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2
Forward-Looking Statements
The statements made by representatives of Natural Resource Partners L.P. (“NRP”) during the course of this presentation that are not historical facts are forward-looking statements. Although NRP believes that the assumptions underlying these statements are reasonable, investors are cautioned that such forward-looking statements are inherently uncertain and necessarily involve risks that may affect NRP’s business prospects and performance, causing actual results to differ from those discussed during the presentation.
Such risks and uncertainties include, by way of example and not of limitation: general business and economic conditions; decreases in demand for coal; changes in our lessees’ operating conditions and costs; changes in the level of costs related to environmental protection and operational safety; unanticipated geologic problems; problems related to force majeure; potential labor relations problems; changes in the legislative or regulatory environment; and lessee production cuts.
These and other applicable risks and uncertainties have been described more fully in NRP’s 2006 Annual Report on Form 10-K. NRP undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events.
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NRP – A Lower Risk Proxy for the Coal Industry
• 2.1 billion tons of coal reserves
• 69 lessees produce approximately 5% of the US production from our 187 leases
• Three major coal producing regions in eleven states
• 2007 estimated production: 60 million tons to 65 million tons (metallurgical – 22% steam – 78%)
• 2007 estimated total revenues - $222 million to $238 million
4
NRP Financial Profile
Market Capitalization ($37 per unit):
Enterprise Value:
Distribution per Unit (1Q 2007):
$2.4 billion
$2.9 billion
$0.455 quarterly
$1.82 annualized
Senior Notes (3/31/2007):
Drawn on Revolver (3/31/2007):
$472 million
$0 million
Cash on Balance Sheet (3/31/2007):
Units Outstanding:
$56 million
64.9 million
5
Diverse Portfolio of PropertiesCoal Reserves
• 2.1 billion tons at 12/31/06• 24% Met / 76% Steam• 60% Low Sulfur / 36% Compliance
States in which NRP has Aggregates
Coal Producing Basins in U.S.
States in which NRP has Coal Reserves
Aggregate Reserves
• 70 million tons
States in which NRP has both Coal Reserves and Coal Handling Facilities
6
Active Acquisition History
Over the last four and a half years
• Completed 28 acquisitions totaling ~$1.1 billion
• Diversified our portfolio of properties and lessees
• Established two new growth platforms within the last year
7
Recent Acquisition History
Dingess-Rum4.8 million
common units92 million tons
01/16/0712/18/06
Cline8.92 million Common and
Class B unitsReserves, Transportation Agreements, and Future
Development Opportunities
01/04/07
D.D. Shepard$110 million
80 million tons
12/04/06 12/29/06
Quadrant$26.5 million
70 million tons of aggregates
Bluestone$20 million
20 million tons
Westmoreland$12.7 million
Override on 225 million tons
02/23/07
Mettiki$10.2 million &
500,000 common units35 million tons
04/02/07
TaggartEckman, WV Coal Handling
Facilities$16.2 million
Preparation Plant, Rail Load-out
05/18/07
Transactions involving equity
8
Three Platforms for Growth
Coal RoyaltiesCoal Infrastructure
FeesAggregate Royalties
% Revenues
2006 2007E
1% ~7%
% Revenues
2006 2007E
87% ~78%
% Revenues
2006 2007E
-- ~3%
10
How NRP Differs from a Coal Producer
• NRP revenue is tied to a coal miner’s top line revenue
• Increased mining costs can be NRP’s friend
• Production cuts at one mine can keep prices higher across the
entire industry sector which improves NRP’s top line
• NRP has no maintenance capital expenditures
• NRP has low G&A expenses
11
Pipeline of Growth Opportunities – Coal Reserves
• Gatling Ohio property in 2008
• Our sponsor owns over 20 billion tons of currently non-producing coal that must be sold to NRP when any property reaches a value of $10 million
– Long-term prospects
• Right to acquire 3 billion tons of Illinois Basin reserves from Cline Resources
– Near-term prospects
• Deals come to us due to our relationships
– Large deal flow
13
Acquisition Opportunities in Coal Infrastructure
• Taggart Global
– Agreement with Taggart Global to jointly identify coal preparation,
handling and rail load-out facilities in the U.S.
– Taggart will design, build and operate the facilities
– NRP will own and lease the facilities to Taggart for a throughput fee
• Cline Resources
– Infrastructure assets associated with 3 billion tons of Illinois Basin
coal reserves
– Gatling Ohio
15
Acquisition Opportunities - Aggregates
• Aggregates industry produces 3 billion tons per year
– Very fragmented business
• Construction sand and gravel
– Production of ~1.3 billion tons per year
– 3800 companies
– 6000 operations
• Crushed stone
– Production of ~1.7 billion tons per year
– 1200 companies
– 3200 quarries, 85 underground mines
Source: USGS
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Increased distributions 16 out of 17 quarters since IPO, 78% overall
DistributionsDistributions
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
4
Q 0
2
2
Q 0
3
4
Q 0
3
2
Q 0
4
4
Q 0
5
2
Q 0
5
4
Q 0
5
2
Q 0
6
4
Q 0
6
78% Distribution Increase
Increased Quarterly Distributions
Distributions have been adjusted for the April 07 two-for-one unit split
17
Investment Highlights
• A lower risk proxy for the coal industry
• Attractive portfolio of long-life, diverse properties
• Lease to operators with diverse customer base
• No direct exposure to mining operating costs or risks
• Demonstrated ability to grow asset base and distributions
• Well-positioned for growth via coal acquisitions
• Two new growth platforms in addition to coal reserves
• Distribution supported by stable, royalty-based cash flows