Natural Resource Partners LP (NYSE:NRP) Q3 2018 Earnings Conference Call Transcript

Nov 07, 2018 • 10:00 am ET


Natural Resource Partners LP (NYSE:NRP) Q3 2018 Earnings Conference Call Transcript


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Good morning, ladies and gentlemen and welcome to Natural Resource Partners LP Third Quarter 2018 Earnings Conference Call. As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference Kathy Roberts, Natural Resource Partners' VP of IR. Ms. Roberts, you may begin.

Kathy Roberts

Thank you, Stella. Good morning and welcome to the Natural Resource Partners Third Quarter 2018 Conference Call. Today's call is being webcast and a replay will be available on our website. Joining me today are Craig Nunez our President and COO; and Chris Zolas our CFO.

(Forward-Looking Cautionary Statements)

Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP measures are included in our third quarter 2018 press release which can be found on our website.

I would like to remind everyone that we do not intend to discuss the operations or outlook for any particular coal lessee or get into detail market fundamentals, nor do we discuss pricing or sales with respect to our construction aggregates operations for competitive reasons. In addition I refer you to Ciner Resources' public disclosures and commentary for specific questions regarding our soda ash business segment.

Now I would like to turn the call over to Craig Nunez, our President and COO.

Craig Nunez

Thank you, Kathy, and welcome everyone to our quarterly call. It's good to have you with us today. NRP continues to generate significant amounts of cash on the back of solid demand for metallurgical and thermal coal, a trend we have seen for sometime now. Over the last 12 months we recorded $230 million of EBITDA, $148 million of free cash flow, and $89 million of net income attributable to common unit holders.

This strong performance allowed to pay out $22 million of distributions to common unit holders while still retaining $67 million of earnings resulting in a 37% increase in common equity before the beneficial impact of a new accounting standard. As we've said previously we are becoming more confident with each passing quarter that our past performance may be indicative of a sustainable run rate that we can plan on for the future.

In addition we are pleased to announce that early in the fourth quarter, which means it is not reflected in our third quarter results that we received the initial payment of $25 million from Foresight Energy regarding the previously announced litigation settlements surrounding the Hillsboro and Macoupin mines. This is the first of a total of $190 million of non-recoupable payments Foresight has agreed to make to us over the next 15 years.

We believe this mutually beneficial resolution to our legal disputes represents an important step and marks a new era of cooperation between our two companies, and we look forward to working together in the years ahead. With this litigation behind us we can now focus all our energy on positioning our company for the future, a future that I'm pleased to say is looking brighter with