News Release
On
Our priorities for 2015 will be to preserve liquidity, continue controlling cost, only pursue capital spending with strong justification, and maintain our excellent safety record, all while responding quickly to changing and challenging market conditions. Our balance sheet remains strong with relatively low debt levels and low legacy liabilities.
Since completing the sale of our
During the fourth quarter, the difficult market conditions that continue to affect nearly all coal companies adversely impacted our results. Conditions remained weak in all served markets, with excess supply and low natural gas prices weighing heavily on coal. At Hopedale, poor rail service continued to constrain shipments from this operation while costs remained high due to intermittent adverse geological conditions encountered in the advancement to the new 7-seam reserve. In addition, productivity was lower and costs were higher than anticipated at our new Pennyrile mine due to coal processing issues and geological conditions that we are working through as the mine continues its ramp up. Sales volumes were strong during the quarter at our
Our Pennyrile mine ramped up production during the fourth quarter and shipments were made to fulfill our base 800,000 ton per year contract. We are in the final stages of completing a long-term sales contract with another local utility customer for 120,000 tons in 2015, 400,000 tons in 2016 and 550,000 tons in 2017. We have added a second mining section at Pennyrile to increase production capacity to fulfill the long-term sales contracts. We received permission for a deep cut mining plan, which will help lower costs. Pennyrile gives us additional diversification and we expect it to be a significant generator of stable cash flow as it ramps up to its full potential run rate of two million tons per year.
Our
Further, Mr. Funk stated "We dissolved the Rhino Eastern joint venture in
Coal Operations Update
Pennyrile
- Rhino is in the final stages of completing a long-term sales contract with a local utility customer for 120,000 tons in 2015, 400,000 tons in 2016 and 550,000 tons in 2017.
- Along with the existing long-term contract for 800,000 tons per year, this additional long-term contract will extend the committed sales to 1.2 million ton in 2016 and 1.35 million tons in 2017.
- A second mining section has been added to the Riveredge mine at Pennyrile to increase production capacity to fulfill the current long-term contracts. Rhino is pursuing additional long-term sales agreements for this operation to reach its potential of 2.0 million tons per year.
- Rhino's Pennyrile operations produced approximately 111,000 tons during the fourth quarter while coal sales were approximately 143,000 tons.
- While mining conditions improved in the fourth quarter, the Pennyrile operation continued to experience higher than anticipated mining and coal processing costs. MSHA recently approved a deep cut mining plan, which is an important step to higher productivity and lower mining costs in the future.
- Pennyrile's sales remain fully contracted through 2015 and as production is further ramped up, Rhino expects the mine to be sold out through 2016.
Northern Appalachia
-
For the fourth quarter, year over year coal revenues per ton decreased
$1.10 to $58.46 while cost of operations costs per ton rose by$8.33 to $51.83 . Our cost of operations per ton improved by$8.22 versus the prior quarter as mining conditions improved at Hopedale. We continue to encounter intermittent adverse geological conditions as we advance into the 7-seam at Hopedale, which has resulted in higher per ton expense compared to the prior year. - Sales volume was 257,000 tons, versus 266,000 tons in the prior year and 244,000 tons in the prior quarter. At Hopedale, railroad service impacted production and sales during the quarter, as production shifts were cancelled due to coal stockpile limitations at the mine. Rail service did improve significantly in December and January.
- Sales at Rhino's Hopedale and Sands Hill operations in Northern Appalachia are fully contracted through 2015.
Rhino Western
-
Coal revenue per ton in the quarter decreased to
$40.51 versus$40.59 in the prior year and$41.06 in the prior quarter. Sales volume was 301,000 tons versus 228,000 tons in the prior year and 298,000 tons in the prior quarter as theCastle Valley operation continued to see strong demand for coal from this operation. -
Cost of operations per ton was
$34.74 versus$33.91 in the prior year and$30.22 in the prior quarter.Castle Valley had higher maintenance expenses in the fourth quarter, which caused the sequential increase in cost of operations per ton. -
Castle Valley's sales remain fully contracted through 2016.
Central Appalachia
-
Coal revenue per ton was
$69.16 versus$82.81 in the prior year and$67.83 in the prior quarter. Metallurgical coal revenue per ton was$75.59 versus$81.42 in the prior year and$74.90 in the prior quarter. Steam coal revenue was$65.32 per ton versus$83.92 in the prior year and$64.81 in the prior quarter. Sales volume was 274,000 tons in the quarter versus 333,000 in the prior year and 330,000 tons in the prior quarter. -
Cost of operations per ton in the quarter was
$65.10 versus$61.47 in the prior year and$66.09 in the prior quarter. - Rhino continues to evaluate its Central Appalachia operations to reduce costs at idle facilities and better utilize the Partnership's Central Appalachia properties.
Eastern Met
-
As previously announced, Rhino dissolved the Rhino Eastern joint venture with
Patriot Coal Corporation ("Patriot") inJanuary 2015 . - Patriot received the active Eagle mining operations and related coal reserves that had been previously owned and operated by the Rhino Eastern joint venture.
- Rhino received approximately 34 million tons of premium metallurgical coal reserves not related to the Eagle mining area and a recoupable prepaid royalty balance that will provide value to Rhino when these coal reserves are mined in the future.
-
Rhino anticipates the divestiture of the Rhino Eastern joint venture will improve the Partnership's cash flow by approximately
$6 million in 2015. -
In the fourth quarter, Rhino recorded a non-cash impairment charge of approximately
$5.9 million related to its investment in the Rhino Eastern joint venture based upon the fair value of the assets received and liabilities assumed in the dissolution compared to Rhino's carrying amount of its investment in the joint venture.
Asset Impairments
Due to the prolonged weakness in the U.S. coal markets and the dim prospects for an upturn in the coal markets in the near term, in the fourth quarter of 2014, Rhino performed a comprehensive review of its current coal mining operations as well as potential future development projects to ascertain any potential impairment losses. Rhino identified various properties, projects and operations that were potentially impaired based upon changes in its strategic plans, market conditions or other factors. Rhino recorded approximately
Rhino controls certain mineral rights and related surface land located eleven miles north of
Rich Mountain Property
In
Bevins Branch Operation
Rhino has a surface mine operation in eastern
Rhino Eastern Joint Venture
In
Other Asset Impairments
As of
Capital Expenditures
-
Maintenance capital expenditures for the fourth quarter were approximately
$2.9 million . -
Expansion capital expenditures for the fourth quarter were approximately
$1.8 million , which consisted primarily of funding the completed development of Pennyrile, along with other internal development projects.
Sales Commitments
The table below displays Rhino's committed coal sales for the periods indicated.
Year 2015 | Year 2016 | |||
Avg Price | Tons | Avg Price | Tons | |
Northern Appalachia/Illinois Basin | $ 54.54 | 1,996,408 | $ 51.15 | 1,121,200 |
Rhino Western | $ 37.56 | 1,000,000 | $ 39.70 | 1,000,000 |
Central Appalachia | $ 67.78 | 263,480 | $ -- | -- |
Total | $ 50.40 | 3,259,888 | $ 45.75 | 2,121,200 |
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
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
Overview of Financial Results
Results for the three months ended
-
Adjusted EBITDA from continuing operations of
$2.3 million and net loss from continuing operations of$61.2 million compared to Adjusted EBITDA from continuing operations of$14.4 million and net income from continuing operations of$0.7 million in the fourth quarter of 2013. Including a net loss from discontinued operations of approximately$0.1 million , total net loss and Adjusted EBITDA for the three months endedDecember 31, 2014 were$61.3 million and$2.2 million , respectively. Net loss for the fourth quarter 2014 was impacted by$45.3 million of asset impairment and related charges, as well as an additional$5.9 million impairment charge related to the Rhino Eastern joint venture investment. -
Basic and diluted net loss per common unit from continuing operations of
$2.07 compared to basic and diluted net income per common unit from continuing operations of$0.02 for the fourth quarter of 2013. Including (loss)/income from discontinued operations, total basic and diluted net loss per common unit remained at$2.07 for the fourth quarter of 2014 compared to total basic and diluted net income per common unit of$0.03 for the fourth quarter of 2013. - Coal sales were 1.0 million tons, which was an improvement of 18% compared to the fourth quarter of 2013, primarily due to sales from the new Pennyrile operation.
-
Total revenues and coal revenues of
$61.9 million and$52.5 million , respectively, compared to$62.7 million and$52.7 million , respectively, for the same period of 2013. -
Coal revenues per ton of
$53.80 compared to$63.69 for the fourth quarter of 2013, a decrease of 15.5%. -
Cost of operations from continuing operations of
$54.5 million compared to$43.4 million for the same period of 2013. -
Cost of operations per ton from continuing operations of
$55.83 compared to$52.50 for the fourth quarter of 2013, an increase of 6.3%.
Total coal revenues decreased approximately 0.3% despite an increase in tons sold due to lower selling prices resulting from the ongoing weakness in the met and steam coal markets. Coal revenues per ton decreased primarily because of lower prices for metallurgical coal sold in the fourth quarter of 2014 compared to the same period of 2013, as well as the expiration of an above-market steam coal contract in Central Appalachia. Total dollars spent on cost of operations increased year to year primarily due to the new Pennyrile operation in the
Results for the year ended
-
Adjusted EBITDA from continuing operations of
$14.9 million and net loss from continuing operations of$81.9 million compared to Adjusted EBITDA from continuing operations of$59.2 million and net income from continuing operations of$8.1 million for the year endedDecember 31, 2013 . Net loss for the year endedDecember 31, 2014 was impacted by$45.3 million of asset impairment and related charges, as well as an additional$5.9 million impairment charge related to the Rhino Eastern joint venture investment. Including income from discontinued operations of approximately$130.3 million , total net income and Adjusted EBITDA for the year endedDecember 31, 2014 were$48.4 million and$145.2 million , respectively. Income from discontinued operations consisted primarily of the gain of approximately$121.7 million from the sale of theUtica Shale oil and natural gas properties. -
Basic and diluted net loss per common unit from continuing operations of
$2.76 compared to basic and diluted net income per common unit from continuing operations of$0.29 for the year endedDecember 31 , 2013. Including income from discontinued operations, total basic and diluted net income per common unit was$1.63 for the year endedDecember 31, 2014 compared to total basic and diluted net income per common unit of$0.33 for the year endedDecember 31, 2013 . -
Coal sales were 3.6 million tons compared to 3.7 million for the year ended
December 31, 2013 . -
Total revenues and coal revenues of
$239.1 million and$202.9 million , respectively, compared to$272.2 million and$236.6 million , respectively, for the same period of 2013. -
Coal revenues per ton of
$57.03 compared to$64.42 for the year endedDecember 31, 2013 , a decrease of 11.5%. -
Cost of operations from continuing operations of
$200.2 million compared to$199.7 million for the same period of 2013. -
Cost of operations per ton from continuing operations of
$56.26 compared to$54.37 for the year endedDecember 31, 2013 , an increase of 3.5%.
Total coal revenues decreased approximately 14.3% due to a decrease in tons sold and lower selling prices resulting from the ongoing weakness in the met and steam coal markets as mentioned above. Coal revenues per ton decreased primarily because of lower prices for metallurgical coal sold in the year ended
Segment Information
The Partnership produces and markets coal from surface and underground mines in
Beginning with 2013 year-end reporting, the Partnership had included a reportable business segment for its oil and natural gas activities since the total assets for these operations met the quantitative threshold for separate segment reporting. The
The Partnership accounted for the Rhino Eastern joint venture under the equity method prior to its dissolution in
(In millions, except per ton data and %) |
Fourth Quarter 2014 |
Fourth Quarter 2013 |
% Change* 4Q14 / 4Q13 |
Year to Date 2014 |
Year to Date 2013 |
% Change* 2014 / 2013 |
Central Appalachia | ||||||
Coal revenues | $18.9 | $27.6 | (31.3%) | $89.0 | $126.4 | (29.6%) |
Total revenues | $23.8 | $33.4 | (28.6%) | $109.5 | $147.4 | (25.8%) |
Coal revenues per ton* | $69.16 | $82.81 | (16.5%) | $70.53 | $83.85 | (15.9%) |
Cost of operations | $17.8 | $20.5 | (12.9%) | $81.2 | $100.0 | (18.8%) |
Cost of operations per ton* | $65.10 | $61.47 | 5.9% | $64.33 | $66.33 | (3.0%) |
Tons produced | 0.256 | 0.297 | (13.9%) | 1.262 | 1.529 | (17.5%) |
Tons sold | 0.274 | 0.333 | (17.7%) | 1.262 | 1.508 | (16.3%) |
Northern Appalachia | ||||||
Coal revenues | $15.1 | $15.8 | (4.8%) | $60.5 | $72.2 | (16.3%) |
Total revenues | $18.2 | $18.3 | (0.5%) | $71.5 | $80.4 | (11.1%) |
Coal revenues per ton* | $58.46 | $59.56 | (1.8%) | $59.51 | $58.95 | 0.9% |
Cost of operations | $13.3 | $11.5 | 15.5% | $56.5 | $52.4 | 7.8% |
Cost of operations per ton* | $51.83 | $43.50 | 19.2% | $55.67 | $42.79 | 30.1% |
Tons produced | 0.256 | 0.326 | (21.5%) | 0.963 | 1.279 | (24.7%) |
Tons sold | 0.257 | 0.266 | (3.0%) | 1.015 | 1.225 | (17.1%) |
Rhino Western | ||||||
Coal revenues | $12.2 | $9.3 | 31.7% | $44.0 | $38.0 | 16.0% |
Total revenues | $12.2 | $9.5 | 28.2% | $44.1 | $38.3 | 15.2% |
Coal revenues per ton* | $40.51 | $40.59 | (0.2%) | $41.27 | $40.37 | 2.2% |
Cost of operations | $10.5 | $7.7 | 35.2% | $36.0 | $30.7 | 17.2% |
Cost of operations per ton* | $34.74 | $33.91 | 2.5% | $33.70 | $32.62 | 3.3% |
Tons produced | 0.287 | 0.220 | 30.5% | 1.068 | 0.881 | 21.1% |
Tons sold | 0.301 | 0.228 | 32.0% | 1.067 | 0.940 | 13.5% |
Illinois Basin | ||||||
Coal revenues | $6.3 | -- | n/a | $9.4 | -- | n/a |
Total revenues | $6.3 | -- | n/a | $9.7 | $0.3 | n/a |
Coal revenues per ton* | $43.92 | -- | n/a | $44.28 | -- | n/a |
Cost of operations | $8.8 | ($0.1) | n/a | $12.0 | ($0.3) | n/a |
Cost of operations per ton* | $61.31 | -- | n/a | $56.35 | -- | n/a |
Tons produced | 0.111 | -- | n/a | 0.221 | -- | n/a |
Tons sold | 0.143 | -- | n/a | 0.213 | -- | n/a |
Other** | ||||||
Coal revenues | n/a | n/a | n/a | n/a | n/a | n/a |
Total revenues | $1.4 | $1.5 | (8.6%) | $4.3 | $5.8 | (26.6%) |
Coal revenues per ton | n/a | n/a | n/a | n/a | n/a | n/a |
Cost of operations | $4.1 | $3.8 | 7.1% | $14.5 | $16.9 | (14.4%) |
Cost of operations per ton | n/a | n/a | n/a | n/a | n/a | n/a |
Total | ||||||
Coal revenues | $52.5 | $52.7 | (0.3%) | $202.9 | $236.6 | (14.3%) |
Total revenues | $61.9 | $62.7 | (1.3%) | $239.1 | $272.2 | (12.2%) |
Coal revenues per ton* | $53.80 | $63.69 | (15.5%) | $57.03 | $64.42 | (11.5%) |
Cost of operations | $54.5 | $43.4 | 25.5% | $200.2 | $199.7 | 0.2% |
Cost of operations per ton* | $55.83 | $52.50 | 6.3% | $56.26 | $54.37 | 3.5% |
Tons produced | 0.910 | 0.843 | 8.0% | 3.514 | 3.689 | (4.7%) |
Tons sold | 0.975 | 0.827 | 18.0% | 3.557 | 3.673 | (3.1%) |
Eastern Met 100% Basis † | ||||||
Coal revenues | $5.0 | $7.1 | (29.7%) | $21.4 | $27.7 | (22.7%) |
Total revenues | $5.1 | $7.2 | (29.3%) | $21.7 | $27.9 | (22.0%) |
Coal revenues per ton* | $97.07 | $109.54 | (11.4%) | $97.76 | $111.27 | (12.1%) |
Cost of operations | $6.4 | $6.4 | 1.1% | $28.6 | $31.5 | (9.3%) |
Cost of operations per ton* | $125.03 | $98.06 | 27.5% | $130.41 | $126.60 | 3.0% |
Tons produced*** | 0.055 | 0.063 | (11.9%) | 0.213 | 0.205 | 3.5% |
Tons sold*** | 0.051 | 0.065 | (20.7%) | 0.219 | 0.249 | (12.0%) |
* 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 initial results for Rhino's new Pennyrile mine, as well as results for Rhino's ancillary businesses. The activities performed by Rhino's ancillary businesses do not directly relate to coal production. As a result, coal revenues per ton and cost of operations per ton are not presented for the Other 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 per ton data and %)** |
Fourth Quarter 2014 |
Fourth Quarter 2013 |
% Change* 4Q14 / 4Q13 |
Year to Date 2014 |
Year to Date 2013 |
% Change* 2014 / 2013 |
Met coal tons sold | 102.6 | 147.6 | (30.5%) | 337.0 | 597.9 | (43.6%) |
Steam coal tons sold | 171.5 | 185.4 | (7.5%) | 924.6 | 909.8 | 1.6% |
Total tons sold | 274.1 | 333.0 | (17.7%) | 1,261.6 | 1,507.7 | (16.3%) |
Met coal revenue | $7,752 | $12,021 | (35.5%) | $26,058 | $53,721 | (51.5%) |
Steam coal revenue | $11,204 | $15,559 | (28.0%) | $62,920 | $72,699 | (13.5%) |
Total coal revenue | $18,956 | $27,580 | (31.3%) | $88,978 | $126,420 | (29.6%) |
Met coal revenues per ton | $75.59 | $81.42 | (7.2%) | $77.33 | $89.86 | (13.9%) |
Steam coal revenues per ton | $65.32 | $83.92 | (22.2%) | $68.05 | $79.90 | (14.8%) |
Total coal revenues per ton | $69.16 | $82.81 | (16.5%) | $70.53 | $83.85 | (15.9%) |
Met coal tons produced | 84.2 | 120.3 | (30.1%) | 333.3 | 570.5 | (41.6%) |
Steam coal tons produced | 171.4 | 176.4 | (2.8%) | 928.9 | 958.7 | (3.1%) |
Total tons produced | 255.6 | 296.7 | (13.9%) | 1,262.2 | 1,529.2 | (17.5%) |
* 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
Fourth Quarter 2014 Financial and Operational Results Conference Call
Rhino's fourth quarter 2014 financial and operational results conference call is scheduled for today at
A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call 888-286-8010 (
The webcast will be archived on the site for one year.
About Rhino Resource Partners LP
About
Rhino's general partner,
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 "Coal Operations Update." 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.
Other factors that could cause Rhino's actual results to differ from its projected results are described in its filings with the
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, 2014 AND 2013 | ||
(in thousands) | ||
December 31, | December 31, | |
2014 | 2013 | |
ASSETS | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 626 | $ 423 |
Accounts receivable, net of allowance | 22,467 | 25,461 |
Inventories | 13,030 | 18,580 |
Prepaid expenses and other | 5,006 | 4,751 |
Current assets held for sale | -- | 454 |
Total current assets | 41,129 | 49,669 |
Net property, plant & equipment, incl coal properties, mine development and construction costs | 383,437 | 424,990 |
Investment in unconsolidated affiliates | 20,653 | 21,243 |
Other non-current assets | 18,840 | 16,368 |
Non-current assets held for sale | 9,279 | 55,497 |
TOTAL | $ 473,338 | $ 567,767 |
LIABILITIES AND EQUITY | ||
CURRENT LIABILITIES: | ||
Accounts payable | $ 10,924 | $ 17,710 |
Current portion of long-term debt | 210 | 1,024 |
Accrued expenses and other | 19,804 | 22,515 |
Current liabilities held for sale | -- | 5,241 |
Total current liabilities | 30,938 | 46,490 |
NON-CURRENT LIABILITIES: | ||
Long-term debt | 57,222 | 170,022 |
Asset retirement obligations | 28,452 | 32,837 |
Other non-current liabilities | 34,165 | 22,006 |
Non-current liabilities held for sale | 2,250 | 41 |
Total non-current liabilities | 122,089 | 224,906 |
Total liabilities | 153,027 | 271,396 |
COMMITMENTS AND CONTINGENCIES | ||
PARTNERS' CAPITAL: | ||
Limited partners | 307,984 | 283,339 |
General partner | 10,954 | 10,801 |
Accumulated other comprehensive income | 1,373 | 2,231 |
Total partners' capital | 320,311 | 296,371 |
TOTAL | $ 473,338 | $ 567,767 |
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, | |||
2014 | 2013 | 2014 | 2013 | |
REVENUES: | ||||
Coal sales | $ 52,478 | $ 52,655 | $ 202,881 | $ 236,601 |
Other revenues | 9,392 | 10,029 | 36,176 | 35,664 |
Total revenues | 61,870 | 62,684 | 239,057 | 272,265 |
COSTS AND EXPENSES: | ||||
Cost of operations (exclusive of depreciation, depletion and amortization) | 54,455 | 43,402 | 200,141 | 199,705 |
Freight and handling costs | 658 | 400 | 1,877 | 1,294 |
Depreciation, depletion and amortization | 9,444 | 9,675 | 37,233 | 39,627 |
Selling, general and administrative (exclusive of depreciation, depletion and amortization) | 5,458 | 4,639 | 19,840 | 19,800 |
Asset impairment and related charges | 45,296 | 1,667 | 45,296 | 1,667 |
(Gain) on sale/disposal of assets—net | (101) | (58) | (569) | (10,359) |
Total costs and expenses | 115,210 | 59,725 | 303,818 | 251,734 |
(LOSS)/INCOME FROM OPERATIONS | (53,340) | 2,959 | (64,761) | 20,531 |
INTEREST AND OTHER (EXPENSE)/INCOME : | ||||
Interest expense and other | (908) | (2,050) | (5,708) | (7,898) |
Interest income and other | 3 | 207 | 274 | 207 |
Equity in net income (loss) of unconsolidated affiliate | (7,004) | (429) | (11,712) | (4,729) |
Total interest and other (expense) | (7,909) | (2,272) | (17,146) | (12,420) |
NET (LOSS)/INCOME BEFORE INCOME TAXES FROM CONTINUING OPERATIONS | (61,249) | 687 | (81,907) | 8,111 |
NET (LOSS)/INCOME FROM CONTINUING OPERATIONS | (61,249) | 687 | (81,907) | 8,111 |
DISCONTINUED OPERATIONS | ||||
(Loss)/income from discontinued operations | (75) | 133 | 130,342 | 1,307 |
NET (LOSS)/INCOME | $ (61,324) | $ 820 | $ 48,435 | $ 9,418 |
General partner's interest in net (loss)/income: | ||||
Net (loss)/income from continuing operations | $ (1,225) | $ 13 | $ (1,638) | $ 162 |
Net (loss)/income from discontinued operations | (2) | 3 | 2,607 | 26 |
General partner's interest in net (loss)/income | $ (1,227) | $ 16 | $ 969 | $ 188 |
Common unitholders' interest in net (loss)/income: | ||||
Net (loss)/income from continuing operations | $ (34,438) | $ 383 | $ (46,051) | $ 4,448 |
Net (loss)/income from discontinued operations | (42) | 71 | 73,271 | 769 |
Common unitholders' interest in net (loss)/income | $ (34,480) | $ 454 | $ 27,220 | $ 5,217 |
Subordinated unitholders' interest in net (loss)/income: | ||||
Net (loss)/income from continuing operations | $ (25,586) | $ 291 | $ (34,218) | $ 3,501 |
Net (loss)/income from discontinued operations | (31) | 59 | 54,464 | 512 |
Subordinated unitholders' interest in net (loss)/income | $ (25,617) | $ 350 | $ 20,246 | $ 4,013 |
Net (loss)/income per limited partner unit, basic: | ||||
Common units: | ||||
Net (loss)/income per unit from continuing operations | $ (2.07) | $ 0.02 | $ (2.76) | $ 0.29 |
Net (loss)/income per unit from discontinued operations | (0.00) | 0.01 | 4.39 | 0.04 |
Net (loss)/income per common unit, basic | $ (2.07) | $ 0.03 | $ 1.63 | $ 0.33 |
Subordinated units | ||||
Net (loss)/income per unit from continuing operations | $ (2.07) | $ 0.02 | $ (2.76) | $ 0.28 |
Net (loss)/income per unit from discontinued operations | (0.00) | 0.01 | 4.39 | 0.04 |
Net (loss)/income per subordinated unit, basic | $ (2.07) | $ 0.03 | $ 1.63 | $ 0.32 |
Net (loss)/income per limited partner unit, diluted: | ||||
Common units | ||||
Net (loss)/income per unit from continuing operations | $ (2.07) | $ 0.02 | $ (2.76) | $ 0.29 |
Net (loss)/income per unit from discontinued operations | (0.00) | 0.01 | 4.39 | 0.04 |
Net (loss)/income per common unit, diluted | $ (2.07) | $ 0.03 | $ 1.63 | $ 0.33 |
Subordinated units | ||||
Net (loss)/income per unit from continuing operations | $ (2.07) | $ 0.02 | $ (2.76) | $ 0.28 |
Net (loss)/income per unit from discontinued operations | (0.00) | 0.01 | 4.39 | 0.04 |
Net (loss)/income per subordinated unit, diluted | $ (2.07) | $ 0.03 | $ 1.63 | $ 0.32 |
Distributions paid per limited partner unit (1) | $ 0.05 | $ 0.445 | $ 1.385 | $ 1.78 |
Weighted average number of limited partner units outstanding, basic: | ||||
Common units | 16,685 | 16,659 | 16,678 | 15,751 |
Subordinated units | 12,397 | 12,397 | 12,397 | 12,397 |
Weighted average number of limited partner units outstanding, diluted: | ||||
Common units | 16,685 | 16,672 | 16,685 | 15,760 |
Subordinated units | 12,397 | 12,397 | 12,397 | 12,397 |
(1) No distributions were paid on the subordinated units for the three and twelve months ended December 31, 2014 and 2013. |
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.
($ in millions) |
Fourth Quarter 2014 |
Fourth Quarter 2013 |
Year to Date 2014 |
Year to Date 2013 |
Net (loss)/income from continuing operations | $ (61.2) | $ 0.7 | $ (81.9) | $ 8.1 |
Plus: | ||||
Depreciation, depletion and amortization (DD&A) | 9.4 | 9.7 | 37.2 | 39.6 |
Interest expense | 0.9 | 2.0 | 5.7 | 7.9 |
EBITDA from continuing operations | $ (50.9) | $ 12.4 | $ (39.0) | $ 55.6 |
Plus: Rhino Eastern DD&A-51% | 0.3 | 0.3 | 1.0 | 1.0 |
Plus: Rhino Eastern interest expense-51% | -- | -- | -- | -- |
Plus: Impairment of Rhino Eastern joint venture (1) | 5.9 | -- | 5.9 | -- |
Plus: Asset impairments and other non-cash charges (1) | 47.0 | 1.7 | 47.0 | 2.6 |
Adjusted EBITDA from continuing operations | 2.3 | 14.4 | 14.9 | 59.2 |
Net (loss)/income from discontinued operations | (0.1) | 0.1 | 130.3 | 1.3 |
DD&A included in net income from discontinued operations | -- | 1.6 | -- | 3.0 |
Adjusted EBITDA | $ 2.2 | $ 16.1 | $ 145.2 | $ 63.5 |
(1) For the total
During the first quarter of 2013, Rhino incurred a non-cash expense of approximately
Three Months Ended December 31, | Twelve Months Ended December 31 | |||
($ in millions) | 2014 | 2013 | 2014 | 2013 |
Net cash provided by operating activities | $ 3.8 | $ 11.5 | $ 21.2 | $ 51.7 |
Plus: | ||||
Increase in net operating assets | -- | 3.3 | -- | -- |
Gain on sale of assets | 0.1 | 0.1 | 130.6 | 10.4 |
Amortization of deferred revenue | 0.4 | 0.5 | 1.7 | 1.6 |
Amortization of actuarial gain | 0.1 | -- | 0.4 | 0.1 |
Interest expense | 0.9 | 2.0 | 5.7 | 7.9 |
Equity in net income of unconsolidated affiliate | -- | -- | -- | -- |
Less: | ||||
Decrease in net operating assets | 2.3 | -- | 5.2 | 0.6 |
Accretion on interest-free debt | -- | -- | -- | 0.1 |
Amortization of advance royalties | 0.2 | 0.1 | 0.5 | 0.3 |
Amortization of debt issuance costs | 0.2 | 0.4 | 2.1 | 1.3 |
Increase in provision for doubtful accounts | 0.7 | -- | 0.7 | -- |
Loss on retirement of advanced royalties | -- | 0.1 | 0.2 | 0.2 |
Asset impairment and related charges | 45.3 | 1.7 | 45.3 | 1.7 |
Equity-based compensation | -- | -- | 0.3 | 0.6 |
Accretion on asset retirement obligations | 0.6 | 0.6 | 2.3 | 2.3 |
Equity in net loss of unconsolidated affiliates | 7.0 | 0.4 | 11.7 | 4.7 |
EBITDA | (51.0) | 14.1 | 91.3 | 59.9 |
Plus: Rhino Eastern DD&A-51% | 0.3 | 0.3 | 1.0 | 1.0 |
Plus: Rhino Eastern interest expense-51% | -- | -- | -- | -- |
Plus: Impairment of Rhino Eastern joint venture (1) | 5.9 | -- | 5.9 | |
Plus: Asset impairments and other non-cash charges (1) | 47.0 | 1.7 | 47.0 | 2.6 |
Adjusted EBITDA | 2.2 | 16.1 | 145.2 | 63.5 |
Less: Net (loss)/income from discontinued operations | (0.1) | 0.1 | 130.3 | 1.3 |
Less: DD&A included in net income from discontinued operations | -- | 1.6 | -- | 3.0 |
Adjusted EBITDA from continuing operations | $ 2.3 | $ 14.4 | $ 14.9 | $ 59.2 |
(1) For the total
During the first quarter of 2013, Rhino incurred a non-cash expense of approximately
CONTACT: Investor Contacts:Scott Morris +1 859.519.3622 smorris@rhinolp.com