nrp-20220804
false000117148600011714862022-08-042022-08-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________________________________
FORM 8-K
 ______________________________________________________

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): August 4, 2022
  ______________________________________________________
nrp-20220804_g1.gif
NATURAL RESOURCE PARTNERS LP
(Exact Name of Registrant as Specified in Charter)
  ______________________________________________________
Delaware
001-31465
35-2164875
(State or other jurisdiction
of incorporation or organization)
(Commission File
Number)
(I.R.S. Employer
Identification No.)
1415 Louisiana St., Suite 2400
Houston, Texas77002
(Address of principal executive office) (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 classTrading Symbol(s)Name of each exchange on which registered
Common Units representing limited partner interestsNRPNew York Stock Exchange
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 ¨


Item 2.02.Results of Operations and Financial Condition

    In accordance with General Instruction B.2. of Form 8-K, the following information and the exhibit referenced therein are being furnished pursuant to Item 2.02 of Form 8-K and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, are not subject to the liabilities of that section and are not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
 
    On August 4, 2022, Natural Resource Partners L.P. announced via press release its earnings and operating results for the second quarter of 2022. A copy of NRP’s press release is attached hereto as Exhibit 99.1.
Item 9.01.Financial Statements and Exhibits
(d)Exhibits.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURE

    Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NATURAL RESOURCE PARTNERS L.P.
(Registrant)
By: NRP (GP) LP
its General Partner
By: GP Natural Resource Partners LLC
 its General Partner
Date: August 4, 2022
 /s/ Philip T. Warman    
 Philip T. Warman
 General Counsel


Exhibit 99.1



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Natural Resource Partners L.P.
1415 Louisiana St., Suite 2400, Houston, TX 77002
NEWS RELEASE
Natural Resource Partners L.P. Reports Second Quarter 2022 Results and Declares Second Quarter 2022 Distribution of $0.75 per Unit

HOUSTON, August 4, 2022 - Natural Resource Partners L.P. (NYSE:NRP) today reported second quarter 2022 results as follows:
For the Three Months EndedLast Twelve Months Ended
(In thousands) (Unaudited)June 30, 2022
Operating cash flow$63,123 $200,674 
Free cash flow (1)
63,686 202,318 
Cash flow cushion (last twelve months) (1)
84,673 
Net income $66,820 $215,858 
Adjusted EBITDA (1)
80,709 260,842 
(1)See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

Highlights:

•$64 million Free Cash Flow in the second quarter of 2022
•Record Free Cash Flow for the first half of the year of $116 million
•Paid down $120.5 million of debt in the second quarter of 2022
•1.2x Leverage Ratio at June 30, 2022, down from 4.6x at June 30, 2021

“The second quarter was another quarter of exceptional results for NRP with the generation of $64 million of free cash flow," said Craig Nunez, NRP’s president and chief operating officer. “When combined with the $52 million of free cash flow generated in the first quarter, the first half of 2022 was the best annual start in the history of the Partnership. We took advantage of the strong financial results and positive outlook to retire $118 million of debt, driving our leverage ratio down to 1.2x at the end of the second quarter, which was a dramatic improvement from 4.6x just twelve months earlier. We believe current market conditions will allow us to continue de-risking the capital structure while continuing to provide distributions to our common unitholders.”

NRP announced today that the Board of Directors of its general partner declared a cash distribution of $0.75 per common unit to be paid on August 23, 2022 to unitholders of record on August 16, 2022. This is a 67% increase as compared to the distribution paid for the prior year quarter and is consistent with the previous quarter. In addition, the board declared a $7.5 million cash distribution on the preferred units. Future distributions on NRP's common and preferred units 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, 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.

NRP's liquidity was $159.4 million at June 30, 2022, consisting of $59.4 million of cash and $100.0 million of borrowing capacity available under its revolving credit facility.
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Segment Performance
Mineral Rights
Mineral Rights net income for the second quarter of 2022 increased $43.5 million as compared to the prior year period. Free cash flow for the second quarter increased $39.3 million as compared to the prior year period. These increases were primarily due to stronger metallurgical coal demand and pricing in 2022. Approximately 75% of coal royalty revenues and approximately 45% of coal royalty sales volumes were derived from metallurgical coal in the second quarter of 2022.

Metallurgical coal prices have declined from their record highs during the first quarter of 2022 but remain supported by the ongoing tightness in the supply-demand balance for metallurgical coal. Metallurgical coal production continues to face ongoing labor shortages and global supply chain interruptions which limits the ability of operators to increase metallurgical coal production and should provide continued support for domestic and international prices in the near term despite slowing global economic growth and softening demand for steel.

Thermal coal demand and pricing remains strong due to increased demand for electricity, high natural gas prices and constrained growth in thermal coal production. Boycotts on Russian coal caused by the war in Ukraine are amplifying the tightness in thermal coal markets caused by labor shortages, global supply chain interruptions, and environmental and political pressures limiting the ability of operators to increase thermal coal production to meet domestic and international demand. NRP continues to believe the near-term outlook for thermal coal prices is positive.

NRP continues to identify alternative revenue opportunities across its large portfolio of land and mineral assets specifically within the transitional energy economy. NRP owns the rights to sequester carbon dioxide ("CO2") on approximately 3.5 million mineral acres of pore space in the southern United States. As announced previously, in the first quarter of 2022 NRP executed on its first subsurface CO2 sequestration transaction by granting Denbury the right to develop a world-class subsurface CO2 sequestration project on 75,000 acres of underground pore space NRP owns in southwest Alabama with the potential to store over 300 million metric tons of CO2. While the timing and likelihood of additional cash flows being realized from further activities is uncertain, NRP believes its large ownership footprint throughout the United States will provide additional opportunities to create value in this regard and position NRP to benefit from the transitional energy economy with minimal capital investment.
Soda Ash
Soda Ash net income in the second quarter of 2022 increased $12.1 million as compared to the prior year period primarily as a result of increased international sales prices. Free cash flow in the second quarter of 2022 increased $10.5 million as compared to the prior year period due to Sisecam Wyoming reinstating its regular quarterly cash distributions beginning in the fourth quarter of 2021.

Strong demand growth for soda ash, driven by global secular trends including investments in renewable energy, the electrification of the global auto fleet and urbanization, coupled with constrained soda ash supply due in part to COVID-19 flash lockdowns in China and a partial closure of a Green River competitor due to a force majeure event allowed Sisecam Wyoming to deliver improved financial results in the second quarter of 2022.
Corporate and Financing
Corporate and Financing costs in the second quarter increased $4.1 million as compared to the prior year period primarily due to the loss on extinguishment of debt associated with the early retirement of debt, partially offset by lower interest expense as a result of less debt outstanding. Free cash flow in the second quarter of 2022 increased $1.0 million as compared to the prior year period primarily due to lower cash paid for interest as a result of less debt outstanding.

During the second quarter of 2022, NRP retired $118.1 million of its 9.125% Senior Notes due 2025, which will save approximately $10.8 million annually in interest costs. These notes were purchased on the open market at a weighted average price of 102.275%, a discount to the current redemption price of 104.563%. In July, NRP was able to retire an additional $38.8 million of its 2025 Senior Notes, which will save an additional $3.5 million annually in interest costs. The current outstanding amount of 9.125% Senior Notes due 2025 is $143.1 million.

In addition, in May of 2022 NRP paid a first quarter 2022 cash distribution of $0.75 per common unit of NRP and a $7.5 million cash distribution on the preferred units.
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Conference Call
A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link: https://conferencingportals.com/event/kfJdSHYP. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relationsb section of NRP’s website.
Withholding Information for Foreign Investors

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of NRP's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, NRP's distributions to foreign investors are subject to federal income tax withholding at the highest applicable rate.
Company Profile

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of properties in the United States including coal, industrial minerals and other natural resources, as well as rights to conduct carbon sequestration and renewable energy activities. NRP also owns an equity investment in Sisecam Wyoming LLC, one of the world’s lowest-cost producers of soda ash.

For additional information, please contact Tiffany Sammis at 713-751-7515 or [email protected]. Further information about NRP is available on the Partnership’s website at http://www.nrplp.com.
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Forward-Looking Statements

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees, including Foresight Energy; Sisecam Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; 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 or loss, 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. 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.
“Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as 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 receivable; less maintenance capital expenditures. 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, distributable cash flow 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. Distributable cash flow 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.
“Free cash flow” or "FCF" is a non-GAAP financial measure that we define as 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 receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. Free cash flow 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. Free cash flow may not be calculated the same for us as for other companies. Free cash flow 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.
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"Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions and redemption of PIK units, common unit distributions and warrant cash settlements. Cash flow cushion 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. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units.




-Financial Tables and Reconciliation of Non-GAAP Measures Follow-
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Natural Resource Partners L.P.
Financial Tables
(Unaudited)

Consolidated Statements of Comprehensive Income
For the Three Months Ended For the Six Months Ended
 June 30,March 31,June 30,
(In thousands, except per unit data)20222021202220222021
Revenues and other income
Royalty and other mineral rights$79,333 $33,611 $71,083 $150,416 $66,538 
Transportation and processing services5,612 2,182 3,796 9,408 4,374 
Equity in earnings of Sisecam Wyoming14,643 2,601 14,837 29,480 4,574 
Gain on asset sales and disposals345 116 — 345 175 
Total revenues and other income$99,933 $38,510 $89,716 $189,649 $75,661 
Operating expenses
Operating and maintenance expenses$10,015 $5,170 $8,076 $18,091 $10,722 
Depreciation, depletion and amortization5,847 4,871 3,868 9,715 9,963 
General and administrative expenses5,052 3,388 4,467 9,519 7,498 
Asset impairments43 16 19 62 4,059 
Total operating expenses$20,957 $13,445 $16,430 $37,387 $32,242 
Income from operations$78,976 $25,065 $73,286 $152,262 $43,419 
Other expenses, net
Interest expense, net$(8,108)$(9,683)$(9,387)$(17,495)$(19,656)
Loss on extinguishment of debt(4,048)— — (4,048)— 
Total other expenses, net$(12,156)$(9,683)$(9,387)$(21,543)$(19,656)
Net income $66,820 $15,382 $63,899 $130,719 $23,763 
Less: income attributable to preferred unitholders(7,500)(7,842)(7,500)(15,000)(15,569)
Net income attributable to common unitholders and the general partner$59,320 $7,540 $56,399 $115,719 $8,194 
Net income attributable to common unitholders$58,134 $7,389 $55,271 $113,405 $8,030 
Net income attributable to the general partner1,186 151 1,128 2,314 164 
Net income per common unit
Basic $4.65 $0.60 $4.45 $9.10 $0.65 
Diluted3.29 0.56 3.11 6.50 0.65 
Net income $66,820 $15,382 $63,899 $130,719 $23,763 
Comprehensive income (loss) from unconsolidated investment and other(4,013)2,533 2,545 (1,468)3,265 
Comprehensive income $62,807 $17,915 $66,444 $129,251 $27,028 
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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
Consolidated Statements of Cash Flows
For the Three Months Ended For the Six Months Ended
 June 30,March 31,June 30,
(In thousands)20222021202220222021
Cash flows from operating activities
Net income $66,820 $15,382 $63,899 $130,719 $23,763 
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization5,847 4,871 3,868 9,715 9,963 
Distributions from unconsolidated investment10,486 — 13,230 23,716 3,920 
Equity earnings from unconsolidated investment(14,643)(2,601)(14,837)(29,480)(4,574)
Gain on asset sales and disposals(345)(116)— (345)(175)
Loss on extinguishment of debt4,048 — — 4,048 — 
Asset impairments43 16 19 62 4,059 
Bad debt expense(388)(737)1,028 640 (354)
Unit-based compensation expense1,339 593 1,448 2,787 1,719 
Amortization of debt issuance costs and other1,297 977 375 1,672 1,246 
Change in operating assets and liabilities:
Accounts receivable(5,033)162 (7,579)(12,612)(3,169)
Accounts payable73 (83)(60)13 (93)
Accrued liabilities2,047 1,838 (7,156)(5,109)(1,196)
Accrued interest(7,413)(7,424)7,250 (163)(291)
Deferred revenue(2,259)677 (7,316)(9,575)531 
Other items, net1,204 (171)(1,838)(634)1,235 
Net cash provided by operating activities $63,123 $13,384 $52,331 $115,454 $36,584 
Cash flows from investing activities
Proceeds from asset sales and disposals$346 $116 $— $346 $175 
Return of long-term contract receivable563 541 — 563 1,082 
Net cash provided by investing activities $909 $657 $— $909 $1,257 
Cash flows from financing activities
Debt repayments$(120,474)$(2,365)$(16,697)$(137,171)$(19,061)
Distributions to common unitholders and the general partner(9,570)(5,672)(5,672)(15,242)(11,302)
Distributions to preferred unitholders(7,500)(3,864)(7,500)(15,000)(7,670)
Redemption of preferred units paid-in-kind— — (19,579)(19,579)— 
Acquisition of non-controlling interest in BRP— (1,000)— — (1,000)
Other items, net(2,722)1 (2,813)(5,535)(690)
Net cash used in financing activities $(140,266)$(12,900)$(52,261)$(192,527)$(39,723)
Net increase (decrease) in cash and cash equivalents$(76,234)$1,141 $70 $(76,164)$(1,882)
Cash and cash equivalents at beginning of period135,590 96,767 135,520 135,520 99,790 
Cash and cash equivalents at end of period$59,356 $97,908 $135,590 $59,356 $97,908 
Supplemental cash flow information:
Cash paid for interest$15,128 $16,611 $1,644 $16,772 $18,931 
Non-cash investing and financing activities:
Preferred unit distributions paid-in-kind$— $3,863 $— $— $7,669 
7
Natural Resource Partners L.P.
Financial Tables

Consolidated Balance Sheets
June 30, December 31,
(In thousands, except unit data)20222021
ASSETS(Unaudited)
Current assets
Cash and cash equivalents$59,356 $135,520 
Accounts receivable, net37,288 24,538 
Other current assets, net3,204 2,723 
Total current assets$99,848 $162,781 
Land24,008 24,008 
Mineral rights, net428,505 437,697 
Intangible assets, net15,634 16,130 
Equity in unconsolidated investment280,300 276,004 
Long-term contract receivable, net30,182 31,371 
Other long-term assets, net4,664 5,832 
Total assets$883,141 $953,823 
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable$1,969 $1,956 
Accrued liabilities5,507 10,297 
Accrued interest1,050 1,213 
Current portion of deferred revenue11,475 11,817 
Current portion of long-term debt, net39,070 39,102 
Total current liabilities$59,071 $64,385 
Deferred revenue40,811 50,045 
Long-term debt, net259,296 394,443 
Other non-current liabilities5,012 5,018 
Total liabilities$364,190 $513,891 
Commitments and contingencies
Class A Convertible Preferred Units (250,000 and 269,321 units issued and outstanding at June 30, 2022 and December 31, 2021, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at June 30, 2022 and December 31, 2021)
$164,587 $183,908 
Partners’ capital:
Common unitholders’ interest (12,505,996 and 12,351,306 units issued and outstanding at June 30, 2022 and December 31, 2021, respectively),$300,753 $203,062 
General partner’s interest3,904 1,787 
Warrant holders' interest47,964 47,964 
Accumulated other comprehensive income 1,743 3,211 
Total partners’ capital$354,364 $256,024 
Total liabilities and partners' capital$883,141 $953,823 

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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
Consolidated Statements of Partners' Capital
 Common UnitholdersGeneral PartnerWarrant HoldersAccumulated
Other
Comprehensive Income		Total Partners' Capital
 
(In thousands)UnitsAmounts
Balance at December 31, 202112,351 $203,062 $1,787 $47,964 $3,211 $256,024 
Net income (1)
— 62,621 1,278 — — 63,899 
Distributions to common unitholders and the general partner— (5,559)(113)— — (5,672)
Distributions to preferred unitholders— (7,603)(155)— — (7,758)
Issuance of unit-based awards155 — — — — — 
Unit-based awards amortization and vesting, net— (1,754)— — — (1,754)
Capital contribution— — 112 — — 112 
Comprehensive income from unconsolidated investment and other— — — — 2,545 2,545 
Balance at March 31, 202212,506 $250,767 $2,909 $47,964 $5,756 $307,396 
Net income (1)
— 65,484 1,336 — — 66,820 
Distributions to common unitholders and the general partner— (9,379)(191)— — (9,570)
Distributions to preferred unitholders— (7,350)(150)— — (7,500)
Unit-based awards amortization and vesting— 1,231 — — — 1,231 
Comprehensive loss from unconsolidated investment and other— — — — (4,013)(4,013)
Balance at June 30, 202212,506 $300,753 $3,904 $47,964 $1,743 $354,364 
(1)Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

9

Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 Common UnitholdersGeneral PartnerWarrant HoldersAccumulated
Other
Comprehensive
Income		Total Partners' Capital
 
(In thousands)UnitsAmounts
Balance at December 31, 202012,261 $136,927 $459 $66,816 $322 $204,524 
Net income (1)
— 8,213 168 — — 8,381 
Distributions to common unitholders and the general partner— (5,517)(113)— — (5,630)
Distributions to preferred unitholders— (7,461)(152)— — (7,613)
Issuance of unit-based awards90 — — — — — 
Unit-based awards amortization and vesting, net— 215 — — — 215 
Capital contribution— — 32 — — 32 
Comprehensive income from unconsolidated investment and other— — — — 732 732 
Balance at March 31, 202112,351 $132,377 $394 $66,816 $1,054 $200,641 
Net income (2)
— 15,074 308 — — 15,382 
Distributions to common unitholders and the general partner— (5,559)(113)— — (5,672)
Distributions to preferred unitholders— (7,571)(155)— — (7,726)
Unit-based awards amortization and vesting— 515 — — — 515 
Comprehensive income from unconsolidated investment and other— — — — 2,533 2,533 
Balance at June 30, 202112,351 $134,836 $434 $66,816 $3,587 $205,673 
(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.
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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
The following tables present NRP's unaudited business results by segment for the three months ended June 30, 2022 and 2021 and March 31, 2022:
Operating Segments
Mineral RightsCorporate and Financing
(In thousands)Soda AshTotal
For the Three Months Ended June 30, 2022
Revenues $84,945 $14,643 $— $99,588 
Gain on asset sales and disposals345 — — 345 
Total revenues and other income $85,290 $14,643 $— $99,933 
Asset impairments$43 $— $— $43 
Net income (loss) $69,408 $14,620 $(17,208)$66,820 
Adjusted EBITDA (1)
$75,298 $10,463 $(5,052)$80,709 
Cash flow provided by (used in) continuing operations:
Operating activities$70,351 $10,430 $(17,658)$63,123 
Investing activities$909 $— $— $909 
Financing activities$— $— $(140,266)$(140,266)
Distributable cash flow (1)
$71,260 $10,430 $(17,658)$64,032 
Free cash flow (1)
$70,914 $10,430 $(17,658)$63,686 
For the Three Months Ended June 30, 2021
Revenues$35,793 $2,601 $— $38,394 
Gain on asset sales and disposals116 — — 116 
Total revenues and other income$35,909 $2,601 $— $38,510 
Asset impairments$16 $— $— $16 
Net income (loss)$25,886 $2,566 $(13,070)$15,382 
Adjusted EBITDA (1)
$30,774 $(35)$(3,388)$27,351 
Cash flow provided by (used in) continuing operations:
Operating activities$32,028 $(35)$(18,609)$13,384 
Investing activities$657 $— $— $657 
Financing activities$(1,000)$— $(11,900)$(12,900)
Distributable cash flow (1)
$32,685 $(35)$(18,609)$14,041 
Free cash flow (1)
$31,569 $(35)$(18,609)$12,925 
For the Three Months Ended March 31, 2022
Revenues$74,879 $14,837 $— $89,716 
Gain on asset sales and disposals— — — — 
Total revenues and other income$74,879 $14,837 $— $89,716 
Asset impairments$19 $— $— $19 
Net income (loss)$62,967 $14,786 $(13,854)$63,899 
Adjusted EBITDA (1)
$66,854 $13,179 $(4,467)$75,566 
Cash flow provided by (used in) continuing operations:
Operating activities$48,176 $13,195 $(9,040)$52,331 
Investing activities$— $— $— $— 
Financing activities$(614)$— $(51,647)$(52,261)
Distributable cash flow (1)
$48,176 $13,195 $(9,040)$52,331 
Free cash flow (1)
$48,176 $13,195 $(9,040)$52,331 
(1)See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.
11

Natural Resource Partners L.P.
Financial Tables
(Unaudited)
The following table presents NRP's unaudited business results by segment for the six months ended June 30, 2022 and 2021:
Operating Segments
Mineral RightsCorporate and Financing
(In thousands)Soda AshTotal
For the Six Months Ended June 30, 2022
Revenues $159,824 $29,480 $— $189,304 
Gain on asset sales and disposals345 — — 345 
Total revenues and other income$160,169 $29,480 $— $189,649 
Asset impairments$62 $— $— $62 
Net income (loss)$132,375 $29,406 $(31,062)$130,719 
Adjusted EBITDA (1)
$142,152 $23,642 $(9,519)$156,275 
Cash flow provided by (used in) continuing operations:
Operating activities$118,527 $23,625 $(26,698)$115,454 
Investing activities$909 $— $— $909 
Financing activities$(614)$— $(191,913)$(192,527)
Distributable cash flow (1)
$119,436 $23,625 $(26,698)$116,363 
Free cash flow (1)
$119,090 $23,625 $(26,698)$116,017 
For the Six Months Ended June 30, 2021
Revenues$70,912 $4,574 $— $75,486 
Gain on asset sales and disposals175 — — 175 
Total revenues and other income$71,087 $4,574 $— $75,661 
Asset impairments$4,059 $— $— $4,059 
Net income (loss) $46,374 $4,519 $(27,130)$23,763 
Adjusted EBITDA (1)
$60,420 $3,865 $(7,498)$56,787 
Cash flow provided by (used in) continuing operations:
Operating activities$57,990 $3,853 $(25,259)$36,584 
Investing activities$1,257 $— $— $1,257 
Financing activities$(1,132)$— $(38,591)$(39,723)
Distributable cash flow (1)
$59,247 $3,853 $(25,259)$37,841 
Free cash flow (1)
$58,072 $3,853 $(25,259)$36,666 
(1)See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.
12

Natural Resource Partners L.P.
Financial Tables
(Unaudited)
Operating Statistics - Mineral Rights
For the Three Months EndedFor the Six Months Ended
 June 30,March 31,June 30,
(In thousands, except per ton data)20222021202220222021
Coal sales volumes (tons)
Appalachia
Northern 392 405 428 820 525 
Central 3,484 2,975 3,251 6,735 5,625 
Southern312 316 361 673 416 
Total Appalachia4,188 3,696 4,040 8,228 6,566 
Illinois Basin3,403 2,640 1,502 4,905 5,298 
Northern Powder River Basin699 185 1,238 1,937 1,244 
Gulf Coast67 — 69 136 — 
Total coal sales volumes8,357 6,521 6,849 15,206 13,108 
Coal royalty revenue per ton
Appalachia
Northern $11.84 $4.45 $10.14 $10.95 $4.27 
Central12.19 4.62 11.37 11.80 4.44 
Southern17.67 7.63 17.56 17.61 7.06 
Illinois Basin2.07 2.01 2.20 2.11 2.04 
Northern Powder River Basin4.74 4.15 3.74 4.10 3.49 
Gulf Coast0.57 — 0.55 0.56 — 
Combined average coal royalty revenue per ton7.54 3.69 8.12 7.80 3.45 
Coal royalty revenues
Appalachia
Northern $4,640 $1,804 $4,341 $8,981 $2,241 
Central42,461 13,756 36,980 79,441 24,951 
Southern5,513 2,410 6,340 11,853 2,938 
Total Appalachia52,614 17,970 47,661 100,275 30,130 
Illinois Basin7,061 5,300 3,303 10,364 10,783 
Northern Powder River Basin3,314 768 4,632 7,946 4,341 
Gulf Coast38 — 38 76 — 
Unadjusted coal royalty revenues63,027 24,038 55,634 118,661 45,254 
Coal royalty adjustment for minimum leases
(82)(5,740)(185)(267)(11,591)
Total coal royalty revenues$62,945 $18,298 $55,449 $118,394 $33,663 
Other revenues
Production lease minimum revenues
$65 $3,556 $1,592 $1,657 $7,006 
Minimum lease straight-line revenues
4,674 4,869 4,783 9,457 10,965 
Wheelage revenues4,379 1,844 3,717 8,096 3,625 
Property tax revenues1,695 1,587 1,472 3,167 3,056 
Coal overriding royalty revenues 682 976 258 940 2,835 
Lease amendment revenues811 772 880 1,691 1,640 
Aggregates royalty revenues1,037 456 770 1,807 910 
Oil and gas royalty revenues2,906 900 1,814 4,720 2,266 
Other revenues139 353 348 487 572 
Total other revenues$16,388 $15,313 $15,634 $32,022 $32,875 
Royalty and other mineral rights$79,333 $33,611 $71,083 $150,416 $66,538 
Transportation and processing services revenues5,612 2,182 3,796 9,408 4,374 
Gain on asset sales and disposals345 116 — 345 175 
Total Mineral Rights segment revenues and other income$85,290 $35,909 $74,879 $160,169 $71,087 

13

Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
Adjusted EBITDA
Mineral RightsCorporate and Financing
(In thousands)Soda AshTotal
For the Three Months Ended June 30, 2022
Net income (loss) $69,408 $14,620 $(17,208)$66,820 
Less: equity earnings from unconsolidated investment— (14,643)— (14,643)
Add: total distributions from unconsolidated investment— 10,486 — 10,486 
Add: interest expense, net— — 8,108 8,108 
Add: loss on extinguishment of debt— — 4,048 4,048 
Add: depreciation, depletion and amortization 5,847 — — 5,847 
Add: asset impairments43 — — 43 
Adjusted EBITDA$75,298 $10,463 $(5,052)$80,709 
For the Three Months Ended June 30, 2021
Net income (loss)$25,886 $2,566 $(13,070)$15,382 
Less: equity earnings from unconsolidated investment— (2,601)— (2,601)
Add: total distributions from unconsolidated investment— — — — 
Add: interest expense, net1 — 9,682 9,683 
Add: loss on extinguishment of debt— — — — 
Add: depreciation, depletion and amortization4,871— — 4,871 
Add: asset impairments16 — — 16 
Adjusted EBITDA$30,774 $(35)$(3,388)$27,351 
For the Three Months Ended March 31, 2022
Net income (loss) $62,967 $14,786 (13,854)$63,899 
Less: equity earnings from unconsolidated investment— (14,837)— (14,837)
Add: total distributions from unconsolidated investment— 13,230 — 13,230 
Add: interest expense, net— — 9,387 9,387 
Add: loss on extinguishment of debt— — — — 
Add: depreciation, depletion and amortization3,868 — — 3,868 
Add: asset impairments19 — — 19 
Adjusted EBITDA$66,854 $13,179 $(4,467)$75,566 

14

Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
Adjusted EBITDA
Mineral RightsCorporate and Financing
(In thousands)Soda AshTotal
For the Six Months Ended June 30, 2022
Net income (loss)$132,375 $29,406 $(31,062)$130,719 
Less: equity earnings from unconsolidated investment— (29,480)— (29,480)
Add: total distributions from unconsolidated investment— 23,716 — 23,716 
Add: interest expense, net— — 17,495 17,495 
Add: loss on extinguishment of debt— — 4,048 4,048 
Add: depreciation, depletion and amortization 9,715 — — 9,715 
Add: asset impairments62 — — 62 
Adjusted EBITDA$142,152 $23,642 $(9,519)$156,275 
For the Six Months Ended June 30, 2021
Net income (loss)$46,374 $4,519 $(27,130)$23,763 
Less: equity earnings from unconsolidated investment— (4,574)— (4,574)
Add: total distributions from unconsolidated investment— 3,920 — 3,920 
Add: interest expense, net24 — 19,632 19,656 
Add: loss on extinguishment of debt— — — — 
Add: depreciation, depletion and amortization9,963 — — 9,963 
Add: asset impairments4,059 — — 4,059 
Adjusted EBITDA$60,420 $3,865 $(7,498)$56,787 


15

Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
Distributable Cash Flow and Free Cash Flow
Mineral RightsCorporate and Financing
(In thousands)Soda AshTotal
For the Three Months Ended June 30, 2022
Net cash provided by (used in) operating activities of continuing operations$70,351 $10,430 $(17,658)$63,123 
Add: proceeds from asset sales and disposals346 — — 346 
Add: return of long-term contract receivable563 — — 563 
Distributable cash flow$71,260 $10,430 $(17,658)$64,032 
Less: proceeds from asset sales and disposals(346)— — (346)
Less: acquisition costs— — — — 
Free cash flow$70,914 $10,430 $(17,658)$63,686 
Net cash provided by investing activities$909 $— $— $909 
Net cash used in financing activities— — (140,266)(140,266)
For the Three Months Ended June 30, 2021
Net cash provided by (used in) operating activities of continuing operations$32,028 $(35)$(18,609)$13,384 
Add: proceeds from asset sales and disposals116 — — 116 
Add: return of long-term contract receivable541 — — 541 
Distributable cash flow$32,685 $(35)$(18,609)$14,041 
Less: proceeds from asset sales and disposals(116)— — (116)
Less: acquisition costs(1,000)— — (1,000)
Free cash flow$31,569 $(35)$(18,609)$12,925 
Net cash provided by investing activities$657 $— $— $657 
Net cash used in financing activities(1,000)— (11,900)(12,900)
For the Three Months Ended March 31, 2022
Net cash provided by (used in) operating activities of continuing operations$48,176 $13,195 $(9,040)$52,331 
Add: proceeds from asset sales and disposals— — — — 
Add: return of long-term contract receivable— — — — 
Distributable cash flow$48,176 $13,195 $(9,040)$52,331 
Less: proceeds from asset sales and disposals— — — — 
Less: acquisition costs— — — — 
Free cash flow$48,176 $13,195 $(9,040)$52,331 
Net cash provided by investing activities$— $— $— $— 
Net cash used in financing activities(614)— (51,647)(52,261)


16

Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
Distributable Cash Flow and Free Cash Flow
Mineral RightsCorporate and Financing
(In thousands)Soda AshTotal
For the Six Months Ended June 30, 2022
Net cash provided by (used in) operating activities of continuing operations$118,527 $23,625 $(26,698)$115,454 
Add: proceeds from asset sales and disposals346 — — 346 
Add: return of long-term contract receivable563 — — 563 
Distributable cash flow$119,436 $23,625 $(26,698)$116,363 
Less: proceeds from asset sales and disposals(346)— — (346)
Less: acquisition costs— — — — 
Free cash flow$119,090 $23,625 $(26,698)$116,017 
Net cash provided by investing activities$909 $— $— $909 
Net cash used in financing activities(614)— (191,913)(192,527)
For the Six Months Ended June 30, 2021
Net cash provided by (used in) operating activities of continuing operations$57,990 $3,853 (25,259)$36,584 
Add: proceeds from asset sales and disposals175 — — 175 
Add: return of long-term contract receivable1,082 — — 1,082 
Distributable cash flow$59,247 $3,853 $(25,259)$37,841 
Less: proceeds from asset sales and disposals(175)— — (175)
Less: acquisition costs(1,000)— — (1,000)
Free cash flow$58,072 $3,853 $(25,259)$36,666 
Net cash provided by investing activities$1,257 $— $— $1,257 
Net cash used in financing activities(1,132)— (38,591)(39,723)

Cash Flow Cushion
For the Three Months Ended
(In thousands)September 30, 2021December 31, 2021March 31, 2022June 30, 2022Last 12 Months
Net cash provided by operating activities of continuing operations$30,059 $55,161 $52,331 $63,123 $200,674 
Add: proceeds from asset sales and disposals74 — — 346 420 
Add: return of long-term contract receivable540 541 — 563 1,644 
Distributable cash flow$30,673 $55,702 $52,331 $64,032 $202,738 
Less: proceeds from asset sales and disposals(74)— — (346)(420)
Free cash flow$30,599 $55,702 $52,331 $63,686 $202,318 
Less: mandatory Opco debt repayments— (20,335)(16,697)(2,365)(39,397)
Less: preferred unit distributions and redemption of PIK units(3,921)(3,980)(27,079)(7,500)(42,480)
Less: common unit distributions(5,671)(5,672)(5,672)(9,570)(26,585)
Less: warrant cash settlement— (9,183)— — (9,183)
Cash flow cushion $21,007 $16,532 $2,883 $44,251 $84,673 

17

Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)

Leverage Ratio
For the Three Months Ended
(In thousands)September 30, 2021December 31, 2021March 31, 2022June 30, 2022Last Twelve Months
Net income $29,498 $55,641 $63,899 $66,820 $215,858 
Less: equity earnings from unconsolidated investment(6,672)(10,625)(14,837)(14,643)(46,777)
Add: total distributions from unconsolidated investment— 7,350 13,230 10,486 31,066 
Add: interest expense, net9,652 9,568 9,387 8,108 36,715 
Add: loss on extinguishment of debt— — — 4,048 4,048 
Add: depreciation, depletion and amortization5,182 3,930 3,868 5,847 18,827 
Add: asset impairments57 986 19 43 1,105 
Adjusted EBITDA$37,717 $66,850 $75,566 $80,709 $260,842 
Debt—at June 30, 2022$301,313 
Leverage Ratio (1)
1.2 x
(1)Leverage Ratio is calculated as the outstanding principal of NRP's debt as of June 30, 2022 divided by the last twelve months' Adjusted EBITDA. Note that Adjusted EBITDA under the indenture governing NRP's 2025 parent company notes may be different than the amount shown above. However, NRP's last twelve months Leverage ratio as of June 30, 2022, was 1.2x as calculated under the indenture governing NRP's 2025 parent company notes.
For the Three Months Ended
(In thousands)September 30, 2020December 31, 2020March 31, 2021June 30, 2021Last Twelve Months
Net income $7,216 $14,687 $8,381 $15,382 $45,666 
Less: equity earnings from unconsolidated investment(1,986)(5,528)(1,973)(2,601)(12,088)
Add: total distributions from unconsolidated investment— — 3,920 — 3,920 
Add: interest expense, net10,254 10,077 9,973 9,683 39,987 
Add: depreciation, depletion and amortization2,111 3,013 5,092 4,871 15,087 
Add: asset impairments934 2,668 4,043 16 7,661 
Adjusted EBITDA$18,529 $24,917 $29,436 $27,351 $100,233 
Debt—at June 30, 2021$458,819 
Leverage Ratio (1)
4.6 x
(1)Leverage Ratio is calculated as the outstanding principal of NRP's debt as of June 30, 2021 divided by the last twelve months' Adjusted EBITDA

-end-
18