Rhino Resource Partners Announces Fourth Quarter 2012 Financial And Operating Results

Rhino Resource Partners Announces Fourth Quarter 2012 Financial And Operating
                                   Results

PR Newswire

LEXINGTON, Ky., Feb. 28, 2013

LEXINGTON, Ky., Feb. 28, 2013 /PRNewswire/ --Rhino Resource Partners LP
(NYSE: RNO) ("Rhino" or the "Partnership") announced today its financial and
operating results for the quarter ended December 31, 2012. For the quarter,
the Partnership reported adjusted EBITDA of $21.9 million and net income of
$9.4 million, compared to adjusted EBITDA of $24.6 million and net income of
$12.7 million in the fourth quarter of 2011. Diluted earnings per unit were
$0.33 for the quarter compared to $0.45 for the fourth quarter of 2011. Total
revenues for the quarter were $86.5 million, with coal sales generating $78.9
million of the total. (Refer to "Reconciliations of Adjusted EBITDA" included
later in this release for reconciliations to the most directly comparable GAAP
financial measures).

On January 22, 2013, the Partnership announced a cash distribution of $0.445
per common unit, or $1.78 per unit on an annualized basis. This distribution
was paid on February 14, 2013 to all common unitholders of record as of the
close of business on February 1, 2013. No distribution was paid on the
subordinated units.

Dave Zatezalo, President and Chief Executive Officer of Rhino's general
partner, stated "We have continued to deliver positive financial results
despite the ongoing weakness in both the met and steam coal markets. Our
focus on safety and improved operating efficiency during 2012 has resulted in
one of the best years for safety performance in our history.

Our announcement of the initial multi-year coal sales contract for our
Pennyrile property in western Kentucky provides us the opportunity to begin
construction of the mine, with initial earthwork development scheduled to
begin in the next few weeks and production targeted to commence in mid-2014.
With Pennyrile located directly on the navigable Green River in western
Kentucky, this property provides unique low cost access to a large customer
base, including export markets, and we anticipate this project will generate
long term, stable and predictable cash flows similar to our Hopedale and
Castle Valley operations once it is at full production.

Our steam coal at Hopedale and Castle Valley remains fully contracted through
2013 and 2014. In addition, our steam coal customers that had previously
delayed shipments earlier in the year took all of their 2012 contracted
shipments by the end of the year. We have completed contract negotiations
with our metallurgical coal customers for 2013 shipments at acceptable price
levels, which will keep our Central Appalachia met mines open and work crews
in place. We continue to see an increase in inquires for our met coal, which
have led to some limited spot met sales, giving us greater confidence that the
met market has bottomed and is improving. However, we only participate in
these sales when prices are acceptable to us.

We believe our Utica investment has added significant realizable value to the
Partnership which will diversify our cash flows and reduce our overall risk.
We saw the first benefits of our diversification efforts as we recorded our
initial revenue in December 2012 from wells producing in our Utica shale
acreage. We believe the Utica wells drilled on our acreage by Gulfport can
add significant cash flows to our business once additional transportation
infrastructure is put in place. Our Utica position of 6,850 net acres has
substantial value as demonstrated by recent transactions. Our well site
preparation business has completed the construction of three drill pads and we
expect this area to continue to grow as the pace of drilling increases."

Further, Zatezalo stated "Our ongoing efforts at the Rhino Eastern joint
venture to improve safety, productivity and cost structure at this operation
have continued to show positive results. Due to weak market conditions, we
have reduced production to align it with projected sales until market
conditions improve."

Operations Update

Pennyrile

  oSigned multi-year initial sales contract with a regional utility customer
    for 800,000 tons per year and continue discussions with additional
    customers, which leads Rhino to believe there is a high level of interest
    for this quality coal.
  oInitial earthwork development scheduled to begin in Q1 2013 with
    production targeted to commence in mid-2014.
  oLarge contiguous reserve with 32.5 million tons of fully permitted proven
    and probable reserves under lease, with opportunity to add an additional
    15 million tons.
  oLocated directly on the navigable Green River in western Kentucky, which
    provides unique low cost access to large customer base, including export
    markets.

Northern Appalachia

  oRhino's Hopedale operation continues to perform well with contracted sales
    and predictable cash flows as customers who had previously delayed
    shipments have caught up on their contracted tonnage for 2012.
  oRhino's Clinton Stone operation sold approximately 469,000 tons of
    limestone in 2012, which represents an 11% increase year over year, and
    Rhino saw its limestone sales prices increase for the first time since
    2009, due to growing demand for this quality product.
  oRhino's Sands Hill operation has reduced its production schedule to align
    2013 production with committed sales while it seeks additional customer
    contracts.

Rhino Western

  oThe Castle Valley mine continues to perform well, with over 1 million tons
    sold during 2012, which is more than twice the tons sold in 2011.
  oRhino has seen spot sales activity increase for coal from its Castle
    Valley mine, which provides additional cash flow opportunities for this
    operation.

Central Appalachia

  oRhino's Tug River prep plant is operational and being utilized on a
    reduced basis.
  oRhino is preparing high-wall operations at its Remining 3 surface mine in
    order to efficiently produce met coal from this operation.
  oRecent customer inquiries and spot met sales support Rhino's view that
    utilization will increase at both the Tug River prep plant and high-wall
    miner.
  oThe Remining 3 and Grapevine surface mines at the Tug River complex
    produce quality metallurgical coal that can take advantage of spot and
    term sales as the met coal market improves.

Eastern Met

  oRhino Eastern has demonstrated substantial organizational improvement,
    which is evident in the safety and operating results at this operation.
  oRhino Eastern's new Eagle #3 mine began production during the third
    quarter of 2012. At full capacity, Eagle #3 is expected to produce at a
    rate of approximately 490,000 tons per year. Eagle #3 will replace and
    expand on Eagle #1 production, which will deplete in late Q1 of 2013.
  oProduction has been curtailed due to limited contracted sales commitments.

Oil and Gas

  oUtica Shale

       oRhino co-invested with Wexford Capital and Gulfport Energy
         ("Gulfport"), with Gulfport acting as the operator, and Rhino
         currently has a 5% interest in a portfolio of approximately 137,000
         gross acres (6,850 net acres).
       oRhino believes its investment in the Utica provides significant value
         to the Partnership, which is evidenced by recent sales transactions.
         In addition, Rhino expects future cash flows from producing wells and
         wells currently being drilled on Rhino's property.
       oThree wells are currently producing and Rhino recorded its initial
         proportionate revenue in December 2012.
       oThe average initial production rate of the first nine wells drilled
         by Gulfport was 3,849 BOEPD consisting of 787 barrels of condensate
         per day, 10.85 MMCF of natural gas per day and 1,253 barrels of NGLs
         (see note (1) in table below).
       oFifteen wells have been spudded and test results of Gulfport's wells
         are listed in the following table.



                                                         Production mix
Well                                IP Rate (Boe/d) (1)  Oil  Gas  NGLs
Wagner 1-28H (active producing)     4,650                9%   50%  41%
Boy Scout 1-33H (active producing)  3,456                45%  26%  29%
Boy Scout 5-33H (active producing)  1,662                54%  23%  23%
Groh 1-12H                          1,935                61%  20%  19%
Shugert 1-1H                        4,913                3%   56%  41%
Ryser 1-25H                         2,914                51%  27%  22%
BK Stephens 1-14H                   3,007                41%  34%  25%
Shugert 1-12H                       7,482                4%   57%  39%
Clay 1-4H                           2,226                34%  32%  34%
Stutzman 1-14H                      4,060                -    77%  23%
Source: Gulfport Energy Corporation
(1) Assumes full ethane recovery

  oServices Group – Rhino's new services company, Razorback, completed
    construction of three drill pads in the Utica Shale and has commenced work
    on its fourth. Rhino expects the pace of construction to accelerate as
    drilling increases in the region.

Capital Expenditures

  oMaintenance capital expenditures for the fourth quarter were approximately
    $3.2 million.
  oExpansion capital expenditures for the fourth quarter were approximately
    $6.0 million, which consisted primarily of Rhino's continuing investment
    in the Utica Shale, along with other internal development projects.

Sales Commitments

The table below displays Rhino's committed steam coal sales for the periods
indicated.

                                   Year 2013            Year 2014
                                   Avg Price Tons       Avg Price Tons
Northern Appalachia/Illinois Basin $  59.59 1,689,000  $  59.18 1,328,000
Rhino Western                      $  41.05 864,200    $  42.38 1,000,000
Central Appalachia                 $  83.50 919,160    $  75.50 132,000
Total                              $  61.04 3,472,360  $  53.23 2,460,000

Evaluating Financial Results

Rhino management uses a variety of financial measurements to analyze the
Partnership's performance, including (1) Adjusted EBITDA, (2) coal revenues
per ton and (3) cost of operations per ton.

Adjusted EBITDA. Adjusted EBITDA represents net income before deducting
interest expense, income taxes and depreciation, depletion and amortization,
including Rhino's proportionate share of these expense items from its Rhino
Eastern LLC joint venture, while also excluding certain non-recurring items.
Adjusted EBITDA is used by management primarily as a measure of the
Partnership's operating performance. Because not all companies calculate
Adjusted EBITDA identically, the Partnership's calculation may not be
comparable to similarly titled measures of other companies. Adjusted EBITDA
should not be considered an alternative to net income, income from operations,
cash flows from operating activities or any other measure of financial
performance or liquidity presented in accordance with GAAP. (Refer to
"Reconciliations of Adjusted EBITDA" included later in this release for
reconciliations of Adjusted EBITDA to the most directly comparable GAAP
financial measures).

Coal Revenues Per Ton. Coal revenues per ton sold represents coal revenues
divided by tons of coal sold. Coal revenues per ton is a key indicator of
Rhino's effectiveness in obtaining favorable prices for the Partnership's
product.

Cost of Operations Per Ton. Cost of operations per ton sold represents the
cost of operations (exclusive of depreciation, depletion and amortization)
divided by tons of coal sold. Rhino management uses this measurement as a key
indicator of the efficiency of operations.

Overview of Financial Results

Results for the three months ended December 31, 2012 included:

  oAdjusted EBITDA of $21.9 million and net income of $9.4 million compared
    to Adjusted EBITDA of $24.6 million and net income of $12.7 million in the
    fourth quarter of 2011. The 2012 and 2011 figures include $0.2 million of
    net loss and $0.2 million of net income, respectively, from the
    Partnership's joint venture, Rhino Eastern LLC, which also contributes to
    the Partnership's consolidated Adjusted EBITDA.
  oBasic and diluted net income per common unit of $0.33 compared to $0.45
    for the fourth quarter of 2011.
  oCoal sales were 1.2 million tons compared to 1.3 million for the fourth
    quarter of 2011.
  oTotal revenues and coal revenues of $86.5 million and $78.9 million,
    respectively, compared to $101.0 million and $89.5 million, respectively,
    for the same period of 2011.
  oCoal revenues per ton of $66.74 compared to $68.62 for the fourth quarter
    of 2011, a decrease of 2.7%.
  oCost of operations of $60.4 million compared to $69.7 million for the same
    period of 2011.
  oCost of operations per ton of $51.14 compared to $53.44 for the fourth
    quarter of 2011, a decrease of 4.3%. 

Total coal revenues decreased approximately 11.9% primarily due to an decrease
in tons sold due to ongoing weakness in the met and steam coal markets. Coal
revenues per ton decreased primarily due to a higher mix of lower priced coal
from the Rhino Western operations. Cost of operations decreased year to year
due to decreased production due to weakness in the met and steam coal markets.
Cost of operations per ton decreased primarily due to a higher mix of lower
cost tons from Rhino's Castle Valley operation.

Results for the year ended December 31, 2012 included:

  oAdjusted EBITDA of $90.5 million and net income of $40.2 million compared
    to Adjusted EBITDA of $82.0 million and net income of $38.1 million for
    the year ended 2011. The 2012 and 2011 figures include $6.0 million and
    $3.3 million of net income, respectively, from the Partnership's joint
    venture, Rhino Eastern LLC, which also contributes to the Partnership's
    consolidated Adjusted EBITDA.
  oBasic and diluted net income per common unit of $1.42 compared to $1.43
    for the year ended 2011.
  oCoal sales of 4.7 million tons compared to 4.9 million tons for the year
    ended 2011.
  oTotal revenues and coal revenues of $352.0 million and $304.6 million,
    respectively, compared to $367.2 million and $333.9 million, respectively,
    for the same period of 2011.
  oCoal revenues per ton of $65.22 compared to $68.47 for the year ended
    2011, a decrease of 4.8%.
  oCost of operations of $247.1 million compared to $267.2 million for the
    same period of 2011.
  oCost of operations per ton of $52.91 compared to $54.79 for the year ended
    2011, a decrease of 3.4%.

Total coal revenues decreased approximately 8.8% primarily due to weakness in
the met and steam coal markets that resulted in fewer tons sold. Total
year-to-date revenues decreased by a smaller amount compared to the prior year
primarily due to $7.4 million in total lease bonus payments received for our
Utica Shale acreage, which was recorded in Other revenues. Coal revenues per
ton decreased primarily due to a higher mix of lower priced coal from the
Rhino Western operations. Cost of operations decreased year to year primarily
due to idling our Central Appalachia operations during June and the first week
of July to reduce inventory levels, as well as decreased production due to
weakness in the met and steam coal markets. Cost of operations per ton
decreased primarily due to a higher mix of lower cost tons from Rhino's Castle
Valley operation.

Segment Information

The Partnership produces and markets coal from surface and underground mines
in Kentucky, West Virginia, Ohio and Utah. In addition, with the acquisition
of Elk Horn, the Partnership also leases coal reserves to third parties in
exchange for royalty revenues. For the quarter ended December 31, 2012, the
Partnership had four reportable business segments: Central Appalachia
(includes results for Elk Horn), Northern Appalachia, Rhino Western and
Eastern Met (comprised solely of a joint venture with Patriot Coal
Corporation). Additionally, the Partnership reports an Other category that is
comprised of the Partnership's ancillary businesses, including its oil and gas
investments.

The Partnership has historically accounted for the Rhino Eastern joint venture
under the equity method. Under the equity method of accounting, only limited
information (net income) is presented in the Partnership's consolidated
financial statements. The Partnership has presented additional financial and
operating details of the Rhino Eastern joint venture toward the end of this
section.



                                           %
                         Fourth   Fourth             Year to  Year to  %
(In millions, except     Quarter  Quarter  Change*   Date     Date     Change*
per ton data and %)      2012     2011               2012     2011     2012 /
                                           4Q12 /                      2011
                                           4Q11
Central Appalachia
Coal revenues            $43.5    $54.0    (19.5%)   $161.3   $202.9   (20.5%)
Total revenues           $47.8    $61.2    (21.9%)   $183.4   $219.2   (16.4%)
Coal revenues per ton*   $92.22   $90.18   2.3%      $91.83   $87.92   4.4%
Cost of operations       $31.2    $38.3    (18.6%)   $125.1   $154.2   (18.8%)
Cost of operations per   $66.12   $63.95   3.4%      $71.23   $66.79   6.7%
ton*
Tons produced            0.463    0.614    (24.6%)   1.804    2.234    (19.2%)
Tons sold                0.472    0.599    (21.3%)   1.756    2.308    (23.9%)
Northern Appalachia
Coal revenues            $25.7    $26.9    (4.1%)    $102.9   $109.3   (5.8%)
Total revenues           $27.7    $29.7    (6.5%)    $122.0   $120.0   1.7%
Coal revenues per ton*   $54.93   $53.00   3.6%      $54.87   $53.00   3.5%
Cost of operations       $18.3    $18.9    (2.7%)    $76.0    $75.1    1.2%
Cost of operations per   $39.19   $37.25   5.2%      $40.54   $36.45   11.2%
ton*
Tons produced            0.461    0.507    (9.3%)    1.884    2.047    (8.0%)
Tons sold                0.468    0.507    (7.5%)    1.875    2.061    (9.0%)
Rhino Western
Coal revenues            $9.7     $8.6     12.1%     $40.4    $21.7    86.4%
Total revenues           $9.9     $8.6     15.2%     $40.7    $21.7    87.6%
Coal revenues per ton*   $39.94   $43.41   (8.0%)    $38.89   $42.78   (9.1%)
Cost of operations       $6.9     $6.8     1.4%      $27.5    $17.9    53.0%
Cost of operations per   $28.53   $34.29   (16.8%)   $26.42   $35.42   (25.4%)
ton*
Tons produced            0.230    0.208    10.7%     1.011    0.592    70.8%
Tons sold                0.242    0.198    21.8%     1.039    0.507    105.1%
Other**
Coal revenues            n/a      n/a      n/a       n/a      n/a      n/a
Total revenues           $1.1     $1.5     (28.7%)   $5.9     $6.3     (6.3%)
Coal revenues per ton    n/a      n/a      n/a       n/a      n/a      n/a
Cost of operations       $4.0     $5.7     (29.9%)   $18.5    $20.0    (7.1%)
Cost of operations per   n/a      n/a      n/a       n/a      n/a      n/a
ton
Total
Coal revenues            $78.9    $89.5    (11.9%)   $304.6   $333.9   (8.8%)
Total revenues           $86.5    $101.0   (14.3%)   $352.0   $367.2   (4.1%)
Coal revenues per ton*   $66.74   $68.62   (2.7%)    $65.22   $68.47   (4.8%)
Cost of operations       $60.4    $69.7    (13.3%)   $247.1   $267.2   (7.5%)
Cost of operations per   $51.14   $53.44   (4.3%)    $52.91   $54.79   (3.4%)
ton*
Tons produced            1.154    1.329    (13.2%)   4.699    4.873    (3.6%)
Tons sold                1.182    1.304    (9.4%)    4.670    4.876    (4.2%)
Eastern Met 100% Basis
****
Coal revenues            $6.1     $13.0    (53.0%)   $55.2    $50.0    10.4%
Total revenues           $6.1     $13.0    (53.1%)   $55.2    $50.1    10.3%
Coal revenues per ton*   $185.20  $199.73  (7.3%)    $185.98  $198.97  (6.5%)
Cost of operations       $5.1     $11.1    (54.0%)   $36.7    $37.6    (2.3%)
Cost of operations per   $155.14  $170.88  (9.2%)    $123.71  $149.55  (17.3%)
ton*
Net income               ($0.4)   $0.4     (201.6%)  $12.0    $6.5     82.6%
Partnership's portion    ($0.2)   $0.2     (201.6%)  $6.0     $3.3     80.4%
of net income
Tons produced***         0.054    0.077    (29.5%)   0.337    0.266    26.6%
Tons sold***             0.033    0.065    (49.3%)   0.297    0.251    18.1%



* Percentages, totals and per ton amounts are calculated based on actual
amounts and not the rounded amounts presented in this table.

** The Other category includes results for Rhino's ancillary businesses. The
activities performed by these ancillary businesses do not directly relate to
coal production. As a result, coal revenues, coal revenues per ton and cost of
operations per ton are not presented for this category.

*** Rhino Eastern currently produces and sells only premium mid-vol met coal.

**** Eastern Met includes the financial data for the Rhino Eastern joint
venture in which the Partnership has a 51% membership interest and for which
the Partnership serves as manager. The Partnership's consolidated revenue and
costs do not include any portion of the revenue or costs of Rhino Eastern
since the Partnership accounts for this operation under the equity method.
The Partnership only records its proportionate share of net income of Rhino
Eastern as a single item in its financial statements, but the Partnership
believes the presentation of these items for Rhino Eastern provides additional
insight into how this operation contributes to the overall performance of the
Partnership.

Additional information for the Central Appalachia segment detailing the types
of coal produced and sold, premium high-vol met coal and steam coal, is
presented below. Note that the Partnership's Northern Appalachia and Rhino
Western segments currently produce and sell only steam coal.

(In thousands, except   Fourth   Fourth   %        Year to   Year to   %
per ton data and        Quarter  Quarter  Change*  Date      Date      Change*
%)****                  2012     2011     4Q12 /   2012      2011      2012 /
                                          4Q11                         2011
Met coal tons sold      122.4    173.6    (29.5%)  467.8     654.6     (28.5%)
Steam coal tons sold    349.2    425.7    (18.0%)  1,288.3   1,653.4   (22.1%)
Total tons sold         471.6    599.3    (21.3%)  1,756.1   2,308.0   (23.9%)
Met coal revenue        $15,235  $21,483  (29.1%)  $59,511   $79,227   (24.9%)
Steam coal revenue      $28,254  $32,558  (13.2%)  $101,762  $123,706  (17.7%)
Total coal revenue      $43,489  $54,041  (19.5%)  $161,273  $202,933  (20.5%)
Met coal revenues per   $124.49  $123.77  0.6%     $127.21   $121.04   5.1%
ton
Steam coal revenues     $80.90   $76.48   5.8%     $78.99    $74.82    5.6%
per ton
Total coal revenues     $92.22   $90.18   2.3%     $91.83    $87.92    4.4%
per ton
Met coal tons produced  78.7     187.6    (58.0%)  468.3     660.5     (29.1%)
Steam coal tons         384.5    426.5    (9.9%)   1,336.2   1,573.5   (15.1%)
produced
Total tons produced     463.2    614.1    (24.6%)  1,804.5   2,234.0   (19.2%)

* Percentages are calculated based on actual amounts and not the rounded
amounts presented in this table.

**** Excludes data for the Rhino Eastern mining complex located in West
Virginia for which the Partnership has a 51% membership interest and serves as
manager.

Guidance

For the full year 2013, Rhino currently anticipates the following:

                                  2013
                                  Coal Operations  Oil and Gas  Total
For:                              (in millions)
Adjusted EBITDA                   $50 - $60        $10 - $20    $60 - $80
Maintenance Capital Expenditures  $10 - $15        -            $10 - $15
Expansion Capital Expenditures    $16 - $19        $15 - $20    $31 - $39
Interest Expense                  -                -            $7
Cash Available for Distribution   -                -            $43 - $58
Production*                       3.7 - 4.3        -            3.7 - 4.3
Sales*                            3.7 - 4.3        -            3.7 - 4.3

* Guidance for production tons and sale tons includes 51% of expected activity
from Rhino Eastern

Fourth Quarter 2012 Financial and Operational Results Conference Call

Rhino's fourth quarter 2012 financial and operational results conference call
is scheduled for today at 10:00 am Eastern Time. Participants should call
800-322-2803 (United States/Canada) or 617-614-4925 (International) and
utilize the confirmation code 21327361. A live broadcast of the earnings
conference call will also be available via the Internet at www.rhinolp.com
under 'Investor Relations'.

A telephonic replay will be available for anyone unable to participate in the
live call. To access the replay, call 888-286-8010 (United States/Canada) or
617-801-6888 (International) and enter confirmation code 90299476. The
recording will be available from 12:00 pm (ET) on Thursday, February 28, 2013
through Thursday, March 7, 2013 at 11:59 pm (ET).

The webcast will be archived on the site for one year.

About Rhino Resource Partners LP

Rhino Resource Partners LP is a growth-oriented limited partnership. Rhino
produces metallurgical and steam coal in a variety of basins throughout the
United States, leases coal through its Elk Horn subsidiary, and owns oil and
gas acreage in the Utica and Cana Woodford areas. 

About Wexford Capital LP

Rhino's general partner, Rhino GP LLC, is an affiliate of Wexford Capital LP
("Wexford"). Wexford is an SEC registered investment advisor with over $4.7
billion of assets under management. Wexford has particular expertise in the
energy/natural resources sector with actively managed investments in coal, oil
and gas exploration and production, energy services and related sectors.
Through Wexford's extensive portfolio of energy, resource and related
investments, it sees an extensive flow of potential new investment
opportunities, many which could be suitable for Rhino. Although Wexford has
no obligation to provide such investment opportunities to Rhino, it has made
available several of these investments to Rhino and expects to be in a
position to continue to selectively source and underwrite for Rhino new coal,
energy and related investment opportunities.

Additional information regarding Rhino and Wexford is available on their
respective web sites – RhinoLP.com and Wexford.com.

Forward Looking Statements

Except for historical information, statements made in this press release are
"forward-looking statements." All statements, other than statements of
historical facts, included in this press release that address activities,
events or developments that Rhino expects, believes or anticipates will or may
occur in the future are forward-looking statements, including the statements
and information included under the heading "Operations Update," "Oil and Gas,"
and "Guidance." These forward-looking statements are based on Rhino's current
expectations and beliefs concerning future developments and their potential
effect on Rhino's business, operating results, financial condition and similar
matters. While management believes that these forward-looking statements are
reasonable as and when made, there can be no assurance that future
developments affecting Rhino will turn out as Rhino anticipates. Whether
actual results and developments in the future will conform to expectations is
subject to significant risks, uncertainties and assumptions, many of which are
beyond Rhino's control or ability to predict. Therefore, actual results and
developments could materially differ from Rhino's historical experience,
present expectations and what is expressed, implied or forecast in these
forward-looking statements. Important factors that could cause actual results
to differ materially from those in the forward-looking statements include, but
are not limited to, the following: decline in coal prices, which depend upon
several factors such as the supply of domestic and foreign coal, the demand
for domestic and foreign coal, governmental regulations, price and
availability of alternative fuels for electricity generation and prevailing
economic conditions; increased competition in global coal markets and declines
in demand for coal; current and future environmental laws and regulations
which could materially increase operating costs or limit Rhino's ability to
produce and sell coal; extensive government regulation of mine operations,
especially with respect to mine safety and health, which imposes significant
actual and potential costs; difficulties in obtaining and/or renewing permits
necessary for operations; a variety of operating risks, such as unfavorable
geologic conditions, natural disasters, mining and processing equipment
unavailability, failures and unexpected maintenance problems and accidents,
including fire and explosions from methane; fluctuations in transportation
costs or disruptions in transportation services could increase competition or
impair Rhino's ability to supply coal; a shortage of skilled labor; increases
in raw material costs, such as steel, diesel fuel and explosives; Rhino's
ability to acquire replacement coal reserves that are economically
recoverable; inaccuracies in Rhino's estimates of coal reserves and
non-reserve coal deposits; existing and future laws and regulations regulating
the emission of sulfur dioxide and other compounds could affect coal consumers
and as a result reduce demand for coal; federal and state laws restricting the
emissions of greenhouse gases; Rhino's ability to acquire or failure to
maintain, obtain or renew surety bonds used to secure obligations to reclaim
mined property; Rhino's dependence on a few customers and its ability to find
and retain customers under favorable supply contracts; changes in consumption
patterns by utilities away from the use of coal, such as resulting from low
natural gas prices; disruption in supplies of coal produced by contractors
operating Rhino's mines; defects in title in properties that Rhino owns or
losses of any of Rhino's leasehold interests; increased labor costs or work
stoppages; the ability to retain and attract senior management and other key
personnel; and assumptions underlying reclamation and mine closure obligations
are materially inaccurate.

In addition to the foregoing, Rhino's business, financial condition, results
of operations and cash available for distribution could be adversely affected
by factors relating to, or resulting from, the Elk Horn acquisition. Such
factors would include the failure to realize the anticipated benefits of the
Elk Horn acquisition; a material change in Elk Horn management's estimated
coal reserves and non-reserve coal deposits; exposure of the lessees' mining
operations to the same risks and uncertainties that Rhino faces as a mine
operator; ability of the lessees to effectively manage their operations on the
leased properties; ability of the lessees to satisfy customer contracts with
coal from properties other than Elk Horn's properties; and incorrect reporting
of royalty revenue by lessees.

Other factors that could cause Rhino's actual results to differ from its
projected results are described in its filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K.

Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date hereof. Rhino undertakes no
obligation to publicly update or revise any forward-looking statements after
the date they are made, whether as a result of new information, future events
or otherwise, unless required by law.

RHINO RESOURCE PARTNERS LP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2012 and 2011
(in thousands)
                                      December 31,         December 31,
                                      2012                 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents             $        461  $        449
Accounts receivable, net of          33,560               37,242
allowance
Inventories                           18,743               15,629
Prepaid expenses and other            4,510                5,755
Total current assets                  57,274               59,075
Net property, plant & equipment,
incl coal properties, mine            463,960              450,116
development and construction costs
Investment in unconsolidated          23,659               18,736
affiliates
Other non-current assets              14,565               10,867
TOTAL                                 $    559,458     $    538,794
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable                      $     18,030    $     23,145
Current portion of long-term debt     2,350                1,334
Accrued expenses and other            24,566               23,040
Total current liabilities             44,946               47,519
NON-CURRENT LIABILITIES:
Long-term debt                        161,199              141,764
Asset retirement obligations          30,748               30,921
Other non-current liabilities         16,923               11,492
Total non-current liabilities         208,870              184,177
Total liabilities                     253,816              231,696
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
Limited partners                      292,791              293,100
General partner                       11,420               11,650
Accumulated other comprehensive       1,431                2,348
income
Total partners' capital               305,642              307,098
TOTAL                                 $    559,458     $    538,794

RHINO RESOURCE PARTNERS LP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
                            Three Months              Twelve Months
                            Ended December 31,        Ended December 31,
                            2012         2011         2012         2011
REVENUES:
Coal sales                  $         $         $          $  
                            78,885      89,509      304,568     333,876
Other revenues              7,651        11,517       47,423       33,345
Total revenues              86,536       101,026      351,991      367,221
COSTS AND EXPENSES:
Cost of operations
(exclusive of depreciation, 60,446       69,703       247,105      267,180
depletion
and amortization)
Freight and handling costs  1,251        1,058        5,833        4,329
Depreciation, depletion and 10,458       9,812        41,370       36,325
amortization
Selling, general and
administrative (exclusive
of                          5,402        6,470        20,442       21,815
depreciation, depletion and
amortization)
(Gain) loss on sale of      (2,714)      (336)        (4,890)      (3,172)
assets—net
Total costs and expenses    74,843       86,707       309,860      326,477
INCOME FROM OPERATIONS      11,693       14,319       42,131       40,744
INTEREST AND OTHER INCOME
(EXPENSE):
Interest expense and other  (1,878)      (1,788)      (7,767)      (6,062)
Interest income and other   -            1            92           51
Equity in net income (loss) (439)        180          5,766        3,338
of unconsolidated affiliate
Total interest and other    (2,317)      (1,607)      (1,909)      (2,673)
income (expense)
INCOME BEFORE INCOME TAXES  9,376        12,712       40,222       38,071
NET INCOME                  $        $         $         $   
                            9,376       12,712      40,222      38,071
General partner's interest  $       $       $       $     
in net income                188         254         804         762
Common unitholders'         $        $        $         $   
interest in net income      5,080       6,884       21,794      19,603
Subordinated unitholders'   $        $        $         $   
interest in net income      4,108       5,574       17,624      17,706
Net income per limited
partner unit, basic:
Common units                $       $       $       $     
                            0.33        0.45        1.42        1.43
Subordinated units          $       $       $       $     
                            0.33        0.45        1.42        1.43
Net income per limited
partner unit, diluted:
Common units                $       $       $       $     
                            0.33        0.45        1.42        1.43
Subordinated units          $       $       $       $     
                            0.33        0.45        1.42        1.43
Distributions paid per      $        $       $       $   
limited partner unit (1)    0.445       0.48        1.85        1.8108
Weighted average number of
limited partner units
outstanding, basic:
Common units                15,348       15,309       15,331       13,725
Subordinated units          12,397       12,397       12,397       12,397
Weighted average number of
limited partner units
outstanding, diluted:
Common units                15,349       15,320       15,335       13,744
Subordinated units          12,397       12,397       12,397       12,397
(1) No distributions were paid on the subordinated units during the three
months ended December 31, 2012.



Reconciliations of Adjusted EBITDA

The following tables present reconciliations of Adjusted EBITDA to the most
directly comparable GAAP financial measures for each of the periods indicated
(note: DD&A refers to depreciation, depletion and amortization). Rhino
management believes the presentation of Adjusted EBITDA that includes the
proportionate share of DD&A and interest expense for Rhino Eastern is
appropriate since the Partnership's portion of Rhino Eastern's net income that
is recognized as a single line item in its financial statements is affected by
these expense items. Since Rhino does not reflect these proportionate expense
items of DD&A and interest expense in its consolidated financial statements,
management believes that the adjustment for these expense items in the
Adjusted EBITDA calculation is more representative of how management reviews
the results of the Partnership and provides investors with additional
information that they can use to evaluate Rhino's results.



                      Fourth       Fourth       Year to   Year to  Year
($ in millions)       Quarter      Quarter      Date      Date     Ending
                      2012         2011         2012      2011     2013 (est
                                                                   midpoint)
                      $       $       $      $   
Net income (loss)      9.4        12.7           40.2         $   22.0
                                                          38.1
Plus:
Depreciation,
depletion and         10.4         9.8          41.4      36.3     40.0
amortization (DD&A)
Interest expense      1.9          1.8          7.8       6.1      7.0
                      $       $       $      $   
EBITDA*               21.7         24.3           89.4         $   69.0
                                                          80.4
Plus: Rhino Eastern   0.2          0.3          1.0       1.5      1.0
DD&A-51%
Plus: Rhino Eastern   -            -            0.1       0.1      -
interest expense-51%
                      $       $       $      $   
Adjusted EBITDA*      21.9         24.6           90.5         $   70.0
                                                          82.0
* Totals may not foot due to rounding





                            Three Months Ended        Twelve Months Ended
                            December 31               December 31
($ in millions)             2012         2011         2012         2011
Net cash provided by        $       $       $       $     
operating activities        21.7        15.6         79.7       66.9
Plus:
Increase in net operating   -            10.7         -            8.9
assets
Gain on sale of assets      3.1          0.3          4.9          3.2
Amortization of deferred    0.3          0.2          1.1          0.5
revenue
Amortization of actuarial   0.1          -            0.3          -
gain
Interest expense            1.9          1.8          7.8          6.1
Equity in net income of     -            0.2          5.8          3.3
unconsolidated affiliate
Less:
Decrease in net operating   3.7          -            2.8          -
assets
Accretion on interest-free  0.1          0.1          0.2          0.2
debt
Amortization of advance     0.1          0.2          0.2          1.1
royalties
Amortization of debt        0.3          0.3          1.1          1.1
issuance costs
Equity-based compensation   0.2          0.1          0.9          0.7
Loss on retirement of       -            -            0.1          0.1
advance royalties
Accretion on asset          0.6          0.5          1.9          2.0
retirement obligations
Distributions from          -            3.3          3.0          3.3
unconsolidated affiliate
Equity in net loss of       0.4          -            -            -
unconsolidated affiliate
EBITDA                      $       $       $       $     
                            21.7        24.3         89.4       80.4
Plus: Rhino Eastern         0.2          0.3          1.0          1.5
DD&A-51%
Plus: Rhino Eastern         -            -            0.1          0.1
interest expense-51%
Adjusted EBITDA             $       $       $       $     
                            21.9        24.6         90.5       82.0





SOURCE Rhino Resource Partners LP

Website: http://www.rhinolp.com
Contact: Investor Contacts: Scott Morris, +1-859-519-3622, smorris@rhinolp.com
 
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