NRP 10-Q
Natural Resource Partners LP (NRP)
10-Q
2021-11-03
For: 2021-09-30
View Original
Added on
April 11, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
| Washington, D.C. 20549 | ||
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||
For the quarterly period ended September 30, 2021 or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||
| Commission file number: | | |||||||||||||
| (Exact name of registrant as specified in its charter) | |||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices)
(Zip Code)
(713 ) 751-7507
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of "accelerated filer", "large accelerated filer", "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☐ | ☒ | ||||||||||||
| Non-accelerated Filer | ☐ (Do not check if a smaller reporting company) | Smaller Reporting Company | ||||||||||||
| Emerging Growth Company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
NATURAL RESOURCE PARTNERS, L.P.
TABLE OF CONTENTS
| Page | ||||||||
i
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | ||||||||||
| (In thousands, except unit data) | 2021 | 2020 | |||||||||
| ASSETS | (Unaudited) | ||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Other current assets, net | |||||||||||
| Total current assets | $ | $ | |||||||||
| Land | |||||||||||
| Mineral rights, net | |||||||||||
| Intangible assets, net | |||||||||||
| Equity in unconsolidated investment | |||||||||||
| Long-term contract receivable, net | |||||||||||
| Other long-term assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND CAPITAL | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities | |||||||||||
| Accrued interest | |||||||||||
| Current portion of deferred revenue | |||||||||||
| Current portion of long-term debt, net | |||||||||||
| Total current liabilities | $ | $ | |||||||||
| Deferred revenue | |||||||||||
| Long-term debt, net | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | $ | $ | |||||||||
| Commitments and contingencies (see Note 12) | |||||||||||
Class A Convertible Preferred Units ( | $ | $ | |||||||||
| Partners’ capital | |||||||||||
Common unitholders’ interest ( | $ | $ | |||||||||
| General partner’s interest | |||||||||||
| Warrant holders’ interest | |||||||||||
| Accumulated other comprehensive income | |||||||||||
| Total partners’ capital | $ | $ | |||||||||
| Total liabilities and partners' capital | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
1
NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands, except per unit data) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Revenues and other income | |||||||||||||||||||||||
| Coal royalty and other | $ | $ | $ | $ | |||||||||||||||||||
| Transportation and processing services | |||||||||||||||||||||||
| Equity in earnings of Ciner Wyoming | |||||||||||||||||||||||
| Gain on asset sales and disposals | |||||||||||||||||||||||
| Total revenues and other income | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Operating and maintenance expenses | $ | $ | $ | $ | |||||||||||||||||||
| Depreciation, depletion and amortization | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Asset impairments | |||||||||||||||||||||||
| Total operating expenses | $ | $ | $ | $ | |||||||||||||||||||
| Income (loss) from operations | $ | $ | $ | $ | ( | ||||||||||||||||||
| Interest expense, net | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||
| Less: income attributable to preferred unitholders | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) attributable to common unitholders and the general partner | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Net income (loss) attributable to common unitholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Net income (loss) attributable to the general partner | ( | ( | |||||||||||||||||||||
| Net income (loss) per common unit (see Note 4) | |||||||||||||||||||||||
| Basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted | ( | ( | |||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||
| Comprehensive income from unconsolidated investment and other | |||||||||||||||||||||||
| Comprehensive income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
2
NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(Unaudited)
| Common Unitholders | General Partner | Warrant Holders | Accumulated Other Comprehensive Income | Partners' Capital Excluding Non-Controlling Interest | Non-Controlling Interest | Total Capital | |||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Units | Amounts | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income (1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Distributions to common unitholders and the general partner | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Distributions to preferred unitholders | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of unit-based awards | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Unit-based awards amortization and vesting, net | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Capital contribution | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income from unconsolidated investment and other | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income (2) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Distributions to common unitholders and the general partner | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Distributions to preferred unitholders | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Unit-based awards amortization and vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income from unconsolidated investment and other | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2021 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income (3) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Distributions to common unitholders and the general partner | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Distributions to preferred unitholders | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of unit-based awards | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Unit-based awards amortization and vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income from unconsolidated investment and other | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2021 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
(1)Net income includes $7.7 million of income attributable to preferred unitholders that accumulated during the period, of which $7.6 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.
(2)Net income includes $7.8 million of income attributable to preferred unitholders that accumulated during the period, of which $7.7 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.
(3)Net income includes $8.0 million of income attributable to preferred unitholders that accumulated during the period, of which $7.8 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.
The accompanying notes are an integral part of these consolidated financial statements.
3
NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(Unaudited)
| Common Unitholders | General Partner | Warrant Holders | Accumulated Other Comprehensive Income (Loss) | Partners' Capital Excluding Non-Controlling Interest | Non-Controlling Interest | Total Capital | |||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Units | Amounts | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
| Cumulative effect of adoption of accounting standard (see Note 15) | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Net income (1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Distributions to common unitholders and the general partner | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Distributions to preferred unitholders | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Unit-based awards amortization and vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Comprehensive loss from unconsolidated investment and other | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2020 | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Net loss (2) | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Distributions to preferred unitholders | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Acquisition of non-controlling interest in BRP | — | ( | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Unit-based awards amortization and vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income from unconsolidated investment and other | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net income (1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Distributions to common unitholders and the general partner | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Distributions to preferred unitholders | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Unit-based awards amortization and vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income from unconsolidated investment and other | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2020 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
(1)Net income includes $7.5 7.4 0.2
The accompanying notes are an integral part of these consolidated financial statements.
4
| For the Nine Months Ended September 30, | |||||||||||
| (In thousands) | 2021 | 2020 | |||||||||
| Cash flows from operating activities | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations: | |||||||||||
| Depreciation, depletion and amortization | |||||||||||
| Distributions from unconsolidated investment | |||||||||||
| Equity earnings from unconsolidated investment | ( | ( | |||||||||
| Gain on asset sales and disposals | ( | ( | |||||||||
| Asset impairments | |||||||||||
| Bad debt expense | |||||||||||
| Unit-based compensation expense | |||||||||||
| Amortization of debt issuance costs and other | |||||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Accounts payable | |||||||||||
| Accrued liabilities | ( | ( | |||||||||
| Accrued interest | |||||||||||
| Deferred revenue | ( | ||||||||||
| Other items, net | ( | ||||||||||
| Net cash provided by operating activities of continuing operations | $ | $ | |||||||||
| Net cash provided by operating activities of discontinued operations | |||||||||||
| Net cash provided by operating activities | $ | $ | |||||||||
| Cash flows from investing activities | |||||||||||
| Proceeds from asset sales and disposals | $ | $ | |||||||||
| Return of long-term contract receivable | |||||||||||
| Acquisition of non-controlling interest in BRP | ( | ||||||||||
| Net cash provided by investing activities of continuing operations | $ | $ | |||||||||
| Net cash used in investing activities of discontinued operations | ( | ||||||||||
| Net cash provided by investing activities | $ | $ | |||||||||
| Cash flows from financing activities | |||||||||||
| Debt repayments | $ | ( | $ | ( | |||||||
| Distributions to common unitholders and the general partner | ( | ( | |||||||||
| Distributions to preferred unitholders | ( | ( | |||||||||
| Contributions from discontinued operations | |||||||||||
| Acquisition of non-controlling interest in BRP | ( | ||||||||||
| Other items | ( | ||||||||||
| Net cash used in financing activities of continuing operations | $ | ( | $ | ( | |||||||
| Net cash used in financing activities of discontinued operations | ( | ||||||||||
| Net cash used in financing activities | $ | ( | $ | ( | |||||||
5
| For the Nine Months Ended September 30, | |||||||||||
| (In thousands) | 2021 | 2020 | |||||||||
| Net increase in cash and cash equivalents | $ | $ | |||||||||
| Cash and cash equivalents of continuing operations at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities | $ | $ | |||||||||
| Preferred unit distributions paid-in-kind | |||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
Nature of Business
Natural Resource Partners L.P. (the "Partnership") engages principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and owns a non-controlling 49 % interest in Ciner Wyoming LLC ("Ciner Wyoming"), a trona ore mining and soda ash production business. The Partnership is organized into two operating segments further described in Note 5. Segment Information. As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context.
Principles of Consolidation and Reporting
The accompanying unaudited Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2020 and notes thereto included in the Partnership's Annual Report on Form 10-K, which was filed with the SEC on March 15, 2021. Certain reclassifications have been made to prior year amounts in the Notes to Consolidated Financial Statements to conform with current year presentation. These reclassifications had no impact on previously reported total assets, total liabilities, partners' capital, net income (loss) or cash flows from operating, investing or financing activities.
2. Revenues from Contracts with Customers
The following table presents the Partnership's Coal Royalty and Other segment revenues by major source:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
| Coal royalty revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Production lease minimum revenues | ||||||||||||||||||||||||||
| Minimum lease straight-line revenues | ||||||||||||||||||||||||||
| Property tax revenues | ||||||||||||||||||||||||||
| Wheelage revenues | ||||||||||||||||||||||||||
| Coal overriding royalty revenues | ||||||||||||||||||||||||||
| Lease amendment revenues | ||||||||||||||||||||||||||
| Aggregates royalty revenues | ||||||||||||||||||||||||||
| Oil and gas royalty revenues | ||||||||||||||||||||||||||
| Other revenues | ||||||||||||||||||||||||||
| Coal royalty and other revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Transportation and processing services revenues (1) | ||||||||||||||||||||||||||
| Total coal royalty and other segment revenues | $ | $ | $ | $ | ||||||||||||||||||||||
7
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
The following table details the Partnership's Coal Royalty and Other segment receivables and liabilities resulting from contracts with customers:
| September 30, | December 31, | |||||||||||||
| (In thousands) | 2021 | 2020 | ||||||||||||
| Receivables | ||||||||||||||
| Accounts receivable, net | $ | $ | ||||||||||||
Other current assets, net (1) | ||||||||||||||
Other long-term assets, net (2) | ||||||||||||||
| Contract liabilities | ||||||||||||||
| Current portion of deferred revenue | $ | $ | ||||||||||||
| Deferred revenue | ||||||||||||||
(1)Other current assets, net includes short-term notes receivables from contracts with customers.
(2)Other long-term assets, net includes long-term lease amendment fee receivables from contracts with customers.
The following table shows the activity related to the Partnership's Coal Royalty and Other segment deferred revenue:
| For the Nine Months Ended September 30, | ||||||||||||||
| (In thousands) | 2021 | 2020 | ||||||||||||
| Balance at beginning of period (current and non-current) | $ | $ | ||||||||||||
| Increase due to minimums and lease amendment fees | ||||||||||||||
| Recognition of previously deferred revenue | ( | ( | ||||||||||||
| Balance at end of period (current and non-current) | $ | $ | ||||||||||||
The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty leases are as follows as of September 30, 2021 (in thousands):
Lease Term (1) | Weighted Average Remaining Years | Annual Minimum Payments (2) | ||||||||||||
| 0 - 5 years | $ | |||||||||||||
| 5 - 10 years | ||||||||||||||
| 10+ years | ||||||||||||||
| Total | $ | |||||||||||||
(1)Lease term does not include renewal periods.
3. Common and Preferred Unit Distributions
The Partnership makes cash distributions to common and preferred unitholders on a quarterly basis, subject to approval by the Board of Directors of GP Natural Resource Partners LLC (the "Board of Directors"). NRP recognizes both common unit and preferred unit distributions on the date the distribution is declared.
Distributions made on the common units and the general partner's general partner ("GP") interest are made on a pro-rata basis in accordance with their relative percentage interests in the Partnership. The general partner is entitled to receive 2 % of such distributions.
8
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
Income (loss) available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income (loss) available to common unitholders and the general partner by $8.0 million and $7.5 million during the three months ended September 30, 2021 and 2020, respectively, and $23.5 million and $22.6 million during the nine months ended September 30, 2021 and 2020, respectively, as a result of accumulated preferred unit distributions earned during the period. In August 2021, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended June 30, 2021, which resulted in the issuance of an additional 3,921 preferred units during the three months ended September 30, 2021. In May 2021, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended March 31, 2021, which resulted in the issuance of an additional 3,863 preferred units during the three months ended June 30, 2021. In February 2021, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended December 31, 2020, which resulted in the issuance of an additional 3,806 preferred units during the three months ended March 31, 2021. In May 2020, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended March 31, 2020, and then redeemed all of these outstanding paid in kind preferred units on June 30, 2020.
The following table shows the cash distributions declared and paid to common and preferred unitholders during the nine months ended September 30, 2021 and 2020, respectively:
| Common Units | Preferred Units | |||||||||||||||||||||||||||||||
| Date Paid | Period Covered by Distribution | Distribution per Unit | Total Distribution (1) (In thousands) | Distribution per Unit | Total Distribution (In thousands) | |||||||||||||||||||||||||||
| 2021 | ||||||||||||||||||||||||||||||||
| February 2021 | October 1 - December 31, 2020 | $ | $ | $ | $ | |||||||||||||||||||||||||||
| May 2021 | January 1 - March 31, 2021 | |||||||||||||||||||||||||||||||
| August 2021 | April 1 - June 30, 2020 | |||||||||||||||||||||||||||||||
| 2020 | ||||||||||||||||||||||||||||||||
| February 2020 | October 1 - December 31, 2019 | $ | $ | $ | $ | |||||||||||||||||||||||||||
| May 2020 | January 1 - March 31, 2020 | |||||||||||||||||||||||||||||||
June 2020 (2) | January 1 - March 31, 2020 | |||||||||||||||||||||||||||||||
| August 2020 | April 1 - June 30, 2020 | |||||||||||||||||||||||||||||||
(1)Totals include the amount paid to NRP's general partner in accordance with the general partner's 2 % general partner interest.
(2)Redemption of preferred units paid in kind plus accrued interest.
4. Net Income (Loss) Per Common Unit
Basic net income (loss) per common unit is computed by dividing net income (loss), after considering income attributable to preferred unitholders and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income (loss) per common unit includes the effect of NRP's preferred units, warrants, and unvested unit-based awards if the inclusion of these items is dilutive.
The dilutive effect of the preferred units is calculated using the if-converted method. Under the if-converted method, the preferred units are assumed to be converted at the beginning of the period, and the resulting common units are included in the denominator of the diluted net income (loss) per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the preferred units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation. The calculation of diluted net income per common unit for the three and nine months ended September 30, 2021 includes the assumed conversion of the preferred units. The calculation of diluted net income (loss) per common unit for the three and nine months ended September 30, 2020 does not include the assumed conversion of the preferred units because the impact would have been anti-dilutive.
9
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
The dilutive effect of the warrants is calculated using the treasury stock method, which assumes that the proceeds from the exercise of these instruments are used to purchase common units at the average market price for the period. The calculation of diluted net income (loss) per common unit for the three and nine months ended September 30, 2021 and 2020 does not include the net settlement of warrants to purchase 1.75 22.81 2.25 34.00
The following tables reconcile the numerator and denominator of the basic and diluted net income (loss) per common unit computations and calculates basic and diluted net income (loss) per common unit:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands, except per unit data) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Allocation of net income (loss) | |||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||
| Less: income attributable to preferred unitholders | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) attributable to common unitholders and the general partner | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Add (less): net loss (income) attributable to the general partner | ( | ( | |||||||||||||||||||||
| Net income (loss) attributable to common unitholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Basic net income (loss) per common unit | |||||||||||||||||||||||
| Weighted average common units—basic | |||||||||||||||||||||||
| Basic net income (loss) per common unit | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted net income (loss) per common unit | |||||||||||||||||||||||
| Weighted average common units—basic | |||||||||||||||||||||||
| Plus: dilutive effect of preferred units | |||||||||||||||||||||||
| Plus: dilutive effect of unvested unit-based awards | |||||||||||||||||||||||
| Weighted average common units—diluted | |||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||
| Less: income attributable to preferred unitholders | ( | ( | |||||||||||||||||||||
| Diluted net income (loss) attributable to common unitholders and the general partner | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Add (less): diluted net loss (income) attributable to the general partner | ( | ( | |||||||||||||||||||||
| Diluted net income (loss) attributable to common unitholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted net income (loss) per common unit | $ | $ | ( | $ | $ | ( | |||||||||||||||||
10
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
5. Segment Information
The Partnership's segments are strategic business units that offer distinct products and services to different customers in different geographies within the U.S. and that are managed accordingly. NRP has the following two operating segments:
Coal Royalty and Other—consists primarily of coal royalty properties and coal-related transportation and processing assets. Other assets include industrial mineral royalty properties, aggregates royalty properties, oil and gas royalty properties and timber. The Partnership's coal reserves are primarily located in Appalachia, the Illinois Basin and the Northern Powder River Basin in the United States. The Partnership's industrial minerals and aggregates properties are located in various states across the United States. The Partnership's oil and gas royalty assets are primarily located in Louisiana and its timber assets are primarily located in West Virginia.
Soda Ash—consists of the Partnership's 49 % non-controlling equity interest in Ciner Wyoming, a trona ore mining operation and soda ash refinery in the Green River Basin of Wyoming. Ciner Wyoming mines trona and processes it into soda ash that is sold both domestically and internationally to the glass and chemicals industries.
Direct segment costs and certain other costs incurred at the corporate level that are identifiable and that benefit the Partnership's segments are allocated to the operating segments accordingly. These allocated costs generally include salaries and benefits, insurance, property taxes, legal, royalty, information technology and shared facilities services and are included in operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss).
Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment and are included in general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss).
11
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
The following table summarizes certain financial information for each of the Partnership's business segments:
| Operating Segments | ||||||||||||||||||||||||||
| (In thousands) | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | ||||||||||||||||||||||
| For the Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Gain on asset sales and disposals | ||||||||||||||||||||||||||
| Operating and maintenance expenses | ||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Asset impairments | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Net income (loss) | ( | |||||||||||||||||||||||||
| For the Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Operating and maintenance expenses | ||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Asset impairment | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Net income (loss) | ( | |||||||||||||||||||||||||
| For the Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Gain on asset sales and disposals | ||||||||||||||||||||||||||
| Operating and maintenance expenses | ||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Asset impairments | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Net income (loss) | ( | |||||||||||||||||||||||||
| For the Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Gain on asset sales and disposals | ||||||||||||||||||||||||||
| Operating and maintenance expenses | ||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Asset impairments | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Net income (loss) | ( | ( | ( | |||||||||||||||||||||||
12
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
6. Equity Investment
The Partnership accounts for its 49 % investment in Ciner Wyoming using the equity method of accounting. Activity related to this investment is as follows:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Income allocation to NRP’s equity interests | |||||||||||||||||||||||
| Amortization of basis difference | ( | ( | ( | ( | |||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||
| Distribution | ( | ( | |||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
The following table represents summarized financial information for Ciner Wyoming as derived from their respective unaudited financial statements for the three and nine months ended September 30, 2021 and 2020:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
7. Mineral Rights, Net
The Partnership’s mineral rights consist of the following:
| September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
| (In thousands) | Carrying Value | Accumulated Depletion | Net Book Value | Carrying Value | Accumulated Depletion | Net Book Value | |||||||||||||||||||||||||||||
| Coal properties | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Aggregates properties | ( | ( | |||||||||||||||||||||||||||||||||
| Oil and gas royalty properties | ( | ( | |||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||
| Total mineral rights, net | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income (Loss) and totaled $4.6 million and $2.1 million for the three months ended September 30, 2021 and 2020, respectively, and $13.8 million and $6.0 million for the nine months ended September 30, 2021 and 2020, respectively.
13
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
8. Debt, Net
The Partnership's debt consists of the following:
| September 30, | December 31, | ||||||||||
| (In thousands) | 2021 | 2020 | |||||||||
| NRP LP debt: | |||||||||||
| $ | $ | ||||||||||
| Opco debt: | |||||||||||
| Revolving credit facility | $ | $ | |||||||||
| Senior Notes | |||||||||||
| $ | $ | ||||||||||
| Total Opco Senior Notes | $ | $ | |||||||||
| Total debt at face value | $ | $ | |||||||||
| Net unamortized debt issuance costs | ( | ( | |||||||||
| Total debt, net | $ | $ | |||||||||
| Less: current portion of long-term debt | ( | ( | |||||||||
| Total long-term debt, net | $ | $ | |||||||||
NRP LP Debt
2025 Senior Notes
The 2025 Senior Notes were issued under an Indenture dated as of April 29, 2019 (the "2025 Indenture"), bear interest at 9.125 % per year and mature on June 30, 2025. Interest is payable semi-annually on June 30 and December 30.
14
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
NRP and NRP Finance have the option to redeem the 2025 Senior Notes, in whole or in part, at any time on or after October 30, 2021, at the redemption prices (expressed as percentages of principal amount) of 104.563 % for the 12-month period beginning October 30, 2021, 102.281 % for the 12-month period beginning October 30, 2022, and thereafter at 100.000 %, together, in each case, with any accrued and unpaid interest to the date of redemption. Furthermore, before October 30, 2021, NRP may on any one or more occasions redeem up to 35 % of the aggregate principal amount of the 2025 Senior Notes with the net proceeds of certain public or private equity offerings at a redemption price of 109.125 % of the principal amount of 2025 Senior Notes, plus any accrued and unpaid interest, if any, to the date of redemption, if at least 65 % of the aggregate principal amount of the 2025 Senior Notes issued under the 2025 Indenture remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering. In the event of a change of control, as defined in the 2025 Indenture, the holders of the 2025 Senior Notes may require us to purchase their 2025 Senior Notes at a purchase price equal to 101 % of the principal amount of the 2025 Senior Notes, plus accrued and unpaid interest, if any. The 2025 Senior Notes were issued at par.
The 2025 Senior Notes are the senior unsecured obligations of NRP and NRP Finance. The 2025 Senior Notes rank equal in right of payment to all existing and future senior unsecured debt of NRP and NRP Finance and senior in right of payment to any of NRP's subordinated debt. The 2025 Senior Notes are effectively subordinated in right of payment to all future secured debt of NRP and NRP Finance to the extent of the value of the collateral securing such indebtedness and are structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries, including the Opco Credit Facility and each series of Opco’s existing senior notes. "Opco" refers to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. None of NRP's subsidiaries guarantee the 2025 Senior Notes. As of September 30, 2021 and December 31, 2020, NRP and NRP Finance were in compliance with the terms of the Indenture relating to their 2025 Senior Notes.
Opco Debt
All of Opco’s debt is guaranteed by its wholly owned subsidiaries and is secured by certain of the assets of Opco and its wholly owned subsidiaries, other than BRP LLC and NRP Trona LLC. As of September 30, 2021 and December 31, 2020, Opco was in compliance with the terms of the financial covenants contained in its debt agreements.
Opco Credit Facility
In April 2019, the Partnership entered into the Fourth Amendment (the “Fourth Amendment”) to the Opco Credit Facility (the "Opco Credit Facility"). The Fourth Amendment extended the term of the Opco Credit Facility until April 2023. Lender commitments under the Opco Credit Facility remain at $100.0
•A leverage ratio of consolidated indebtedness to EBITDDA (as defined in the Opco Credit Facility) not to exceed 4.0 x; provided, however, that if the Partnership increases its quarterly distribution to its common unitholders above $0.45 per common unit, the maximum leverage ratio under the Opco Credit Facility will permanently decrease from 4.0 x to 3.0 x; and
•a fixed charge coverage ratio of consolidated EBITDDA to consolidated fixed charges (consisting of consolidated interest expense and consolidated lease expense) of not less than 3.5 to 1.0.
During the three and nine months ended September 30, 2021 and 2020, the Partnership did not have any borrowings outstanding under the Opco Credit Facility and had $100.0
The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of $352.1 million and $364.5 million classified as mineral rights, net and other long-term assets, net on the Partnership’s Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020, respectively.
15
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
Opco Senior Notes
Opco has issued several series of private placement senior notes (the "Opco Senior Notes") with various interest rates and principal due dates. As of September 30, 2021 and December 31, 2020, the Opco Senior Notes had cumulative principal balances of $158.8 million and $177.9 million, respectively. Opco made mandatory principal payments of $19.1 million and $25.8 million during the nine months ended September 30, 2021 and 2020, respectively.
The 8.92 % Opco Senior Notes also provides that in the event that Opco’s leverage ratio of consolidated indebtedness to consolidated EBITDDA (as defined in the Note Purchase Agreements) exceeds 3.75 to 1.00 at the end of any fiscal quarter, then in addition to all other interest accruing on these notes, additional interest in the amount of 2.00 % per annum shall accrue on the notes for the two succeeding quarters and for as long thereafter as the leverage ratio remains above 3.75 to 1.00. Opco has not exceeded the 3.75 to 1.00 ratio at the end of any fiscal quarter through September 30, 2021.
9. Fair Value Measurements
Fair Value of Financial Assets and Liabilities
The Partnership’s financial assets and liabilities consist of cash and cash equivalents, a contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents approximate fair value due to their short-term nature. The Partnership uses available market data and valuation methodologies to estimate the fair value of its debt and contract receivable.
The following table shows the carrying value and estimated fair value of the Partnership's debt and contract receivable:
| September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||
| (In thousands) | Fair Value Hierarchy Level | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||||||||||||||
| Debt: | |||||||||||||||||||||||||||||
| NRP 2025 Senior Notes | 1 | $ | $ | $ | $ | ||||||||||||||||||||||||
Opco Senior Notes (1) | 3 | ||||||||||||||||||||||||||||
| Opco Credit Facility | 3 | ||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
Contract receivable, net (current and long-term) (2) | 3 | $ | $ | $ | $ | ||||||||||||||||||||||||
(1)The fair value of the Opco Senior Notes are estimated by management using quotations obtained for the NRP 2025 Senior Notes on the closing trading prices near period end, which were at 101 % and 92 % of par value at September 30, 2021 and December 31, 2020, respectively.
16
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
10. Related Party Transactions
Affiliates of our General Partner
The Partnership’s general partner does not receive any management fee or other compensation for its management of NRP. However, in accordance with the partnership agreement, the general partner and its affiliates are reimbursed for services provided to the Partnership and for expenses incurred on the Partnership’s behalf. Employees of Quintana Minerals Corporation ("QMC") and Western Pocahontas Properties Limited Partnership ("WPPLP"), affiliates of the Partnership, provide their services to manage the Partnership's business. QMC and WPPLP charge the Partnership the portion of their employee salary and benefits costs related to their employee services provided to NRP. These QMC and WPPLP employee management service costs are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss). NRP also reimburses overhead costs incurred by its affiliates, including Quintana Infrastructure Development ("QID"), to manage the Partnership's business. These overhead costs include certain rent, information technology, administration of employee benefits and other corporate services incurred by or on behalf of the Partnership’s general partner and its affiliates and are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss).
Direct general and administrative expenses charged to the Partnership by QMC, WPPLP and QID are included on the Partnership's Consolidated Statement of Comprehensive Income (Loss) as follows:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Operating and maintenance expenses | $ | $ | $ | $ | |||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
The Partnership had accounts payable on its Consolidated Balance Sheets of $0.4 0.3
During the three months ended September 30, 2021 and 2020, the Partnership recognized $0.9 million and $0.2 million, respectively, in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income (Loss) related to an overriding royalty agreement with WPPLP. These amounts were $2.1 million and $0.3 million during the nine months ended September 30, 2021 and 2020, respectively. At December 31, 2020 the Partnership had $0.3 million of other long-term assets, net on its Consolidated Balance Sheets related to a prepaid royalty for this agreement.
11. Major Customers
Revenues from customers that exceeded 10 percent of total revenues for any of the periods presented below are as follows:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Revenues | Percent | Revenues | Percent | Revenues | Percent | Revenues | Percent | ||||||||||||||||||||||||||||||||||||||||||
Foresight Energy Resources LLC ("Foresight") (1) (2) | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||
Alpha Metallurgical Resources, Inc. (1) | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||
(1)Revenues from Foresight and Alpha Metallurgical Resources, Inc. (formerly Contura Energy Inc.) are included within the Partnership's Coal Royalty and Other segment.
17
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
12. Commitments and Contingencies
13. Unit-Based Compensation
The Partnership's unit-based awards granted in 2021 and 2020 were valued using the closing price of NRP's common units as of the grant date. The grant date fair value of these awards granted during the nine months ended September 30, 2021 and 2020 were $3.8 million and $3.5 million, respectively. Total unit-based compensation expense associated with these awards was $1.1 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $2.8 million and $2.6 million for the nine months ended September 30, 2021 and 2020, respectively, and is included in general and administrative expenses and operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss). The unamortized cost associated with unvested outstanding awards as of September 30, 2021 is $4.2 million, which is to be recognized over a weighted average period of 1.7 years. The unamortized cost associated with unvested outstanding awards as of December 31, 2020 was $3.7 million.
A summary of the unit activity in the outstanding grants during 2021 is as follows:
| (In thousands) | Common Units | Weighted Average Exercise Price | |||||||||
| Outstanding at January 1, 2021 | $ | ||||||||||
| Granted | $ | ||||||||||
| Fully vested and issued | ( | $ | |||||||||
| Forfeitures | ( | $ | |||||||||
| Outstanding at September 30, 2021 | $ | ||||||||||
14. Financing Transaction
15. Credit Losses
18
NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)
As of September 30, 2021 and December 31, 2020, NRP had the following current expected credit loss (“CECL”) allowance related to its receivables and long-term contract receivable:
| September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||
| (In thousands) | Gross | CECL Allowance | Net | Gross | CECL Allowance | Net | ||||||||||||||||||||||||||||||||
| Receivables | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Long-term contract receivable | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
NRP recorded $0.5 million and $0.3 million in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income (Loss) related to the change in the CECL allowance during the three months ended September 30, 2021 and 2020, respectively, and $(0.2 ) million and $0.0 million during the nine months ended September 30, 2021 and 2020, respectively.
NRP has procedures in place to monitor its ongoing credit exposure through timely review of counterparty balances against contract terms and due dates, account and financing receivable reconciliation, bankruptcy monitoring, lessee audits and dispute resolution. The Partnership may employ legal counsel or collection specialists to pursue recovery of defaulted receivables.
16. Subsequent Events
The following represents material events that have occurred subsequent to September 30, 2021 through the time of the Partnership’s filing of its Quarterly Report on Form 10-Q with the SEC:
Common Unit and Preferred Unit Distributions
In November 2021, the Board of Directors declared a distribution of $0.45 per common unit with respect to the third quarter of 2021. The Board of Directors also declared a distribution on NRP's preferred units with respect to the third quarter of 2021 to be paid one-half in cash equal to $3.98 million and one-half in kind through the issuance of 3,980 additional preferred units.
19
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following review of operations for the three and nine month periods ended September 30, 2021 and 2020 should be read in conjunction with our Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in this Form 10-Q and with the Consolidated Financial Statements, Notes to Consolidated Financial Statements and Management’s Discussion and Analysis included in the Natural Resource Partners L.P. Annual Report on Form 10-K for the year ended December 31, 2020.
As used herein, unless the context otherwise requires: "we," "our," "us" and the "Partnership" refer to Natural Resource Partners L.P. and, where the context requires, our subsidiaries. References to "NRP" and "Natural Resource Partners" refer to Natural Resource Partners L.P. only, and not to NRP (Operating) LLC or any of Natural Resource Partners L.P.’s subsidiaries. References to "Opco" refer to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. NRP Finance Corporation ("NRP Finance") is a wholly owned subsidiary of NRP and a co-issuer with NRP on the 9.125% senior notes due 2025 (the "2025 Senior Notes").
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Statements included in this 10-Q may constitute forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are also forward-looking statements. Such forward-looking statements include, among other things, statements regarding: the effects of the global COVID-19 pandemic; our business strategy; our liquidity and access to capital and financing sources; our financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected production levels by our lessees; Ciner Wyoming LLC’s ("Ciner Wyoming's") trona mining and soda ash refinery operations; distributions from our soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us, and of scheduled or potential regulatory or legal changes; and global and U.S. economic conditions.
These forward-looking statements speak only as of the date hereof and are made based upon our current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. You should not put undue reliance on any forward-looking statements. See "Item 1A. Risk Factors" included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2020 for important factors that could cause our actual results of operations or our actual financial condition to differ.
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment, net income attributable to non-controlling interest and gain on reserve swap; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. For a description of Opco's debt agreements, see Note 8. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note 11. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, 2020. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.
20
Distributable Cash Flow
Distributable cash flow ("DCF") represents net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivables; less maintenance capital expenditures and distributions to non-controlling interest. DCF 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. DCF may not be calculated the same for us as for other companies. In addition, DCF presented below is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. DCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to asses our ability to make cash distributions and repay debt.
Free Cash Flow
Free cash flow ("FCF") represents net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivables; less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. FCF 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. FCF may not be calculated the same for us as for other companies. FCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.
Introduction
The following discussion and analysis presents management's view of our business, financial condition and overall performance. Our discussion and analysis consists of the following subjects:
•Executive Overview
•Results of Operations
•Liquidity and Capital Resources
•Off-Balance Sheet Transactions
•Related Party Transactions
•Summary of Critical Accounting Estimates
•Recent Accounting Standards
21
Executive Overview
We are a diversified natural resource company engaged principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and own a non-controlling 49% interest in Ciner Wyoming, a trona ore mining and soda ash production business. Our common units trade on the New York Stock Exchange under the symbol "NRP." Our business is organized into two operating segments:
Coal Royalty and Other—consists primarily of coal royalty properties and coal-related transportation and processing assets. Other assets include industrial mineral royalty properties, aggregates royalty properties, oil and gas royalty properties and timber. Our coal reserves are primarily located in Appalachia, the Illinois Basin and the Northern Powder River Basin in the United States. Our industrial minerals and aggregates properties are located in various states across the United States, our oil and gas royalty assets are primarily located in Louisiana and our timber assets are primarily located in West Virginia.
Soda Ash—consists of our 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining and soda ash production business located in the Green River Basin of Wyoming. Ciner Wyoming mines the trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries.
In addition to actively managing our producing coal and hard mineral properties, we continue to identify alternative revenue sources across our large portfolio of land, mineral and timber assets. The types of opportunities include the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar and wind energy. In the fourth quarter of this year, we were able to execute on one such project through the issuance and subsequent sale of 1.1 million forest carbon offset credits for $13.8 million. The offset credits were issued to us by the California Air Resources Board under its cap-and-trade program and represent 1.1 million tonnes of carbon sequestered from approximately 39,000 acres of our forest assets in West Virginia. This is an encouraging first step in our ability to create value through alternative revenue sources. While the timing and likelihood of additional cash flows being realized from further activities is uncertain, we believe our large ownership footprint throughout the United States will provide additional opportunities to create value in this regard with minimal capital investment.
Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment.
Our financial results by segment for the nine months ended September 30, 2021 are as follows:
| Operating Segments | ||||||||||||||||||||||||||
| (In thousands) | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | ||||||||||||||||||||||
| Revenues and other income | $ | 121,210 | $ | 11,246 | $ | — | $ | 132,456 | ||||||||||||||||||
| Net income (loss) | $ | 82,980 | $ | 11,115 | $ | (40,834) | $ | 53,261 | ||||||||||||||||||
Adjusted EBITDA (1) | $ | 102,265 | $ | 3,789 | $ | (11,550) | $ | 94,504 | ||||||||||||||||||
| Cash flow provided by (used in) continuing operations | ||||||||||||||||||||||||||
| Operating activities | $ | 91,958 | $ | 3,817 | $ | (29,132) | $ | 66,643 | ||||||||||||||||||
| Investing activities | $ | 1,871 | $ | — | $ | — | $ | 1,871 | ||||||||||||||||||
| Financing activities | $ | (1,132) | $ | — | $ | (48,183) | $ | (49,315) | ||||||||||||||||||
Distributable cash flow (1) | $ | 93,829 | $ | 3,817 | $ | (29,132) | $ | 68,514 | ||||||||||||||||||
Free cash flow (1) | $ | 92,580 | $ | 3,817 | $ | (29,132) | $ | 67,265 | ||||||||||||||||||
(1)See "—Results of Operations" below for reconciliations to the most comparable GAAP financial measures.
22
Current Results/Market Commentary
Business Outlook and Quarterly Distributions
We generated $67.3 million of free cash flow during the nine months ended September 30, 2021, and ended the quarter with $219.0 million of liquidity consisting of $119.0 million of cash and cash equivalents and $100.0 million of borrowing capacity under our Opco Credit Facility.
Our liquidity has remained steady and our consolidated leverage ratio has decreased to 3.8x at September 30, 2021. The indenture governing our 2025 parent company notes restricts us from paying more than one-half of the quarterly distribution on our preferred units in cash if our consolidated leverage ratio exceeds 3.75x. Accordingly, the Board of Directors of our general partner has declared a distribution on our preferred units to be paid one-half in kind through the issuance of additional preferred units (“PIK units”) for the past five quarters. While our leverage ratio is currently above the 3.75x threshold, as a result of the strong coal and soda ash pricing expected in the fourth quarter and the forest carbon offset transaction described above, we expect our leverage ratio to be below the 3.75x threshold by December 31, 2021. If this occurs, we plan to redeem our outstanding paid-in-kind preferred units and continue paying cash distributions to our common unitholders. If our consolidated leverage ratio were to remain above 3.75x and we remain unable to redeem our outstanding paid-in-kind preferred units, we would be required to temporarily suspend distributions on our common units until the leverage ratio drops below 3.75x and the outstanding paid-in-kind preferred units are redeemed. Additionally, we expect our leverage ratio to continue its long-term decline as we pay down debt.
Future distributions on our common and preferred units and decisions regarding paid-in-kind preferred unit redemptions will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, covenants in our debt and partnership agreements, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs.
Coal Royalty and Other Business Segment
Metallurgical coal markets have rebounded significantly from the lows seen in 2020 to record highs and the outlook remains strong as steel demand driven by global economic recovery is more than offsetting challenges related to the COVID-19 pandemic. Domestic and export thermal coal markets have also significantly improved from the lows seen in 2020, however we do not have meaningful sensitivity to thermal coal price movements this year since the substantial majority of our thermal cash flows are fixed through 2021 pursuant to a contract with Foresight Energy ("Foresight") that went into effect as they emerged from bankruptcy in 2020. While there is potential for us to capture upside from improved thermal coal demand and pricing in 2022, thermal coal markets still face the long-term challenges of lower electricity demand, competition from natural gas and the secular shift to renewable energy.
Our lessees sold 21.1 million tons of coal from our properties in the first nine months of 2021 and we derived approximately 60% of our coal royalty revenues and approximately 45% of our coal royalty sales volumes from metallurgical coal during the same period.
Soda Ash Business Segment
Ciner Wyoming's business continues to recover to pre-COVID-19 levels. While we believe Ciner Wyoming's facility is competitively positioned as one of the lowest cost producers of soda ash in the world, we expect the market to remain volatile as a result of ongoing uncertainties with the COVID-19 pandemic.
Revenues and other income in the first nine months of 2021 were higher by $6.0 million compared to the prior year period as demand for soda ash continues to improve globally from the lows caused by the COVID-19 pandemic.
We received a special distribution of $3.9 million in the first nine months of 2021 as compared to $14.2 million of regular quarterly distributions received in the first nine months of 2020. In order to have financial flexibility during the COVID-19 pandemic, Ciner Wyoming suspended its regular quarterly distributions in the third quarter of 2020. As a result of the continued improvement in global soda ash demand and pricing, Ciner Wyoming reinstated its quarterly cash distribution and NRP will receive $7.4 million in the fourth quarter of 2021.
23
When considering the significant investment required by Ciner Wyoming’s previously announced expansion project and the infrastructure improvements designed to increase overall efficiency, combined with the COVID-19 pandemic’s negative impact on Ciner Wyoming’s financial results, Ciner Wyoming has reprioritized the timing of the significant capital expenditure items in order to increase financial and liquidity flexibility until it has more clarity and visibility into the ongoing impact of the COVID-19 pandemic on its business.
Results of Operations
Third Quarter of 2021 and 2020 Compared
Revenues and Other Income
The following table includes our revenues and other income by operating segment:
| For the Three Months Ended September 30, | Increase | Percentage Change | ||||||||||||||||||||||||
| Operating Segment (In thousands) | 2021 | 2020 | ||||||||||||||||||||||||
| Coal Royalty and Other | $ | 50,123 | $ | 27,944 | $ | 22,179 | 79 | % | ||||||||||||||||||
| Soda Ash | 6,672 | 1,986 | 4,686 | 236 | % | |||||||||||||||||||||
| Total | $ | 56,795 | $ | 29,930 | $ | 26,865 | 90 | % | ||||||||||||||||||
The changes in revenues and other income is discussed for each of the operating segments below:
24
Coal Royalty and Other
The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:
| For the Three Months Ended September 30, | Increase (Decrease) | Percentage Change | |||||||||||||||||||||
| (In thousands, except per ton data) | 2021 | 2020 | |||||||||||||||||||||
| Coal sales volumes (tons) | |||||||||||||||||||||||
| Appalachia | |||||||||||||||||||||||
| Northern | 422 | 102 | 320 | 314 | % | ||||||||||||||||||
| Central | 3,199 | 2,247 | 952 | 42 | % | ||||||||||||||||||
| Southern | 642 | 172 | 470 | 273 | % | ||||||||||||||||||
| Total Appalachia | 4,263 | 2,521 | 1,742 | 69 | % | ||||||||||||||||||
| Illinois Basin | 2,689 | 758 | 1,931 | 255 | % | ||||||||||||||||||
| Northern Powder River Basin | 1,047 | 365 | 682 | 187 | % | ||||||||||||||||||
| Gulf Coast | 13 | — | 13 | 100 | % | ||||||||||||||||||
| Total coal sales volumes | 8,012 | 3,644 | 4,368 | 120 | % | ||||||||||||||||||
| Coal royalty revenue per ton | |||||||||||||||||||||||
| Appalachia | |||||||||||||||||||||||
| Northern | $ | 7.18 | $ | 3.06 | $ | 4.12 | 135 | % | |||||||||||||||
| Central | 5.74 | 3.83 | 1.91 | 50 | % | ||||||||||||||||||
| Southern | 11.61 | 4.78 | 6.83 | 143 | % | ||||||||||||||||||
| Illinois Basin | 2.33 | 1.63 | 0.70 | 43 | % | ||||||||||||||||||
| Northern Powder River Basin | 3.71 | 3.46 | 0.25 | 7 | % | ||||||||||||||||||
| Gulf Coast | 0.54 | — | 0.54 | 100 | % | ||||||||||||||||||
| Combined average coal royalty revenue per ton | 4.87 | 3.36 | 1.51 | 45 | % | ||||||||||||||||||
| Coal royalty revenues | |||||||||||||||||||||||
| Appalachia | |||||||||||||||||||||||
| Northern | $ | 3,031 | $ | 312 | $ | 2,719 | 871 | % | |||||||||||||||
| Central | 18,357 | 8,602 | 9,755 | 113 | % | ||||||||||||||||||
| Southern | 7,452 | 823 | 6,629 | 805 | % | ||||||||||||||||||
| Total Appalachia | 28,840 | 9,737 | 19,103 | 196 | % | ||||||||||||||||||
| Illinois Basin | 6,261 | 1,234 | 5,027 | 407 | % | ||||||||||||||||||
| Northern Powder River Basin | 3,881 | 1,262 | 2,619 | 208 | % | ||||||||||||||||||
| Gulf Coast | 7 | — | 7 | 100 | % | ||||||||||||||||||
| Unadjusted coal royalty revenues | 38,989 | 12,233 | 26,756 | 219 | % | ||||||||||||||||||
| Coal royalty adjustment for minimum leases | (6,557) | (1,623) | (4,934) | (304) | % | ||||||||||||||||||
| Total coal royalty revenues | $ | 32,432 | $ | 10,610 | $ | 21,822 | 206 | % | |||||||||||||||
| Other revenues | |||||||||||||||||||||||
| Production lease minimum revenues | $ | 3,235 | $ | 4,267 | $ | (1,032) | (24) | % | |||||||||||||||
| Minimum lease straight-line revenues | 4,808 | 3,553 | 1,255 | 35 | % | ||||||||||||||||||
| Property tax revenues | 1,466 | 1,896 | (430) | (23) | % | ||||||||||||||||||
| Wheelage revenues | 1,964 | 1,680 | 284 | 17 | % | ||||||||||||||||||
| Coal overriding royalty revenues | 757 | 1,314 | (557) | (42) | % | ||||||||||||||||||
| Lease amendment revenues | 1,519 | 858 | 661 | 77 | % | ||||||||||||||||||
| Aggregates royalty revenues | 429 | 221 | 208 | 94 | % | ||||||||||||||||||
| Oil and gas royalty revenues | 1,154 | 1,078 | 76 | 7 | % | ||||||||||||||||||
| Other revenues | 120 | 263 | (143) | (54) | % | ||||||||||||||||||
| Total other revenues | $ | 15,452 | $ | 15,130 | $ | 322 | 2 | % | |||||||||||||||
| Coal royalty and other | $ | 47,884 | $ | 25,740 | $ | 22,144 | 86 | % | |||||||||||||||
| Transportation and processing services revenues | 2,171 | 2,204 | (33) | (1) | % | ||||||||||||||||||
| Gain on asset sales and disposals | 68 | — | 68 | 100 | % | ||||||||||||||||||
| Total Coal Royalty and Other segment revenues and other income | $ | 50,123 | $ | 27,944 | $ | 22,179 | 79 | % | |||||||||||||||
25
Coal Royalty Revenues
Approximately 65% of coal royalty revenues and approximately 45% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, 2021. Total coal royalty revenues increased $21.8 million as compared to the prior year quarter as a result of increased demand and pricing for both metallurgical and thermal coals. The discussion by region is as follows:
•Appalachia: Coal royalty revenues increased $19.1 million primarily due to a 69% increase in sales volumes in addition to higher sales prices as compared to the prior year quarter.
•Illinois Basin: Coal royalty revenues increased $5.0 million primarily due to a 255% increase in sales volumes and a 43% increase in sales prices for the three months ended September 30, 2021 as compared to the prior year quarter. In the second quarter of 2020, we entered into lease amendments with Foresight pursuant to which Foresight agreed to pay us fixed cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between us and Foresight for calendar years 2020 and 2021. As a result of these amendments, actual revenues recognized from Foresight were flat period-over-period.
•Northern Powder River Basin: Coal royalty revenues increased $2.6 million primarily due to a 187% increase in sales volumes as our lessee mined on our property more during the third quarter of 2021 as compared to the prior year quarter in accordance with its mine plan in addition to a 7% increase in sales prices as compared to the prior year quarter.
Soda Ash
Revenues and other income related to our Soda Ash segment increased $4.7 million compared to the prior year quarter as demand for soda ash continues to improve globally from the lows caused by the COVID-19 pandemic.
Operating Expenses
The following table presents the significant categories of our consolidated operating expenses:
| For the Three Months Ended September 30, | Increase (Decrease) | Percentage Change | ||||||||||||||||||||||||
| (In thousands) | 2021 | 2020 | ||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Operating and maintenance expenses | $ | 8,354 | $ | 5,781 | $ | 2,573 | 45 | % | ||||||||||||||||||
| Depreciation, depletion and amortization | 5,182 | 2,111 | 3,071 | 145 | % | |||||||||||||||||||||
| General and administrative expenses | 4,052 | 3,634 | 418 | 12 | % | |||||||||||||||||||||
| Asset impairments | 57 | 934 | (877) | (94) | % | |||||||||||||||||||||
| Total operating expenses | $ | 17,645 | $ | 12,460 | $ | 5,185 | 42 | % | ||||||||||||||||||
Total operating expenses increased $5.2 million primarily due to a $3.1 million increase in depreciation, depletion and amortization expense as a result of increased production at certain Illinois Basin coal properties. Additionally, operating and maintenance expenses increased $2.6 million primarily due to an increase in bad debt expense as compared to the prior year quarter.
26
Adjusted EBITDA (Non-GAAP Financial Measure)
The following table reconciles net income (loss) (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:
| Operating Segments | ||||||||||||||||||||||||||
| For the Three Months Ended (In thousands) | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | ||||||||||||||||||||||
| September 30, 2021 | ||||||||||||||||||||||||||
| Net income (loss) | $ | 36,606 | $ | 6,596 | $ | (13,704) | $ | 29,498 | ||||||||||||||||||
| Less: equity earnings from unconsolidated investment | — | (6,672) | — | (6,672) | ||||||||||||||||||||||
| Add: interest expense, net | — | — | 9,652 | 9,652 | ||||||||||||||||||||||
| Add: depreciation, depletion and amortization | 5,182 | — | — | 5,182 | ||||||||||||||||||||||
| Add: asset impairments | 57 | — | — | 57 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 41,845 | $ | (76) | $ | (4,052) | $ | 37,717 | ||||||||||||||||||
| September 30, 2020 | ||||||||||||||||||||||||||
| Net loss | $ | 19,173 | $ | 1,890 | $ | (13,847) | $ | 7,216 | ||||||||||||||||||
| Less: equity earnings from unconsolidated investment | — | (1,986) | — | (1,986) | ||||||||||||||||||||||
| Add: interest expense, net | 41 | — | 10,213 | 10,254 | ||||||||||||||||||||||
| Add: depreciation, depletion and amortization | 2,111 | — | — | 2,111 | ||||||||||||||||||||||
| Add: asset impairments | 934 | — | — | 934 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 22,259 | $ | (96) | $ | (3,634) | $ | 18,529 | ||||||||||||||||||
Adjusted EBITDA increased $19.2 million primarily due to a $19.6 million increase in Adjusted EBITDA within our Coal Royalty and Other segment as a result of higher revenues and other income, partially offset by higher operating and maintenance expenses, both discussed above.
Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)
The following table presents the three major categories of the statement of cash flows by business segment:
| Operating Segments | ||||||||||||||||||||||||||
| For the Three Months Ended (In thousands) | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | ||||||||||||||||||||||
| September 30, 2021 | ||||||||||||||||||||||||||
| Cash flow provided by (used in) continuing operations | ||||||||||||||||||||||||||
| Operating activities | $ | 33,968 | $ | (36) | $ | (3,873) | $ | 30,059 | ||||||||||||||||||
| Investing activities | 614 | — | — | 614 | ||||||||||||||||||||||
| Financing activities | — | — | (9,592) | (9,592) | ||||||||||||||||||||||
| September 30, 2020 | ||||||||||||||||||||||||||
| Cash flow provided by (used in) continuing operations | ||||||||||||||||||||||||||
| Operating activities | $ | 28,573 | $ | (75) | $ | (4,175) | $ | 24,323 | ||||||||||||||||||
| Investing activities | 332 | — | — | 332 | ||||||||||||||||||||||
| Financing activities | — | — | (19,910) | (19,910) | ||||||||||||||||||||||
27
The following table reconciles net cash provided by (used in) operating activities of continuing operations (the most comparable GAAP financial measure) by business segment to DCF and FCF:
| Operating Segments | ||||||||||||||||||||||||||
| For the Three Months Ended (In thousands) | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | ||||||||||||||||||||||
| September 30, 2021 | ||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 33,968 | $ | (36) | $ | (3,873) | $ | 30,059 | ||||||||||||||||||
| Add: proceeds from asset sales and disposals | 74 | — | — | 74 | ||||||||||||||||||||||
| Add: return of long-term contract receivable | 540 | — | — | 540 | ||||||||||||||||||||||
| Distributable cash flow | $ | 34,582 | $ | (36) | $ | (3,873) | $ | 30,673 | ||||||||||||||||||
| Less: proceeds from asset sales and disposals | (74) | — | — | (74) | ||||||||||||||||||||||
| Free cash flow | $ | 34,508 | $ | (36) | $ | (3,873) | $ | 30,599 | ||||||||||||||||||
| September 30, 2020 | ||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 28,573 | $ | (75) | $ | (4,175) | $ | 24,323 | ||||||||||||||||||
| Add: return of long-term contract receivable | 332 | — | — | 332 | ||||||||||||||||||||||
| Distributable cash flow and free cash flow | $ | 28,905 | $ | (75) | $ | (4,175) | $ | 24,655 | ||||||||||||||||||
DCF and FCF increased $6.0 million and $5.9 million, respectively, primarily due to increased coal royalty cash flow as a result of stronger metallurgical coal demand and pricing in the third quarter of 2021.
Results of Operations
First Nine Months of 2021 and 2020 Compared
Revenues and Other Income
The following table includes our revenues and other income by operating segment:
| For the Nine Months Ended September 30, | Increase | Percentage Change | ||||||||||||||||||||||||
| Operating Segment (In thousands) | 2021 | 2020 | ||||||||||||||||||||||||
| Coal Royalty and Other | $ | 121,210 | $ | 95,955 | $ | 25,255 | 26 | % | ||||||||||||||||||
| Soda Ash | 11,246 | 5,200 | 6,046 | 116 | % | |||||||||||||||||||||
| Total | $ | 132,456 | $ | 101,155 | $ | 31,301 | 31 | % | ||||||||||||||||||
The changes in revenues and other income is discussed for each of the operating segments below:
28
Coal Royalty and Other
The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:
| For the Nine Months Ended September 30, | Increase (Decrease) | Percentage Change | |||||||||||||||||||||
| (In thousands, except per ton data) | 2021 | 2020 | |||||||||||||||||||||
| Coal sales volumes (tons) | |||||||||||||||||||||||
| Appalachia | |||||||||||||||||||||||
| Northern | 947 | 516 | 431 | 84 | % | ||||||||||||||||||
| Central | 8,824 | 7,643 | 1,181 | 15 | % | ||||||||||||||||||
| Southern | 1,058 | 820 | 238 | 29 | % | ||||||||||||||||||
| Total Appalachia | 10,829 | 8,979 | 1,850 | 21 | % | ||||||||||||||||||
| Illinois Basin | 7,987 | 1,841 | 6,146 | 334 | % | ||||||||||||||||||
| Northern Powder River Basin | 2,291 | 1,232 | 1,059 | 86 | % | ||||||||||||||||||
| Gulf Coast | 13 | — | 13 | 100 | % | ||||||||||||||||||
| Total coal sales volumes | 21,120 | 12,052 | 9,068 | 75 | % | ||||||||||||||||||
| Coal royalty revenue per ton | |||||||||||||||||||||||
| Appalachia | |||||||||||||||||||||||
| Northern | $ | 5.57 | $ | 2.22 | $ | 3.35 | 151 | % | |||||||||||||||
| Central | 4.91 | 4.28 | 0.63 | 15 | % | ||||||||||||||||||
| Southern | 9.82 | 4.70 | 5.12 | 109 | % | ||||||||||||||||||
| Illinois Basin | 2.13 | 2.48 | (0.35) | (14) | % | ||||||||||||||||||
| Northern Powder River Basin | 3.59 | 3.66 | (0.07) | (2) | % | ||||||||||||||||||
| Gulf Coast | 0.54 | — | 0.54 | 100 | % | ||||||||||||||||||
| Combined average coal royalty revenue per ton | 3.99 | 3.88 | 0.11 | 3 | % | ||||||||||||||||||
| Coal royalty revenues | |||||||||||||||||||||||
| Appalachia | |||||||||||||||||||||||
| Northern | $ | 5,272 | $ | 1,143 | $ | 4,129 | 361 | % | |||||||||||||||
| Central | 43,308 | 32,726 | 10,582 | 32 | % | ||||||||||||||||||
| Southern | 10,390 | 3,857 | 6,533 | 169 | % | ||||||||||||||||||
| Total Appalachia | 58,970 | 37,726 | 21,244 | 56 | % | ||||||||||||||||||
| Illinois Basin | 17,044 | 4,570 | 12,474 | 273 | % | ||||||||||||||||||
| Northern Powder River Basin | 8,222 | 4,510 | 3,712 | 82 | % | ||||||||||||||||||
| Gulf Coast | 7 | — | 7 | 100 | % | ||||||||||||||||||
| Unadjusted coal royalty revenues | 84,243 | 46,806 | 37,437 | 80 | % | ||||||||||||||||||
| Coal royalty adjustment for minimum leases | (18,148) | (6,247) | (11,901) | (191) | % | ||||||||||||||||||
| Total coal royalty revenues | $ | 66,095 | $ | 40,559 | $ | 25,536 | 63 | % | |||||||||||||||
| Other revenues | |||||||||||||||||||||||
| Production lease minimum revenues | $ | 10,241 | $ | 13,554 | $ | (3,313) | (24) | % | |||||||||||||||
| Minimum lease straight-line revenues | 15,773 | 12,349 | 3,424 | 28 | % | ||||||||||||||||||
| Property tax revenues | 4,522 | 4,256 | 266 | 6 | % | ||||||||||||||||||
| Wheelage revenues | 5,589 | 5,468 | 121 | 2 | % | ||||||||||||||||||
| Coal overriding royalty revenues | 3,592 | 3,319 | 273 | 8 | % | ||||||||||||||||||
| Lease amendment revenues | 3,159 | 2,591 | 568 | 22 | % | ||||||||||||||||||
| Aggregates royalty revenues | 1,339 | 1,068 | 271 | 25 | % | ||||||||||||||||||
| Oil and gas royalty revenues | 3,420 | 4,923 | (1,503) | (31) | % | ||||||||||||||||||
| Other revenues | 692 | 752 | (60) | (8) | % | ||||||||||||||||||
| Total other revenues | $ | 48,327 | $ | 48,280 | $ | 47 | — | % | |||||||||||||||
| Coal royalty and other | $ | 114,422 | $ | 88,839 | $ | 25,583 | 29 | % | |||||||||||||||
| Transportation and processing services revenues | 6,545 | 6,651 | (106) | (2) | % | ||||||||||||||||||
| Gain on asset sales and disposals | 243 | 465 | (222) | (48) | % | ||||||||||||||||||
| Total Coal Royalty and Other segment revenues and other income | $ | 121,210 | $ | 95,955 | $ | 25,255 | 26 | % | |||||||||||||||
29
Coal Royalty Revenues
Approximately 60% of coal royalty revenues and approximately 45% of coal royalty sales volumes were derived from metallurgical coal during the nine months ended September 30, 2021. Total coal royalty revenues increased $25.5 million during the nine months ended September 30, 2021 as compared to the prior year period primarily as a result of increased demand for both metallurgical and thermal coals from their lows in 2020 caused by the global COVID-19 pandemic. The discussion by region is as follows:
•Appalachia: Coal royalty revenues increased $21.2 million primarily due to a 21% increase in sales volumes in addition to higher sales prices as compared to the prior year period.
•Illinois Basin: Coal royalty revenues increased $12.5 million primarily due to a 334% increase in sales volumes, partially offset by a 14% decrease in sales prices as compared to the prior year period. As previously mentioned, in 2020 we entered into lease amendments with Foresight pursuant to which Foresight agreed to pay us fixed cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between the us and Foresight for calendar years 2020 and 2021 and as a result actual revenues from Foresight were flat period-over-period.
•Northern Powder River Basin: Coal royalty revenues increased $3.7 million primarily due to an 86% increase in sales volumes as our lessee mined on our property more during 2021 as compared to the prior year period in accordance with its mine plan, partially offset by a 2% decrease in sales prices as compared to the prior year period.
Soda Ash
Revenues and other income related to our Soda Ash segment increased $6.0 million compared to the prior year compared to the prior year period as demand for soda ash continues to improve globally from the lows caused by the COVID-19 pandemic.
Operating Expenses
The following table presents the significant categories of our consolidated operating expenses:
| For the Nine Months Ended September 30, | Increase (Decrease) | Percentage Change | ||||||||||||||||||||||||
| (In thousands) | 2021 | 2020 | ||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Operating and maintenance expenses | $ | 19,076 | $ | 19,200 | $ | (124) | (1) | % | ||||||||||||||||||
| Depreciation, depletion and amortization | 15,145 | 6,185 | 8,960 | 145 | % | |||||||||||||||||||||
| General and administrative expenses | 11,550 | 11,168 | 382 | 3 | % | |||||||||||||||||||||
| Asset impairments | 4,116 | 133,217 | (129,101) | (97) | % | |||||||||||||||||||||
| Total operating expenses | $ | 49,887 | $ | 169,770 | $ | (119,883) | (71) | % | ||||||||||||||||||
Total operating expenses decreased $119.9 million primarily due to a $129.1 million decrease in asset impairments. Asset impairments in the first nine months of 2021 primarily related to a lease termination while asset impairments in the first nine months of 2020 were due to weakened coal markets that resulted in termination of certain coal leases, changes to lessee mine plans resulting in permanent moves off certain of our coal properties and decreased oil and gas drilling activity which negatively impacted the outlook for NRP's frac sand properties. This decrease was partially offset by a $9.0 million increase in depreciation, depletion and amortization expense primarily as a result of increased production at certain Illinois Basin coal properties.
30
Adjusted EBITDA (Non-GAAP Financial Measure)
The following table reconciles net income (loss) (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:
| Operating Segments | ||||||||||||||||||||||||||
| For the Nine Months Ended (In thousands) | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | ||||||||||||||||||||||
| September 30, 2021 | ||||||||||||||||||||||||||
| Net income (loss) | $ | 82,980 | $ | 11,115 | $ | (40,834) | $ | 53,261 | ||||||||||||||||||
| Less: equity earnings from unconsolidated investment | — | (11,246) | — | (11,246) | ||||||||||||||||||||||
| Add: total distributions from unconsolidated investment | — | 3,920 | — | 3,920 | ||||||||||||||||||||||
| Add: interest expense, net | 24 | — | 29,284 | 29,308 | ||||||||||||||||||||||
| Add: depreciation, depletion and amortization | 15,145 | — | — | 15,145 | ||||||||||||||||||||||
| Add: asset impairments | 4,116 | — | — | 4,116 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 102,265 | $ | 3,789 | $ | (11,550) | $ | 94,504 | ||||||||||||||||||
| September 30, 2020 | ||||||||||||||||||||||||||
| Net income (loss) | $ | (62,562) | $ | 5,059 | $ | (42,003) | $ | (99,506) | ||||||||||||||||||
| Less: equity earnings from unconsolidated investment | — | (5,200) | — | (5,200) | ||||||||||||||||||||||
| Add: total distributions from unconsolidated investment | — | 14,210 | — | 14,210 | ||||||||||||||||||||||
| Add: interest expense, net | 56 | — | 30,835 | 30,891 | ||||||||||||||||||||||
| Add: depreciation, depletion and amortization | 6,185 | — | — | 6,185 | ||||||||||||||||||||||
| Add: asset impairments | 133,217 | — | — | 133,217 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 76,896 | $ | 14,069 | $ | (11,168) | $ | 79,797 | ||||||||||||||||||
Adjusted EBITDA increased $14.7 million primarily due to a $25.4 million increase in Adjusted EBITDA within our Coal Royalty and Other segment as a result of higher revenues and other income as discussed above, partially offset by a $10.3 million decrease in Adjusted EBITDA within our Soda Ash segment as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2021 as compared to the prior year period.
Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)
The following table presents the three major categories of the statement of cash flows by business segment:
| Operating Segments | ||||||||||||||||||||||||||
| For the Nine Months Ended (In thousands) | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | ||||||||||||||||||||||
| September 30, 2021 | ||||||||||||||||||||||||||
| Cash flow provided by (used in) continuing operations | ||||||||||||||||||||||||||
| Operating activities | $ | 91,958 | $ | 3,817 | $ | (29,132) | $ | 66,643 | ||||||||||||||||||
| Investing activities | 1,871 | — | — | 1,871 | ||||||||||||||||||||||
| Financing activities | (1,132) | — | (48,183) | (49,315) | ||||||||||||||||||||||
| September 30, 2020 | ||||||||||||||||||||||||||
| Cash flow provided by (used in) continuing operations | ||||||||||||||||||||||||||
| Operating activities | $ | 91,082 | $ | 14,091 | $ | (30,760) | $ | 74,413 | ||||||||||||||||||
| Investing activities | 969 | — | — | 969 | ||||||||||||||||||||||
| Financing activities | — | — | (58,074) | (58,074) | ||||||||||||||||||||||
31
The following table reconciles net cash provided by (used in) operating activities of continuing operations (the most comparable GAAP financial measure) by business segment to DCF and FCF:
| Operating Segments | ||||||||||||||||||||||||||
| For the Nine Months Ended (In thousands) | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | ||||||||||||||||||||||
| September 30, 2021 | ||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 91,958 | $ | 3,817 | $ | (29,132) | $ | 66,643 | ||||||||||||||||||
| Add: proceeds from asset sales and disposals | 249 | — | — | 249 | ||||||||||||||||||||||
| Add: return of long-term contract receivable | 1,622 | — | — | 1,622 | ||||||||||||||||||||||
| Distributable cash flow | $ | 93,829 | $ | 3,817 | $ | (29,132) | $ | 68,514 | ||||||||||||||||||
| Less: proceeds from asset sales and disposals | (249) | — | — | (249) | ||||||||||||||||||||||
| Less: acquisition costs | (1,000) | — | — | (1,000) | ||||||||||||||||||||||
| Free cash flow | $ | 92,580 | $ | 3,817 | $ | (29,132) | $ | 67,265 | ||||||||||||||||||
| September 30, 2020 | ||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 91,082 | $ | 14,091 | $ | (30,760) | $ | 74,413 | ||||||||||||||||||
| Add: proceeds from asset sales and disposals | 507 | — | — | 507 | ||||||||||||||||||||||
| Add: proceeds from sale of discontinued operations | — | — | — | (66) | ||||||||||||||||||||||
| Add: return of long-term contract receivable | 1,462 | — | — | 1,462 | ||||||||||||||||||||||
| Distributable cash flow | $ | 93,051 | $ | 14,091 | $ | (30,760) | $ | 76,316 | ||||||||||||||||||
| Less: proceeds from asset sales and disposals | (507) | — | — | (507) | ||||||||||||||||||||||
| Less: proceeds from sale of discontinued operations | — | — | — | 66 | ||||||||||||||||||||||
| Less: acquisition costs | (1,000) | — | — | (1,000) | ||||||||||||||||||||||
| Free cash flow | $ | 91,544 | $ | 14,091 | $ | (30,760) | $ | 74,875 | ||||||||||||||||||
DCF and FCF decreased $7.8 million and $7.6 million, respectively, primarily due to the following:
•Soda Ash Segment
◦DCF and FCF decreased $10.3 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2021 as compared to the prior year period.
This decrease was partially offset by:
•Corporate and Financing Segment
◦DCF and FCF increased $1.6 million primarily due to lower cash paid for interest as our debt balance continues to decline.
•Coal Royalty and Other Segment
◦DCF and FCF increased $0.8 million and $1.0 million, respectively, primarily due to increased cash flow in 2021 as a result of the rebounding of coal demand from its low in 2020 caused by the global COVID-19 pandemic, partially offset by one-time lease amendment fee and past due payments received in the nine months ended September 30, 2020.
32
Liquidity and Capital Resources
Current Liquidity
As of September 30, 2021, we had total liquidity of $219.0 million, consisting of $119.0 million of cash and cash equivalents and $100.0 million of borrowing capacity under our Opco Credit Facility. We have significant debt service obligations, including approximately $20 million of principal repayments on Opco’s senior notes throughout the remainder of 2021. We believe our liquidity position provides us with the flexibility to continue paying down debt and manage our business through the current market environment.
Cash Flows
Cash flows provided by operating activities decreased $9.5 million, from $76.1 million in the nine months ended September 30, 2020 to $66.6 million in the nine months ended September 30, 2021, primarily related to $10.3 million of lower cash distributions received from Ciner Wyoming in the first nine months of 2021 as compared to the prior year period and certain one-time lease amendment fee and past due payments received in the nine months ended September 30, 2020. These decreases were partially offset by increased coal royalty cash flow in 2021 primarily as a result of the rebounding of coal demand from its low in 2020 caused by the global COVID-19 pandemic in addition to $1.9 million of lower cash paid for interest as our debt balance continues to decline.
Cash flows used in financing activities decreased $10.4 million from $59.7 million used in the nine months ended September 30, 2020 to $49.3 million used in the nine months ended September 30, 2021, primarily due to an $11.0 million decrease in cash distributions to preferred unitholders as we paid one-half of our preferred unit distributions in kind through the issuance of 11.6 million preferred units in the nine months ended September 30, 2021. Additionally, debt repayments decreased $6.8 million in the nine months ended September 30, 2021 as one of our Opco Senior Notes was fully repaid during the nine months ended September 30, 2020. These decreases in cash flow used were partially offset by a $5.7 million increase in distributions to common unitholders and the general partner as the common unit distribution was suspended in the second quarter of 2020.
Capital Resources and Obligations
Debt, Net
We had the following debt outstanding as of September 30, 2021 and December 31, 2020:
| September 30, | December 31, | ||||||||||
| (In thousands) | 2021 | 2020 | |||||||||
| Current portion of long-term debt, net | $ | 39,082 | $ | 39,055 | |||||||
| Long-term debt, net | 414,437 | 432,444 | |||||||||
| Total debt, net | $ | 453,519 | $ | 471,499 | |||||||
We have been and continue to be in compliance with the terms of the financial covenants contained in our debt agreements. For additional information regarding our debt and the agreements governing our debt, including the covenants contained therein, see Note 8. Debt, Net to the Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Off-Balance Sheet Transactions
We do not have any off-balance sheet arrangements with unconsolidated entities or related parties and accordingly, there are no off-balance sheet risks to our liquidity and capital resources from unconsolidated entities.
Related Party Transactions
The information required set forth under Note 10. Related Party Transactions to the Consolidated Financial Statements is incorporated herein by reference.
33
Summary of Critical Accounting Estimates
The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.
Recent Accounting Standards
The information set forth under Note 1. Basis of Presentation to the Consolidated Financial Statements is incorporated herein by reference.
34
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to include this disclosure in our Form 10-Q for the quarterly period ended September 30, 2021.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
NRP carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of NRP management, including the Chief Executive Officer and Chief Financial Officer of the general partner of the general partner of NRP. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective in providing reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (b) such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in the Partnership’s Internal Control Over Financial Reporting
There were no material changes in the Partnership’s internal control over financial reporting during the first nine months of 2021 that materially affected, or were reasonably likely to materially affect, the Partnership’s internal control over financial reporting.
35
PART II
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are involved in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, we believe these ordinary course matters will not have a material effect on our financial position, liquidity or operations.
ITEM 1A. RISK FACTORS
During the period covered by this report, there were no material changes from the risk factors previously disclosed in Natural Resource Partners L.P.’s Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
None.
36
ITEM 6. EXHIBITS
| Exhibit Number | Description | |||||||
| Fifth Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated as of March 2, 2017 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on March 6, 2017). | ||||||||
| Fifth Amended and Restated Agreement of Limited Partnership of NRP (GP) LP, dated as of December 16, 2011 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 16, 2011). | ||||||||
| Fifth Amended and Restated Limited Liability Company Agreement of GP Natural Resource Partners LLC, dated as of October 31, 2013 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on October 31, 2013). | ||||||||
| Certificate of Limited Partnership of Natural Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed April 19, 2002, File No. 333-86582). | ||||||||
| Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley. | ||||||||
| Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley. | ||||||||
| Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350. | ||||||||
| Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350. | ||||||||
| 101.INS* | Inline XBRL Instance Document | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) | |||||||
| * | Filed herewith | |||||||
| ** | Furnished herewith | |||||||
37
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned and thereunto duly authorized.
| NATURAL RESOURCE PARTNERS L.P. | |||||||||||
| By: | NRP (GP) LP, its general partner | ||||||||||
| By: | GP NATURAL RESOURCE | ||||||||||
| PARTNERS LLC, its general partner | |||||||||||
Date: November 3, 2021 | By: | /s/ CORBIN J. ROBERTSON, JR. | |||||||||
| Corbin J. Robertson, Jr. | |||||||||||
| Chairman of the Board and | |||||||||||
| Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
Date: November 3, 2021 | By: | /s/ CHRISTOPHER J. ZOLAS | |||||||||
| Christopher J. Zolas | |||||||||||
| Chief Financial Officer and Treasurer | |||||||||||
| (Principal Financial and Accounting Officer) | |||||||||||
38