UNITED STATES

SECURITIES AND EXCHANGE COMMISSION



Washington, D.C. 20549

FORM 10-Q



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

For the quarterly period ended September 30, ~~2019~~2020 or

¨☐

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

~~Commission file number: 001-31465~~

Commission file number:

001-31465


NATURAL RESOURCE PARTNERS ~~L.P.~~LP
						(Exact name of registrant as specified in its charter)



Delaware						35-2164875
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1201 Louisiana Street, Suite 3400

Houston, Texas 77002

(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

Common Units representing limited partner interests

NRP

New York Stock Exchange

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 ý☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ý☒ 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

¨☐

Accelerated Filer

ý☒

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 ý☒

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.

Table of Contents

NATURAL RESOURCE PARTNERS, L.P.

TABLE OF CONTENTS

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED BALANCE SHEETS


	September 30,			December 31,				September 30,		December 31,
(In thousands, except unit data)	2019			2018			(In thousands, except unit data)	2020		2019
ASSETS	(Unaudited)						ASSETS	(Unaudited)
Current assets							Current assets
Cash and cash equivalents	$	99,636		$	101,839		Cash and cash equivalents	$	115,573	$	98,265
Restricted cash	12,527			104,191

Accounts receivable, net	27,447			32,058			Accounts receivable, net	17,462		30,869
Prepaid expenses and other	3,111			3,462
Other current assets, net							Other current assets, net	3,972		1,244
Current assets of discontinued operations	988			993			Current assets of discontinued operations	0		1,706
Total current assets	$	143,709		$	242,543		Total current assets	$	137,007	$	132,084
Land	24,008			24,008			Land	24,008		24,008
Plant and equipment, net	762			984

Mineral rights, net	733,154			743,112			Mineral rights, net	465,870		605,096
Intangible assets, net	40,461			42,513			Intangible assets, net	17,601		17,687
Equity in unconsolidated investment	258,063			247,051			Equity in unconsolidated investment	256,834		263,080
Long-term contract receivable	37,473			38,945
Other assets	6,274			2,491
Long-term contract receivable, net							Long-term contract receivable, net	33,791		36,963
Other long-term assets, net							Other long-term assets, net	7,447		6,989
Total assets	$	1,243,904		$	1,341,647		Total assets	$	942,558	$	1,085,907
LIABILITIES AND CAPITAL							LIABILITIES AND CAPITAL
Current liabilities							Current liabilities
Accounts payable	$	1,591		$	2,414		Accounts payable	$	1,372	$	1,179
Accrued liabilities	7,290			12,347			Accrued liabilities	6,859		8,764
Accrued interest	14,364			14,345			Accrued interest	9,273		2,316
Current portion of deferred revenue	5,047			3,509			Current portion of deferred revenue	11,035		4,608
Current portion of long-term debt, net	45,789			115,184			Current portion of long-term debt, net	39,072		45,776
Current liabilities of discontinued operations	174			947			Current liabilities of discontinued operations	0		65
Total current liabilities	$	74,255		$	148,746		Total current liabilities	$	67,611	$	62,708
Deferred revenue	43,587			49,044			Deferred revenue	50,980		47,213
Long-term debt, net	490,378			557,574			Long-term debt, net	452,401		470,422
Other non-current liabilities	4,843			1,150			Other non-current liabilities	5,020		4,949
Total liabilities	$	613,063		$	756,514		Total liabilities	$	576,012	$	585,292
Commitments and contingencies (see Note 14)
Class A Convertible Preferred Units (250,000 units issued and outstanding at $1,000 par value per unit; liquidation preference of $1,500 per unit)	$	164,587		$	164,587
Commitments and contingencies (see Note 12)							Commitments and contingencies (see Note 12)
Class A Convertible Preferred Units (250,000 units issued and outstanding at September 30, 2020 and December 31, 2019, at $1,000 par value per unit; liquidation preference of $1,700 per unit at September 30, 2020 and $1,500 per unit at December 31, 2019)							Class A Convertible Preferred Units (250,000 units issued and outstanding at September 30, 2020 and December 31, 2019, at $1,000 par value per unit; liquidation preference of $1,700 per unit at September 30, 2020 and $1,500 per unit at December 31, 2019)	$	164,587	$	164,587
Partners’ capital							Partners’ capital
Common unitholders’ interest (12,261,199 and 12,249,469 units issued and outstanding at September 30, 2019 and December 31, 2018, respectively)	$	400,266		$	355,113
Common unitholders’ interest (12,261,199 units issued and outstanding at September 30, 2020 and December 31, 2019)							Common unitholders’ interest (12,261,199 units issued and outstanding at September 30, 2020 and December 31, 2019)	$	134,545	$	271,471
General partner’s interest	5,909			5,014			General partner’s interest	428		3,270
Warrant holders’ interest	66,816			66,816			Warrant holders’ interest	66,816		66,816
Accumulated other comprehensive loss	(3,802		)	(3,462		)
Accumulated other comprehensive income (loss)							Accumulated other comprehensive income (loss)	170		(2,594)
Total partners’ capital	$	469,189		$	423,481		Total partners’ capital	$	201,959	$	338,963
Non-controlling interest	(2,935		)	(2,935		)	Non-controlling interest	0		(2,935)
Total capital	$	466,254		$	420,546		Total capital	$	201,959	$	336,028
Total liabilities and capital	$	1,243,904		$	1,341,647		Total liabilities and capital	$	942,558	$	1,085,907

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,							For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands, except per unit data)	2019			2018			2019			2018			(In thousands, except per unit data)	2020		2019		2020		2019
Revenues and other income													Revenues and other income
Coal royalty and other	$	39,919		$	42,518		$	154,037		$	134,912		Coal royalty and other	$	25,740	$	39,919	$	88,839	$	154,037
Transportation and processing services	3,865			6,853			14,740			17,238			Transportation and processing services	2,204		3,865		6,651		14,740
Equity in earnings of Ciner Wyoming	13,818			8,836			36,833			34,986			Equity in earnings of Ciner Wyoming	1,986		13,818		5,200		36,833
Gain on asset sales and disposals	6,107			—			6,609			819			Gain on asset sales and disposals	0		6,107		465		6,609
Total revenues and other income	$	63,709		$	58,207		$	212,219		$	187,955		Total revenues and other income	$	29,930	$	63,709	$	101,155	$	212,219

Operating expenses													Operating expenses
Operating and maintenance expenses	$	5,994		$	6,790		$	26,813		$	21,122		Operating and maintenance expenses	$	5,781	$	5,994	$	19,200	$	26,813
Depreciation, depletion and amortization	3,384			4,888			11,746			15,364			Depreciation, depletion and amortization	2,111		3,384		6,185		11,746
General and administrative expenses	4,253			3,183			12,799			10,782			General and administrative expenses	3,634		4,253		11,168		12,799
Asset impairments	484			—			484			242			Asset impairments	934		484		133,217		484
Total operating expenses	$	14,115		$	14,861		$	51,842		$	47,510		Total operating expenses	$	12,460	$	14,115	$	169,770	$	51,842

Income from operations	$	49,594		$	43,346		$	160,377		$	140,445
Income (loss) from operations													Income (loss) from operations	$	17,470	$	49,594	$	(68,615)	$	160,377

Other expenses, net													Other expenses, net
Interest expense, net	$	(10,431	)	$	(17,493	)	$	(37,061	)	$	(53,177	)	Interest expense, net	$	(10,254)	$	(10,431)	$	(30,891)	$	(37,061)

Loss on extinguishment of debt	—			—			(29,282		)	—			Loss on extinguishment of debt	0		0		0		(29,282)
Total other expenses, net	$	(10,431	)	$	(17,493	)	$	(66,343	)	$	(53,177	)	Total other expenses, net	$	(10,254)	$	(10,431)	$	(30,891)	$	(66,343)

Net income from continuing operations	$	39,163		$	25,853		$	94,034		$	87,268
Net income (loss) from continuing operations													Net income (loss) from continuing operations	$	7,216	$	39,163	$	(99,506)	$	94,034
Income from discontinued operations	7			2,688			206			3,721			Income from discontinued operations	0		7		0		206
Net income	$	39,170		$	28,541		$	94,240		$	90,989
Net loss (income) attributable to non-controlling interest	—			359			—			(510		)
Net income attributable to NRP	$	39,170		$	28,900		$	94,240		$	90,479
Net income (loss)													Net income (loss)	$	7,216	$	39,170	$	(99,506)	$	94,240

Less: income attributable to preferred unitholders	(7,500		)	(7,500		)	(22,500		)	(22,500		)	Less: income attributable to preferred unitholders	(7,500)		(7,500)		(22,613)		(22,500)
Net income attributable to common unitholders and general partner	$	31,670		$	21,400		$	71,740		$	67,979
Net income (loss) attributable to common unitholders and general partner													Net income (loss) attributable to common unitholders and general partner	$	(284)	$	31,670	$	(122,119)	$	71,740

Net income attributable to common unitholders	$	31,036		$	20,972		$	70,305		$	66,619
Net income attributable to the general partner	634			428			1,435			1,360
Net income (loss) attributable to common unitholders													Net income (loss) attributable to common unitholders	$	(279)	$	31,036	$	(119,677)	$	70,305
Net income (loss) attributable to the general partner													Net income (loss) attributable to the general partner	(5)		634		(2,442)		1,435

Income from continuing operations per common unit (see Note 5)
Income (loss) from continuing operations per common unit (see Note 4)													Income (loss) from continuing operations per common unit (see Note 4)
Basic	$	2.53		$	1.50		$	5.72		$	5.14		Basic	$	(0.02)	$	2.53	$	(9.76)	$	5.72
Diluted	1.66			1.18			3.91			3.89			Diluted	(0.02)		1.66		(9.76)		3.91

Net income per common unit (see Note 5)
Net income (loss) per common unit (see Note 4)													Net income (loss) per common unit (see Note 4)
Basic	$	2.53		$	1.71		$	5.73		$	5.44		Basic	$	(0.02)	$	2.53	$	(9.76)	$	5.73
Diluted	1.66			1.30			3.92			4.06			Diluted	(0.02)		1.66		(9.76)		3.92

Net income	$	39,170		$	28,541		$	94,240		$	90,989
Net income (loss)													Net income (loss)	$	7,216	$	39,170	$	(99,506)	$	94,240
Comprehensive income (loss) from unconsolidated investment and other	(520		)	791			(340		)	(768		)	Comprehensive income (loss) from unconsolidated investment and other	2,428		(520)		2,764		(340)
Comprehensive income	$	38,650		$	29,332		$	93,900		$	90,221
Comprehensive loss (income) attributable to non-controlling interest	—			359			—			(510		)
Comprehensive income attributable to NRP	$	38,650		$	29,691		$	93,900		$	89,711
Comprehensive income (loss)													Comprehensive income (loss)	$	9,644	$	38,650	$	(96,742)	$	93,900

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)


	Common Unitholders				General Partner			Warrant Holders		Accumulated Other Comprehensive Loss			Partners' Capital Excluding Non-Controlling Interest			Non-Controlling Interest			Total Capital				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																				(In thousands)	Units	Amounts
Balance at December 31, 2018	12,249	$	355,113		$	5,014		$	66,816	$	(3,462	)	$	423,481		$	(2,935	)	$	420,546
Balance at December 31, 2019																						Balance at December 31, 2019	12,261	$	271,471	$	3,270	$	66,816	$	(2,594)	$	338,963	$	(2,935)	$	336,028
Cumulative effect of adoption of accounting standard (see Note 15)																						Cumulative effect of adoption of accounting standard (see Note 15)	—	(3,833)		(78)		—		—		(3,911)		—		(3,911)
Net income ⁽¹⁾	—	35,005			714			—		—			35,719			—			35,719			Net income (1)	—	18,403		376		—		—		18,779		—		18,779
Distributions to common unitholders and general partner	—	(5,513		)	(112		)	—		—			(5,625		)	—			(5,625		)	Distributions to common unitholders and general partner	—	(5,517)		(113)		—		—		(5,630)		—		(5,630)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)	Distributions to preferred unitholders	—	(7,350)		(150)		—		—		(7,500)		—		(7,500)
Issuance of unit-based awards	12	486			—			—		—			486			—			486

Unit-based awards amortization and vesting																						Unit-based awards amortization and vesting	—	673		—		—		—		673		—		673

Comprehensive loss from unconsolidated investment and other																						Comprehensive loss from unconsolidated investment and other	—	—		—		—		(1,023)		(1,023)		—		(1,023)
Balance at March 31, 2020																						Balance at March 31, 2020	12,261	$	273,847	$	3,305	$	66,816	$	(3,617)	$	340,351	$	(2,935)	$	337,416
Net loss (2)																						Net loss (2)	—	(122,991)		(2,510)		—		—		(125,501)		—		(125,501)

Distributions to preferred unitholders																						Distributions to preferred unitholders	—	(7,461)		(152)		—		—		(7,613)		—		(7,613)

Acquisition of non-controlling interest in BRP																						Acquisition of non-controlling interest in BRP	—	(4,747)		(97)		—		—		(4,844)		2,935		(1,909)
Unit-based awards amortization and vesting	—	399			—			—		—			399			—			399			Unit-based awards amortization and vesting	—	869		—		—		—		869		—		869
Comprehensive income from unconsolidated investment and other	—	—			10			—		1,005			1,015			—			1,015			Comprehensive income from unconsolidated investment and other	—	—		—		—		1,359		1,359		—		1,359
Balance at March 31, 2019	12,261	$	378,140		$	5,476		$	66,816	$	(2,457	)	$	447,975		$	(2,935	)	$	445,040
Balance at June 30, 2020																						Balance at June 30, 2020	12,261	$	139,517	$	546	$	66,816	$	(2,258)	$	204,621	$	0	$	204,621
Net income ⁽¹⁾	—	18,964			387			—		—			19,351			—			19,351			Net income (1)	—	7,072		144		—		—		7,216		—		7,216
Distributions to common unitholders and general partner	—	(15,939		)	(326		)	—		—			(16,265		)	—			(16,265		)	Distributions to common unitholders and general partner	—	(5,518)		(112)		—		—		(5,630)		—		(5,630)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)	Distributions to preferred unitholders	—	(7,350)		(150)		—		—		(7,500)		—		(7,500)

Unit-based awards amortization and vesting	—	460			—			—		—			460			—			460			Unit-based awards amortization and vesting	—	824		—		—		—		824		—		824
Comprehensive loss from unconsolidated investment and other	—	—			—			—		(825		)	(825		)	—			(825		)
Balance at June 30, 2019	12,261	$	374,275		$	5,387		$	66,816	$	(3,282	)	$	443,196		$	(2,935	)	$	440,261
Net income ⁽¹⁾	—	38,386			784			—		—			39,170			—			39,170
Distributions to common unitholders and general partner	—	(5,518		)	(112		)	—		—			(5,630		)	—			(5,630		)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)
Unit-based awards amortization and vesting	—	473			—			—		—			473			—			473
Comprehensive loss from unconsolidated investment and other	—	—			—			—		(520		)	(520		)	—			(520		)
Balance at September 30, 2019	12,261	$	400,266		$	5,909		$	66,816	$	(3,802	)	$	469,189		$	(2,935	)	$	466,254
Comprehensive income from unconsolidated investment and other																						Comprehensive income from unconsolidated investment and other	—	—		—		—		2,428		2,428		—		2,428
Balance at September 30, 2020																						Balance at September 30, 2020	12,261	$	134,545	$	428	$	66,816	$	170	$	201,959	$	0	$	201,959

(1)Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.


~~(1)~~	Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.

(2)Net loss includes $7.6 million attributable to preferred unitholders that accumulated during the period, of which $7.46 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)


	Common Unitholders				General Partner			Warrant Holders		Accumulated Other Comprehensive Loss			Partners' Capital Excluding Non-Controlling Interest			Non-Controlling Interest			Total Capital				Common Unitholders			General Partner		Warrant Holders		Accumulated Other Comprehensive Loss		Partners' Capital Excluding Non-Controlling Interest		Non-Controlling Interest		Total Capital

(In thousands)	Units	Amounts																				(In thousands)	Units	Amounts
Balance at December 31, 2017	12,232	$	199,851		$	1,857		$	66,816	$	(3,313	)	$	265,211		$	(3,394	)	$	261,817
Cumulative effect of adoption of accounting standard	—	69,057			1,409			—		—			70,466			—			70,466
Balance at December 31, 2018																						Balance at December 31, 2018	12,249	$	355,113	$	5,014	$	66,816	$	(3,462)	$	423,481	$	(2,935)	$	420,546
Net income ⁽¹⁾	—	23,851			487			—		—			24,338			—			24,338			Net income (1)	—	35,005		714		—		—		35,719		—		35,719
Distributions to common unitholders and general partner	—	(5,505		)	(112		)	—		—			(5,617		)	—			(5,617		)	Distributions to common unitholders and general partner	—	(5,513)		(112)		—		—		(5,625)		—		(5,625)
Distributions to preferred unitholders	—	(7,610		)	(155		)	—		—			(7,765		)	—			(7,765		)	Distributions to preferred unitholders	—	(7,350)		(150)		—		—		(7,500)		—		(7,500)
Issuance of unit-based awards	14	410			—			—		—			410			—			410			Issuance of unit-based awards	12	486		—		—		—		486		—		486
Unit-based awards amortization and vesting	—	197			—			—		—			197			—			197			Unit-based awards amortization and vesting	—	399		—		—		—		399		—		399
Comprehensive income (loss) from unconsolidated investment and other	—	—			8			—		(1,125		)	(1,117		)	—			(1,117		)
Balance at March 31, 2018	12,246	$	280,251		$	3,494		$	66,816	$	(4,438	)	$	346,123		$	(3,394	)	$	342,729

Comprehensive income from unconsolidated investment and other																						Comprehensive income from unconsolidated investment and other	—	—		10		—		1,005		1,015		—		1,015
Balance at March 31, 2019																						Balance at March 31, 2019	12,261	$	378,140	$	5,476	$	66,816	$	(2,457)	$	447,975	$	(2,935)	$	445,040
Net income ⁽¹⁾	—	36,496			745			—		—			37,241			869			38,110			Net income (1)	—	18,964		387		—		—		19,351		0		19,351
Distributions to common unitholders and general partner	—	(5,510		)	(113		)	—		—			(5,623		)	—			(5,623		)	Distributions to common unitholders and general partner	—	(15,939)		(326)		—		—		(16,265)		—		(16,265)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)	Distributions to preferred unitholders	—	(7,350)		(150)		—		—		(7,500)		—		(7,500)

Unit-based awards amortization and vesting	—	136			—			—		—			136			—			136			Unit-based awards amortization and vesting	—	460		—		—		—		460		—		460
Comprehensive income (loss) from unconsolidated investment and other	—	50			1			—		(434		)	(383		)	(51		)	(434		)
Balance at June 30, 2018	12,246	$	304,073		$	3,977		$	66,816	$	(4,872	)	$	369,994		$	(2,576	)	$	367,418
Net income (loss)⁽¹⁾	—	28,322			578			—		—			28,900			(359		)	28,541
Comprehensive loss from unconsolidated investment and other																						Comprehensive loss from unconsolidated investment and other	—	—		—		—		(825)		(825)		—		(825)
Balance at June 30, 2019																						Balance at June 30, 2019	12,261	$	374,275	$	5,387	$	66,816	$	(3,282)	$	443,196	$	(2,935)	$	440,261
Net income (1)																						Net income (1)	—	38,386		784		—		—		39,170		—		39,170
Distributions to common unitholders and general partner	—	(5,511		)	(112		)	—		—			(5,623		)	—			(5,623		)	Distributions to common unitholders and general partner	—	(5,518)		(112)		—		—		(5,630)		—		(5,630)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)	Distributions to preferred unitholders	—	(7,350)		(150)		—		—		(7,500)		—		(7,500)

Unit-based awards amortization and vesting	—	139			—			—		—			139			—			139			Unit-based awards amortization and vesting	—	473		—		—		—		473		—		473
Comprehensive income from unconsolidated investment and other	—	—			—			—		791			791			—			791
Balance at September 30, 2018	12,246	319,673			4,293			66,816		(4,081		)	386,701			(2,935		)	383,766
Comprehensive loss from unconsolidated investment and other																						Comprehensive loss from unconsolidated investment and other	—	—		—		—		(520)		(520)		—		(520)
Balance at September 30, 2019																						Balance at September 30, 2019	12,261	$	400,266	$	5,909	$	66,816	$	(3,802)	$	469,189	$	(2,935)	$	466,254


~~(1)~~	(1)Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, ~~of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.~~

~~The accompanying notes are an integral part~~ of ~~these consolidated financial statements.~~

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

Nine Months Ended September 30,
(In thousands) 2019 2018
Cash flows from operating activities
Net income $ 94,240
$ 90,989
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization 11,746
15,364
Distributions from unconsolidated investment 25,480
34,653
Equity earnings from unconsolidated investment (36,833 ) (34,986 )
Gain on asset sales and disposals (6,609 ) (819 )
Loss on extinguishment of debt 29,282
—
Income from discontinued operations (206 ) (3,721 )
Asset impairments 484
242
Unit-based compensation expense 1,842
1,144
Amortization of debt issuance costs and other 3,223
4,021
Change in operating assets and liabilities:
Accounts receivable 4,731
(6,283 )
Accounts payable (822 ) 90
Accrued liabilities (5,083 ) (3,193 )
Accrued interest 19
(9,944 )
Deferred revenue (3,920 ) 9,200
Other items, net 351
1,036
Net cash provided by operating activities of continuing operations $ 117,925
$ 97,793
Net cash provided by (used in) operating activities of discontinued operations (4 ) 9,755
Net cash provided by operating activities $ 117,921
$ 107,548

Cash flows from investing activities
Distributions from unconsolidated investment in excess of cumulative earnings $ —
$ 2,097
Proceeds from asset sales and disposals 6,611
826
Return of long-term contract receivable 1,351
2,606
Net cash provided by investing activities of continuing operations $ 7,962
$ 5,529
Net cash used in investing activities of discontinued operations (556 ) (9,343 )
Net cash provided by (used in) investing activities $ 7,406
$ (3,814 )

Cash flows from financing activities
Debt borrowings $ 300,000
$ 35,000
Debt repayments (442,747 ) (55,720 )
Redemption of preferred units paid-in-kind —
(8,844 )
Distributions to common unitholders and general partner (27,520 ) (16,863 )
Distributions to preferred unitholders (22,500 ) (22,765 )
Contributions to discontinued operations (560 ) (2,275 )
Debt issuance costs and other (26,427 ) (228 )
Net cash used in financing activities of continuing operations $ (219,754 ) $ (71,695 )
Net cash provided by financing activities of discontinued operations 560
1,521
Net cash used in financing activities $ (219,194 ) $ (70,174 )

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

Nine Months Ended September 30,
(In thousands) 2019 2018
Net increase (decrease) in cash, cash equivalents and restricted cash $ (93,867 ) $ 33,560

Cash, cash equivalents and restricted cash of continuing operations at beginning of period $ 206,030
$ 26,980
Cash and cash equivalents of discontinued operations at beginning of period —
2,847
Cash, cash equivalents and restricted cash at beginning of period $ 206,030
$ 29,827

Cash, cash equivalents and restricted cash at end of period $ 112,163
$ 63,387
Less: cash and cash equivalents of discontinued operations at end of period —
(4,780 )
Cash, cash equivalents and restricted cash of continuing operations at end of period $ 112,163
$ 58,607

Supplemental cash flow information:
Cash paid during the period for interest of continuing operations $ 36,270
$ 58,153
which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,
(In thousands)	2020		2019
Cash flows from operating activities
Net income (loss)	$	(99,506)	$	94,240
Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization	6,185		11,746
Distributions from unconsolidated investment	14,210		25,480
Equity earnings from unconsolidated investment	(5,200)		(36,833)
Gain on asset sales and disposals	(465)		(6,609)

Loss on extinguishment of debt	0		29,282
Income from discontinued operations	0		(206)
Asset impairments	133,217		484
Bad debt expense	3,915		6,842
Unit-based compensation expense	2,566		1,842
Amortization of debt issuance costs and other	491		3,223
Change in operating assets and liabilities:
Accounts receivable	7,994		(2,111)
Accounts payable	193		(822)
Accrued liabilities	(2,985)		(5,083)
Accrued interest	6,957		19
Deferred revenue	10,194		(3,920)
Other items, net	(3,353)		351
Net cash provided by operating activities of continuing operations	$	74,413	$	117,925
Net cash provided by (used in) operating activities of discontinued operations	1,706		(4)
Net cash provided by operating activities	$	76,119	$	117,921

Cash flows from investing activities

Proceeds from asset sales and disposals	$	507	$	6,611
Return of long-term contract receivable	1,462		1,351
Acquisition of non-controlling interest in BRP	(1,000)		0

Net cash provided by investing activities of continuing operations	$	969	$	7,962
Net cash used in investing activities of discontinued operations	(66)		(556)
Net cash provided by investing activities	$	903	$	7,406



Cash flows from financing activities


Debt borrowings	$	0	$	300,000

Debt repayments	(25,841)		(442,747)
Distributions to common unitholders and general partner	(11,260)		(27,520)
Distributions to preferred unitholders	(22,613)		(22,500)


Contributions from (to) discontinued operations	1,640		(560)
Debt issuance costs and other	0		(26,427)
Net cash used in financing activities of continuing operations	$	(58,074)	$	(219,754)
Net cash provided by (used in) financing activities of discontinued operations	(1,640)		560
Net cash used in financing activities	$	(59,714)	$	(219,194)

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,
(In thousands)	2020		2019

Net increase (decrease) in cash and cash equivalents	$	17,308	$	(93,867)

Cash and cash equivalents at beginning of period	98,265		206,030








Cash and cash equivalents at end of period	$	115,573	$	112,163

Supplemental cash flow information:
Cash paid during the period for interest	$	22,712	$	36,270


Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities	$	947	$	0

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

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~~2 operating segments further described in Note 6.5. 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~~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, ~~2018~~2019 and notes thereto included in the Partnership's Annual Report on Form 10-K, which was filed with the SEC on March 7, 2019. In management's opinion, all necessary adjustments to fairly present the Partnership's results of operations, financial position and cash flows for the periods presented have been made and all such adjustments were of a normal and recurring nature. Certain reclassifications have been made to prior period amounts on the Consolidated Balance Sheets, Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows to conform with current period presentation. These reclassifications had no impact on previously reported total assets, total liabilities, partners' capital, net income or cash flows from operating, investing or financing activities.

~~Recasting of Certain Prior Period Information~~

~~As described in~~ ~~Note 3. Discontinued Operations~~, the Partnership reclassified prior period information for the assets and liabilities, operating results and cash flows of its construction aggregates business as discontinued operations in its consolidated financial statements for all periods presented.

~~Restricted Cash~~

Restricted cash at September 30, 2019 and December 31, 2018 represents the remaining net proceeds from the sale of the Partnership's construction aggregates business and other asset sales and disposals that is required to be used to repay debt, make acquisitions or make capital expenditures per the terms of the Partnership's and Opco's debt agreements. In the first nine months of 2019, the Partnership used $97.1 million of restricted cash to repay principal amounts on Opco's private placement senior notes (the "Opco Senior Notes") and it intends to use the remaining $12.5 million of restricted cash to repay a portion of the remaining principal payments on the Opco Senior Notes in 2019.February 27, 2020.

Recently Adopted Accounting Standards

~~Leases~~Credit Losses

On January 1, ~~2019, NRP~~2020, the Partnership adopted ~~Accounting Standards Codification~~ ~~(ASC) 842, Leases,~~ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), and all the related amendments ~~(the “new lease standard” and "ASC 842"~~("the new credit loss standard") ~~and~~. The Partnership recognized ~~assets and liabilities on its Consolidated Balance Sheet for~~a $3.9 million cumulative effect of adoption in the ~~present value~~opening balance of the rights and obligations created by all leases with terms of more than 12 months. This standard does not apply to leases that explore for or use minerals, oil, natural gas and similar non-regenerative resources, including the intangible right to explore for those natural resources and rights to use the land in which those natural resources are contained. The guidance also required disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows arising from leases. The guidance was adopted by NRPpartners' capital on January 1, ~~2019 using~~2020 as a ~~modified retrospective approach.~~

~~The Partnership is a lessee in one lease that is accounted for as an operating lease under the new lease standard, and~~result of the adoption of the new ~~lease standard did not have a material impact to the Partnership's consolidated financial statements. For lease~~credit loss standard. See Note 15. Credit Losses for more information.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

~~agreements entered into or reassessed after the adoption of ASC 842, the Partnership elected to not combine lease and non-lease components. See~~ ~~Note 17. Leases~~ ~~for more information.~~

~~Recently Issued Accounting Standards~~

~~Credit Losses~~

~~In June 2016, the FASB issued~~ ~~ASU No. 2016-13, Financial Instruments—Credit Losses~~ (Topic 326). The new standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new standard replaces today's "incurred loss" model with an "expected credit loss" model that requires entities to estimate an expected lifetime credit loss on financial assets, including trade accounts receivable. The guidance is effective for annual and interim periods beginning after December 15, 2019 and is to be adopted using a modified retrospective approach. The Partnership is continuing to evaluate the provisions of this guidance on its consolidated financial statements, but based on its analysis to date, the Partnership does not expect this standard to have a material effect on its consolidated financial statements.

2. Revenues from Contracts with Customers

The following table ~~represents~~presents the Partnership's Coal Royalty and Other segment revenues by major source:

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2019 2018 2019 2018
Coal royalty revenues $ 24,727
$ 30,709
$ 87,561
$ 96,473
Production lease minimum revenues 2,752
1,769
21,331
6,310
Minimum lease straight-line revenues 3,982
567
11,152
1,739
Property tax revenues 1,606
1,263
4,416
3,968
Wheelage revenues 1,675
1,572
5,035
5,155
Coal overriding royalty revenues 2,189
3,918
10,163
10,492
Lease amendment revenues 1,535
—
6,720
—
Aggregates royalty revenues 954
888
3,655
3,551
Oil and gas royalty revenues 374
1,427
2,575
5,679
Other revenues 125
405
1,429
1,545
Coal royalty and other revenues⁽¹⁾
$ 39,919
$ 42,518
$ 154,037
$ 134,912
Transportation and processing services revenues ⁽²⁾
3,865
6,853
14,740
17,238
Total Coal Royalty and Other segment revenues $ 43,784
$ 49,371
$ 168,777
$ 152,150


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	2020		2019		2020		2019
Coal royalty revenues (1)	$	10,610	$	24,727	$	40,559	$	87,561
Production lease minimum revenues (1)	4,267		2,752		13,554		21,331
Minimum lease straight-line revenues (1)	3,553		3,982		12,349		11,152
Property tax revenues	1,896		1,606		4,256		4,416
Wheelage revenues	1,680		1,675		5,468		5,035
Coal overriding royalty revenues	1,314		2,189		3,319		10,163
Lease amendment revenues	858		1,535		2,591		6,720
Aggregates royalty revenues	221		954		1,068		3,655
Oil and gas royalty revenues	1,078		374		4,923		2,575
Other revenues	263		125		752		1,429
Coal royalty and other revenues	$	25,740	$	39,919	$	88,839	$	154,037
Transportation and processing services revenues (2)	2,204		3,865		6,651		14,740
Total coal royalty and other segment revenues	$	27,944	$	43,784	$	95,490	$	168,777


~~(1)~~	~~Coal royalty and other revenues from contracts with customers as defined under ASC 606.~~

~~(2)~~

Transportation and processing services revenues from contracts with customers as defined under ASC 606 was $1.7 million and $3.6 million for the three months ended September 30, 2019 and 2018, respectively, and $7.3 million and $9.6 million for the nine months ended September 30, 2019 and 2018, respectively. The remaining transportation and processing services revenues of $2.2 million and $3.3 million for the three months ended September 30, 2019, and 2018, respectively, and $7.5 million and $7.6 million for the nine months ended September 30, 2019 and 2018, respectively, related to other NRP-owned infrastructure leased to and operated by third party operators accounted for under other guidance. See ~~Note 16. Financing Transaction~~ ~~and~~ ~~Note 17. Leases~~ ~~for more information.~~

(1)Effective January 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications to certain leases that fixed consideration paid to the Partnership over a two year period.

~~Table~~(2)Transportation and processing services revenues from contracts with customers as defined under ASC 606 was $1.2 million and $1.7 million for the three months ended September 30, 2020 and 2019, respectively and $3.7 million and $7.3 million for the nine months ended September 30, 2020 and 2019, respectively. The remaining transportation and processing services revenues of ~~Contents~~$1.0 million and $2.2 million for the three months ended September 30, 2020 and 2019, respectively, and $2.9 million and $7.5 million for the nine months ended September 30, 2020 and 2019, respectively, related to other NRP-owned infrastructure leased to and operated by third-party operators accounted for under other guidance. See Note 14. Financing Transaction

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

for more information.

The following table details the Partnership's Coal Royalty and Other segment receivables and liabilities resulting from contracts with customers:


	September 30,		December 31,			September 30,		December 31,
(In thousands)	2019		2018		(In thousands)	2020		2019
Receivables					Receivables
Accounts receivable, net	$	24,758	$	29,001	Accounts receivable, net	$	15,371	$	27,915
Prepaid expenses and other ⁽¹⁾	2,852		2,483
Other current assets, net (1)					Other current assets, net (1)	3,696		90
Other long-term assets, net (2)					Other long-term assets, net (2)	691		0

Contract liabilities					Contract liabilities
Current portion of deferred revenue	$	5,047	$	3,509	Current portion of deferred revenue	$	11,035	$	4,608
Deferred revenue	43,587		49,044		Deferred revenue	50,980		47,213

(1)Other current assets, net includes short-term notes receivables from contracts with customers.


~~(1)~~	~~Prepaid expenses and other includes notes receivable from contracts with customers.~~

(2)Other long-term assets, net includes long-term notes receivables from contracts with customers.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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)		2020		2019


Balance at beginning of period (current and non-current)		$	51,821	$	52,553
Increase due to minimums and lease amendment fees		38,005		37,315
Recognition of previously deferred revenue		(27,811)		(41,234)
Balance at end of period (current and non-current)		$	62,015	$	48,634

Nine Months Ended September 30,
(In thousands) 2019 2018
Balance at end of prior period (current and non-current) $ 52,553
$ 100,605
Cumulative adjustment for change in accounting principle —
(65,591 )
Balance at beginning of period (current and non-current) $ 52,553
$ 35,014
Increase due to minimums and lease amendment fees 37,315
23,534
Recognition of previously deferred revenue (41,234 ) (16,260 )
Balance at end of period (current and non-current) $ 48,634
$ 42,288

The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty and overriding royalty leases are as follows as of September 30, 2020 (in thousands):

Lease Term ⁽¹⁾
Weighted Average Remaining Years as of September 30, 2019
Annual Minimum Payments ⁽²⁾
0 - 5 years 2.2 $ 12,439
5 - 10 years 6.4 9,426
10+ years 12.1 46,737
Total 9.6 $ 68,602


Lease Term (1)	Weighted Average Remaining Years	Annual Minimum Payments (2)
0 - 5 years	3.7	$	14,792
5 - 10 years	5.7	7,478
10+ years	13.5	30,922
Total	9.3	$	53,192


~~(1)~~	~~Lease term does not include renewal periods.~~


~~(2)~~	~~Annual minimum payments do not include $5.0 million from a coal infrastructure lease that is accounted for as a financing transaction. See~~ ~~Note 16. Financing Transaction~~ ~~for additional information.~~

(1)Lease term does not include renewal periods.

~~Table~~(2)Annual minimum payments do not include $40.0 million of ~~Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

~~3. Discontinued Operations~~

~~In December 2018, the Partnership sold VantaCore Partners LLC, its construction aggregates business,~~annual fixed consideration owed to NRP in 2020 and ~~in July 2016, the Partnership sold its non-operated oil and gas working interest assets. The Partnership's exit~~2021 resulting from both its construction aggregates business and non-operated oil and gas working interest business represented strategic shifts to reduce debt and focus on its Coal Royalty and Other and Soda Ash business segments. As a result, the Partnership classified the assets and liabilities, operating results and cash flows of these businesses as discontinued operations in its Consolidated Balance Sheets, Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows for all periods presented.

~~The following table presents the carrying amounts of the Partnership's assets and liabilities of discontinued operations in the Consolidated Balance Sheets:~~

September 30, 2019 December 31, 2018
(In thousands) Construction Aggregates NRP
Oil and Gas Total Construction Aggregates NRP
Oil and Gas Total
ASSETS
Current assets
Accounts receivable, net $ —
$ 988
$ 988
$ 5
$ 988
$ 993
Total assets of discontinued operations $ —
$ 988
$ 988
$ 5
$ 988
$ 993
LIABILITIES
Current liabilities
Accounts payable $ 42
$ —
$ 42
$ 181
$ —
$ 181
Accrued liabilities 132
—
132
766
—
766
Total liabilities of discontinued operations $ 174
$ —
$ 174
$ 947
$ —
$ 947

~~The following tables present summarized financial results of the Partnership's discontinued operations in the Consolidated Statements of Comprehensive Income:~~

Three Months Ended September 30,
2019 2018
(In thousands) Construction Aggregates NRP
Oil and Gas Total Construction Aggregates
NRP
Oil and Gas
Total
Revenues and other income
Construction aggregates $ —
$ —
$ —
$ 30,398
$ —
$ 30,398
Road construction and asphalt paving services —
—
—
6,250
—
6,250
Oil and gas —
2
2
—
(1 ) (1 )
Gain on asset sales and disposals 5
—
5
163
—
163
Total revenues and other income $ 5
$ 2
$ 7
$ 36,811
$ (1 ) $ 36,810
Operating expenses
Operating and maintenance expenses $ —
$ —
$ —
$ 30,758
$ 23
$ 30,781
Depreciation, depletion and amortization —
—
—
3,333
—
3,333
Total operating expenses $ —
$ —
$ —
$ 34,091
$ 23
$ 34,114
Interest expense —
—
—
(8 ) —
(8 )
Income (loss) from discontinued operations $ 5
$ 2
$ 7
$ 2,712
$ (24 ) $ 2,688

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

Nine Months Ended September 30,
2019 2018
(In thousands) Construction Aggregates NRP
Oil and Gas Total Construction Aggregates
NRP
Oil and Gas
Total
Revenues and other income
Construction aggregates $ —
$ —
$ —
$ 91,055
$ —
$ 91,055
Road construction and asphalt paving services —
—
—
13,154
—
13,154
Oil and gas —
2
2
—
(3 ) (3 )
Gain on asset sales and disposals 243
—
243
214
—
214
Total revenues and other income $ 243
$ 2
$ 245
$ 104,423
$ (3 ) $ 104,420
Operating expenses
Operating and maintenance expenses $ 27
$ 12
$ 39
$ 91,225
$ 69
$ 91,294
Depreciation, depletion and amortization —
—
—
9,377
—
9,377
Total operating expenses $ 27
$ 12
$ 39
$ 100,602
$ 69
$ 100,671
Interest expense —
—
—
(28 ) —
(28 )
Income (loss) from discontinued operations $ 216
$ (10 ) $ 206
$ 3,793
$ (72 ) $ 3,721

~~Capital expenditures related to the Partnership's discontinued operations were $9.7 million~~contract modifications entered into during the ~~nine months ended September 30, 2018.~~second quarter of 2020. Additionally, $5.0 million of this $40.0 million annual fixed consideration amount relates to a coal infrastructure lease that is accounted for as a financing transaction. See Note 14. Financing Transaction for more information.

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.

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 ~~attributable~~(loss) available to common unitholders and the general partner by $7.5 million during the three months ended September 30, 2020 and 2019, and ~~2018~~$22.6 million and $22.5 million during the nine months ended September 30, 2020 and 2019, ~~and 2018~~respectively, as a result of accumulated preferred unit distributions earned during the period. ~~During~~In May 2020, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended March 31, ~~2018,~~2020. In June 2020, the Partnership redeemed all of the outstanding ~~PIK Units, which resulted~~preferred units paid in ~~an $8.8 million cash payment during the period. This $8.8 million cash payment is not included in the table below.~~kind.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

The following table shows the cash distributions declared and paid to common and preferred unitholders during the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively:


		Common Units				Preferred Units						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)		Date Paid	Period Covered by Distribution	Distribution per Unit		Total Distribution (1) (In thousands)		Distribution per Unit		Total Distribution (In thousands)
2020										2020
February 2020										February 2020	October 1 - December 31, 2019	$	0.45	$	5,630	$	30.00	$	7,500
May 2020										May 2020	January 1 - March 31, 2020	0		0		15.00		3,750
June 2020 (2)										June 2020 (2)	January 1 - March 31, 2020	—		—		15.45		3,863
August 2020										August 2020	April 1 - June 30, 2020	0.45		5,630		30.00		7,500

2019										2019
February 2019	October 1 - December 31, 2018	$	0.45	$	5,625	$	30.00	$	7,500	February 2019	October 1 - December 31, 2018	$	0.45	$	5,625	$	30.00	$	7,500
May 2019	January 1 - March 31, 2019	0.45		5,630		30.00		7,500		May 2019	January 1 - March 31, 2019	0.45		5,630		30.00		7,500
May 2019 ⁽²⁾	Special Distribution	0.85		10,635		—		—
May 2019 (3)										May 2019 (3)	Special Distribution	0.85		10,635		—		—
August 2019	April 1 - June 30, 2019	0.45		5,630		30.00		7,500		August 2019	April 1 - June 30, 2019	0.45		5,630		30.00		7,500

2018
February 2018	October 1 - December 31, 2017	$	0.45	$	5,617	$	30.00	$	7,765
May 2018	January 1 - March 31, 2018	0.45		5,623		30.00		7,500
August 2018	April 1 - June 30, 2018	0.45		5,623		30.00		7,500


~~(1)~~	~~Totals include the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.~~


~~(2)~~	~~The special distribution of $0.85 per common unit was made to cover the common unitholders’ tax liability resulting from the sale of NRP’s construction aggregates business in December 2018.~~

(1)Total common unit distribution includes the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.

5.(2)Redemption of preferred units paid in kind plus accrued interest.

(3)Special distribution was made to cover the common unitholders’ tax liability resulting from the sale of NRP’s construction aggregates business in December 2018.

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 ~~non-controlling interest,~~ 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 (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. The calculation of diluted net income per common unit for the three and nine months ended September 30, 2019 includes the assumed conversion of the preferred units.

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, 2020 did not include the net settlement of warrants to purchase 1.75 million common units at a strike price of $22.81 or the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive. The calculation of the dilutive effect of the warrants for the three months ended September 30, 2019 ~~and 2018 and the nine months ended September 30, 2018~~ includes the net settlement of warrants to purchase 1.75 million common units with a strike price of $22.81 but did not include the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive. The calculation of ~~diluted net income per common unit~~the dilutive effect of the warrants for the nine months ended September 30, 2019 includes both the net settlement of warrants to purchase 1.75 million common units atwith a strike price of $22.81 and the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

The following ~~table reconciles~~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:

Three Months Ended
September 30, Nine Months Ended
September 30,
(In thousands, except per unit data) 2019 2018 2019 2018
Allocation of net income
Net income from continuing operations $ 39,163
$ 25,853
$ 94,034
$ 87,268
Add (less): net loss (income) attributable to non-controlling interest —
359
—
(510 )
Less: income attributable to preferred unitholders (7,500 ) (7,500 ) (22,500 ) (22,500 )
Net income from continuing operations attributable to common unitholders and general partner $ 31,663
$ 18,712
$ 71,534
$ 64,258
Less: net income from continuing operations attributable to the general partner (634 ) (374 ) (1,431 ) (1,285 )
Net income from continuing operations attributable to common unitholders $ 31,029

$ 18,338

$ 70,103

$ 62,973

Net income from discontinued operations $ 7
$ 2,688
$ 206
$ 3,721
Less: net income from discontinued operations attributable to the general partner 0
(54 ) (4 ) (75 )
Net income from discontinued operations attributable to common unitholders $ 7

$ 2,634

$ 202
$ 3,646

Net income $ 39,170

$ 28,541

$ 94,240
$ 90,989
Add (less): net loss (income) attributable to non-controlling interest —
359
—
(510 )
Less: income attributable to preferred unitholders (7,500 ) (7,500 ) (22,500 ) (22,500 )
Net income attributable to common unitholders and general partner $ 31,670
$ 21,400
$ 71,740
$ 67,979
Less: net income attributable to the general partner (634 )
(428 )
(1,435 ) (1,360 )
Net income attributable to common unitholders $ 31,036

$ 20,972

$ 70,305

$ 66,619

Basic net income per common unit
Weighted average common units—basic 12,261
12,246
12,259
12,243
Basic net income from continuing operations per common unit $ 2.53

$ 1.50

$ 5.72
$ 5.14
Basic net income from discontinued operations per common unit $ 0.00

$ 0.22

$ 0.02
$ 0.30
Basic net income per common unit $ 2.53

$ 1.71

$ 5.73
$ 5.44


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands, except per unit data)	2020		2019		2020		2019
Allocation of net income (loss)
Net income (loss) from continuing operations	$	7,216	$	39,163	$	(99,506)	$	94,034

Less: income attributable to preferred unitholders	(7,500)		(7,500)		(22,613)		(22,500)
Net income (loss) from continuing operations attributable to common unitholders and general partner	$	(284)	$	31,663	$	(122,119)	$	71,534
Add (less): net loss (income) from continuing operations attributable to the general partner	5		(634)		2,442		(1,431)
Net income (loss) from continuing operations attributable to common unitholders	$	(279)	$	31,029	$	(119,677)	$	70,103

Net income from discontinued operations	$	0	$	7	$	0	$	206
Less: net income from discontinued operations attributable to the general partner	0		0		0		(4)
Net income from discontinued operations attributable to common unitholders	$	0	$	7	$	0	$	202

Net income (loss)	$	7,216	$	39,170	$	(99,506)	$	94,240

Less: income attributable to preferred unitholders	(7,500)		(7,500)		(22,613)		(22,500)
Net income (loss) attributable to common unitholders and general partner	$	(284)	$	31,670	$	(122,119)	$	71,740
Add (less): net loss (income) attributable to the general partner	5		(634)		2,442		(1,435)
Net income (loss) attributable to common unitholders	$	(279)	$	31,036	$	(119,677)	$	70,305

Basic net income (loss) per common unit
Weighted average common units—basic	12,261		12,261		12,261		12,259
Basic net income (loss) from continuing operations per common unit	$	(0.02)	$	2.53	$	(9.76)	$	5.72
Basic net income from discontinued operations per common unit	$	0.00	$	0.00	$	0.00	$	0.02
Basic net income (loss) per common unit	$	(0.02)	$	2.53	$	(9.76)	$	5.73

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands, except per unit data)	2020		2019		2020		2019
Diluted income (loss) per common unit
Weighted average common units—basic	12,261		12,261		12,261		12,259
Plus: dilutive effect of preferred units	0		10,494		0		10,494
Plus: dilutive effect of warrants	0		389		0		800
Plus: dilutive effect of unvested unit-based awards	—		13		—		31
Weighted average common units—diluted	12,261		23,157		12,261		23,584

Net income (loss) from continuing operations	$	7,216	$	39,163	$	(99,506)	$	94,034
Less: income attributable to preferred unitholders	(7,500)		0		(22,613)		0
Diluted net income (loss) from continuing operations attributable to common unitholders and general partner	$	(284)	$	39,163	$	(122,119)	$	94,034
Add (less): diluted net loss (income) from continuing operations attributable to the general partner	5		(784)		2,442		(1,881)
Diluted net income (loss) from continuing operations attributable to common unitholders	$	(279)	$	38,379	$	(119,677)	$	92,153

Diluted net income from discontinued operations attributable to common unitholders	$	0	$	7	$	0	$	202

Net income (loss)	$	7,216	$	39,170	$	(99,506)	$	94,240
Less: income attributable to preferred unitholders	(7,500)		0		(22,613)		0
Diluted net income (loss) attributable to common unitholders and general partner	$	(284)	$	39,170	$	(122,119)	$	94,240
Add (less): diluted net loss (income) attributable to the general partner	5		(784)		2,442		(1,885)
Diluted net income (loss) attributable to common unitholders	$	(279)	$	38,386	$	(119,677)	$	92,355

Diluted net income (loss) from continuing operations per common unit	$	(0.02)	$	1.66	$	(9.76)	$	3.91
Diluted net income from discontinued operations per common unit	$	0.00	$	0.00	$	0.00	$	0.01
Diluted net income (loss) per common unit	$	(0.02)	$	1.66	$	(9.76)	$	3.92

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
(In thousands, except per unit data) 2019 2018 2019 2018
Diluted income per common unit ��
Weighted average common units—basic 12,261
12,246
12,259
12,243
Plus: dilutive effect of Preferred Units 10,494
9,124
10,494
9,124
Plus: dilutive effect of Warrants 389
470
800
474
Plus: dilutive effect of unvested unit-based awards 13
—
31
—
Weighted average common units—diluted 23,157

21,840

23,584
21,841

Net income from continuing operations $ 39,163

$ 25,853

$ 94,034
$ 87,268
Add (less): net loss (income) attributable to non-controlling interest —
359
—
(510 )
Diluted net income from continuing operations attributable to common unitholders and general partner $ 39,163
$ 26,212
$ 94,034
$ 86,758
Less: diluted net income from continuing operations attributable to the general partner (784 ) (524 ) (1,881 ) (1,735 )
Diluted net income from continuing operations attributable to common unitholders $ 38,379

$ 25,688

$ 92,153
$ 85,023

Diluted net income from discontinued operations attributable to common unitholders $ 7

$ 2,634

$ 202
$ 3,646

Net income $ 39,170

$ 28,541

$ 94,240
$ 90,989
Add (less): net loss (income) attributable to non-controlling interest —
359
—
(510 )
Diluted net income attributable to common unitholders and general partner $ 39,170
$ 28,900
$ 94,240
$ 90,479
Less: diluted net income attributable to the general partner (784 ) (578 ) (1,885 ) (1,810 )
Diluted net income attributable to common unitholders $ 38,386

$ 28,322

$ 92,355
$ 88,669

Diluted net income from continuing operations per common unit $ 1.66

$ 1.18

$ 3.91
$ 3.89
Diluted net income from discontinued operations per common unit $ 0.00

$ 0.12

$ 0.01
$ 0.17
Diluted net income per common unit $ 1.66

$ 1.30

$ 3.92
$ 4.06

6.5. 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~~2 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 ~~a number of~~various states across the United States. The Partnership's oil and gas royalty assets are primarily located in ~~Louisiana.~~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 ~~production business located~~refinery in the Green River Basin of Wyoming. Ciner Resources LP, the Partnership's operating partner, mines the trona, processes it into soda ash, and distributes the soda ash both domestically and internationally to the glass and chemicals industries.

~~In December 2018, the Partnership sold its construction aggregates business which enabled it to further reduce debt and focus on its Coal Royalty and Other and Soda Ash business segments. See~~ ~~Note 3. Discontinued Operations~~ ~~for more information.~~

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

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.~~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.~~Income (Loss).

Table of Contents

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, 2020
Revenues	$	27,944	$	1,986	$	0	$	29,930


Operating and maintenance expenses	5,685		96		0		5,781
Depreciation, depletion and amortization	2,111		0		0		2,111
General and administrative expenses	0		0		3,634		3,634
Asset impairments	934		0		0		934
Other expenses, net	41		0		10,213		10,254
Net income (loss) from continuing operations	19,173		1,890		(13,847)		7,216


For the Three Months Ended September 30, 2019
Revenues	$	43,784	$	13,818	$	0	$	57,602

Gain on asset sales and disposals	6,107		0		0		6,107
Operating and maintenance expenses	5,771		223		0		5,994
Depreciation, depletion and amortization	3,384		0		0		3,384
General and administrative expenses	0		0		4,253		4,253
Asset impairments	484		0		0		484
Other expenses, net	0		0		10,431		10,431
Net income (loss) from continuing operations	40,252		13,595		(14,684)		39,163
Income from discontinued operations	0		0		0		7

For the Nine Months Ended September 30, 2020
Revenues	$	95,490	$	5,200	$	0	$	100,690

Gain on asset sales and disposals	465		0		0		465
Operating and maintenance expenses	19,059		141		0		19,200
Depreciation, depletion and amortization	6,185		0		0		6,185
General and administrative expenses	0		0		11,168		11,168
Asset impairments	133,217		0		0		133,217
Other expenses, net	56		0		30,835		30,891
Net income (loss) from continuing operations	(62,562)		5,059		(42,003)		(99,506)


For the Nine Months Ended September 30, 2019
Revenues	$	168,777	$	36,833	$	0	$	205,610

Gain on asset sales and disposals	6,609		0		0		6,609
Operating and maintenance expenses	26,590		223		0		26,813
Depreciation, depletion and amortization	11,746		0		0		11,746
General and administrative expenses	0		0		12,799		12,799
Asset impairments	484		0		0		484
Other expenses, net	0		0		66,343		66,343
Net income (loss) from continuing operations	136,566		36,610		(79,142)		94,034
Income from discontinued operations	0		0		0		206

Operating Segments
(In thousands) Coal Royalty and Other Soda Ash Corporate and Financing Total
Three Months Ended September 30, 2019
Revenues $ 43,784
$ 13,818
$ —
$ 57,602
Gain on asset sales and disposals 6,107
—
—
6,107
Operating and maintenance expenses 5,771
223
—
5,994
Depreciation, depletion and amortization 3,384
—
—
3,384
General and administrative expenses —
—
4,253
4,253
Asset impairments 484
—
—
484
Other expenses, net —
—
10,431
10,431
Net income (loss) from continuing operations 40,252
13,595
(14,684 ) 39,163
Income from discontinued operations —
—
—
7

Three Months Ended September 30, 2018
Revenues $ 49,371
$ 8,836
$ —
$ 58,207
Operating and maintenance expenses 6,790
—
—
6,790
Depreciation, depletion and amortization 4,888
—
—
4,888
General and administrative expenses —
—
3,183
3,183
Other expenses, net —
—
17,493
17,493
Net income (loss) from continuing operations 37,693
8,836
(20,676 ) 25,853
Income from discontinued operations —
—
—
2,688

Nine Months Ended September 30, 2019
Revenues $ 168,777
$ 36,833
$ —
$ 205,610
Gain on asset sales and disposals 6,609
—
—
6,609
Operating and maintenance expenses 26,590
223
—
26,813
Depreciation, depletion and amortization 11,746
—
—
11,746
General and administrative expenses —
—
12,799
12,799
Asset impairments 484
—
—
484
Other expenses, net —
—
66,343
66,343
Net income (loss) from continuing operations 136,566
36,610
(79,142 ) 94,034
Income from discontinued operations —
—
—
206

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

Operating Segments
(In thousands) Coal Royalty and Other Soda Ash Corporate and Financing Total
Nine Months Ended September 30, 2018
Revenues $ 152,150
$ 34,986
$ —
$ 187,136
Gain on asset sales and disposals 819
—
—
819
Operating and maintenance expenses 21,122
—
—
21,122
Depreciation, depletion and amortization 15,364
—
—
15,364
General and administrative expenses —
—
10,782
10,782
Asset impairments 242
—
—
242
Other expenses, net —
—
53,177
53,177
Net income (loss) from continuing operations 116,241
34,986
(63,959 ) 87,268
Income from discontinued operations —
—
—
3,721

As of September 30, 2019
Total assets of continuing operations $ 969,425
$ 258,063
$ 15,428
$ 1,242,916
Total assets of discontinued operations —
—
—
988

As of December 31, 2018
Total assets of continuing operations $ 986,680
$ 247,051
$ 106,923
$ 1,340,654
Total assets of discontinued operations —
—
—
993

7.6. 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:


	Three Months Ended September 30,						Nine Months Ended September 30,							For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	2019			2018			2019			2018			(In thousands)	2020		2019		2020		2019
Balance at beginning of period	$	251,135		$	245,524		$	247,051		$	245,433		Balance at beginning of period	$	252,420	$	251,135	$	263,080	$	247,051
Income allocation to NRP’s equity interests	15,068			10,036			40,511			38,525			Income allocation to NRP’s equity interests	3,004		15,068		8,450		40,511
Amortization of basis difference	(1,250		)	(1,200		)	(3,678		)	(3,539		)	Amortization of basis difference	(1,018)		(1,250)		(3,250)		(3,678)
Comprehensive income (loss) from unconsolidated investment	(520		)	791			(341		)	(768		)
Other comprehensive income (loss)													Other comprehensive income (loss)	2,428		(520)		2,764		(341)
Distribution	(6,370		)	(12,250		)	(25,480		)	(36,750		)	Distribution	0		(6,370)		(14,210)		(25,480)
Balance at end of period	$	258,063		$	242,901		$	258,063		$	242,901		Balance at end of period	$	256,834	$	258,063	$	256,834	$	258,063

The following table represents summarized financial information for Ciner Wyoming as derived from their respective unaudited financial ~~statements:~~statements for the three and nine months ended September 30, 2020 and 2019:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	2020		2019		2020		2019
Net sales	$	98,197	$	137,148	$	288,804	$	397,378
Gross profit	11,704		36,747		35,363		103,382
Net income	6,130		30,750		17,245		82,675

Three Months Ended
September 30, Nine Months Ended
September 30,
(In thousands) 2019 2018 2019 2018
Sales $ 137,148
$ 123,366
$ 397,378
$ 354,467
Gross profit 36,747
26,253
103,382
68,497
Net income 30,750
20,481
82,675
78,623

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

8.7. Mineral Rights, Net

The Partnership’s mineral rights consist of the following:


	September 30, 2019							December 31, 2018								September 30, 2020						December 31, 2019
(In thousands)	Cost		Accumulated Depletion			Net Book Value		Cost		Accumulated Depletion			Net Book Value		(In thousands)	Carrying Value		Accumulated Depletion		Net Book Value		Carrying Value		Accumulated Depletion		Net Book Value
Coal properties	$	1,147,692	$	(459,122	)	$	688,570	$	1,164,845	$	(451,210	)	$	713,635	Coal properties	$	798,870	$	(354,843)	$	444,027	$	981,352	$	(420,448)	$	560,904
Aggregates properties	41,589		(13,132		)	28,457		24,920		(11,814		)	13,106		Aggregates properties	9,102		(2,741)		6,361		41,486		(13,357)		28,129
Oil and gas royalty properties	12,395		(7,823		)	4,572		12,395		(7,632		)	4,763		Oil and gas royalty properties	12,354		(8,416)		3,938		12,395		(7,887)		4,508
Other	13,156		(1,601		)	11,555		13,158		(1,550		)	11,608		Other	13,156		(1,612)		11,544		13,156		(1,601)		11,555
Total mineral rights, net	$	1,214,832	$	(481,678	)	$	733,154	$	1,215,318	$	(472,206	)	$	743,112	Total mineral rights, net	$	833,482	$	(367,612)	$	465,870	$	1,048,389	$	(443,293)	$	605,096

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 ~~$2.8~~$2.1 million and ~~$3.9~~$2.8 million for the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$9.5~~$6.0 million and ~~$12.8~~$9.5 million for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

~~During~~The Partnership recorded $0.9 million and $133.2 million of expense to fully impair certain properties during the three and nine months ended September 30, ~~2019, the Partnership recorded a gain of $6.1 million and $6.6 million,~~2020, respectively, ~~included in gain on asset sales and disposals on the Consolidated Statements of Comprehensive Income~~ primarily related to ~~the disposal~~weakened coal markets that resulted in termination of certain coal ~~mineral rights with a $0~~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. The Partnership has developed procedures to evaluate its long-lived assets for possible impairment periodically or whenever events or changes in circumstances indicate an asset's net book ~~value.~~

~~9. Intangible Assets, Net~~

~~The Partnership's intangible assets consist of above-market coal royalty~~value may not be recoverable. Potential events or circumstances include, but are not limited to, specific events such as a reduction in economically recoverable reserves or production ceasing on a property for an extended period. This analysis is based on historic, current and ~~related transportation contracts with subsidiaries of Foresight Energy LP ("Foresight Energy") pursuant to which the Partnership receives royalty payments for coal sales~~future performance and ~~throughput fees for the transportation~~considers both quantitative and ~~processing of coal. The Partnership's intangible assets included on its Consolidated Balance Sheets are as follows:~~

September 30, December 31,
(In thousands) 2019 2018
Intangible assets at cost $ 81,109
$ 81,109
Less: accumulated amortization (40,648 ) (38,596 )
Total intangible assets, net $ 40,461
$ 42,513

~~Amortization expense included in depreciation, depletion and amortization on~~qualitative information. While the Partnership's ~~Consolidated Statements~~impairment evaluation as of ~~Comprehensive Income was $0.5 million and $0.9 million for the three months ended~~ September 30, ~~2019~~2020 incorporated an estimated impact of the global COVID-19 pandemic, there is significant uncertainty as to the severity and ~~2018, respectively and $2.1 million and $2.3 million for~~duration of this disruption. If the ~~nine months ended September 30, 2019 and 2018, respectively.~~impact is worse than we currently estimate, an additional impairment charge may be recognized in future periods.

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(Unaudited)

~~10.~~8. Debt, Net

The Partnership's debt consists of the following:


	September 30,		December 31,
(In thousands)	2020		2019
NRP LP debt:
9.125% senior notes, with semi-annual interest payments in June and December, due June 2025, issued at par ("2025 Senior Notes")	$	300,000	$	300,000


Opco debt:
Revolving credit facility	$	0	$	0
Senior Notes
5.05% with semi-annual interest payments in January and July, with annual principal payments in July, due July 2020	$	0	$	6,780
5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023	7,094		9,458
4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023	24,016		24,016
5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	50,738		63,423
8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	16,047		20,059
5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	79,945		79,945
5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	20,375		20,375

Total Opco Senior Notes	$	198,215	$	224,056

Total debt at face value	$	498,215	$	524,056

Net unamortized debt issuance costs	(6,742)		(7,858)
Total debt, net	$	491,473	$	516,198
Less: current portion of long-term debt	(39,072)		(45,776)
Total long-term debt, net	$	452,401	$	470,422

September 30, December 31,
(In thousands) 2019 2018
NRP LP debt:
9.125% senior notes, with semi-annual interest payments in June and December, due June 2025 issued at par ("2025 Senior Notes") $ 300,000
$ —
10.500% senior notes, with semi-annual interest payments in March and September, due March 2022, $241 million issued at par and $105 million issued at 98.75% ("2022 Senior Notes") —
345,638
Opco debt:
Revolving credit facility $ —
$ —
Senior Notes
8.38% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2019 $ —
$ 21,319
5.05% with semi-annual interest payments in January and July, with annual principal payments in July, due July 2020 6,780
15,290
5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023 9,458
13,414
4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023 30,019
37,195
5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024 63,423
89,529
8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024 20,059
27,185
5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026 91,365
107,013
5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026 23,286
30,555
Total Opco Senior Notes $ 244,390
$ 341,500
Total debt at face value $ 544,390
$ 687,138
Net unamortized debt discount —
(1,266 )
Net unamortized debt issuance costs (8,223 ) (13,114 )
Total debt, net $ 536,167
$ 672,758
Less: current portion of long-term debt (45,789 ) (115,184 )
Total long-term debt, net $ 490,378
$ 557,574

NRP LP Debt

2025 Senior Notes

~~In April 2019, NRP and NRP Finance issued the 2025 Senior Notes and used the $300 million proceeds and $76 million of cash on hand to fund the redemption of the 2022 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 beginning December 30, 2019.~~

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30.

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.

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(Unaudited)

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. None of NRP's subsidiaries guarantee the 2025 Senior Notes. As of September 30, 2020 and December 31, 2019, NRP and NRP Finance were in compliance with the terms of the Indenture relating to their 2025 Senior Notes.

2022 Senior Notes

During the second quarter of 2019, the Partnership redeemed the 2022 Senior Notes at a redemption price equal to 105.250% of the principal amount of the 2022 Senior Notes, plus accrued and unpaid interest. In connection with the early redemption, the Partnership paid an $18.1 million call premium and ~~also~~ wrote off $10.4 million of unamortized debt issuance costs and debt discount. These expenses are included in loss on extinguishment of debt on the Partnership's Consolidated Statements of Comprehensive ~~Income.~~Income (Loss).

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 NRP Trona LLC. As of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, 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 ~~extends~~extended the term of the Opco Credit Facility until April 2023. Lender commitments under the Opco Credit Facility remain at $100.0 million. The Opco Credit Facility contains financial covenants requiring Opco to maintain:

•A leverage ratio of consolidated indebtedness to EBITDDA (as defined in the Opco Credit Facility) not to exceed 4.0x; 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 4.0x to 3.0x; 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.

~~As of~~During the three and nine months ended September 30, 2020 and 2019, the Partnership did not have any borrowings outstanding under the Opco Credit Facility and had $100 million in available borrowing ~~capacity.~~

~~The weighted average interest rates for the borrowings outstanding under the Opco Credit Facility during the three and nine months ended~~capacity at both September 30, ~~2018 were 6.34%~~2020 and ~~6.18%, respectively. There were no borrowings outstanding under the Opco Credit Facility during the three and nine months ended September 30,~~December 31, 2019.

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~~(Unaudited)~~

The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of ~~$541.5~~$366.8 million and ~~$548.9~~$399.7 million classified as mineral rights, net and ~~plant and equipment,~~other long-term assets, net on the Partnership’s Consolidated Balance Sheets as of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

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, ~~2019~~2020 and December 31, ~~2018,~~2019, the Opco Senior Notes had cumulative principal balances of ~~$244.4~~$198.2 million and ~~$341.5~~$224.1 million, respectively. Opco made mandatory principal payments of $25.8 million during the nine months ended September 30, 2020 and $97.1 million during the nine months ended September 30, 2019, which included a $49.3 million pre-payment as a result of the sale of the Partnership's construction aggregates ~~business, during the nine months ended September 30, 2019, and $55.7 million during the nine months ended September 30, 2018.~~business.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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, ~~2019.~~2020.

~~11.~~9. Fair Value Measurements

Fair Value of Financial Assets and Liabilities

The Partnership’s financial assets and liabilities consist of cash and cash equivalents, ~~restricted cash,~~a contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents ~~and restricted cash~~ approximate fair value due to their short-term nature. ~~There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three and nine months ended September 30, 2019 or 2018.~~ 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 ~~amount~~value and estimated fair value of the Partnership's debt and contract receivable:


		September 30, 2020				December 31, 2019
(In thousands)	Fair Value Hierarchy Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Debt:
NRP 2025 Senior Notes	1	$	294,891	$	263,250	$	294,084	$	269,250

Opco Senior Notes (1)	3	196,582		173,934		222,114		201,090
Opco Credit Facility	3	0		0		0		0


Assets:

Contract receivable (current and long-term) (2)	3	$	35,800	$	27,255	$	38,945	$	33,460

September 30, 2019 December 31, 2018
(In thousands) Fair Value Hierarchy Level Carrying
Value Estimated
Fair Value Carrying
Value Estimated
Fair Value
Debt:
NRP 2025 Senior Notes 1 $ 293,824
$ 287,250
$ —
$ —
NRP 2022 Senior Notes 1 —
—
334,024
356,871
Opco Senior Notes 3 242,343
234,003
338,734
352,599
Opco Credit Facility 3 —
—
—
—

Assets:
Contract receivable (current and long-term) 3 $ 39,416
$ 33,784
$ 40,776
$ 34,704

(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 88% of par value at September 30, 2020.

(2)The fair value of the Partnership's contract receivable is determined based on the present value of future cash flow projections related to the underlying asset at a discount rate of 15% at September 30, 2020.

NRP has embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that are accounted for separately from the preferred units as assets and liabilities at fair value on the Partnership's Consolidated Balance Sheets. Level 3 valuation of the embedded derivatives are based on numerous factors including the likelihood of the event occurring. The embedded derivatives are revalued quarterly and changes in their fair value would be recorded in other ~~expense,~~expenses, net on the Partnership's Consolidated Statements of Comprehensive ~~Income.~~Income (Loss). The embedded derivatives had ~~zero~~0 value as of September 30, ~~2019~~2020 and December 31, ~~2018.~~2019.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

~~12.~~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.~~Income (Loss). NRP also reimburses overhead costs incurred by its affiliates 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.~~Income (Loss).

Direct general and administrative expenses charged to the Partnership by QMC and WPPLP are included inon the Partnership's Consolidated Statement of Comprehensive Income (Loss) as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018		(In thousands)	2020		2019		2020		2019
Operating and maintenance expenses	$	1,598	$	1,560	$	4,806	$	4,694	Operating and maintenance expenses	$	1,562	$	1,598	$	4,729	$	4,806
General and administrative expenses	855		934		2,704		2,714		General and administrative expenses	878		855		2,657		2,704

The Partnership had accounts payable to QMC of $0.4 million at both September 30, 2020 and ~~$0.5~~December 31, 2019 and $0.2 million and $0.1 million to WPPLP on its Consolidated Balance Sheets ~~as of~~at September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

During the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, the Partnership recognized ~~$0.3~~$0.2 million and ~~$0.6~~$0.3 million in operating and maintenance expenses, respectively, on its Consolidated Statements of Comprehensive Income (Loss) related to an overriding royalty agreement with WPPLP. These amounts were ~~$3.8~~$0.3 million and ~~$3.5~~$3.8 million during the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively. At September 30, ~~2019,~~2020, the Partnership had ~~$0.1~~$0.4 million of other long-term assets on its Consolidated Balance ~~Sheets~~Sheet related to a prepaid royalty for this agreement and at December 31, ~~2018~~2019, the Partnership had ~~$1.4~~$0.1 million of accounts payable to WPPLP ~~for~~related to this agreement.

~~Quintana Capital Group GP, Ltd.~~

Corbin J. Robertson, Jr. is a principal in Quintana Capital Group GP, Ltd. ("Quintana Capital"), which controls several private equity funds focused on investments in the energy business. In connection with the formation of Quintana Capital, the Partnership adopted a formal conflicts policy that establishes the opportunities that will be pursued by the Partnership and those that will be pursued by Quintana Capital. The governance documents of Quintana Capital’s affiliated investment funds reflect the guidelines set forth in the Partnership's conflicts policy. At September 30, 2019, a fund controlled by Quintana Capital owned a substantial interest in Corsa Coal Corp. ("Corsa"), a coal mining company traded on the TSX Venture Exchange that was one of the Partnership’s lessees in Tennessee. During the second quarter of 2018, Corsa assigned its lease with NRP to a third party and is no longer deemed a related party as of such date. Coal related revenues from Corsa totaled $0.4 million for the nine months ended September 30, 2018.

Industrial Minerals Group LLC

Corbin J. Robertson, III, a Director of GP Natural Resource Partners LLC, ~~owns~~owned a minority ownership interest in Industrial Minerals Group LLC (“Industrial Minerals”), which, through its subsidiaries, leases two of NRP's coal royalty properties in Central Appalachia. As of December 31, 2019, Mr. Robertson no longer held an equity interest in Industrial Minerals; accordingly, revenues are no longer classified as related party revenues as of such date. Coal royalty related revenues from Industrial Minerals totaled $0.4 million and ~~$0.2~~$0.9 million for the three ~~months ended September 30, 2019~~ and ~~2018, respectively and $0.9 million and $0.6 million for the~~ nine months ended September 30, 2019, ~~and 2018,~~ respectively. The Partnership had accounts receivable from Industrial Minerals of ~~$0.2 million and $0.1~~$0.7 million on its Consolidated Balance ~~Sheets~~Sheet as of December 31, 2019.

Quinwood Coal Company

In May 2017, a subsidiary of Alpha Natural Resources assigned two coal leases with us to Quinwood Coal Company ("Quinwood"), an entity wholly owned by Corbin J. Robertson III. Coal related revenues from Quinwood totaled $0.0 million and $0.2 million for the three and nine months ended September 30, 2019, ~~and December 31, 2018,~~ respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

~~13.~~11. Major Customers

Revenues from customers that exceeded 10 percent of total revenues for any of the periods presented below are as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
(In thousands) Revenues Percent Revenues Percent Revenues Percent Revenues Percent
Foresight Energy ⁽¹⁾
$ 12,375
21 % $ 15,035
26 % $ 44,604
22 % $ 40,456
22 %
Contura Energy^{(1) (2)}
9,190
16 % 4,709
8 % 32,915
16 % 16,091
9 %


	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2020				2019				2020				2019
(In thousands)	Revenues		Percent		Revenues		Percent		Revenues		Percent		Revenues		Percent
Foresight Energy (1) (2)	$	8,592	29	%	$	12,375	21	%	$	27,052	27	%	$	44,604	22	%
Contura Energy (1)	7,143		24	%	9,190		16	%	23,164		23	%	32,915		16	%


~~(1)~~	~~Revenues from Foresight Energy and Contura Energy are included within the Partnership's Coal Royalty and Other segment.~~


~~(2)~~	In the fourth quarter of 2018, Contura Energy and Alpha Natural Resources merged. Revenues during the three and nine months ended September 30, 2019 relate to the combined company, while revenues during the three and nine months ended September 30, 2018 do not include revenues from Alpha Natural Resources.

(1)Revenues from Foresight Energy and Contura Energy are included within the Partnership's Coal Royalty and Other segment.

~~14.~~(2)In June 2020, the Partnership entered into lease amendments with Foresight Energy pursuant to which Foresight agreed to pay NRP fixed cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between the Partnership and Foresight Energy for calendar years 2020 and 2021.

12. Commitments and Contingencies

~~Legal~~

NRP is involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, Partnership management believes these ordinary course matters will not have a material effect on the Partnership’s financial position, liquidity or operations. ~~During the third quarter, NRP was also involved in the matters described below.~~

~~Anadarko Contingent Consideration Payment Dispute~~

In January 2013, NRP acquired a non-controlling 48.51% general partner interest in OCI Wyoming, L.P. ("OCI LP") and all of the preferred stock and a portion of the common stock of OCI Wyoming Co. ("OCI Co") (which in turn owned a 1% limited partner interest in OCI LP) from Anadarko Holding Company and its subsidiary, Big Island Trona Company (together, "Anadarko"). The remaining general partner interest in OCI LP and common stock of OCI Co were owned by subsidiaries of OCI Chemical Corporation.

The acquisition agreement provided for additional contingent consideration of up to $50 million to be paid by NRP if certain performance criteria were met at OCI LP as defined in the purchase and sale agreement in any of the years 2013, 2014 or 2015. For those years, NRP paid an aggregate of $11.5 million to Anadarko in full satisfaction of these contingent consideration payment obligations.

In July 2013, pursuant to a series of transactions in connection with an initial public offering by a subsidiary of OCI Chemical Corporation, the ownership structure in OCI LP was simplified. In connection with such reorganization, NRP exchanged the stock of OCI Co for a limited partner interest in OCI LP. Following the reorganization, NRP's interest in OCI LP remained at 49%, consisting of both limited and general partner interests. The restructuring did not have any impact on the operations, revenues, management or control of OCI LP.

In July 2017, Anadarko filed a lawsuit against Opco and NRP Trona LLC in the District Court of Harris County, Texas, 157th judicial district. The complaint alleged that the transactions conducted in 2013 triggered an acceleration of NRP's obligation under the purchase agreement with Anadarko to pay additional contingent consideration in full and demanded immediate payment of such amount, together with interest, court costs and attorneys’ fees. NRP does not believe the reorganization transactions triggered an obligation to pay any additional contingent consideration and is vigorously defending this lawsuit. However, the ultimate outcome cannot be predicted with certainty and the Partnership estimates a possible range of loss between $0, if it prevails, and approximately $40 million plus interest, court costs and attorneys’ fees if Anadarko prevails and is awarded the full damages it seeks. A trial in this matter was held in October 2019. The parties are currently awaiting a ruling by the trial court.

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~~(Unaudited)~~

~~15.~~13. Unit-Based Compensation

The Partnership's unit-based awards granted in ~~2019~~2020 and ~~2018~~2019 were valued using the closing price of NRP's units as of the grant date. The grant date fair value of these awards granted during the nine months ended September 30, 2020 and 2019 ~~and 2018~~ were ~~$5.4~~$3.5 million and ~~$2.2~~$5.4 million, respectively. Total unit-based compensation expense associated with these awards was ~~$0.5~~$0.9 million and ~~$0.2~~$0.5 million for the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$1.8~~$2.6 million and ~~$0.9~~$1.8 million for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and is included in general and administrative expenses and operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive ~~Income.~~Income (Loss). The unamortized cost associated with unvested outstanding awards as of September 30, ~~2019~~2020 is ~~$4.0~~$4.4 million, which is to be recognized over a weighted average period of ~~2.2~~1.8 years. The unamortized cost associated with unvested outstanding awards as of December 31, ~~2018~~2019 was ~~$1.2~~$3.5 million.

A summary of the unit activity in the outstanding grants during ~~2019~~2020 is as follows:


(In thousands)	Common Units	Weighted Average Exercise Price
Outstanding at January 1, 2020	157	$	37.48
Granted	203	$	17.20
Fully vested and issued	0	$	0
Forfeitures	(5)	$	17.20
Outstanding at September 30, 2020	355	$	26.20

(In thousands) Common Units Weighted Average Exercise Price
Outstanding at January 1, 2019 55
$ 29.10
Granted 129
$ 41.41
Fully vested and issued (12 ) $ 41.47
Forfeitures (15 ) $ 37.33
Outstanding at September 30, 2019 157
$ 37.48

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NATURAL RESOURCE PARTNERS L.P.

~~16.~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

14. Financing Transaction

The Partnership owns rail loadout and associated infrastructure at the Sugar Camp mine in the Illinois Basin operated by a subsidiary of Foresight Energy. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight Energy and is accounted for as a financing transaction (the "Sugar Camp lease"). The Sugar Camp lease expires in 2032 with renewal options for up to 80 additional years. Minimum payments are $5.0 million per year through the end of the lease term. The $5.0 million due to the Partnership in 2020 and 2021 is included in the fixed cash payments from Foresight Energy resulting from contract modifications entered into during the second quarter of 2020 as discussed in Note 11. Major Customers. The Partnership is also entitled to variable payments in the form of throughput fees determined based on the amount of coal transported and processed utilizing the Partnership's assets. In the event the Sugar Camp lease is renewed beyond 2032, payments become a fixed $10 thousand per year for the remainder of the renewed term.

The following table shows certain amounts related to the Partnership's Sugar Camp ~~lease:~~lease through 2032:


	September 30,		December 31,
(In thousands)	2020		2019
Accounts receivable, net	$	0	$	540
Contract receivable, net (current and long-term)	35,800		38,945
Unearned income	19,704		21,889
Projected remaining payments, net	$	55,504	$	61,374

15. Credit Losses

The Partnership is exposed to credit losses through collection of its trade receivables resulting from contracts with customers and a long-term receivable resulting from a financing transaction with a customer. The Partnership records an allowance for current expected credit losses on these receivables based on the loss-rate method. NRP assessed the likelihood of collection of its receivables utilizing historical loss rates, current market conditions that included the estimated impact of the global COVID-19 pandemic, industry and macroeconomic factors, reasonable and supportable forecasts and facts or circumstances of individual customers and properties. Examples of these facts or circumstances include, but are not limited to, contract disputes or renegotiations with the customer and evaluation of short and long-term economic viability of the contracted property. For its long-term contract receivable, management reverts to the historical loss experience immediately after the reasonable and supportable forecast period ends.

As of September 30, 2020, NRP recorded the following current expected credit loss (“CECL”) related to its receivables and long-term contract receivable:


(In thousands)	Gross		CECL Allowance		Net
Receivables	$	24,172	$	(2,324)	$	21,848
Long-term contract receivable	35,370		(1,579)		33,791
Total	$	59,542	$	(3,903)	$	55,639

NRP recorded $0.3 million and $0.0 million in operating and maintenance expenses on its Consolidated Statement of Comprehensive Income (Loss) related to the change in CECL allowance during the three and nine months ended September 30, 2020, respectively. In addition, the Partnership recorded $0.0 million and $3.9 million of bad debt expense due to balances deemed to be non-collectible in the three and nine months ended September 30, 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 reconciliations, bankruptcy monitoring, lessee audits and dispute resolution. The Partnership may employ legal counsel or collection specialists to pursue recovery of defaulted receivables.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

(In thousands) September 30, 2019 December 31, 2018
Accounts receivable $ 347
$ 661
Contract receivable (current and long-term) 39,416
40,776
Unearned income 22,667
25,058
Projected remaining payments $ 62,430
$ 66,495

~~17.~~16. Leases

Lessee Accounting

As of September 30, ~~2019,~~2020, the Partnership had one operating lease for an office building that is owned by WPPLP. On January 1, 2019, the Partnership entered into a new lease of the building with a five-year base term and five additional five-year renewal options. Upon lease commencement and as of September 30, ~~2019,~~2020, the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance ~~Sheet~~Sheets using the present value of the future lease payments over 30 years. The Partnership's right-of-use asset and lease liability included within other long-term assets, net and other non-current liabilities, respectively, on its Consolidated Balance ~~Sheet~~Sheets totaled $3.5 million at both ~~January 1, 2019~~September 30, 2020 and ~~September 30,~~December 31, 2019. During the three and nine months ended September 30, 2020 and 2019, the Partnership incurred total operating lease ~~expenses~~expense of $0.1 million and $0.4 million, respectively, included in both operating and maintenance expenses and general and administrative expenses on its Consolidated ~~Statement~~Statements of Comprehensive ~~Income.~~

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~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

Income (Loss).

The following table details the maturity analysis of the Partnership's operating lease liability and reconciles the undiscounted cash flows to the operating lease liability included on its Consolidated Balance Sheet:


Remaining Annual Lease Payments (In thousands)	As of September 30, 2019			Remaining Annual Lease Payments (In thousands)	As of September 30, 2020
2019	$	121
2020	483			2020	$	121
2021	483			2021	483
2022	483			2022	483
2023	483			2023	483
After 2023	12,079
2024				2024	483
After 2024				After 2024	11,597
Total lease payments ⁽¹⁾	$	14,132		Total lease payments (1)	$	13,650
Less: present value adjustment ⁽²⁾	(10,623		)	Less: present value adjustment (2)	(10,150)
Total operating lease liability	$	3,509		Total operating lease liability	$	3,500

(1)The remaining lease term of the Partnership's operating lease is 28.25 years.


~~(1)~~	~~The remaining lease term of the Partnership's operating lease is 29.25 years.~~

~~(2)~~

(2)The present value of the operating lease liability on the Partnership's Consolidated Balance Sheet was calculated using a 13.5% discount rate which represents the Partnership's estimated incremental borrowing rate under the lease. As the Partnership's lease does not provide an implicit rate, the Partnership estimated the incremental borrowing rate at the time the lease was entered into by utilizing the rate of the Partnership's secured debt and adjusting it for factors that reflect the profile of borrowing over the 30-year expected lease term.

~~Lessor Accounting~~

~~The~~Partnership owns loadout and other transportation assets at the Partnership's Macoupin property in the Illinois Basin which is operated by Foresight Energy. The infrastructure at the Macoupin property is leased to a subsidiary of Foresight Energy and is accounted for as an operating lease under ASC 842. The lease with Macoupin expires in January 2108. From the inception of this lease in 2009 through January 2039, the lease provides that the Partnership is entitled to variable lease payments in the form of throughput fees determined based on the amount of coal transported and processed utilizing the Partnership's assets. These fees are included in transportation and processing services revenues on the Partnership's Consolidated ~~Statements of Comprehensive Income and were $1.1 million and $1.4 million in~~Balance Sheets was calculated using a 13.5% discount rate which represents the ~~three months ended September 30, 2019 and 2018, respectively, and $3.6 million and $3.5 million in~~Partnership's estimated incremental borrowing rate under the ~~nine months ended September 30, 2019 and 2018, respectively. After January 2039,~~lease. As the Partnership's lease does not provide an implicit rate, the Partnership estimated the incremental borrowing rate at the time the lease ~~provides that~~was entered into by utilizing the ~~Partnership is entitled to an annual rent of $10 thousand per year in place~~rate of the ~~variable~~Partnership's secured debt and adjusting it for factors that reflect the profile of borrowing over the 30-year expected lease ~~payments.~~term.

~~18.~~

17. Subsequent Events

The following represents material events that have occurred subsequent to September 30, ~~2019~~2020 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 ~~Declared~~

In ~~October 2019,~~November 2020, the Board of Directors declared a distribution of $0.45 per common unit with respect to the third quarter of ~~2019.~~2020. The Board of Directors also declared a ~~cash~~ distribution on NRP's ~~Preferred Units~~preferred units with respect to the third quarter of ~~2019 totaling $7.5 million.~~2020 to be paid one-half in cash equal to $3.75 million and one-half in kind through the issuance of 3,750 additional preferred units.

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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, ~~2019~~2020 and ~~2018~~2019 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, ~~2018.~~2019.

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, ~~2018~~2019 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) from continuing operations less equity earnings (loss) from unconsolidated investment, ~~plus (minus)~~ net ~~loss (income)~~income attributable to non-controlling ~~interest; plus~~interest and gain on reserve ~~swap,~~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 (loss), 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 ~~10.~~8. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note ~~13.~~12. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. 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.

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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 ~~receivable;~~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 ~~assess~~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 ~~receivable;~~receivables; less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as investing or financing activities and distributions to non-controlling interest. 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 ~~the Partnership's~~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

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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 LLC ("Ciner Wyoming"), a ~~producer of natural~~trona ore mining and soda ~~ash.~~ash production business. Our common units trade on the New York Stock Exchange under the symbol ~~"NRP".~~"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 ~~a number of~~various states across the United ~~States. Our~~States, our oil and gas royalty assets are primarily located in ~~Louisiana.~~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 Resources LP, our operating partner, mines the trona, processes it into soda ash, and distributes the soda ash both domestically and internationally into the glass and chemicals industries.

We remain focused on strengthening our balance sheet and maintaining sufficient liquidity to manage our business through periods of volatility in commodity prices. We devote significant amounts of cash each year to make mandatory amortization payments on the Opco Senior Notes as well as to make distributions on our preferred units and common units. Accordingly, preserving the financial flexibility to respond to changes in market conditions while continuing to service our debt and make distributions to unitholders is one of our key objectives.

Our financial results by segment for the nine months ended September 30, ~~2019~~2020 are as follows:


	Operating Segments											Operating Segments
(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing			Total			(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
Revenues and other income	$	175,386	$	36,833	$	—		$	212,219		Revenues and other income	$	95,955	$	5,200	$	—	$	101,155
Net income (loss) from continuing operations	$	136,566	$	36,610	$	(79,142	)	$	94,034		Net income (loss) from continuing operations	$	(62,562)	$	5,059	$	(42,003)	$	(99,506)
Adjusted EBITDA ⁽¹⁾	$	148,796	$	25,257	$	(12,799	)	$	161,254		Adjusted EBITDA (1)	$	76,896	$	14,069	$	(11,168)	$	79,797

Cash flow provided by (used in) continuing operations											Cash flow provided by (used in) continuing operations
Operating activities	$	139,821	$	25,257	$	(47,153	)	$	117,925		Operating activities	$	91,082	$	14,091	$	(30,760)	$	74,413
Investing activities	$	7,962	$	—	$	—		$	7,962		Investing activities	$	969	$	—	$	—	$	969
Financing activities	$	—	$	—	$	(219,754	)	$	(219,754	)	Financing activities	$	—	$	—	$	(58,074)	$	(58,074)
Distributable cash flow ⁽¹⁾	$	147,783	$	25,257	$	(47,153	)	$	125,331		Distributable cash flow (1)	$	93,051	$	14,091	$	(30,760)	$	76,316
Free cash flow ⁽¹⁾	$	141,172	$	25,257	$	(47,153	)	$	119,276		Free cash flow (1)	$	91,544	$	14,091	$	(30,760)	$	74,875


~~(1)~~	~~See "—Results of Operations" below for reconciliations to the most comparable GAAP financial measures.~~

(1)See "—Results of Operations" below for reconciliations to the most comparable GAAP financial measures.

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Current Results/Market Commentary

Business Outlook and Quarterly Distributions

The global COVID-19 pandemic has had a significant negative impact on demand for steel, electricity and glass, which translates to lower demand for the coal and soda ash that our properties produce. While demand for metallurgical and thermal coals and soda ash began to rebound during the third quarter, prices remain below pre-pandemic levels. We continue to employ remote work protocols and are conducting business as usual despite the pandemic. Although we are unable to predict the ultimate severity or duration of the COVID-19 pandemic or its impact on our business, we ended the third quarter with $215.6 million of liquidity consisting of $115.6 million of cash and cash equivalents and $100.0 million of borrowing capacity under our Opco Credit Facility and generated $74.9 million of free cash flow during the nine months ended September 30, 2020. As a result, we believe we have the financial flexibility to navigate the effects of the pandemic on our business.

Despite our liquidity level at the end of the third quarter, our consolidated leverage ratio has risen since the onset of the COVID-19 pandemic and was 4.2x at September 30, 2020. 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 declared a distribution on our preferred units for the third quarter of 2020 to be paid one-half in cash equal to $3.75 million and one-half in kind through the issuance of 3,750 additional preferred units. The Board also declared a cash distribution of $0.45 per common unit for the third quarter of 2020. To the extent our leverage ratio continues to exceed 3.75x, which we expect for the foreseeable future, we will be required to continue to pay one-half of the required preferred distributions in kind (“PIK units”) and will be unable to redeem any PIK units until our consolidated leverage ratio falls below 3.75x. Distributions on the outstanding PIK units will accrue and accumulate at 12% per year until such PIK units are redeemed.

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.

Coal Royalty and Other Business Segment

Demand for steel and electricity began to rebound in the third quarter and the outlook for our coal businesses has improved, though sales volumes and prices for coal sold from our properties in the third quarter remained below pre-pandemic levels. We expect coal markets to remain volatile as a result of ongoing uncertainties with the COVID-19 pandemic.

Our ~~results~~lessees sold 12.1 million tons of coal from our properties in the first nine months of ~~2019 were driven by stability in both metallurgical~~2020 and thermal coal realizations from our lessees during the first half of the year but reduced realizations during the third quarter driven by weakened market demand and lower activity at certain of our properties. Wewe derived approximately ~~65%~~70% of our coal royalty revenues and approximately ~~55%~~65% of our coal royalty sales volumes from metallurgical coal during the ~~nine months ended September 30, 2019. Despite solid performance through~~same period. Revenues and other income in the first nine months of ~~2019, declining coal prices and lessee bankruptcies are expected~~2020 were lower by $79.4 million as compared to ~~put downward pressure on our performance in~~ the ~~coming months.~~

~~The~~prior year period. This decrease is primarily a result of a weakened market for metallurgical coal ~~weakened primarily~~as compared to the prior year period due to a decline in global ~~economic growth.~~steel demand. As a result, both sales volumes and prices for metallurgical coal sold were lower in the first nine months of 2020 compared to the prior year period. Prices for metallurgical coal have rebounded from the lows seen in the second quarter, but are not currently above pre-pandemic levels.

In addition, weaker domestic and export thermal coal markets compared to the prior year period resulted in lower revenues from our properties declined in the third quarter of 2019. Metallurgical coal sales volumes from our properties also declined in the third quarter of 2019 as a result of certain lessees moving off our coal reserves in the normal course of their mine plans and lower activity at certain other mines.

~~The domestic market for~~ thermal coal ~~remains~~properties. Domestic and export thermal coal markets remained challenged by lower utility demand, continued low natural gas prices and ~~growing stockpiles~~the secular shift to renewable energy. Although natural gas prices are forecasted to rise above $3/MMBtu this winter, stockpile levels at domestic ~~utilities. In addition,~~utilities remain high, which we expect will temper the ~~export market for~~increased thermal coal demand that would normally result from higher natural gas prices. Our thermal coal business results are largely dependent on our various lease agreements with Foresight Energy. In June 2020, we entered into lease amendments with Foresight Energy pursuant to which Foresight agreed to pay us fixed cash payments of $48.75 million in 2020 and $42.0 million in 2021 to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between us and Foresight Energy for calendar years 2020 and 2021. These amendments provide us cash flow certainty for our thermal coal business through 2021. Through the first nine months of 2020, we received $35.0 million of the $48.75 million due to us in 2020.

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Soda Ash Business Segment

Ciner Wyoming has ~~weakened~~been negatively impacted by the COVID-19 pandemic as lower activity in the global auto, container and construction industries reduced demand for glass and soda ash. Revenues and other income in the third quarter of 2020 were lower by $11.8 million compared to the prior year quarter primarily due to a combination of lower pricing and volumes sold. However, demand ~~from European utilities, competition from international producers and oversupply of LNG.~~

~~We remain cautious about~~for glass began to rebound in the ~~financial position of U.S. coal producers with over-leveraged capital structures~~third quarter and the ~~state~~outlook for our soda ash business has improved. While Ciner Wyoming has yet to recover to pre-COVID levels, overall sales volumes increased 26.7% and overall production volumes increased 1.5% over second quarter 2020 results, though global prices remain depressed. While we believe our facility is competitively positioned as one of the ~~domestic and global coal markets generally. The current price environment along with limited access to capital has taken a toll on a number~~lowest cost producers of producers. Four of our lessees have filed for protection under the U.S. Bankruptcy Code in the last six months, and other lessees continue to face challenges. Foresight Energy, which is our largest lessee, has agreed to a forbearance period with its lenders to evaluate their restructuring options. To the extent Foresight determines to idle operations on our properties for a prolonged period or to shut any of its mines on our properties down permanently, our business could be adversely affected. Accordingly, we remain focused on further strengthening our liquidity and balance sheet.

~~Soda Ash Business Segment~~

Ciner Wyoming's results are primarily affected by the global supply of and demand for soda ash, which in turn directly impacts the prices Ciner Wyoming and other producers charge for its products. Demand for soda ash in the United States is driven in a large part by economic growth and activity levels in the end markets that the glass-making industry serve, such as the automotive and construction industries. Because the United States is a well-developed market for soda ash,world, we expect ~~that domestic supply~~the market to remain volatile as a result of ongoing uncertainties with the COVID-19 pandemic.

In order to have financial flexibility during the COVID-19 pandemic, Ciner Wyoming suspended its quarterly distribution in August 2020 and ~~demand for soda ash will remain stable~~accordingly, did not pay quarterly distributions for the near future. Soda ash demand in international markets has continued to grow in conjunction with GDP. We expect that future global economic growth will positively influence global demand and pricing, which will likely result in increased exports, primarily from the United States, Turkey and to a limited extent, from China, the largest supplierssecond or third quarters of ~~soda ash to international markets.~~

~~While the performance of the underlying business remains stable,~~2020. Ciner Wyoming ~~has announced that it~~ will ~~commence~~continue to evaluate, on a quarterly basis, whether to reinstate the distribution. Ciner Wyoming’s ability to pay future quarterly distributions will be dependent in part on its cash reserves, liquidity, total debt levels and anticipated capital expenditures. In addition, Ciner Wyoming continues to develop plans for a significant capacity expansion capital project. However, they have delayed the timing of significant costs related to this project ~~soon that it intends to fund in part by reinvesting cash that would otherwise be distributed to its partners. As a result, we expect for~~until they have more visibility into the cash distributions we receive from Ciner Wyoming to decrease to approximately $25 million to $28 million per year and be held at such levels for the next two to three years. We believe that we will benefit over the long-term from increased productivity and cash distributions from Ciner Wyoming’s operations following completion of this capital project.

~~Business Outlook~~

~~Despite solid performance in the first nine months~~impact of the ~~year, we expect the challenges described above to have an overall adverse impact~~COVID-19 pandemic on ~~our future results as compared to recent results. However, we believe the progress made to strengthen our financial profile in recent years positions us well to navigate a sustained downturn.~~their business

~~Table of Contents~~

Results of Operations

Third Quarter of ~~2019~~2020 and ~~2018~~2019 Compared

Revenues and Other Income

The following table includes our revenues and other income by operating segment:


	For the Three Months Ended September 30,				Decrease		Percentage Change
Operating Segment (In thousands)	2020		2019
Coal Royalty and Other	$	27,944	$	49,891	$	(21,947)	(44)	%
Soda Ash	1,986		13,818		(11,832)		(86)	%
Total	$	29,930	$	63,709	$	(33,779)	(53)	%

For the Three Months Ended September 30, Increase
(Decrease) Percentage
Change
Operating Segment (In thousands) 2019 2018
Coal Royalty and Other $ 49,891
$ 49,371
$ 520
1 %
Soda Ash 13,818
8,836
4,982
56 %
Total $ 63,709
$ 58,207
$ 5,502
9 %

The changes in revenues and other income is discussed for each of the operating segments below:

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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)	2020		2019
Coal sales volumes (tons)
Appalachia
Northern	102		290		(188)		(65)	%
Central	2,247		3,222		(975)		(30)	%
Southern	172		438		(266)		(61)	%
Total Appalachia	2,521		3,950		(1,429)		(36)	%
Illinois Basin	758		551		207		38	%
Northern Powder River Basin	365		532		(167)		(31)	%

Total coal sales volumes	3,644		5,033		(1,389)		(28)	%

Coal royalty revenue per ton
Appalachia
Northern	$	3.06	$	2.54	$	0.52	20	%
Central	3.83		5.25		(1.42)		(27)	%
Southern	4.78		5.99		(1.21)		(20)	%

Illinois Basin	1.63		4.82		(3.19)		(66)	%
Northern Powder River Basin	3.46		4.69		(1.23)		(26)	%

Combined average coal royalty revenue per ton	3.36		5.05		(1.69)		(33)	%

Coal royalty revenues
Appalachia
Northern	$	312	$	735	$	(423)	(58)	%
Central	8,602		16,929		(8,327)		(49)	%
Southern	823		2,626		(1,803)		(69)	%
Total Appalachia	9,737		20,290		(10,553)		(52)	%
Illinois Basin	1,234		2,658		(1,424)		(54)	%
Northern Powder River Basin	1,262		2,492		(1,230)		(49)	%
Unadjusted coal royalty revenues	12,233		25,440		(13,207)		(52)	%
Coal royalty adjustment for minimum leases (1)	(1,623)		(713)		(910)		(128)	%
Total coal royalty revenues	$	10,610	$	24,727	$	(14,117)	(57)	%

Other revenues
Production lease minimum revenues (1)	$	4,267	$	2,752	$	1,515	55	%
Minimum lease straight-line revenues (1)	3,553		3,982		(429)		(11)	%
Property tax revenues	1,896		1,606		290		18	%
Wheelage revenues	1,680		1,675		5		—	%
Coal overriding royalty revenues	1,314		2,189		(875)		(40)	%
Lease amendment revenues	858		1,535		(677)		(44)	%

Aggregates royalty revenues	221		954		(733)		(77)	%
Oil and gas royalty revenues	1,078		374		704		188	%
Other revenues	263		125		138		110	%
Total other revenues	$	15,130	$	15,192	$	(62)	—	%
Coal royalty and other	$	25,740	$	39,919	$	(14,179)	(36)	%
Transportation and processing services revenues	2,204		3,865		(1,661)		(43)	%
Gain on asset sales and disposals	—		6,107		(6,107)		(100)	%
Total Coal Royalty and Other segment revenues and other income	$	27,944	$	49,891	$	(21,947)	(44)	%

For the Three Months Ended September 30,
Increase
(Decrease)

Percentage
Change
(In thousands, except per ton data) 2019 2018
Coal sales volumes (tons)
Appalachia
Northern 290
349
(59 ) (17 )%
Central 3,222
3,873
(651 ) (17 )%
Southern 438
346
92
27 %
Total Appalachia 3,950

4,568
(618 ) (14 )%
Illinois Basin 551
609
(58 ) (10 )%
Northern Powder River Basin 532
855
(323 ) (38 )%
Total coal sales volumes 5,033

6,032
(999 ) (17 )%

Coal royalty revenue per ton
Appalachia
Northern $ 2.54
$ 4.01
$ (1.47 ) (37 )%
Central 5.25
5.37
(0.12 ) (2 )%
Southern 5.99
6.82
(0.83 ) (12 )%
Illinois Basin 4.82
4.89
(0.07 ) (1 )%
Northern Powder River Basin 4.69
3.79
0.90
24 %
Combined average coal royalty revenue per ton 5.05
5.10
(0.05 ) (1 )%

Coal royalty revenues
Appalachia
Northern $ 735
$ 1,402
$ (667 ) (48 )%
Central 16,929
20,786
(3,857 ) (19 )%
Southern 2,626
2,359
267
11 %
Total Appalachia 20,290
24,547
(4,257 ) (17 )%
Illinois Basin 2,658
2,973
(315 ) (11 )%
Northern Powder River Basin 2,492
3,237
(745 ) (23 )%
Unadjusted coal royalty revenues 25,440

30,757
(5,317 ) (17 )%
Coal royalty adjustment for minimum leases (713 ) (48 ) (665 ) (1,385 )%
Total coal royalty revenues $ 24,727
$ 30,709
$ (5,982 ) (19 )%

Other revenues

Production lease minimum revenues $ 2,752
$ 1,769
$ 983
56 %
Minimum lease straight-line revenues 3,982
567
3,415
602 %
Property tax revenues 1,606
1,263
343
27 %
Wheelage revenues 1,675
1,572
103
7 %
Coal overriding royalty revenues 2,189
3,918
(1,729 ) (44 )%
Lease amendment revenues 1,535
—
1,535
100 %
Aggregates royalty revenues 954
888
66
7 %
Oil and gas royalty revenues 374
1,427
(1,053 ) (74 )%
Other revenues 125
405
(280 ) (69 )%
Total other revenues $ 15,192
$ 11,809

$ 3,383
29 %
Coal royalty and other $ 39,919
$ 42,518
$ (2,599 ) (6 )%
Transportation and processing services revenues 3,865
6,853
(2,988 ) (44 )%
Gain on asset sales and disposals 6,107
—
6,107
100 %
Total Coal Royalty and Other segment revenues and other income $ 49,891
$ 49,371
$ 520
1 %

(1)Beginning April 1, 2020 and effective January 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight Energy that fixed consideration paid to us over a two-year period.

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Coal Royalty Revenues

Approximately 70% of coal royalty revenues and approximately 65% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, 2020. Coal royalty revenues decreased ~~$6.0~~$14.1 million period-over-period primarily driven by the weakened coal markets that resulted in lower coal sales ~~volumes.~~volumes and prices. The discussion of these decreases by region is as follows:

•Appalachia: Sales volumes decreased ~~14%~~36% and coal royalty revenues decreased ~~$4.3~~$10.6 million primarily ~~as a result of~~due to weakened coal ~~markets,~~demand compounded by the ~~temporary~~ COVID-19 pandemic.

•Illinois Basin: Sales volumes increased 38% due to increased activity at the Hillsboro and Williamson mines, while coal royalty revenues decreased $1.4 million primarily due to the idling of our Macoupin property. As mentioned above, certain ~~properties~~revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to ~~lessee bankruptcies and the idling of the Pinnacle mine since the fourth quarter of 2018.~~

contract modifications with Foresight Energy that fixed consideration paid to us over a two-year period.

~~Illinois~~•Northern Powder River Basin: Sales volumes decreased ~~10%~~31% and coal royalty revenues decreased ~~$0.3 million primarily due to reduced demand for Illinois Basin coal.~~

~~Northern Powder River Basin: Sales volumes decreased 38% and coal royalty revenues decreased $0.7~~$1.2 million primarily due to our lessee mining off of our property in accordance with its mine plan in ~~2019.~~

~~Other Revenues~~

Total other revenues increased $3.4 million primarily due to $3.4 million of increased minimum lease straight-line revenues primarily related to our Hillsboro property that we began to recognize in 2019 after the completion of the Hillsboro litigation settlement with Foresight and $1.5 million of increased lease amendment revenues during the third quarter of 2019. These increases were partially offset by lower coal overriding royalty revenues due to reduced sales volumes and lower oil and gas royalty revenues driven by lower natural gas prices during the third quarter of 2019 compared to the prior year quarter.2020.

Transportation and Processing Services Revenues

Transportation and processing services revenues decreased ~~$3.0~~$1.7 million primarily due to ~~weakened demand for Illinois Basin coal that resulted in fewer tons being transported out~~idling of ~~our Illinois Basin~~the Macoupin mine where we own loadout and other transportation ~~and processing assets during the third quarter of 2019.~~assets.

Gain on Asset Sales and Disposals

Gain on asset sales and disposals ~~increased~~decreased $6.1 million primarily due to the disposal of certain mineral right assets during the third quarter of 2019.

Soda Ash

Revenues and other income related to our Soda Ash segment ~~increased $5.0~~decreased $11.8 million primarily due to ~~an increase~~a combination of lower pricing and volumes sold. Ciner Wyoming was negatively impacted by the COVID-19 pandemic as lower activity in ~~production~~the global auto, container and ~~sales volumes~~construction industries reduced demand for glass and ~~increased domestic~~soda ash.

Operating and ~~international sales prices compared to the third quarter of 2018.~~

~~Operating~~Other Expenses

The following table presents the significant categories of our consolidated operating and other expenses:


	For the Three Months Ended September 30,				Increase (Decrease)		Percentage Change
(In thousands)	2020		2019
Operating expenses
Operating and maintenance expenses	$	5,781	$	5,994	$	(213)	(4)	%
Depreciation, depletion and amortization	2,111		3,384		(1,273)		(38)	%
General and administrative expenses	3,634		4,253		(619)		(15)	%
Asset impairments	934		484		450		93	%
Total operating expenses	$	12,460	$	14,115	$	(1,655)	(12)	%


Other expenses, net
Interest expense, net	$	10,254	$	10,431	$	(177)	(2)	%


Total other expenses, net	$	10,254	$	10,431	$	(177)	(2)	%

For the Three Months Ended September 30, Increase
(Decrease) Percentage
Change
(In thousands) 2019 2018
Operating expenses
Operating and maintenance expenses $ 5,994
$ 6,790
$ (796 ) (12 )%
Depreciation, depletion and amortization 3,384
4,888
(1,504 ) (31 )%
General and administrative expenses 4,253
3,183
1,070
34 %
Asset impairments 484
—
484
100 %
Total operating expenses $ 14,115
$ 14,861
$ (746 ) (5 )%

~~Table of Contents~~

Total operating expenses decreased ~~$0.7~~$1.7 million primarily due to ~~the following:~~

Operating and maintenance expenses include costs to manage the Coal Royalty and Other and Soda Ash segments and primarily consist of royalty, tax, employee-related and legal costs and bad debt expense. These costs decreased $0.8a $1.3 million ~~compared to the prior year quarter primarily due to lower legal costs.~~

~~Depreciation,~~decrease in depreciation, depletion and amortization expense ~~decreased $1.5 million due to~~as a result of lower coal sales volumes at certain properties.

~~General and administrative expenses~~ ~~increased~~ ~~$1.1 million primarily due to higher legal costs.~~

~~Interest Expense, Net~~

Table of Contents

~~Interest expense, net decreased $7.1 million primarily due to lower debt balances during the third quarter of 2019 as a result of debt repayments.~~

~~Income from Discontinued Operations~~

~~Income from discontinued operations~~decreased $2.7 million primarily as a result of the sale of our construction aggregates business in the fourth quarter of 2018. This business generated $2.7 million of net income in the third quarter of 2018.

Adjusted EBITDA (Non-GAAP Financial Measure)

The following table reconciles net income (loss) from continuing operations (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, 2020
Net income (loss) from continuing operations	$	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

September 30, 2019
Net income (loss) from continuing operations	$	40,252	$	13,595	$	(14,684)	$	39,163
Less: equity earnings from unconsolidated investment	—		(13,818)		—		(13,818)

Add: total distributions from unconsolidated investment	—		6,370		—		6,370
Add: interest expense, net	—		—		10,431		10,431


Add: depreciation, depletion and amortization	3,384		—		—		3,384
Add: asset impairments	484		—		—		484
Adjusted EBITDA	$	44,120	$	6,147	$	(4,253)	$	46,014

Operating Segments
For the Three Months Ended (In thousands) Coal Royalty and Other Soda Ash Corporate and Financing Total
September 30, 2019
Net income (loss) from continuing operations $ 40,252
$ 13,595
$ (14,684 ) $ 39,163
Less: equity earnings from unconsolidated investment —
(13,818 ) —
(13,818 )
Add: total distributions from unconsolidated investment —
6,370
—
6,370
Add: interest expense, net —
—
10,431
10,431
Add: loss on extinguishment of debt —
—
—
—
Add: depreciation, depletion and amortization 3,384
—
—
3,384
Add: asset impairments 484
—
—
484
Adjusted EBITDA $ 44,120

$ 6,147

$ (4,253 )
$ 46,014

September 30, 2018
Net income (loss) from continuing operations $ 37,693
$ 8,836
$ (20,676 ) $ 25,853
Less: equity earnings from unconsolidated investment —
(8,836 ) —
(8,836 )
Add: net loss attributable to non-controlling interest 359
—
—
359
Add: total distributions from unconsolidated investment —
12,250
—
12,250
Add: interest expense, net —
—
17,493
17,493
Add: depreciation, depletion and amortization 4,888
—
—
4,888
Adjusted EBITDA $ 42,940

$ 12,250
$ (3,183 )
$ 52,007

Adjusted EBITDA decreased ~~$6.0~~$27.5 million primarily due to ~~lower~~the following:

•Coal Royalty and Other Segment

◦Adjusted EBITDA decreased $21.9 million primarily as a result of the weakened coal markets in the third quarter of 2020.

•Soda Ash Segment

◦Adjusted EBITDA decreased $6.2 million as a result of the suspended cash ~~distributions received~~distribution from Ciner Wyoming in the third quarter of 2020 as compared to the $6.4 million distribution received during the third quarter of 2019.

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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, 2019
Cash flow provided by (used in) continuing operations
Operating activities $ 41,094
$ 6,147
$ (5,507 ) $ 41,734
Investing activities 6,567
—
—
6,567
Financing activities —
—
(21,913 ) (21,913 )

September 30, 2018
Cash flow provided by (used in) continuing operations
Operating activities $ 41,604
$ 12,250
$ (27,368 ) $ 26,486
Investing activities 1,590
—
—
1,590
Financing activities —
—
(20,798 ) (20,798 )

~~Table of Contents~~


	Operating Segments
For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
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)

September 30, 2019
Cash flow provided by (used in) continuing operations
Operating activities	$	41,094	$	6,147	$	(5,507)	$	41,734
Investing activities	6,567		—		—		6,567
Financing activities	—		—		(21,913)		(21,913)

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, 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






September 30, 2019
Net cash provided by (used in) operating activities of continuing operations	$	41,094	$	6,147	$	(5,507)	$	41,734

Add: proceeds from sale of assets	6,108		—		—		6,108
Add: proceeds from sale of discontinued operations	—		—		—		(122)
Add: return of long-term contract receivable	459		—		—		459


Distributable cash flow	$	47,661	$	6,147	$	(5,507)	$	48,179
Less: proceeds from sale of assets	(6,108)		—		—		(6,108)
Less: proceeds from sale of discontinued operations	—		—		—		122

Free cash flow	$	41,553	$	6,147	$	(5,507)	$	42,193

Operating Segments
For the Three Months Ended (In thousands) Coal Royalty and Other Soda Ash Corporate and Financing Total
September 30, 2019
Net cash provided by (used in) operating activities of continuing operations $ 41,094
$ 6,147
$ (5,507 ) $ 41,734
Add: proceeds from asset sales and disposals 6,108
—
—
6,108
Add: proceeds from sale of discontinued operations —
—
—
(122 )
Add: return of long-term contract receivable 459
—
—
459
Distributable cash flow $ 47,661

$ 6,147

$ (5,507 )
$ 48,179
Less: proceeds from asset sales and disposals (6,108 ) —
—
(6,108 )
Less: proceeds from sale of discontinued operations —
—
—
122
Free cash flow $ 41,553
$ 6,147
$ (5,507 ) $ 42,193

September 30, 2018
Net cash provided by (used in) operating activities of continuing operations $ 41,604
$ 12,250
$ (27,368 ) $ 26,486
Add: return of long-term contract receivable 1,590
—
—
1,590
Distributable cash flow and Free cash flow $ 43,194
$ 12,250
$ (27,368 ) $ 28,076

DCF and FCF ~~increased $20.1~~decreased $23.5 million and ~~$14.1~~$17.5 million, respectively, primarily due to the following:

•Coal Royalty and Other Segment


◦	DCF increased $4.5 million primarily as a result of the proceeds received for the disposal of certain assets and the collection of the Hillsboro minimum payment in the third quarter of 2019, partially offset by lower coal royalty revenues as described above.


◦	FCF decreased $1.6 million primarily due to lower coal royalty revenues in the third quarter of 2019 as compared to the same period in 2018, partially offset by collection of the Hillsboro minimum payment in the third quarter of 2019.

◦DCF and FCF decreased $18.8 million and $12.6 million, respectively, primarily as a result of the weakened coal markets in the third quarter of 2020. DCF was also impacted by $6.1 million in asset sale proceeds received in the third quarter of 2019.

•Soda Ash Segment


◦	◦DCF ~~and FCF decreased $6.1 million as a result of lower cash distributions received from Ciner Wyoming in the third quarter of 2019.~~

~~Corporate~~ and ~~Financing Segment~~


◦	DCF and FCF increased $21.9 million primarily due to lower cash paid for interest as a result of the timing of interest payments on our 2022 Senior Notes in 2018 as compared to the timing of interest payments on our 2025 Senior Notes in 2019 and due to lower interest payments on our Opco Senior Notes as a result of lower principal balances during the third quarter of 2019.

FCF decreased $6.2 million as a result of the suspended cash distribution from Ciner Wyoming in the third quarter of 2020 as compared to the $6.4 million distribution received during the third quarter of 2019.

Table of Contents

Results of Operations

First Nine Months of ~~2019~~2020 and ~~2018~~2019 Compared

Revenues and Other Income

The following table includes our revenues and other income by operating segment:


	For the Nine Months Ended September 30,				Decrease		Percentage Change
Operating Segment (In thousands)	2020		2019
Coal Royalty and Other	$	95,955	$	175,386	$	(79,431)	(45)	%
Soda Ash	5,200		36,833		(31,633)		(86)	%
Total	$	101,155	$	212,219	$	(111,064)	(52)	%

For the Nine Months Ended
September 30, Increase
(Decrease) Percentage
Change
Operating Segment (In thousands) 2019 2018
Coal Royalty and Other $ 175,386
$ 152,969
$ 22,417
15 %
Soda Ash 36,833
34,986
1,847
5 %
Total $ 212,219
$ 187,955
$ 24,264
13 %

The changes in revenues and other income is discussed for each of the operating segments below:

Table of Contents

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)	2020		2019
Coal sales volumes (tons)
Appalachia
Northern	516		2,774		(2,258)		(81)	%
Central	7,643		10,469		(2,826)		(27)	%
Southern	820		1,172		(352)		(30)	%
Total Appalachia	8,979		14,415		(5,436)		(38)	%
Illinois Basin	1,841		1,646		195		12	%
Northern Powder River Basin	1,232		1,979		(747)		(38)	%

Total coal sales volumes	12,052		18,040		(5,988)		(33)	%

Coal royalty revenue per ton
Appalachia
Northern	$	2.22	$	2.23	$	(0.01)	—	%
Central	4.28		5.79		(1.51)		(26)	%
Southern	4.70		7.00		(2.30)		(33)	%

Illinois Basin	2.48		4.70		(2.22)		(47)	%
Northern Powder River Basin	3.66		3.21		0.45		14	%

Combined average coal royalty revenue per ton	3.88		4.94		(1.06)		(21)	%

Coal royalty revenues
Appalachia
Northern	$	1,143	$	6,173	$	(5,030)	(81)	%
Central	32,726		60,628		(27,902)		(46)	%
Southern	3,857		8,204		(4,347)		(53)	%
Total Appalachia	37,726		75,005		(37,279)		(50)	%
Illinois Basin	4,570		7,739		(3,169)		(41)	%
Northern Powder River Basin	4,510		6,347		(1,837)		(29)	%

Unadjusted coal royalty revenues	46,806		89,091		(42,285)		(47)	%
Coal royalty adjustment for minimum leases (1)	(6,247)		(1,530)		(4,717)		(308)	%
Total coal royalty revenues	$	40,559	$	87,561	$	(47,002)	(54)	%

Other revenues
Production lease minimum revenues (1)	$	13,554	$	21,331	$	(7,777)	(36)	%
Minimum lease straight-line revenues (1)	12,349		11,152		1,197		11	%
Property tax revenues	4,256		4,416		(160)		(4)	%
Wheelage revenues	5,468		5,035		433		9	%
Coal overriding royalty revenues	3,319		10,163		(6,844)		(67)	%
Lease amendment revenues	2,591		6,720		(4,129)		(61)	%

Aggregates royalty revenues	1,068		3,655		(2,587)		(71)	%
Oil and gas royalty revenues	4,923		2,575		2,348		91	%
Other revenues	752		1,429		(677)		(47)	%
Total other revenues	$	48,280	$	66,476	$	(18,196)	(27)	%
Coal royalty and other	$	88,839	$	154,037	$	(65,198)	(42)	%
Transportation and processing services revenues	6,651		14,740		(8,089)		(55)	%
Gain on asset sales and disposals	465		6,609		(6,144)		(93)	%
Total Coal Royalty and Other segment revenues and other income	$	95,955	$	175,386	$	(79,431)	(45)	%

For the Nine Months Ended
September 30, Increase
(Decrease) Percentage
Change
(In thousands, except per ton data) 2019 2018
Coal sales volumes (tons)
Appalachia
Northern 2,774
1,490
1,284
86 %
Central 10,469
11,582
(1,113 ) (10 )%
Southern 1,172
1,288
(116 ) (9 )%
Total Appalachia 14,415
14,360
55
0.4 %
Illinois Basin 1,646
2,091
(445 ) (21 )%
Northern Powder River Basin 1,979
2,896
(917 ) (32 )%
Total coal sales volumes 18,040
19,347
(1,307 ) (7 )%

Coal royalty revenue per ton
Appalachia
Northern $ 2.23
$ 3.82
$ (1.59 ) (42 )%
Central 5.79
5.57
0.22
4 %
Southern 7.00
6.98
0.02
0.3 %
Illinois Basin 4.70
4.56
0.14
3 %
Northern Powder River Basin 3.21
2.70
0.51
19 %
Combined average coal royalty revenue per ton 4.94
4.99
(0.05 ) (1 )%

Coal royalty revenues
Appalachia
Northern $ 6,173
$ 5,698
$ 475
8 %
Central 60,628
64,538
(3,910 ) (6 )%
Southern 8,204
8,985
(781 ) (9 )%
Total Appalachia 75,005
79,221
(4,216 ) (5 )%
Illinois Basin 7,739
9,533
(1,794 ) (19 )%
Northern Powder River Basin 6,347
7,817
(1,470 ) (19 )%
Unadjusted coal royalty revenues 89,091

96,571

(7,480 ) (8 )%
Coal royalty adjustment for minimum leases (1,530 ) (98 ) (1,432 ) (1,461 )%
Total coal royalty revenues $ 87,561

$ 96,473
$ (8,912 ) (9 )%

Other revenues
Production lease minimum revenues $ 21,331
$ 6,310
$ 15,021
238 %
Minimum lease straight-line revenues 11,152
1,739
9,413
541 %
Property tax revenues 4,416
3,968
448
11 %
Wheelage revenues 5,035
5,155
(120 ) (2 )%
Coal overriding royalty revenues 10,163
10,492
(329 ) (3 )%
Lease amendment revenues 6,720
—
6,720
100 %
Aggregates royalty revenues 3,655
3,551
104
3 %
Oil and gas royalty revenues 2,575
5,679
(3,104 ) (55 )%
Other 1,429
1,545
(116 ) (8 )%
Total other revenues $ 66,476
$ 38,439
$ 28,037
73 %
Coal royalty and other $ 154,037
$ 134,912
$ 19,125
14 %
Transportation and processing services 14,740
17,238
(2,498 ) (14 )%
Gain on asset sales and disposals 6,609
819
5,790
707 %
Total Coal Royalty and Other segment revenues and other income $ 175,386
$ 152,969
$ 22,417
15 %

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Coal Royalty Revenues

~~Coal~~Total coal royalty revenues decreased ~~$8.9~~$47.0 million ~~year-over-year.~~from 2019 to 2020 primarily driven by weakened coal markets that resulted in lower coal sales volumes and pricing. The discussion of these decreases by region is as follows:

•Appalachia: Sales volumes ~~were flat year-over year while~~decreased 38% and revenues decreased ~~$4.2~~$37.3 million or 5%. Northern Appalachia includes our Hibbs Run property that has significant sales volumes but a low fixed royalty rate per ton and as a result has a minimal impact on our revenues. Excluding Hibbs Run, sales volumes from our Appalachia properties decreased approximately 8% primarily ~~as a result of~~ due to weakened coal ~~markets,~~demand compounded by the ~~temporary idling of certain properties~~ COVID-19 pandemic.

•Illinois Basin: Sales volumes increased 12% due to ~~lessee bankruptcies~~increased activity at the Hillsboro and Williamson mines, while coal royalty revenues decreased $3.2 million primarily due to the idling of ~~the Pinnacle mine since the fourth quarter of 2018.~~

our Macoupin property. As mentioned above, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight Energy that fixed consideration paid to us over a two-year period.

~~Illinois~~•Northern Powder River Basin: Sales volumes decreased ~~21%~~38% and coal royalty revenues decreased $1.8 million primarily due to flooding and high water throughout the river systems that affected transportation logistics during the first half of 2019, including at the Convent Marine Terminal on the Gulf of Mexico, in addition to a weakening of the thermal export market and lower domestic thermal coal demand in 2019.

~~Northern Powder River Basin:~~ ~~Sales volumes decreased~~ ~~32%~~ ~~and coal royalty revenues decreased $1.5~~ million primarily due to our lessee mining off of our property in accordance with its mine plan in ~~2019.~~

2020, partially offset by a 14% increase in sales prices as compared to the prior year.

Other Revenues

~~Total other~~Other revenues ~~increased $28.0~~decreased $18.2 million primarily due ~~to:~~to the following:

~~$15.0~~•A $7.8 million ~~increased~~decrease in production lease minimum revenues primarily as a result of ~~increased~~the Macoupin lease amendment and lessee forfeitures of recoupable balances in the second quarter of 2019 from minimums paid in prior ~~periods.~~periods;

~~$9.4~~•A $6.8 million ~~increased minimum lease straight-line revenues primarily related to our Hillsboro property that we began to recognize~~decrease in ~~2019 after the completion of the Hillsboro litigation settlement with Foresight.~~

~~$6.7 million of lease amendment revenues during the nine months ended September 30, 2019.~~

~~These increases in other revenues were partially offset by $3.1 million of lower oil and gas~~coal overriding royalty ~~revenues during the nine months ended September 30, 2019~~revenues primarily as a result of ~~lower natural gas prices~~production at the Williamson mine moving off NRP's overriding royalty interest and back onto NRP's coal reserves. As a result, this decrease in coal overriding royalty revenues was offset by an increase in coal royalty revenues.

•A $4.1 million decrease in lease amendment revenues year-over-year.

Transportation and Processing Services Revenues

Transportation and processing services revenues decreased ~~$2.5~~$8.1 million primarily due to ~~weakened demand for Illinois Basin coal that resulted in fewer tons being transported out~~idling of ~~our Illinois Basin~~the Macoupin mine where we own loadout and other transportation ~~and processing assets during the nine months ended September 30, 2019.~~assets.

Gain on Asset Sales and Disposals

Gain on asset sales and disposals ~~increased $5.8~~decreased $6.1 million primarily due to the disposal of certain mineral right assets during the third quarter of 2019.

Soda Ash

Revenues and other income related to our Soda Ash segment ~~increased $1.8~~decreased $31.6 million ~~primarily due to an increase in production and sales volumes and increased domestic and international sales prices in the nine months ended September 30, 2019~~ compared to the prior year ~~period, partially offset~~primarily due to a combination of lower pricing and volumes sold. Ciner Wyoming was negatively impacted by ~~Ciner Wyoming's settlement of a royalty dispute~~the COVID-19 pandemic as lower activity in the ~~second quarter of 2018 that resulted in $12.7 million of income in the prior year period.~~global auto, container and construction industries reduced demand for glass and soda ash.

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Operating and Other Expenses

The following table presents the significant categories of our consolidated operating and other expenses:


	For the Nine Months Ended September 30,				Increase (Decrease)		Percentage Change
(In thousands)	2020		2019
Operating expenses
Operating and maintenance expenses	$	19,200	$	26,813	$	(7,613)	(28)	%
Depreciation, depletion and amortization	6,185		11,746		(5,561)		(47)	%
General and administrative expenses	11,168		12,799		(1,631)		(13)	%
Asset impairments	133,217		484		132,733		27,424	%
Total operating expenses	$	169,770	$	51,842	$	117,928	227	%

Other expenses, net
Interest expense, net	$	30,891	$	37,061	$	(6,170)	(17)	%

Loss on extinguishment of debt	—		29,282		(29,282)		(100)	%




Total other expenses, net	$	30,891	$	66,343	$	(35,452)	(53)	%

For the Nine Months Ended
September 30, Increase
(Decrease) Percentage
Change
(In thousands) 2019 2018
Operating expenses
Operating and maintenance expenses $ 26,813
$ 21,122
$ 5,691
27 %
Depreciation, depletion and amortization 11,746
15,364
(3,618 ) (24 )%
General and administrative expenses 12,799
10,782
2,017
19 %
Asset impairments 484
242
242
100 %
Total operating expenses $ 51,842
$ 47,510
$ 4,332
9 %

Other expenses, net
Interest expense, net $ 37,061

$ 53,177
$ (16,116 ) (30 )%
Loss on extinguishment of debt 29,282

—
29,282
100 %
Total other expenses, net $ 66,343

$ 53,177

$ 13,166
25 %

Total operating expenses increased ~~$4.3~~$117.9 million primarily due to the following:

•Asset impairments increased $132.7 million 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 increase in operating expense was partially offset by:

•Operating and maintenance expenses ~~increased $5.7~~include costs to manage the Coal Royalty and Other and Soda Ash segments and primarily consist of royalty, tax, employee-related and legal costs and bad debt expense. These costs decreased $7.6 million primarily due to a decrease in bad debt expense ~~recognized~~ in ~~the second quarter of 2019~~addition to lower royalty fees related to ~~certain of our Coal Royalty and Other receivables, partially~~an overriding royalty agreement with Western Pocahontas Properties Limited Partnership ("WPPLP"). The coal royalty expense NRP pays to WPPLP is fully offset by ~~lower legal costs.~~the coal royalty revenue NRP receives from this property.

•Depreciation, depletion and amortization expense decreased ~~$3.6~~$5.6 million primarily due to lower coal sales volumes at certain properties.

~~General and administrative expenses~~ ~~increased~~ ~~$2.0 million primarily due to increased legal and consulting costs.~~

Total other expenses, net ~~increased $13.2~~decreased $35.5 million primarily due to the following:

~~Interest expense, net decreased $16.1 million primarily due to lower debt balances during the first nine months of 2019 as a result of debt repayments.~~

•Loss on extinguishment of debt ~~was~~of $29.3 million ~~for the nine months ended September 30,~~in 2019 ~~and~~ related to the 105.25% premium paid to redeem the 2022 Senior Notes in the second quarter of 2019 as well as the write-off of unamortized debt issuance costs and debt discount related to the 2022 Senior Notes.

~~Income from Discontinued Operations~~

~~Income from discontinued operations~~•Interest expense, net decreased ~~$3.5~~$6.2 million primarily ~~as a result of the sale of our construction aggregates business in the fourth quarter of 2018. This business generated $3.8 million of net income in~~due to lower debt balances during the first nine months of ~~2018.~~2020 as a result of debt repayments made over the past twelve months.

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Adjusted EBITDA (Non-GAAP Financial Measure)

The following table reconciles net income (loss) from continuing operations (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, 2020
Net income (loss) from continuing operations	$	(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

September 30, 2019
Net income (loss) from continuing operations	$	136,566	$	36,610	$	(79,142)	$	94,034
Less: equity earnings from unconsolidated investment	—		(36,833)		—		(36,833)

Add: total distributions from unconsolidated investment	—		25,480		—		25,480
Add: interest expense, net	—		—		37,061		37,061

Add: loss on extinguishment of debt	—		—		29,282		29,282
Add: depreciation, depletion and amortization	11,746		—		—		11,746
Add: asset impairments	484		—		—		484
Adjusted EBITDA	$	148,796	$	25,257	$	(12,799)	$	161,254

Operating Segments
For the Nine Months Ended (In thousands) Coal Royalty and Other Soda Ash Corporate and Financing Total
September 30, 2019
Net income (loss) from continuing operations $ 136,566
$ 36,610
$ (79,142 ) $ 94,034
Less: equity earnings from unconsolidated investment —
(36,833 ) —
(36,833 )
Add: total distributions from unconsolidated investment —
25,480
—
25,480
Add: interest expense, net —
—
37,061
37,061
Add: loss on extinguishment of debt —
—
29,282
29,282
Add: depreciation, depletion and amortization 11,746
—
—
11,746
Add: asset impairments 484
—
—
484
Adjusted EBITDA $ 148,796
$ 25,257
$ (12,799 ) $ 161,254

September 30, 2018
Net income (loss) from continuing operations $ 116,241
$ 34,986
$ (63,959 ) $ 87,268
Less: equity earnings from unconsolidated investment —
(34,986 ) —
(34,986 )
Less: net income attributable to non-controlling interest (510 ) —
—
(510 )
Add: total distributions from unconsolidated investment —
36,750
—
36,750
Add: interest expense, net —
—
53,177
53,177
Add: depreciation, depletion and amortization 15,364
—
—
15,364
Add: asset impairments 242
—
—
242
Adjusted EBITDA $ 131,337
$ 36,750
$ (10,782 ) $ 157,305

Adjusted EBITDA ~~increased $3.9~~decreased $81.5 million primarily due to the following:

•Coal Royalty and Other Segment


◦	~~Adjusted EBITDA increased $17.5 million primarily as a result of the increase in revenues and other income, partially offset by increased operating and maintenance expenses, both discussed above.~~

◦Adjusted EBITDA decreased $71.9 million primarily as a result of weakened coal markets in the first nine months of 2020.

•Soda Ash Segment


◦	~~Adjusted EBITDA decreased $11.5 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2019.~~

◦Adjusted EBITDA decreased $11.2 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2020.

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Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF")~~(Non-GAAP~~ (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, 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)

September 30, 2019
Cash flow provided by (used in) continuing operations
Operating activities	$	139,821	$	25,257	$	(47,153)	$	117,925
Investing activities	7,962		—		—		7,962
Financing activities	—		—		(219,754)		(219,754)

Operating Segments
For the Nine Months Ended (In thousands) Coal Royalty and Other Soda Ash Corporate and Financing Total
September 30, 2019
Cash flow provided by (used in) continuing operations
Operating activities $ 139,821
$ 25,257
$ (47,153 ) $ 117,925
Investing activities 7,962
—
—
7,962
Financing activities —
—
(219,754 ) (219,754 )

September 30, 2018
Cash flow provided by (used in) continuing operations
Operating activities $ 132,122
$ 34,653
$ (68,982 ) $ 97,793
Investing activities 3,432
2,097
—
5,529
Financing activities —
—
(71,695 ) (71,695 )

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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, 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

September 30, 2019
Net cash provided by (used in) operating activities of continuing operations	$	139,821	$	25,257	$	(47,153)	$	117,925
Add: proceeds from asset sales and disposals	6,611		—		—		6,611
Add: proceeds from sale of discontinued operations	—		—		—		(556)
Add: return of long-term contract receivable	1,351		—		—		1,351
Distributable cash flow	$	147,783	$	25,257	$	(47,153)	$	125,331
Less: proceeds from asset sales and disposals	(6,611)		—		—		(6,611)
Less: proceeds from sale of discontinued operations	—		—		—		556
Free cash flow	$	141,172	$	25,257	$	(47,153)	$	119,276

Operating Segments
For the Nine Months Ended (In thousands) Coal Royalty and Other Soda Ash Corporate and Financing Total
September 30, 2019
Net cash provided by (used in) operating activities of continuing operations $ 139,821
$ 25,257
$ (47,153 ) $ 117,925
Add: proceeds from asset sales and disposals 6,611
—
—
6,611
Add: proceeds from sale of discontinued operations —
—
—
(556 )
Add: return of long-term contract receivable 1,351
—
—
1,351
Distributable cash flow $ 147,783
$ 25,257
$ (47,153 ) $ 125,331
Less: proceeds from asset sales and disposals (6,611 ) —
—
(6,611 )
Less: proceeds from sale of discontinued operations —

—

—

556
Free cash flow $ 141,172
$ 25,257
$ (47,153 ) $ 119,276

September 30, 2018
Net cash provided by (used in) operating activities of continuing operations $ 132,122
$ 34,653
$ (68,982 ) $ 97,793
Add: distributions from unconsolidated investment in excess of cumulative earnings —
2,097
—
2,097
Add: proceeds from asset sales and disposals 826
—
—
826
Add: return of long-term contract receivable 2,606
—
—
2,606
Distributable cash flow $ 135,554
$ 36,750
$ (68,982 ) $ 103,322
Less: proceeds from asset sales and disposals (826 )
—

—

(826 )
Free cash flow $ 134,728
$ 36,750
$ (68,982 ) $ 102,496

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DCF and FCF ~~increased $22.0~~decreased $49.0 million and ~~$16.8~~$44.4 million, respectively, primarily due to the following:

•Coal Royalty and Other Segment


◦	DCF and FCF increased $12.2 million and $6.4 million, respectively, as a result of the collection of lease amendment fees and the Hillsboro minimum payments in the first nine months of 2019, partially offset by lower coal royalty revenues as described above. DCF also increased as a result of the proceeds received in the third quarter of 2019 related to the sale and disposal of certain assets.

◦DCF and FCF decreased $54.7 million and $49.6 million, respectively, primarily as a result of the weakened coal markets in the first nine months of 2020. DCF was also impacted by a $6.1 million decrease in asset sale proceeds compared to the third quarter of 2019.

•Soda Ash Segment


◦	~~DCF and FCF decreased $11.5 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2019.~~

◦DCF and FCF decreased $11.2 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2020.

•Corporate and Financing Segment


◦	DCF and FCF increased $21.8 million primarily due to lower cash paid for interest as a result of the timing of interest payments on our 2022 Senior Notes in 2018 as compared to the timing of interest payments on our 2025 Senior Notes in 2019 and lower interest paid on our Opco Senior Notes as a result of lower principal balances during the first nine months of 2019.

◦DCF and FCF increased $16.4 million primarily due to lower cash paid for interest as a result of less outstanding debt in the first nine months of 2020.

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Liquidity and Capital Resources

Current Liquidity

As of September 30, ~~2019,~~2020, we had total liquidity of ~~$212.2~~$215.6 million, consisting of ~~$99.6~~$115.6 million of cash and cash equivalents ~~$12.5 million of restricted cash~~ and $100.0 million of borrowing capacity under ~~the~~our Opco Credit Facility. The $12.5 million of restricted cash is required to be used to repay debt, make acquisitions or make capital expenditures per the terms of our debt agreements. We intend to use our restricted cash to repay a portion of the remaining principal payments on our Opco Senior Notes in 2019.

Cash Flows

Cash flows provided by operating activities ~~increased $10.4~~decreased $41.8 million, from ~~$107.5 million in the nine months ended September 30, 2018 to~~ $117.9 million in the nine months ended September 30, 2019 to $76.1 million in the nine months ended September 30, 2020 primarily related to ~~the timing of interest payments on our 2022 Senior Notes in 2018 as compared to the timing of interest payments on our 2025 Senior Notes in 2019,~~ lower operating cash ~~paid for interest on our Opco Senior Notes~~flow as a result of ~~lower debt balances during~~ the ~~first nine months of 2019, and the collection of lease amendment fees and the Hillsboro minimum payment within our Coal Royalty and Other segment. These increases were partially offset by~~weakened coal markets in addition to lower cash distributions received from Ciner Wyoming ~~lower coal royalty revenues driven~~in the first nine months of 2020, partially offset by ~~weakened coal markets,~~less cash paid for interest in the ~~temporary idling~~first nine months of ~~certain properties~~2020 due to lessee bankruptcies and the idling of the Pinnacle mine since the fourth quarter of 2018, and lower cash provided by operating activities of discontinued operations as a result of the sale of our construction aggregates business in the fourth quarter of 2018.less debt outstanding.

Cash flows provided by investing activities ~~increased $11.2~~decreased $6.5 million, from ~~$3.8 million used in the nine months ended September 30, 2018 to~~ $7.4 million provided in the nine months ended September 30, 2019 ~~primarily due~~ to $9.7 million of capital expenditures made by our discontinued operation in the first nine months of 2018 and a $5.8 million increase in proceeds from asset sales and disposals year-over-year. These increases were partially offset by a portion of our distribution from Ciner Wyoming being classified as an investing activity in the nine months ended September 30, 2018.

~~Cash flows used in financing activities increased $149.0 million, from $70.2~~$0.9 million in the nine months ended September 30, ~~2018~~2020 primarily due to a $6.1 million decrease in asset sale proceeds compared to the third quarter of 2019.

Cash flows used in financing activities decreased $159.5 million, from $219.2 million in the nine months ended September 30, ~~2019. In~~2019 to $59.7 million in the ~~second quarter of 2019, we extended the maturity date of the $100.0 million Opco Credit Facility~~nine months ended September 30, 2020 primarily due to April 2023 and issued $300 million of a new series of 9.125% senior notes due 2025. We used the net proceeds from this offering, together with $76 million of cash on hand to redeem all of our 2022 Senior Notes. As a result of these transactions, our outstanding debt was reduced, our annual interest expense has decreased, and our debt maturities were extended. Significant increases in cash flow used in financing activities included the following:

•$345.6 million used for the redemption of our 2022 Senior Notes in the second quarter of 2019;

~~$41.4~~•The $49.3 million ~~increase~~pre-payment in ~~payments on~~ the ~~Opco Senior Notes primarily as a result~~first quarter of ~~the prepayment made using proceeds from~~2019 related to the sale of our construction aggregates business;

•$~~35.0~~26.4 million ~~less borrowings on our Opco Credit Facility~~in debt issuance costs and other in 2019 primarily related to 2019 debt refinancings; and

•$16.1 million in lower cash distributions in the first nine months of ~~2019 compared to the prior year period;~~

~~$26.2 million increase in debt issuance costs and other primarily related to the 2019 debt refinancings; and~~

~~$10.7 million increase in common unit distributions made in 2019 primarily~~2020 as a result of ~~a one-time~~the special common unit distribution paid in 2019 and suspending the common unit distribution in the second quarter of ~~$0.85 per common unit.~~2020.

These ~~increases~~decreases in cash flows used ~~in financing activities~~ were partially offset ~~by the following:~~by:

•$300 million provided by the issuance of the 2025 Senior Notes in the second quarter of ~~2019; and~~

~~$8.8 million less cash used in the first nine months of 2019 compared to the prior year period as a result of the redemption of preferred units paid-in-kind in the first quarter of 2018.~~

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2019.

Capital Resources and Obligations

Debt, Net

We had the following debt outstanding as of September 30, ~~2019~~2020 and December 31, ~~2018:~~2019:


	September 30,		December 31,
(In thousands)	2020		2019
Current portion of long-term debt, net	$	39,072	$	45,776
Long-term debt, net	452,401		470,422
Total debt, net	$	491,473	$	516,198

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(In thousands) September 30, 2019 December 31, 2018
Current portion of long-term debt, net $ 45,789
$ 115,184
Long-term debt, net 490,378
557,574
Total debt, net $ 536,167
$ 672,758

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 ~~10.~~8. Debt, Net to the ~~consolidated financial statements~~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 ~~12.~~10. Related Party Transactions to the ~~consolidated financial statements~~Consolidated Financial Statements is incorporated herein by reference.

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~~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, ~~2018.~~2019.

Recent Accounting Standards

The information set forth under Note 1. Basis of Presentation to the ~~consolidated financial statements~~Consolidated Financial Statements is incorporated herein by reference.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk, which includes adverse changes in commodity prices and interest rates as discussed below:

Commodity Price Risk

Our revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prevailing commodity prices. Historically, coal prices have been volatile, with prices fluctuating widely, and they are likely to continue to be volatile. Depressed prices in the future would have a negative impact on our future financial results. In particular, substantially lower prices would significantly reduce revenues and could potentially trigger an impairment of our coal properties or a violation of certain financial debt covenants. Because substantially all of our reserves are coal, changes in coal prices have a more significant impact on our financial results.

We are dependent upon the effective marketing of the coal mined by our lessees. Our lessees sell the coal under various long-term and short-term contracts as well as on the spot market. Current conditions in the coal industry may make it difficult for our lessees to extend existing contracts or enter into supply contracts with terms of one year or more. Our lessees’ failure to negotiate long-term contracts could adversely affect the stability and profitability of our lessees’ operations and adversely affect our future financial results. If more coal is sold on the spot market, coal royalty revenues may become more volatile due to fluctuations in spot coal prices.

~~Table of Contents~~

The market price of soda ash and energy costs directly affects the profitability of Ciner Wyoming’s operations. If the market price for soda ash declines, Ciner Wyoming’s sales revenues will decrease. Historically, the global market and, to a lesser extent, the domestic market for soda ash have been volatile and are likely to remain volatile in the future.

The uncertainty that exists with respect to the economic impact of the global COVID-19 pandemic has introduced significant volatility in the financial markets subsequent to our quarter ended September 30, 2020. The impacts of such volatility on the Partnership cannot be predicted with confidence or reasonably estimated at this time.

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Interest Rate Risk

Our exposure to changes in interest rates results from our borrowings under the Opco Credit Facility, which is subject to variable interest rates based upon LIBOR. At September 30, ~~2019,~~2020, we did not have any borrowings outstanding under the Opco Credit Facility.

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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 ~~2019~~2020 that materially affected, or were reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

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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.

~~For more information regarding certain other legal proceedings involving the Partnership, including the lawsuit involving Anadarko, see~~ ~~Note 14. Commitments and Contingencies~~ to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, Item 3. “Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2018, and Item 1A. “Risk Factors—Risks Related to Our Business—An adverse outcome in our contingent consideration payment dispute with Anadarko could have an adverse effect on our business and liquidity,” in our Annual Report on Form 10-K for the year ended December 31, 2018 which are incorporated herein by reference.

ITEM 1A. RISK FACTORS

During the period covered by this report, ~~except as provided below,~~ 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, ~~2018~~2019 and Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2019.~~March 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.

Table of Contents

ITEM 6. EXHIBITS

Exhibit

Number

Description

2.1

Purchase Agreement, dated as of January 23, 2013, by and among Anadarko Holding Company, Big Island Trona Company, NRP Trona LLC and NRP (Operating) LLC (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on January 25, 2013).

~~2.2~~

Purchase and Sale Agreement dated as of November 16, 2018, by and between NRP (Operating) LLC and VantaCore Intermediate Holdings LLC (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on November 20, 2018).

3.1

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).

3.2

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).

3.3

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).

3.4

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).

~~4.1~~31.1*

Indenture, dated April 29, 2019, by and among Natural Resource Partners L.P. and NRP Finance Corporation, as issuers, and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on May 2, 2019).

~~4.2~~

~~Form of 9.125% Senior Notes due 2025 (contained in Exhibit 1 to Exhibit 4.1).~~

31.1*

Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley.

31.2*

Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley.

32.1**

Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350.

32.2**

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~~

Filed herewith

Furnished herewith

Table of Contents

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 6, 2019~~
	~~By:~~	~~/s/ CORBIN J. ROBERTSON, JR.~~
		~~Corbin J. Robertson, Jr.~~
		~~Chairman of the Board and~~
		~~Chief Executive Officer~~
		~~(Principal Executive Officer)~~



Date: November ~~6, 2019~~5, 2020
	By:	/s/ CORBIN J. ROBERTSON, JR.
		Corbin J. Robertson, Jr.
		Chairman of the Board and
		Chief Executive Officer
		(Principal Executive Officer)


Date: November 5, 2020
	By:	/s/ CHRISTOPHER J. ZOLAS
		Christopher J. Zolas
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)



		Page
Part I. Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive Income (L oss)	2
	Consolidated Statements of Partners’ Capital	3
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2524
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4340
Item 4.	Controls and Procedures	4442
Part II. Other Information
Item 1.	Legal Proceedings	4543
Item 1A.	Risk Factors	4543
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4543
Item 3.	Defaults Upon Senior Securities	4543
Item 4.	Mine Safety Disclosures	4543
Item 5.	Other Information	4543
Item 6.	Exhibits	4644
	Signatures	4745



	Nine Months Ended September 30,
(In thousands)	2019			2018
Cash flows from operating activities
Net income	$	94,240		$	90,989
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization	11,746			15,364
Distributions from unconsolidated investment	25,480			34,653
Equity earnings from unconsolidated investment	(36,833		)	(34,986		)
Gain on asset sales and disposals	(6,609		)	(819		)
Loss on extinguishment of debt	29,282			—
Income from discontinued operations	(206		)	(3,721		)
Asset impairments	484			242
Unit-based compensation expense	1,842			1,144
Amortization of debt issuance costs and other	3,223			4,021
Change in operating assets and liabilities:
Accounts receivable	4,731			(6,283		)
Accounts payable	(822		)	90
Accrued liabilities	(5,083		)	(3,193		)
Accrued interest	19			(9,944		)
Deferred revenue	(3,920		)	9,200
Other items, net	351			1,036
Net cash provided by operating activities of continuing operations	$	117,925		$	97,793
Net cash provided by (used in) operating activities of discontinued operations	(4		)	9,755
Net cash provided by operating activities	$	117,921		$	107,548

Cash flows from investing activities
Distributions from unconsolidated investment in excess of cumulative earnings	$	—		$	2,097
Proceeds from asset sales and disposals	6,611			826
Return of long-term contract receivable	1,351			2,606
Net cash provided by investing activities of continuing operations	$	7,962		$	5,529
Net cash used in investing activities of discontinued operations	(556		)	(9,343		)
Net cash provided by (used in) investing activities	$	7,406		$	(3,814	)

Cash flows from financing activities
Debt borrowings	$	300,000		$	35,000
Debt repayments	(442,747		)	(55,720		)
Redemption of preferred units paid-in-kind	—			(8,844		)
Distributions to common unitholders and general partner	(27,520		)	(16,863		)
Distributions to preferred unitholders	(22,500		)	(22,765		)
Contributions to discontinued operations	(560		)	(2,275		)
Debt issuance costs and other	(26,427		)	(228		)
Net cash used in financing activities of continuing operations	$	(219,754	)	$	(71,695	)
Net cash provided by financing activities of discontinued operations	560			1,521
Net cash used in financing activities	$	(219,194	)	$	(70,174	)



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Coal royalty revenues	$	24,727	$	30,709	$	87,561	$	96,473
Production lease minimum revenues	2,752		1,769		21,331		6,310
Minimum lease straight-line revenues	3,982		567		11,152		1,739
Property tax revenues	1,606		1,263		4,416		3,968
Wheelage revenues	1,675		1,572		5,035		5,155
Coal overriding royalty revenues	2,189		3,918		10,163		10,492
Lease amendment revenues	1,535		—		6,720		—
Aggregates royalty revenues	954		888		3,655		3,551
Oil and gas royalty revenues	374		1,427		2,575		5,679
Other revenues	125		405		1,429		1,545
Coal royalty and other revenues⁽¹⁾	$	39,919	$	42,518	$	154,037	$	134,912
Transportation and processing services revenues ⁽²⁾	3,865		6,853		14,740		17,238
Total Coal Royalty and Other segment revenues	$	43,784	$	49,371	$	168,777	$	152,150



Lease Term ⁽¹⁾	Weighted Average Remaining Years as of September 30, 2019	Annual Minimum Payments ⁽²⁾
0 - 5 years	2.2	$	12,439
5 - 10 years	6.4	9,426
10+ years	12.1	46,737
Total	9.6	$	68,602



	For the Nine Months Ended September 30,				Increase (Decrease)		Percentage Change
Operating Segment (In thousands)	2019		2018		Increase (Decrease)		Percentage Change
Coal Royalty and Other	$	175,386	$	152,969	$	22,417	15	%
Soda Ash	36,833		34,986		1,847		5	%
Total	$	212,219	$	187,955	$	24,264	13	%