,527        14,523
    Other                   6,635       1,965         20,087        11,237
         Total revenues     102,436     93,135        379,147       377,683
Operating expenses:
    Depreciation, depletion 16,155      13,542        58,221        65,118
    and amortization
    Asset impairments       2,568       70,404        2,568         161,336
    General and             5,460       7,397         29,714        29,553
    administrative
    Property, franchise and 4,088       3,568         17,678        14,486
    other taxes
    Transportation costs    498         502           1,944         2,033
    Coal royalty and        461         322           1,857         1,022
    override payments
         Total operating    29,230      95,735        111,982       273,548
         expenses
Income (loss) from          73,206      (2,600)       267,165       104,135
operations
Other income (expense)
    Interest expense        (13,157)    (13,385)      (53,972)      (49,180)
    Interest income         58          29            162           69
Income (loss) before        $   60,107  $ (15,956)    $    213,355  $   55,024
non-controlling interest
    Non-controlling         -           (947)         -             (998)
    interest
Net income (loss)           $   60,107  $ (16,903)    $    213,355  $   54,026
Net income (loss)
attributable to:
    General partner         $           $      (338)  $             $    
                            1,202                      4,267        1,081
    Limited partners        $   58,905  $ (16,565)    $    209,088  $   52,945
Basic and diluted net       $                         $             $      
income (loss) per limited   0.56        $     (0.16)   1.97         0.50
partner unit:
Weighted average number of  106,028     106,028       106,028       106,028
units outstanding:
Comprehensive income (loss) $   60,120  $ (16,890)    $    213,405  $   54,079

Natural Resource Partners L.P.
Consolidated Statements of Cash Flow
(in thousands, except per unit data)
                            Quarter Ended            Year Ended
                            December     December    December       December
                            2012         2011        2012           2011
                            (unaudited)              (unaudited)
Cash flows from operating
activities:
 Net income (loss)          $   60,107   $ (16,903)  $    213,355   $   54,026
 Adjustments to reconcile
 net income (loss) to net
 cash provided by operating
 activities:
   Depreciation, depletion  16,155       13,542      58,221         65,118
   and amortization
   Asset Impairments        2,568        70,404      2,568          161,336
   Gain on sale of assets   (4,752)                  (13,575)       (1,058)
   Gain on reserve swap     -                        -              (2,990)
   Non-cash interest        152          132         605            625
   charge, net
   Non-controlling interest -            947         -              998
 Change in operating assets
 and liabilities:
   Accounts receivable      (1,468)      5,819       (802)          (6,951)
   Other assets             (605)        (466)       (236)          90
   Accounts payable and     854          641         1,909          854
   accrued liabilities
   Accrued interest         2,275        2,660       (496)          950
   Deferred revenue         (183)        6,736       11,684         31,277
   Accrued incentive plan   83           1,923       (3,461)        1,909
   expenses
   Property, franchise and  2,350        1,817       1,636          (610)
   other taxes payable
        Net cash provided
        by operating        77,536       87,252      271,408        305,574
        activities:
Cash flows from investing
activities:
   Acquisition of land,
   coal and other mineral   (46,071)     (12,675)    (180,534)      (120,284)
   rights
   Acquisition or
   construction of plant    -            (79)        (681)          (404)
   and equipment
   Proceeds from sale of    9,775        -           24,822         5,600
   assets
   Return on direct
   financing lease and      270          -           2,669          -
   contractual override
   Acquisition of contracts -            -           (59,009)       -
        Net cash used in
        investing           (36,026)     (12,754)    (212,733)      (115,088)
        activities
Cash flows from financing
activities:
   Proceeds from loans      45,000       50,000      148,000        385,000
   Repayment of loans       -            -           (30,800)       (210,519)
   Deferred financing costs -            (183)       -              (2,957)
   Payment of obligation    -            -           (500)          (7,625)
   related to acquisitions
   Costs associated with    -            -           (59)           (141)
   equity transactions
   Distributions to         (59,505)     (59,505)    (240,814)      (234,828)
   partners
        Net cash provided
        by (used in)        (14,505)     (9,688)     (124,173)      (71,070)
        financing
        activities
Net increase (decrease)  in 27,005       64,810      (65,498)       119,416
cash and cash equivalents
Cash and cash equivalents   122,419      150,112     214,922        95,506
at beginning of period
Cash and cash equivalents   $ 149,424    $ 214,922   $    149,424   $ 214,922
at end of period
SUPPLEMENTAL INFORMATION:
   Cash paid during the     $   10,729   $   10,579  $      53,842  $   47,653
   period for interest
 Non-cash  activities:
   Non-controlling interest $            $           $              $      
                              -            -            -            373
   Obligation related to    $            $           $              $      
   purchase of reserves and   -            -            -            500
   infrastructure
   Notes receivable related $     1,808              $      
   to sale of asset                                   1,808

Natural Resource Partners L.P.
Consolidated Balance Sheets
(in thousands, except for unit information)
ASSETS
                                          December 31,       December 31,
                                          2012               2011
                                          (unaudited)
Current assets:
   Cash and cash equivalents              $       149,424    $       214,922
   Accounts receivable, net of allowance  35,116             30,923
   for doubtful accounts
   Accounts receivable - affiliates       10,613             10,138
   Other                                  1,042              832
           Total current assets           196,195            256,815
Land                                      24,340             24,534
Plant and equipment, net                  32,401             46,185
Mineral rights, net                       1,380,428          1,257,501
Intangible assets, net                    70,811             75,164
Loan financing costs, net                 4,291              4,846
Long-term contracts receivable -          55,576             -
affiliates
Other assets, net                         630                604
           Total assets                   $    1,764,672     $    1,665,649
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
   Accounts payable and accrued           $           3,693  $           2,366
   liabilities
   Accounts payable - affiliates          957                375
   Obligation related to acquisitions     -                  500
   Current portion of long-term debt      87,230             30,801
   Accrued incentive plan expenses -      7,718              8,374
   current portion
   Property, franchise and other taxes    7,952              6,316
   payable
   Accrued interest                       10,265             10,761
           Total current liabilities      117,815            59,493
Deferred revenue                          123,506            113,303
Accrued incentive plan expenses           8,865              11,670
Long-term debt                            897,039            836,268
Partners' capital:
   Common units outstanding (106,027,836) 605,019            629,253
   General partner's interest             10,026             10,517
   Non-controlling interest               2,845              5,638
   Accumulated other comprehensive loss   (443)              (493)
           Total partners' capital        617,447            644,915
           Total liabilities and          $    1,764,672     $    1,665,649
           partners' capital

Natural Resource Partners L.P.
Reconciliation of GAAP Financial Measurements
to Non-GAAP Financial Measurements
(in thousands)
Reconciliation of GAAP "Net cash provided by operating activities"
to Non-GAAP "Distributable cash flow"
                                  Quarter Ended            Year Ended
                                  December    December    December   December
                                  2012        2011        2012       2011
                                  (unaudited)             (unaudited)
Net cash provided by operating    $   77,536  $   87,252  $ 271,408  $ 305,574
activities
Less scheduled principal payments -           -           (30,800)   (31,518)
Less reserves for future          (13,059)    (7,700)     (52,234)   (31,159)
scheduled principal payments
Add reserves used for scheduled   -           -           30,800     31,518
principal payments
Return on direct financing lease  270         -           2,669      -
and contractual override
Proceeds from sale of assets      9,775       -           24,822     5,600
Distributable cash flow           $   74,522  $   79,552  $ 246,665  $ 280,015

Reconciliation of GAAP "Total operating costs and expenses"
to Non-GAAP "Total operating expenses before considering the impairment"
                       Quarter Ended                For the Year Ended
                       December       December      December      December
                       2012           2011          2012          2011
                       (unaudited)                  (unaudited)
Operating expenses
Total operating        $    29,230    $   95,735    $ 111,982     $  273,548
expenses as reported
Impairments            $    (2,568)   $ (70,404)    $   (2,568)   $ (161,336)
Total operating costs
before considering the $    26,662    $   25,331    $ 109,414     $  112,212
impairment
Reconciliation of GAAP "Net income attributable to the limited partners"
to Non-GAAP "Net income attributable to the limited partners before
considering the impairment"
                       Quarter Ended                For the Year Ended 
                       December       December      December      December
                       2012           2011          2012          2011
                       (unaudited)                  (unaudited)
Net income (loss)
attributable to the
limited partners
Net income (loss) as   $    60,107    $ (16,903)    $ 213,355     $    54,026
reported
Impairments            $      2,568   $   70,404    $     2,568   $  161,336
Net income before
considering the        $    62,675    $   53,501    $ 215,923     $  215,362
impairment
Net income, before
considering the
impairment,
attributable to:
  General partner      $      1,254   $     1,070   $     4,318   $      4,307
  Limited partners     $    61,422    $   52,431    $ 211,605     $  211,055
Reconciliation of GAAP "Basic and diluted net income per unit"
to Non-GAAP "Net income per unit before considering the impairment"
                       Quarter Ended                For the Year Ended
                       December       December      December      December
                       2012           2011          2012          2011
                       (unaudited)                  (unaudited)
Net income (loss) per                                * 
unit
Net income (loss) per  $        0.56  $     (0.16)  $       1.97  $      
unit as reported                                                   0.50
Adjustment for         $        0.02  $       0.65  $       0.02  $      
impairments                                                        1.49
Net income per limited
partner unit, before   $        0.58  $       0.49  $       2.00  $      
considering the                                                    1.99
impairment
Weighted number of     106,028        106,028       106,028       106,028
units outstanding
* Numbers may not add
due to rounding

SOURCE Natural Resource Partners L.P.

Website: http://www.nrplp.com
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