UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September 30, 2022~~March 31, 2023 or

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

		Commission file number:	001-31465

NATURAL RESOURCE PARTNERS 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.)

1415 Louisiana Street, Suite ~~2400~~3325

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of "accelerated filer", "large accelerated filer", "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☒
Non-accelerated Filer	☐	Smaller Reporting Company	☒☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

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

					*March 31,*			*December 31,*
	*September 30,*		*December 31,*		*2023*			*2022*
(In thousands, except unit data)	*2022*		*2021*		(Unaudited)
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	60,937	$	135,520	$	17,655		$	39,091
Accounts receivable, net		34,726		24,538		36,513			42,701
Other current assets, net		1,228		2,723		3,216			1,822
Total current assets	$	96,891	$	162,781	$	57,384		$	83,614
Land		24,008		24,008		24,008			24,008
Mineral rights, net		421,351		437,697		408,371			412,312
Intangible assets, net		15,168		16,130		14,613			14,713
Equity in unconsolidated investment		284,806		276,004		295,361			306,470
Long-term contract receivable, net		29,570		31,371		28,309			28,946
Other long-term assets, net		7,216		5,832		7,622			7,068
Total assets	$	879,010	$	953,823	$	835,668		$	877,131
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable	$	2,179	$	1,956	$	1,452		$	1,992
Accrued liabilities		5,913		10,297		3,466			11,916
Accrued interest		4,227		1,213		1,252			989
Current portion of deferred revenue		8,886		11,817		7,450			6,256
Current portion of long-term debt, net		89,989		39,102		39,055			39,076
Total current liabilities	$	111,194	$	64,385	$	52,675		$	60,229
Deferred revenue		35,882		50,045		38,833			40,181
Long-term debt, net		148,734		394,443		133,821			129,205
Other non-current liabilities		5,231		5,018		6,124			5,472
Total liabilities	$	301,041	$	513,891	$	231,453		$	235,087
Commitments and contingencies (see Note 12)
Class A Convertible Preferred Units (250,000 and 269,321 units issued and outstanding at September 30, 2022 and December 31, 2021, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at September 30, 2022 and December 31, 2021)	$	164,587	$	183,908
Commitments and contingencies (see Note 13)
Class A Convertible Preferred Units (202,501 and 250,000 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at March 31, 2023 and December 31, 2022) (See Note 3)					$	133,316		$	164,587
Partners’ capital
Common unitholders’ interest (12,505,996 and 12,351,306 units issued and outstanding at September 30, 2022 and December 31, 2021, respectively)	$	358,332	$	203,062
Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively)					$	417,401		$	404,799
General partner’s interest		5,054		1,787		6,400			5,977
Warrant holders’ interest		47,964		47,964		47,964			47,964
Accumulated other comprehensive income		2,032		3,211
Accumulated other comprehensive income (loss)						(866	)		18,717
Total partners’ capital	$	413,382	$	256,024	$	470,899		$	477,457
Total liabilities and partners' capital	$	879,010	$	953,823	$	835,668		$	877,131

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

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	*For the Three Months Ended September 30,*						*For the Nine Months Ended September 30,*						*For the Three Months Ended March 31,*
(In thousands, except per unit data)	*2022*			*2021*			*2022*			*2021*			*2023*			*2022*
Revenues and other income
Royalty and other mineral rights	$	81,379		$	47,884		$	231,795		$	114,422		$	76,271		$	71,083
Transportation and processing services		5,969			2,171			15,377			6,545			3,598			3,796
Equity in earnings of Sisecam Wyoming		14,556			6,672			44,036			11,246			19,254			14,837
Gain on asset sales and disposals		354			68			699			243			96			—
Total revenues and other income	$	102,258		$	56,795		$	291,907		$	132,456		$	99,219		$	89,716

Operating expenses
Operating and maintenance expenses	$	7,898		$	8,354		$	25,989		$	19,076		$	7,163		$	8,076
Depreciation, depletion and amortization		6,850			5,182			16,565			15,145			4,083			3,868
General and administrative expenses		4,518			4,052			14,037			11,550			5,845			4,467
Asset impairments		812			57			874			4,116			—			19
Total operating expenses	$	20,078		$	17,645		$	57,465		$	49,887		$	17,091		$	16,430

Income from operations	$	82,180		$	39,150		$	234,442		$	82,569		$	82,128		$	73,286

Other expenses, net
Interest expense, net	$	(5,141	)	$	(9,652	)	$	(22,636	)	$	(29,308	)	$	(2,853	)	$	(9,387	)
Loss on extinguishment of debt		(2,484	)		—			(6,532	)		—
Total other expenses, net	$	(7,625	)	$	(9,652	)	$	(29,168	)	$	(29,308	)

Net income	$	74,555		$	29,498		$	205,274		$	53,261		$	79,275		$	63,899
Less: income attributable to preferred unitholders		(7,500	)		(7,961	)		(22,500	)		(23,530	)		(6,661	)		(7,500	)
Less: redemption of preferred units														(16,228	)		—
Net income attributable to common unitholders and the general partner	$	67,055		$	21,537		$	182,774		$	29,731		$	56,386		$	56,399

Net income attributable to common unitholders	$	65,714		$	21,106		$	179,119		$	29,136		$	55,258		$	55,271
Net income attributable to the general partner		1,341			431			3,655			595			1,128			1,128

Net income per common unit (see Note 4)
Net income per common unit (see Note 5)
Basic	$	5.25		$	1.71		$	14.36		$	2.36		$	4.40		$	4.45
Diluted		3.71			1.10			10.24			1.98			3.44			3.11

Net income	$	74,555		$	29,498		$	205,274		$	53,261		$	79,275		$	63,899
Comprehensive income (loss) from unconsolidated investment and other		289			4,204			(1,179	)		7,469			(19,583	)		2,545
Comprehensive income	$	74,844		$	33,702		$	204,095		$	60,730		$	59,692		$	66,444

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

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)

											*Accumulated*																*Accumulated*
											*Other*			*Total*													*Other*			*Total*
	*Common Unitholders*					*General*			*Warrant*		*Comprehensive*			*Partners'*			*Common Unitholders*					*General*			*Warrant*		*Comprehensive*			*Partners'*
(In thousands)	*Units*		*Amounts*			*Partner*			*Holders*		*Income*			*Capital*			*Units*		*Amounts*			*Partner*			*Holders*		*Income (Loss)*			*Capital*
Balance at December 31, 2021		12,351	$	203,062		$	1,787		$	47,964	$	3,211		$	256,024
Balance at December 31, 2022																		12,506	$	404,799		$	5,977		$	47,964	$	18,717		$	477,457
Net income ⁽¹⁾		—		62,621			1,278			—		—			63,899			—		77,690			1,585			—		—			79,275
Redemption of preferred units																		—		(15,904	)		(324	)		—		—			(16,228	)
Distributions to common unitholders and the general partner		—		(5,559	)		(113	)		—		—			(5,672	)		—		(40,082	)		(818	)		—		—			(40,900	)
Distributions to preferred unitholders		—		(7,603	)		(155	)		—		—			(7,758	)		—		(7,924	)		(162	)		—		—			(8,086	)
Issuance of unit-based awards		155		—			—			—		—			—			129		—			—			—		—			—
Unit-based awards amortization and vesting, net		—		(1,754	)		—			—		—			(1,754	)		—		(1,178	)		—			—		—			(1,178	)
Capital contribution		—		—			112			—		—			112			—		—			142			—		—			142
Comprehensive income from unconsolidated investment and other		—		—			—			—		2,545			2,545
Balance at March 31, 2022		12,506	$	250,767		$	2,909		$	47,964	$	5,756		$	307,396
Net income ⁽¹⁾		—		65,484			1,336			—		—			66,820
Distributions to common unitholders and the general partner		—		(9,379	)		(191	)		—		—			(9,570	)
Distributions to preferred unitholders		—		(7,350	)		(150	)		—		—			(7,500	)
Unit-based awards amortization and vesting		—		1,231			—			—		—			1,231
Comprehensive loss from unconsolidated investment and other		—		—			—			—		(4,013	)		(4,013	)		—		—			—			—		(19,583	)		(19,583	)
Balance at June 30, 2022		12,506	$	300,753		$	3,904		$	47,964	$	1,743		$	354,364
Net income ⁽¹⁾		—		73,064			1,491			—		—			74,555
Distributions to common unitholders and the general partner		—		(9,380	)		(191	)		—		—			(9,571	)
Distributions to preferred unitholders		—		(7,350	)		(150	)		—		—			(7,500	)
Unit-based awards amortization and vesting		—		1,245			—			—		—			1,245
Comprehensive income from unconsolidated investment and other		—		—			—			—		289			289
Balance at September 30, 2022		12,506	$	358,332		$	5,054		$	47,964	$	2,032		$	413,382
Balance at March 31, 2023																		12,635	$	417,401		$	6,400		$	47,964	$	(866	)	$	470,899

⁽¹⁾	Net income includes $6.7 million of income attributable to preferred unitholders that accumulated during the period, of which $6.5 million is allocated to the common unitholders and $0.1 million is allocated to the general partner.

											*Accumulated*
											*Other*		*Total*
	*Common Unitholders*					*General*			*Warrant*		*Comprehensive*		*Partners'*
(In thousands)	*Units*		*Amounts*			*Partner*			*Holders*		*Income*		*Capital*
Balance at December 31, 2021		12,351	$	203,062		$	1,787		$	47,964	$	3,211	$	256,024
Net income ⁽¹⁾		—		62,621			1,278			—		—		63,899
Distributions to common unitholders and the general partner		—		(5,559	)		(113	)		—		—		(5,672	)
Distributions to preferred unitholders		—		(7,603	)		(155	)		—		—		(7,758	)
Issuance of unit-based awards		155		—			—			—		—		—
Unit-based awards amortization and vesting, net		—		(1,754	)		—			—		—		(1,754	)
Capital contribution		—		—			112			—		—		112
Comprehensive income from unconsolidated investment and other		—		—			—			—		2,545		2,545
Balance at March 31, 2022		12,506	$	250,767		$	2,909		$	47,964	$	5,756	$	307,396

⁽¹⁾	Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

~~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)~~

Accumulated

Other

Total

Common Unitholders

General

Warrant

Comprehensive

Partners'

(In thousands)

Units

Amounts

Partner

Holders

Income

Capital

Balance at December 31, 2020
12,261 $ 136,927 $ 459 $ 66,816 $ 322 $ 204,524
Net income ⁽¹⁾
— 8,213 168 — — 8,381
Distributions to common unitholders and the general partner
— (5,517 ) (113 ) — — (5,630 )
Distributions to preferred unitholders
— (7,461 ) (152 ) — — (7,613 )
Issuance of unit-based awards
90 — — — — —
Unit-based awards amortization and vesting, net
— 215 — — — 215
Capital contribution
— — 32 — — 32
Comprehensive income from unconsolidated investment and other
— — — — 732 732
Balance at March 31, 2021
12,351 $ 132,377 $ 394 $ 66,816 $ 1,054 $ 200,641
Net income ⁽²⁾
— 15,074 308 — — 15,382
Distributions to common unitholders and the general partner
— (5,559 ) (113 ) — — (5,672 )
Distributions to preferred unitholders
— (7,571 ) (155 ) — — (7,726 )
Unit-based awards amortization and vesting
— 515 — — — 515
Comprehensive income from unconsolidated investment and other
— — — — 2,533 2,533
Balance at June 30, 2021
12,351 $ 134,836 $ 434 $ 66,816 $ 3,587 $ 205,673
Net income ⁽³⁾
— 28,909 589 — — 29,498
Distributions to common unitholders and the general partner
— (5,558 ) (113 ) — — (5,671 )
Distributions to preferred unitholders
— (7,687 ) (156 ) — — (7,843 )
Unit-based awards amortization and vesting
— 959 — — — 959
Comprehensive income from unconsolidated investment and other
— — — — 4,204 4,204
Balance at September 30, 2021
12,351 $ 151,459 $ 754 $ 66,816 $ 7,791 $ 226,820

⁽¹⁾	Net income includes $7.7 million of income attributable to preferred unitholders that accumulated during the period, of which $7.6 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.
⁽²⁾	Net income includes $7.8 million of income attributable to preferred unitholders that accumulated during the period, of which $7.7 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.
⁽³⁾	Net income includes $8.0 million of income attributable to preferred unitholders that accumulated during the period, of which $7.8 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.

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

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	*For the Nine Months Ended September 30,*						*For the Three Months Ended March 31,*
(In thousands)	*2022*			*2021*			*2023*			*2022*
Cash flows from operating activities
Net income	$	205,274		$	53,261		$	79,275		$	63,899
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		16,565			15,145			4,083			3,868
Distributions from unconsolidated investment		34,055			3,920			10,780			13,230
Equity earnings from unconsolidated investment		(44,036	)		(11,246	)		(19,254	)		(14,837	)
Gain on asset sales and disposals		(699	)		(243	)		(96	)		—
Loss on extinguishment of debt		6,532			—
Asset impairments		874			4,116			—			19
Bad debt expense		641			1,715			(610	)		1,028
Unit-based compensation expense		4,216			2,837			2,491			1,448
Amortization of debt issuance costs and other		1,887			1,899			25			375
Change in operating assets and liabilities:
Accounts receivable		(10,118	)		(12,332	)		7,061			(7,579	)
Accounts payable		223			89			(541	)		(60	)
Accrued liabilities		(4,831	)		(839	)		(8,805	)		(7,156	)
Accrued interest		3,014			6,971			263			7,250
Deferred revenue		(17,094	)		(2,121	)		(154	)		(7,316	)
Other items, net		1,447			3,471			(1,618	)		(1,838	)
Net cash provided by operating activities	$	197,950		$	66,643		$	72,900		$	52,331

Cash flows from investing activities
Proceeds from asset sales and disposals	$	699		$	249		$	101		$	—
Return of long-term contract receivable		1,138			1,622			598			—
Capital expenditures		(59	)		—			(2	)		—
Net cash provided by investing activities	$	1,778		$	1,871		$	697		$	—

Cash flows from financing activities
Debt borrowings							$	94,200		$	—
Debt repayments	$	(197,665	)	$	(19,061	)		(89,696	)		(16,697	)
Distributions to common unitholders and the general partner		(24,813	)		(16,973	)		(40,900	)		(5,672	)
Distributions to preferred unitholders		(22,500	)		(11,591	)		(7,500	)		(7,500	)
Acquisition of non-controlling interest in BRP		—			(1,000	)
Redemption of preferred units								(48,085	)		—
Redemption of preferred units paid-in-kind		(19,579	)		—			—			(19,579	)
Other items, net		(9,754	)		(690	)		(3,052	)		(2,813	)
Net cash used in financing activities	$	(274,311	)	$	(49,315	)	$	(95,033	)	$	(52,261	)

Net increase (decrease) in cash and cash equivalents	$	(74,583	)	$	19,199		$	(21,436	)	$	70
Cash and cash equivalents at beginning of period		135,520			99,790			39,091			135,520
Cash and cash equivalents at end of period	$	60,937		$	118,989		$	17,655		$	135,590

Supplemental cash flow information:
Cash paid for interest	$	18,501		$	20,829		$	2,474		$	1,644
Non-cash investing and financing activities:
Preferred unit distributions paid-in-kind		—			11,591

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

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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 Sisecam Wyoming LLC ("Sisecam Wyoming"), a trona ore mining and soda ash production business. The Partnership is organized into two operating segments further described in Note 5.6. Segment Information. The Partnership’s operations are conducted through, and its operating assets are owned by, its subsidiaries. The Partnership owns its subsidiaries through one wholly owned operating company, NRP (Operating) LLC ("Opco"). As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context.

Principles of Consolidation and Reporting

The accompanying unaudited Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, ~~2021~~2022 and notes thereto included in the Partnership's Annual Report on Form 10-K, which was filed with the SEC on March ~~15, 2022.~~3, 2023.

Recently Adopted Accounting Standard

On January 1, 2023, NRP adopted Accounting Standards Update ("ASU") 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06)”. The ASU includes targeted improvements to earnings per share, which the Partnership adopted on a modified retrospective basis. The adoption of this ASU did not have a material impact on the Partnership’s Consolidated Financial Statements. See Note 5. Net Income Per Common Unit for the calculations of our basic and diluted net income per common unit. See Note 3. Class A Convertible Preferred Units and Warrants for disclosures related to our convertible preferred units and warrants.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

2. Revenues from Contracts with Customers

The following table presents the Partnership's Mineral Rights segment revenues by major source:

	*For the Three Months Ended September 30,*				*For the Nine Months Ended September 30,*				*For the Three Months Ended March 31,*
(In thousands)	*2022*		*2021*		*2022*		*2021*		*2023*		*2022*
Coal royalty revenues	$	52,381	$	32,432	$	170,775	$	66,095	$	58,023	$	55,449
Production lease minimum revenues		1,885		3,235		3,542		10,241		613		1,592
Minimum lease straight-line revenues		4,778		4,808		14,235		15,773		4,503		4,783
Carbon neutral initiative revenues ⁽¹⁾		8,600		—		8,600		—		2,118		—
Property tax revenues		1,360		1,466		4,527		4,522		1,470		1,472
Wheelage revenues		2,977		1,964		11,073		5,589		3,869		3,717
Coal overriding royalty revenues		1,367		757		2,307		3,592		188		258
Lease amendment revenues		759		1,519		2,450		3,159		851		880
Aggregates royalty revenues		884		429		2,691		1,339		753		770
Oil and gas royalty revenues		6,170		1,154		10,890		3,420		3,588		1,814
Other revenues		218		120		705		692		295		348
Royalty and other mineral rights revenues	$	81,379	$	47,884	$	231,795	$	114,422	$	76,271	$	71,083
Transportation and processing services revenues ⁽²⁾⁽¹⁾		5,969		2,171		15,377		6,545		3,598		3,796
Total Mineral Rights segment revenues	$	87,348	$	50,055	$	247,172	$	120,967	$	79,869	$	74,879

⁽¹⁾

~~Included within carbon neutral initiative revenues are payments that are recognized at a point in time upon satisfaction of NRP's performance obligation.~~

⁽²⁾

Transportation and processing services revenues from contracts with customers as defined under ASC 606 was ~~$4.9~~$2.9 million and ~~$1.2~~$3.1 million for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022, ~~respectively, and $12.9 million and $3.7 million for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021,~~ respectively. The remaining transportation and processing services revenues of ~~$1.1~~$0.7 million and ~~$0.9~~$0.7 million for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~~~, respectively, and $2.5 million and $2.8 million for the~~ ~~nine~~ ~~months ended~~ ~~September 30,~~ 2022~~and~~ ~~2021~~, respectively, related to other NRP-owned infrastructure leased to and operated by third-party operators accounted for under other guidance. See Note ~~14.~~15. Financing Transactionfor more information.

The following table details the Partnership's Mineral Rights segment receivables and liabilities resulting from contracts with customers:

	*September 30,*		*December 31,*		*March 31,*		*December 31,*
(In thousands)	*2022*		*2021*		*2023*		*2022*
Receivables
Accounts receivable, net	$	30,991	$	22,277	$	32,706	$	39,004
Other current assets, net ⁽¹⁾		874		769		1,947		—
Other long-term assets, net ⁽²⁾		75		250		75		75

Contract liabilities
Current portion of deferred revenue	$	8,886	$	11,817	$	7,450	$	6,256
Deferred revenue		35,882		50,045		38,833		40,181

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

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

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~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

The following table shows the activity related to the Partnership's Mineral Rights segment deferred revenue:

	*For the Nine Months Ended*
	*September 30,*						*For the Three Months Ended March 31,*
(In thousands)	*2022*			*2021*			*2023*			*2022*
Balance at beginning of period (current and non-current)	$	61,862		$	61,554		$	46,437		$	61,862
Increase due to minimums and lease amendment fees		11,309			6,411			7,770			5,059
Recognition of previously deferred revenue		(28,403	)		(8,532	)		(7,924	)		(12,375	)
Balance at end of period (current and non-current)	$	44,768		$	59,433		$	46,283		$	54,546

The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty leases are as follows as of ~~September 30, 2022~~March 31, 2023 (in thousands):

Lease Term ⁽¹⁾	*Weighted Average Remaining Years*	*Annual Minimum Payments*		*Weighted Average Remaining Years*	*Annual Minimum Payments*
0 - 5 years	2.4	$	22,229	1.9	$	21,939
5 - 10 years	3.8		7,517	3.3		7,547
10+ years	12.8		27,221	12.3		27,121
Total	7.5	$	56,967	7.1	$	56,607

⁽¹⁾	Lease term does not include renewal periods.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

3. Class A Convertible Preferred Units and Warrants

On March 2, 2017, NRP issued $250 million of Class A Convertible Preferred Units representing limited partner interests in NRP (the "preferred units") to certain entities controlled by funds affiliated with The Blackstone Group Inc. (collectively referred to as "Blackstone") and certain affiliates of GoldenTree Asset Management LP (collectively referred to as "GoldenTree") (together the "preferred purchasers") pursuant to a Preferred Unit and Warrant Purchase Agreement. NRP issued 250,000 preferred units to the preferred purchasers at a price of $1,000 per preferred unit (the "per unit purchase price"), less a 2.5% structuring and origination fee. The preferred units entitle the preferred purchasers to receive cumulative distributions at a rate of 12% of the purchase price per year, up to one half of which NRP may pay in additional preferred units (such additional preferred units, the "PIK units"). The preferred units have a perpetual term, unless converted or redeemed as described below.

NRP also issued two tranches of warrants (the "warrants") to purchase common units to the preferred purchasers (warrants to purchase 1.75 million common units with a strike price of $22.81 and warrants to purchase 2.25 million common units with a strike price of $34.00). The warrants may be exercised by the holders thereof at any time before the eighth anniversary of the closing date. Upon exercise of the warrants, NRP may, at its option, elect to settle the warrants in common units or cash, each on a net basis.

After March 2, 2022 and prior to March 2, 2025, the holders of the preferred units may elect to convert up to 33% of the outstanding preferred units in any 12-month period into common units if the volume weighted average trading price of our common units (the "VWAP") for the 30 trading days immediately prior to date notice is provided is greater than $51.00. In such case, the number of common units to be issued upon conversion would be equal to the per unit purchase price plus the value of any accrued and unpaid distributions divided by an amount equal to a 7.5% discount to the VWAP for the 30 trading days immediately prior to the notice of conversion. Rather than have the preferred units convert to common units in accordance with the provisions of this paragraph, NRP would have the option to elect to redeem the preferred units proposed to be converted for cash at a price equal to the per unit purchase price plus the value of any accrued and unpaid distributions.

On or after March 2, 2025, the holders of the preferred units may elect to convert the preferred units to common units at a conversion rate equal to the Liquidation Value divided by an amount equal to a 10% discount to the VWAP for the 30 trading days immediately prior to the notice of conversion. The “liquidation value” will be an amount equal to the greater of: (1) (a) the per unit purchase price multiplied by (i) prior to March 2, 2020, 1.50, (ii) on or after March 2, 2020 and prior to March 2, 2021, 1.70 and (iii) on or after March 2, 2021, 1.85, less (b)(i) all preferred unit distributions previously made by NRP and (ii) all cash payments previously made in respect of redemption of any PIK units; and (2) the per unit purchase price plus the value of all accrued and unpaid distributions.

To the extent the holders of the preferred units have not elected to convert their preferred units before March 2, 2029, NRP has the right to force conversion of the preferred units at a price equal to the liquidation value divided by an amount equal to a 10% discount to the VWAP for the 30 trading days immediately prior to the notice of conversion.

In addition, NRP has the ability to redeem at any time (subject to compliance with its debt agreements) all or any portion of the preferred units and any outstanding PIK units for cash. The redemption price for each outstanding PIK unit is $1,000 plus the value of any accrued and unpaid distributions per PIK unit. The redemption price for each preferred unit is the liquidation value divided by the number of outstanding preferred units. The preferred units are redeemable at the option of the preferred purchasers only upon a change in control.

The terms of the preferred units contain certain restrictions on NRP's ability to pay distributions on its common units. To the extent that either (i) NRP's consolidated Leverage Ratio, as defined in the Partnership's Fifth Amended and Restated Partnership Agreement dated March 2, 2017 (the "restated partnership agreement"), is greater than 3.25x, or (ii) the ratio of NRP's Distributable Cash Flow (as defined in the Restated Partnership Agreement) to cash distributions made or proposed to be made is less than 1.2x (in each case, with respect to the most recently completed four-quarter period), NRP may not increase the quarterly distribution above $0.45 per quarter without the approval of the holders of a majority of the outstanding preferred units. In addition, if at any time after January 1, 2022, any PIK units are outstanding, NRP may not make distributions on its common units until it has redeemed all PIK units for cash.

The holders of the preferred units have the right to vote with holders of NRP’s common units on an as-converted basis and have other customary approval rights with respect to changes of the terms of the preferred units. In addition, Blackstone has certain approval rights over certain matters as identified in the restated partnership agreement. GoldenTree also has more limited approval rights that will expand once Blackstone's ownership goes below the minimum preferred unit threshold (as defined below). These approval rights are not transferrable without NRP's consent. In addition, the approval rights held by Blackstone and GoldenTree will terminate at such time that Blackstone (together with their affiliates) or GoldenTree (together with their affiliates), as applicable, no longer own at least 20% of the total number of preferred units issued on the closing date, together with all PIK units that have been issued but not redeemed (the "minimum preferred unit threshold").

At the closing, pursuant to the Board Representation and Observation Rights Agreement, the Preferred Purchasers received certain board appointment and observation rights, and Blackstone appointed one director and one observer to the Board of Directors.

NRP also entered into a registration rights agreement (the "preferred unit and warrant registration rights agreement") with the preferred purchasers, pursuant to which NRP is required to file (i) a shelf registration statement to register the common units issuable upon exercise of the warrants and to cause such registration statement to become effective not later than 90 days following the closing date and (ii) a shelf registration statement to register the common units issuable upon conversion of the preferred units and to cause such registration statement to become effective not later than the earlier of the fifth anniversary of the closing date or 90 days following the first issuance of any common units upon conversion of preferred units (the "registration deadlines"). In addition, the preferred unit and warrant registration rights agreement gives the preferred purchasers piggyback registration and demand underwritten offering rights under certain circumstances. The shelf registration statement to register the common units issuable upon exercise of the warrants became effective on April 20, 2017. If the shelf registration statement to register the common units issuable upon conversion of the preferred units is not effective by the applicable registration deadline, NRP will be required to pay the preferred purchasers liquidated damages in the amounts and upon the term set forth in the preferred unit and warrant registration rights agreement.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

Accounting for the Preferred Units and Warrants

Classification

The preferred units are accounted for as temporary equity on NRP's Consolidated Balance Sheets due to certain contingent redemption rights that may be exercised at the election of preferred purchasers. The warrants are accounted for as equity on NRP's Consolidated Balance Sheets.

Initial Measurement

The net transaction price was allocated to the preferred units and warrants based on their relative fair values at inception date. NRP allocated the transaction issuance costs to the preferred units and warrants primarily on a pro-rata basis based on their relative inception date allocated values.

Subsequent Measurement

Preferred Units

Subsequent adjustment of the preferred units will not occur until NRP has determined that the conversion or redemption of all or a portion of the preferred units is probable of occurring. Once conversion or redemption becomes probable of occurring, the carrying amount of the preferred units will be accreted to their redemption value over the period from the date the feature is probable of occurring to the date the preferred units can first be converted or redeemed.

In February 2023, the Partnership received a notice from holders of the Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 47,499 Class A Preferred Units. The Partnership chose to redeem the preferred units for $47.5 million in cash rather than issuing common units. Of the originally issued 250,000 Class A Preferred Units, 202,501 Class A Preferred Units remain outstanding as of March 31, 2023.

Activity related to the preferred units is as follows:

	*Units*			*Financial*
(In thousands, except unit data)	*Outstanding*			*Position*
Balance at December 31, 2021		269,321		$	183,908
Redemption of preferred units paid-in-kind		(19,321	)		(19,321	)
Balance at December 31, 2022		250,000		$	164,587
Redemption of preferred units		(47,499	)		(31,271	)
Balance at March 31, 2023		202,501		$	133,316

Warrants

As of March 31, 2023 and December 31, 2022 there were 3.0 million warrants outstanding, which included warrants to purchase 0.75 million common units at a strike price of $22.81 and warrants to purchase 2.25 million common units with a strike price of $34.00. These warrants had a $48.0 million carrying value included in warrant holders' interest within partners' capital on the Partnership's Consolidated Balance Sheets at March 31, 2023 and December 31, 2022. Subsequent adjustment of the warrants will not occur until the warrants are exercised, at which time, NRP may, at its option, elect to settle the warrants in common units or cash, each on a net basis. The net basis will be equal to the difference between the Partnership's common unit price and the strike price of the warrant. Once warrant exercise occurs, the difference between the carrying amount of the warrants and the net settlement amount will be allocated on a pro-rata basis to the common unitholders and general partner.

Embedded Features

Certain embedded features within the preferred unit and warrant purchase agreement are accounted for at fair value and are remeasured each quarter. See Note 10.Fair Value Measurements for further information regarding valuation of these embedded derivatives.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

4. 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 available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income available to common unitholders and the general partner by ~~$7.5~~$6.7 million and ~~$8.0~~$7.5 million during the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022, ~~respectively, and $22.5 million and $23.5 million during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021,~~ respectively, as a result of accumulated preferred unit distributions earned during the period. Of the $6.7 million in accumulated preferred unit distributions earned during March 31, 2023, $0.6 million was paid in February 2023 in connection with the preferred units that were redeemed. Income available to common unitholders and the general partner is also reduced by the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred units. As such, NRP reduced net income available to common unitholders and the general partner by $16.2 million during the three months ended March 31, 2023.

The following table shows the cash distributions declared and paid to common and preferred unitholders during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022, respectively:

Cash Distributions

Paid-in-kind Distributions

Common Units

Preferred Units
Total Distribution (1) Total Distribution Total Distribution
Month Paid

Period Covered by Distribution

Distribution per Unit

(In thousands)
Distribution per Unit
(In thousands)

(In units)
2022

February 2022

October 1 - December 31, 2021
$ 0.45 $ 5,672 $ 30.00 $ 7,500 —
May 2022

January 1 - March 31, 2022
0.75 9,570 30.00 7,500 —
August 2022

April 1 - June 30, 2022
0.75 9,571 30.00 7,500 —

2021

February 2021

October 1 - December 31, 2020
$ 0.45 $ 5,630 $ 15.00 $ 3,806 3,806
May 2021

January 1 - March 31, 2021
0.45 5,672 15.00 3,864 3,864
August 2021

April 1 - June 30, 2021
0.45 5,671 15.00 3,921 3,921


		*Common Units*				*Preferred Units*
				Total Distribution ⁽¹⁾				*Total Distribution*
Month Paid	*Period Covered by Distribution*	*Distribution per Unit*		*(In thousands)*		*Distribution per Unit*		*(In thousands)*
2023
February 2023	October 1 - December 31, 2022	$	0.75	$	9,571	$	30.00	$	7,500
February 2023 ⁽²⁾	January 1 - February 8, 2023		—		—		12.33		586
March 2023 ⁽³⁾	Special Distribution		2.43		31,329		—		—

2022
February 2022	October 1 - December 31, 2021	$	0.45	$	5,672	$	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⁾	Relates to accrued distribution paid upon the redemption of 47,499 preferred units in February 2023.
⁽³⁾	Special distribution was made to help cover unitholder tax liabilities associated with owning NRP's common units during 2022.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

4.5. Net Income Per Common Unit

Basic net income per common unit is computed by dividing net income, after considering income attributable to preferred unitholders, the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred units and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income 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 per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the preferred units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation. The calculation of diluted net income per common unit for the three ~~and~~months ended ~~nine~~March 31, 2023 includes the assumed conversion of the remaining preferred units while it does not include the assumed conversion of the preferred units that were redeemed during the first quarter of 2023 as the inclusion of these units would be anti-dilutive. The calculation of diluted net income per common unit for the three months ended ~~September 30,~~March 31, 2022 ~~and~~ ~~2021~~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 per common unit for the three ~~and~~ ~~nine~~months ended ~~September 30,~~ March 31, 2023 and 2022 includes the net settlement of warrants to purchase 0.75 million common units at 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 whereas the calculation of diluted net income per common unit for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~ ~~does~~ ~~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.$34.00.

The following ~~tables reconcile~~table reconciles the numerator and denominator of the basic and diluted net income per common unit computations and calculates basic and diluted net income per common unit:

	*For the Three Months Ended September 30,*						*For the Nine Months Ended September 30,*						*For the Three Months Ended March 31,*
(In thousands, except per unit data)	*2022*			*2021*			*2022*			*2021*			*2023*			*2022*
Allocation of net income
Net income	$	74,555		$	29,498		$	205,274		$	53,261
Less: income attributable to preferred unitholders		(7,500	)		(7,961	)		(22,500	)		(23,530	)
Net income attributable to common unitholders and the general partner	$	67,055		$	21,537		$	182,774		$	29,731
Less: net income attributable to the general partner		(1,341	)		(431	)		(3,655	)		(595	)
Basic net income per common unit
Net income attributable to common unitholders	$	65,714		$	21,106		$	179,119		$	29,136		$	55,258		$	55,271

Basic net income per common unit
Weighted average common units—basic		12,506			12,351			12,476			12,332			12,570			12,415
Basic net income per common unit	$	5.25		$	1.71		$	14.36		$	2.36		$	4.40		$	4.45

Diluted net income per common unit
Weighted average common units—basic		12,506			12,351			12,476			12,332			12,570			12,415
Plus: dilutive effect of preferred units		6,210			13,835			6,210			13,835			3,778			6,974
Plus: dilutive effect of warrants		807			—			759			—			1,255			531
Plus: dilutive effect of unvested unit-based awards		195			188			204			144			209			240
Weighted average common units—diluted		19,718			26,374			19,649			26,311			17,812			20,160

Net income	$	74,555		$	29,498		$	205,274		$	53,261		$	79,275		$	63,899
Less: income attributable to preferred unitholders		—			—			—			—			(586	)		—
Less: redemption of preferred units														(16,228	)		—
Diluted net income attributable to common unitholders and the general partner	$	74,555		$	29,498		$	205,274		$	53,261		$	62,461		$	63,899
Less: diluted net income attributable to the general partner		(1,491	)		(589	)		(4,105	)		(1,065	)		(1,249	)		(1,278	)
Diluted net income attributable to common unitholders	$	73,064		$	28,909		$	201,169		$	52,196		$	61,212		$	62,621

Diluted net income per common unit	$	3.71		$	1.10		$	10.24		$	1.98		$	3.44		$	3.11

810

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

5.6. Segment Information

The Partnership's segments are strategic business units that offer distinct products and services to different customers in different geographies within the U.S. and that are managed accordingly. NRP has the following two operating segments:

Mineral Rights—consists of mineral interests and other subsurface rights across the United States. NRP's ownership provides critical inputs for the manufacturing of steel, electricity and basic building materials, as well as opportunities for carbon sequestration and renewable energy. The Partnership is working to strategically redefine its business as a key player in the transitional energy economy in the years to come.

Soda Ash—consists of the Partnership's 49% non-controlling equity interest in Sisecam Wyoming, a trona ore mining operation and soda ash refinery in the Green River Basin of Wyoming. Sisecam Wyoming mines trona and processes it into soda ash that is sold both domestically and internationally to the glass and chemicals industries.

Direct segment costs and certain other costs incurred at the corporate level that are identifiable and that benefit the Partnership's segments are allocated to the operating segments accordingly. These allocated costs generally include salaries and benefits, insurance, property taxes, legal, royalty, information technology and shared facilities services and are included in operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income.

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.

The following table summarizes certain financial information for each of the Partnership's business segments:

	*Operating Segments*									*Operating Segments*
(In thousands)	*Mineral Rights*		*Soda Ash*		*Corporate and Financing*			*Total*		*Mineral Rights*		*Soda Ash*		*Corporate and Financing*			*Total*
For the Three Months Ended September 30, 2022
For the Three Months Ended March 31, 2023
Revenues	$	87,348	$	14,556	$	—		$	101,904	$	79,869	$	19,254	$	—		$	99,123
Gain on asset sales and disposals		354		—		—			354		96		—		—			96
Operating and maintenance expenses		7,867		31		—			7,898		7,005		158		—			7,163
Depreciation, depletion and amortization		6,850		—		—			6,850		4,079		—		4			4,083
General and administrative expenses		—		—		4,518			4,518		—		—		5,845			5,845
Asset impairments		812		—		—			812		—		—		—			—
Other expenses, net		—		—		7,625			7,625
Interest expense, net											—		—		2,853			2,853
Net income (loss)		72,173		14,525		(12,143	)		74,555		68,881		19,096		(8,702	)		79,275

For the Three Months Ended September 30, 2021
For the Three Months Ended March 31, 2022
Revenues	$	50,055	$	6,672	$	—		$	56,727	$	74,879	$	14,837	$	—		$	89,716
Gain on asset sales and disposals		68		—		—			68
Operating and maintenance expenses		8,278		76		—			8,354		8,025		51		—			8,076
Depreciation, depletion and amortization		5,182		—		—			5,182		3,868		—		—			3,868
General and administrative expenses		—		—		4,052			4,052		—		—		4,467			4,467
Asset impairments		57		—		—			57		19		—		—			19
Other expenses, net		—		—		9,652			9,652
Interest expense, net											—		—		9,387			9,387
Net income (loss)		36,606		6,596		(13,704	)		29,498		62,967		14,786		(13,854	)		63,899

For the Nine Months Ended September 30, 2022
Revenues	$	247,172	$	44,036	$	—		$	291,208
Gain on asset sales and disposals		699		—		—			699
Operating and maintenance expenses		25,884		105		—			25,989
Depreciation, depletion and amortization		16,565		—		—			16,565
General and administrative expenses		—		—		14,037			14,037
Asset impairments		874		—		—			874
Other expenses, net		—		—		29,168			29,168
Net income (loss)		204,548		43,931		(43,205	)		205,274

For the Nine Months Ended September 30, 2021
Revenues	$	120,967	$	11,246	$	—		$	132,213
Gain on asset sales and disposals		243		—		—			243
Operating and maintenance expenses		18,945		131		—			19,076
Depreciation, depletion and amortization		15,145		—		—			15,145
General and administrative expenses		—		—		11,550			11,550
Asset impairments		4,116		—		—			4,116
Other expenses, net		24		—		29,284			29,308
Net income (loss)		82,980		11,115		(40,834	)		53,261

911

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

6.7. Equity Investment

The Partnership accounts for its 49% investment in Sisecam Wyoming using the equity method of accounting. Activity related to this investment is as follows:

	*For the Three Months Ended September 30,*						*For the Nine Months Ended September 30,*						*For the Three Months Ended March 31,*
(In thousands)	*2022*			*2021*			*2022*			*2021*			*2023*			*2022*
Balance at beginning of period	$	280,300		$	266,433		$	276,004		$	262,514		$	306,470		$	276,004
Income allocation to NRP’s equity interests(1)		15,732			7,989			47,601			15,060			20,364			16,065
Amortization of basis difference		(1,176	)		(1,317	)		(3,565	)		(3,814	)		(1,110	)		(1,228	)
Other comprehensive income (loss)		289			4,204			(1,179	)		7,469			(19,583	)		2,545
Distribution		(10,339	)		—			(34,055	)		(3,920	)		(10,780	)		(13,230	)
Balance at end of period	$	284,806		$	277,309		$	284,806		$	277,309		$	295,361		$	280,156

⁽¹⁾	Amounts reclassified into income out of accumulated other comprehensive loss were $20.6 million and $1.7 million for the three months ended March 31, 2023 and 2022, respectively.

The following table represents summarized financial information for Sisecam Wyoming as derived from their respective unaudited financial statements for the three ~~and~~ ~~nine~~months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022:

	*For the Three Months Ended September 30,*				*For the Nine Months Ended September 30,*				*For the Three Months Ended March 31,*
(In thousands)	*2022*		*2021*		*2022*		*2021*		*2023*		*2022*
Net sales	$	190,450	$	135,648	$	542,955	$	384,129	$	207,128	$	163,437
Gross profit	$	39,679		23,530		119,723		50,317		49,055		39,765
Net income	$	32,105		16,304		97,144		30,734		41,560		32,786

7.8. Mineral Rights, Net

The Partnership’s mineral rights consist of the following:

	*September 30, 2022*							*December 31, 2021*							*March 31, 2023*							*December 31, 2022*
(In thousands)	*Carrying Value*		*Accumulated Depletion*			*Net Book Value*		*Carrying Value*		*Accumulated Depletion*			*Net Book Value*		*Carrying Value*		*Accumulated Depletion*			*Net Book Value*		*Carrying Value*		*Accumulated Depletion*			*Net Book Value*
Coal properties	$	666,604	$	(265,031	)	$	401,573	$	670,650	$	(253,503	)	$	417,147	$	661,812	$	(272,743	)	$	389,069	$	661,812	$	(269,037	)	$	392,775
Aggregates properties		8,674		(3,310	)		5,364		8,747		(2,975	)		5,772		8,655		(3,520	)		5,135		8,655		(3,410	)		5,245
Oil and gas royalty properties		12,354		(9,479	)		2,875		12,354		(9,115	)		3,239		12,354		(9,720	)		2,634		12,354		(9,600	)		2,754
Other		13,151		(1,612	)		11,539		13,151		(1,612	)		11,539		13,145		(1,612	)		11,533		13,150		(1,612	)		11,538
Total mineral rights, net	$	700,783	$	(279,432	)	$	421,351	$	704,902	$	(267,205	)	$	437,697	$	695,966	$	(287,595	)	$	408,371	$	695,971	$	(283,659	)	$	412,312

Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income and totaled ~~$6.4~~$3.9 million and ~~$4.6~~$3.7 million for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021,~~2022, ~~respectively, and $15.5 million and $13.8 million for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~, respectively.

~~During the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~the Partnership recorded $0.8 million and~~ ~~$0.9~~ ~~million of asset impairments, respectively. During the~~ ~~three~~ ~~months ended~~ ~~September 30, 2021,~~ ~~the Partnership did~~ ~~not~~ ~~have any material asset impairments and during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021,~~ ~~the Partnership recorded $4.1 million of expense primarily due to a lease termination that resulted in the full impairment of a coal property.~~ 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 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 future performance and considers both quantitative and qualitative information. ~~While the Partnership's impairment evaluation as of~~ ~~September 30, 2022~~ ~~incorporated an estimated impact~~As a result of the ~~global COVID-~~analysis, the Partnership did 19not ~~pandemic, there is significant uncertainty as to~~have any asset impairments during the ~~severity~~ three months ended March 31, 2023 and ~~duration of this disruption. If~~recorded an immaterial impairment expense during the ~~impact is worse than current estimates, an additional impairment charge~~ ~~may~~ three~~be recognized in future periods.~~ months ended March 31, 2022.

1012

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

8.9. Debt, Net

The Partnership's debt consists of the following:

	*September 30,*			*December 31,*			*March 31,*			*December 31,*
(In thousands)	*2022*			*2021*			*2023*			*2022*
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")	$	121,396		$	300,000
Opco debt:
Revolving credit facility	$	—		$	—
Senior Notes
Opco credit facility							$	91,200		$	70,000
Opco Senior Notes
5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023	$	2,366		$	4,730		$	2,366		$	2,366
4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023		12,008			12,008			6,004			6,004
5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024		25,368			38,053			12,684			25,368
8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024		8,023			12,035			4,011			8,023
5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026		57,104			57,104			45,683			45,683
5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026		14,554			14,554			11,643			11,643
Total Opco Senior Notes	$	119,423		$	138,484		$	82,391		$	99,087
Total debt at face value	$	240,819		$	438,484		$	173,591		$	169,087
Net unamortized debt issuance costs		(2,096	)		(4,939	)		(715	)		(806	)
Total debt, net	$	238,723		$	433,545		$	172,876		$	168,281
Less: current portion of long-term debt		(89,989	)		(39,102	)		(39,055	)		(39,076	)
Total long-term debt, net	$	148,734		$	394,443		$	133,821		$	129,205

~~NRP LP Debt~~

~~2025~~ ~~Senior Notes~~

In ~~October 2022,~~ ~~NRP redeemed the outstanding $121.4 million~~ ~~2025~~ Senior Notes at a redemption price of 102.281% of the principal amount plus accrued and unpaid interest, utilizing cash on hand and $70 million in borrowings under its recently extended credit facility. The $51.4 million of ~~2025~~ ~~Senior Notes redeemed using cash on hand is classified as current portion of long-term debt, net on the Consolidated Balance Sheets at~~ ~~September 30, 2022.~~ ~~As of the date of this report, there are~~ no~~2025~~ ~~Senior Notes outstanding. The following describes the terms of the~~ ~~2025~~ ~~Senior Notes prior to their redemption.~~

~~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.~~ ~~NRP has 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. During the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022,~~ ~~NRP retired $60.5 million and $178.6 million, respectively of its~~ ~~2025~~ ~~Senior Notes. These notes were purchased on the open market at a weighted average price of 102.750% and 102.436% for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022,~~ ~~a discount to the redemption price at the time of 104.563%. Included in loss on extinguishment of debt on the Partnership's Consolidated Statements of Comprehensive Income for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~are $1.7 million and $4.4 million, respectively, of call premium and fees and the write off of $0.6 million and $2.0 million, respectively, of debt issuance costs.~~

~~The~~ ~~2025~~ ~~Senior Notes are the senior unsecured obligations of NRP. The~~ ~~2025~~ ~~Senior Notes rank equal in right of payment to all existing and future senior unsecured debt of NRP 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 to the extent of the value of the collateral securing such indebtedness and are structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries, including the Opco Credit Facility and each series of Opco’s existing senior notes. "Opco" refers to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. ~~None~~ ~~of NRP's subsidiaries guarantee the~~ ~~2025~~ ~~Senior Notes. As of~~ ~~September 30, 2022~~ ~~and~~ ~~December 31, 2021~~~~, NRP was in compliance with the terms of the Indenture relating to their~~ ~~2025~~ ~~Senior Notes.~~

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

Opco Debt

All of Opco’s debt is guaranteed by its wholly owned subsidiaries and is secured by certain of the assets of Opco and its wholly owned subsidiaries, other than BRP LLC and NRP Trona LLC. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022, Opco was in compliance with the terms of the financial covenants contained in its debt agreements.

Opco Credit Facility

In August 2022, the Partnership entered into the Fifth Amendment (the "Fifth Amendment) to the Opco Credit Facility (the "Opco Credit Facility"). The Fifth Amendment extended the term of the Opco Credit Facility until August 2027. Lender commitments under the Opco Credit Facility increased to $130.0 million. The Opco Credit Facility contains financial covenants requiring Opco to maintain:

•

A leverage ratio of consolidated indebtedness to EBITDDA (in each case as defined in the Opco Credit Facility) not to exceed ~~3.0~~x;3.0x; provided, and

•

an interest coverage ratio of consolidated EBITDDA to the sum of consolidated interest expense and consolidated lease expense (in each case as defined in the Opco Credit Facility) of not less than 3.5 to 1.0.

As of December 31, 2022, the Partnership had $70.0 million in borrowings outstanding under the Opco Credit Facility. During the three months ended March 31, 2023, the Partnership borrowed $94.2 million and repaid $73.0 million, resulting in $91.2 million in borrowings outstanding under the Opco Credit Facility as of ~~nine~~March 31, 2023. The weighted average interest rate for the borrowings outstanding under the Opco Credit Facility for the three months ended ~~September 30,~~March 31, 2023 was 8.14%. During the three months ended March 31, 2022, ~~and~~ ~~2021~~, the Partnership did not have any borrowings outstanding under the Opco Credit ~~Facility and~~Facility. The Partnership had ~~$130.0~~$38.8 million and ~~$100.0~~$60.0 million inof available borrowing capacity atas of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~~~, As mentioned above, in~~ ~~October~~ 2022, ~~NRP borrowed $70 million under the credit facility to redeem the outstanding~~ ~~2025~~ ~~Senior Notes.~~respectively.

The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of ~~$331.2~~$323.0 million and ~~$345.0~~$326.4 million classified as mineral rights, net and other long-term assets, net on the Partnership’s Consolidated Balance Sheets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022, 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, 2022~~March 31, 2023 and December 31, ~~2021~~2022, the Opco Senior Notes had cumulative principal balances of ~~$119.4~~$82.4 million and ~~$138.5~~$99.1 million, respectively. Opco made mandatory principal payments of ~~$19.1~~$16.7 million during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022.

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, 2022~~March 31, 2023.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

9.10. Fair Value Measurements

Fair Value of Financial Assets and Liabilities

The Partnership’s financial assets and liabilities consist of cash and cash equivalents, a contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents approximate fair value due to their short-term nature. The Partnership uses available market data and valuation methodologies to estimate the fair value of its debt and contract receivable.

The following table shows the carrying value and estimated fair value of the Partnership's debt and contract receivable:

		*September 30, 2022*				*December 31, 2021*						*March 31, 2023*				*December 31, 2022*
	*Fair Value*	*Carrying*		*Estimated*		*Carrying*		*Estimated*		*Fair Value*		*Carrying*		*Estimated*		*Carrying*		*Estimated*
(In thousands)	*Hierarchy Level*	*Value*		*Fair Value*		*Value*		*Fair Value*		*Hierarchy Level*		*Value*		*Fair Value*		*Value*		*Fair Value*
Debt:
NRP 2025 Senior Notes	1	$	120,199	$	124,165	$	296,236	$	300,000
Opco Senior Notes ⁽¹⁾	3		118,524		122,146		137,309		138,484		3	$	81,676	$	77,587	$	98,281	$	96,060
Opco Credit Facility	3		—		—		—		—
Opco Credit Facility ⁽²⁾											3		91,200		91,200		70,000		70,000

Assets:
Contract receivable, net (current and long-term) ⁽²⁾	3	$	31,948	$	25,144	$	33,612	$	26,010
Contract receivable, net (current and long-term) ⁽³⁾											3	$	30,783	$	25,615	$	31,371	$	24,833

⁽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 102% and 100% of par value~~ at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~~~, respectively. All~~ ~~2025~~2022 ~~Senior Notes~~ were ~~redeemed in~~estimated by management utilizing the present value replacement method incorporating the interest rate of the Opco Credit facility at ~~October 2022.~~March 31, 2023

and December 31, 2022, respectively.

⁽²⁾

The fair value of the Opco Credit Facility approximates the outstanding borrowing amount because the interest rates are variable and reflective of market rates and the terms of the credit facility allow the Partnership to repay the debt at any time without penalty.

⁽²³⁾	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, 2022~~March 31, 2023 and December 31, ~~2021~~2022.

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 expenses, net on the Partnership's Consolidated Statements of Comprehensive Income. The embedded derivatives had zero value as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022.

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

~~10.~~11. 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. NRP also reimburses overhead costs incurred by its affiliates, including Quintana Infrastructure Development ("QID"), to manage the Partnership's business. These overhead costs include certain rent, information technology, administration of employee benefits and other corporate services incurred by or on behalf of the Partnership’s general partner and its affiliates and are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income.

Direct general and administrative expenses charged to the Partnership by QMC, WPPLP and QID are included on the Partnership's Consolidated Statement of Comprehensive Income as follows:

	*For the Three Months Ended September 30,*				*For the Nine Months Ended September 30,*				*For the Three Months Ended March 31,*
(In thousands)	*2022*		*2021*		*2022*		*2021*		*2023*		*2022*
Operating and maintenance expenses	$	1,687	$	1,661	$	5,044	$	4,913	$	1,719	$	1,659
General and administrative expenses		1,195		1,185		3,660		3,486		1,320		1,240

The Partnership had accounts payable to QMC of $0.4 million on its Consolidated Balance Sheets ~~of $0.4 million to QMC~~ at ~~both~~ ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022, and $0.8 million and $1.0 million ~~and $0.9 million~~of accounts payable to WPPLP at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022, respectively.

During the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022, the Partnership recognized ~~$2.2~~$2.0 million and ~~$0.9~~$1.6 million, respectively, in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to an overriding royalty agreement with WPPLP. ~~These amounts were $6.5 million and $2.1 million during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~~~, respectively.~~

Corbin J. Robertson, Jr. owns 85% of the general partner of Great Northern Properties Limited Partnership ("GNP"), a privately held company primarily engaged in owning and managing mineral properties and surface leases. ~~As of~~At both ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 the Partnership had ~~$0.0~~$0.03 million ~~and $0.1 million, respectively,~~ of accounts receivable from GNP included in accounts receivable, net on its Consolidated Balance Sheets related to amounts collected for surface leases that belong to NRP.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

~~11.~~12. Major Customers

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

	*For the Three Months Ended September 30,*										*For the Nine Months Ended September 30,*										*For the Three Months Ended March 31,*
	*2022*					*2021*					*2022*					*2021*					*2023*					*2022*
(In thousands)	*Revenues*		*Percent*			*Revenues*		*Percent*			*Revenues*		*Percent*			*Revenues*		*Percent*			*Revenues*		*Percent*			*Revenues*		*Percent*
Foresight Energy Resources LLC ("Foresight") ^{(1) (2)}	$	19,334		19	%	$	8,552		15	%	$	47,081		16	%	$	25,686		19	%
Alpha Metallurgical Resources, Inc. ⁽¹⁾	$	21,000		21	%	$	12,854		23	%	$	81,638		28	%	$	29,748		23	%	$	24,218		24	%	$	27,743		31	%
Foresight Energy Resources LLC ("Foresight") ⁽¹⁾																					$	12,529		13	%	$	11,250		13	%

⁽¹⁾	Revenues from ~~Foresight and~~ Alpha Metallurgical Resources, Inc. and Foresight are included within the Partnership's Mineral Rights segment.

⁽²⁾

~~Revenues from Foresight in~~ ~~2021~~ were fixed as a result of the lease amendment the Partnership entered into with Foresight 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. Revenues from Foresight in ~~2022~~ ~~represent traditional royalty and minimum payments.~~

~~12.~~13. Commitments and Contingencies

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.

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

~~13.~~14. Unit-Based Compensation

During the three months ended March 31, 2023, the Partnership granted service, performance and market-based awards under its 2017 Long-Term Incentive Plan and during the three months ended March 31, 2022, the Partnership granted service-based awards. The Partnership's ~~unit-based~~service and performance-based awards ~~granted in~~ ~~2022~~ ~~and~~ ~~2021~~ ~~were~~are valued using the closing price of NRP's common units as of the grant ~~date.~~date while the Partnership's market-based awards are valued using a Monte Carlo simulation. The grant date fair value of these awards granted during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022 ~~were $7.9~~was $15.9 million and ~~$3.8~~$7.9 million, respectively. Total unit-based compensation expense associated with these awards was ~~$1.4~~$2.5 million and ~~$1.1~~$1.4 million for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021,~~2022, ~~respectively, and $4.2 million and $2.8 million for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~, respectively, and is included in general and administrative expenses and operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income. The unamortized cost associated with unvested outstanding awards as of ~~September 30, 2022~~March 31, 2023 is ~~$7.6~~$20.2 million, which is to be recognized over a weighted average period of ~~2.0~~2.5 years. The unamortized cost associated with unvested outstanding awards as of December 31, ~~2021~~2022 was ~~$3.3~~$6.3 million.

A summary of the unit activity in the outstanding grants during ~~2022~~2023 is as follows:

(In thousands)	*Common Units*		*Weighted Average Grant Date Fair Value per Common Unit*	*Common Units*			*Weighted Average Grant Date Fair Value per Common Unit*
Outstanding at January 1, 2022	411		$23.00
Outstanding at January 1, 2023					386		$	28.96
Granted	208		$38.29		278		$	56.94
Fully vested and issued	(233	)	$26.74		(184	)	$	26.30
Outstanding at September 30, 2022	386		$28.96
Outstanding at March 31, 2023					480		$	46.20

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

~~14.~~15. 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. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight 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 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.

~~15.~~16. Credit Losses

The Partnership is exposed to credit losses through collection of its short-term 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, 2022~~March 31, 2023 and December 31, ~~2021~~2022, NRP had the following current expected credit loss (“CECL”) allowance related to its receivables and long-term contract receivable:

	*September 30, 2022*							*December 31, 2021*							*March 31, 2023*							*December 31, 2022*
(In thousands)	*Gross*		*CECL Allowance*			*Net*		*Gross*		*CECL Allowance*			*Net*		*Gross*		*CECL Allowance*			*Net*		*Gross*		*CECL Allowance*			*Net*
Receivables	$	39,692	$	(4,018	)	$	35,674	$	28,869	$	(3,312	)	$	25,557	$	42,410	$	(3,874	)	$	38,536	$	47,237	$	(4,461	)	$	42,776
Long-term contract receivable		30,631		(1,061	)		29,570		32,497		(1,126	)		31,371		29,325		(1,016	)		28,309		29,984		(1,038	)		28,946
Total	$	70,323	$	(5,079	)	$	65,244	$	61,366	$	(4,438	)	$	56,928	$	71,735	$	(4,890	)	$	66,845	$	77,221	$	(5,499	)	$	71,722

NRP recorded ~~$0.0 million~~($0.6 million) and ~~$0.5~~$1.0 million in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to the change in the CECL allowance during the three months ended ~~September 2022~~March 31, 2023 and ~~2021,~~2022, ~~respectively, and $0.6 million and $(0.2) million during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2022~~ ~~and~~ ~~2021~~, respectively.

NRP has procedures in place to monitor its ongoing credit exposure through timely review of counterparty balances against contract terms and due dates, account and financing receivable reconciliation, bankruptcy monitoring, lessee audits and dispute resolution. The Partnership may employ legal counsel or collection specialists to pursue recovery of defaulted receivables.

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

~~16.~~17. Subsequent Events

The following represents material events that have occurred subsequent to ~~September 30, 2022~~March 31, 2023 through the time of the Partnership’s filing of its Quarterly Report on Form 10-Q with the SEC:

Common Unit and Preferred Unit Distributions

In ~~November 2022,~~May 2023, the Board of Directors declared a distribution of $0.75 per common unit with respect to the ~~third~~first quarter of ~~2022~~2023. The Board of Directors also declared a $6.1 million cash distribution on NRP's outstanding preferred units with respect to the ~~third~~first quarter of ~~2022~~2023 ~~totaling $7.5 million in cash.~~

~~Redemption of~~ ~~2025~~ ~~Senior Notes~~

In ~~October 2022,~~ ~~NRP redeemed the outstanding $121.4 million~~ ~~2025~~ Senior Notes at a redemption price of 102.281% of the principal amount plus accrued and unpaid interest, utilizing cash on hand and $70 million in borrowings under its recently extended credit facility. The ~~fourth~~ ~~quarter~~ ~~2022~~ ~~Consolidated Statement of Comprehensive Income will include a $3.9 million loss on extinguishment of debt associated with the redemption.~~.

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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,~~March 31, 2023 and 2022 ~~and 2021~~ 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, ~~2021.~~2022.

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 was 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; future distributions on our common and preferred units; 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~~future performance by our lessees; Sisecam Wyoming LLC’s ("Sisecam 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, ~~2021~~2022 for important factors that could cause our actual results of operations or our actual financial condition to differ.

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. For a description of Opco's debt agreements, see Note 8.9. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note 11. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

Distributable Cash Flow

Distributable cash flow ("DCF") represents net cash provided by (used in) operating activities ~~of continuing operations~~ plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract ~~receivables;~~receivable; less maintenance capital expenditures. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, DCF presented below is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. DCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to ~~asses~~assess our ability to make cash distributions and repay debt.

Free Cash Flow

Free cash flow ("FCF") represents net cash provided by (used in) operating activities ~~of continuing operations~~ plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract ~~receivables;~~receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. FCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. FCF may not be calculated the same for us as for other companies. FCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

Leverage Ratio

Leverage ratio represents the outstanding principal of our debt at the end of the period divided by the last twelve months' Adjusted EBITDA as defined above. We believe that leverage ratio is a useful measure to management and investors to evaluate and monitor our indebtedness relative to our ability to generate income to service such debt and in understanding trends in our overall financial condition. Leverage ratio may not be calculated the same for us as for other companies and is not a substitute for, and should not be used in conjunction with, GAAP financial ratios.

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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

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 Sisecam Wyoming, a trona ore mining and soda ash production business. Our common units trade on the New York Stock Exchange under the symbol "NRP." Our business is organized into two operating segments:

Mineral Rights—consists of approximately 13 million acres of mineral interests and other subsurface rights across the United States. If combined in a single tract, our ownership would cover roughly 20,000 square miles. Our ownership provides critical inputs for the manufacturing of steel, electricity and basic building materials, as well as opportunities for carbon sequestration and renewable energy. We are working to strategically redefine our business as a key player in the transitional energy economy in the years to come.

Soda Ash—consists of our 49% non-controlling equity interest in Sisecam Wyoming, a trona ore mining and soda ash production business located in the Green River Basin of Wyoming. Sisecam Wyoming mines the trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries.

Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment.

Our financial results by segment for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 are as follows:

	Operating Segments											Operating Segments
(In thousands)	Mineral Rights			Soda Ash		Corporate and Financing			Total			Mineral Rights			Soda Ash		Corporate and Financing			Total
Revenues and other income	$	247,871		$	44,036	$	—		$	291,907		$	79,965		$	19,254	$	—		$	99,219
Net income (loss)	$	204,548		$	43,931	$	(43,205	)	$	205,274		$	68,881		$	19,096	$	(8,702	)	$	79,275
Adjusted EBITDA ⁽¹⁾	$	221,987		$	33,950	$	(14,037	)	$	241,900		$	72,960		$	10,622	$	(5,845	)	$	77,737

Cash flow provided by (used in) continuing operations
Operating activities	$	194,475		$	33,934	$	(30,459	)	$	197,950		$	73,858		$	10,617	$	(11,575	)	$	72,900
Investing activities	$	1,837		$	—	$	(59	)	$	1,778		$	699		$	—	$	(2	)	$	697
Financing activities	$	(614	)	$	—	$	(273,697	)	$	(274,311	)	$	(583	)	$	—	$	(94,450	)	$	(95,033	)
Distributable cash flow ⁽¹⁾	$	196,312		$	33,934	$	(30,518	)	$	199,728		$	74,557		$	10,617	$	(11,577	)	$	73,597
Free cash flow ⁽¹⁾	$	195,613		$	33,934	$	(30,518	)	$	199,029		$	74,456		$	10,617	$	(11,577	)	$	73,496

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

Current Results/Market Commentary

~~Business Outlook~~Financial Results and Quarterly Distributions

We generated ~~$199.0~~$72.9 million of operating cash flow and $73.5 million of free cash flow during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023, and ended the quarter with ~~$190.9~~$56.5 million of liquidity consisting of ~~$60.9~~$17.7 million of cash and cash equivalents and ~~$130.0~~$38.8 million of borrowing capacity under our Opco Credit Facility. During the third quarter of 2022 we refinanced, upsized, and extended our Opco Credit Facility to $130 million due 2027. Also during the third quarter, we permanently retired an additional $60.5 million of 2025 Senior Notes, bringing our total 2025 Senior Note repurchases through the third quarter of 2022 to $178.6 million. These notes were purchased on the open market at a weighted average price of 102.436%, a discount to the redemption price at the time of 104.563%. In October 2022, we redeemed the outstanding $121.4 million 2025 Senior Notes at a redemption price of 102.281% using cash on hand and $70 million in borrowings under our Opco Credit Facility. These debt repurchases and the redemption of our outstanding 2025 Senior Notes will save approximately $27.4 million annually in interest costs. As of ~~September 30, 2022~~March 31, 2023 our leverage ratio was ~~0.8x.~~0.5 x.

In ~~November 2022, the Board of Directors~~February 2023, we declared and paid a cash distribution of $0.75 per common unit of NRP with respect to the ~~third~~fourth quarter of ~~2022. The Board of Directors also declared~~2022 as well as a $7.5 million cash distribution on the preferred units with respect to the ~~third quarter.~~fourth quarter of 2022. In March 2023, we declared and paid a special cash distribution of $2.43 per common unit to help cover unitholder tax liabilities associated with owning NRP's common units during 2022. Future distributions on our 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.

In February 2023, we received a notice from holders of our Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 47,499 Class A Preferred Units. We chose to redeem the preferred units for $47.5 million in cash rather than issuing common units. Of the originally issued 250,000 Class A Preferred Units, 202,501 Class A Preferred Units remain outstanding.

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Mineral Rights Business Segment

~~Metallurgical~~Revenues and ~~thermal~~other income in the first quarter of 2023 increased $5.1 million, or 7%, as compared to the prior year period primarily due to increased metallurgical coal sales volumes and revenue from carbon neutral initiatives. Cash provided by operating activities and free cash flow increased $25.7 million and $26.3 million, respectively, compared to the prior year quarter primarily due to the timing of minimum and royalty payments and prior year recoupments.

Metallurgical coal prices remain ~~supported by ongoing tightness~~strong relative to historical norms, although pricing has declined from the record highs seen in ~~the supply-demand balance~~2022. Continued support for ~~coal. Many~~pricing is expected as operators are limited in their ability to increase production due to ongoing labor shortages, ~~global supply chain interruptions,~~transportation and logistics challenges, difficulty of new mine permitting, and limited access to capital. ~~Thermal coal prices are further supported by the European Union's ban on Russian coal due to the war in Ukraine, as well as increased natural gas prices and demand for electricity.~~ While metallurgical ~~markets are seeing weakened demand for steel, and thermal markets~~prices have pulled back from the peaks reached last year, we continue to ~~face ongoing environmental and political pressures, supply constraints should provide continued support for metallurgical and thermal coal~~believe met prices will remain well-supported for the foreseeable future. ~~Our lessees sold 24.2 million tons~~

Thermal coal prices also reached record highs in 2022, but have declined significantly in recent months due to unusually warm weather in Europe and North America as well as lower natural gas prices. While we do not expect to see thermal prices rebound to last year’s levels, many of the factors that provided support to prices over the last year still exist. Boycotts of Russian coal continue to force European buyers to source coal from ~~our properties in~~other regions, including the ~~first nine months of 2022,~~U.S. Operators will continue to be burdened by labor shortages, pressure from governments, regulators, activists, and ~~we derived approximately 75% of our~~capital providers, which will limit ability to increase thermal production to meet demand. China appears to be relaxing its three-year ban on Australian coal ~~royalty revenues and approximately 45% of our coal royalty sales volumes~~imports with the recent approvals for several Chinese companies to buy Australian coal. Additional demand from ~~metallurgical coal during~~a Chinese economy emerging from a zero-COVID policy should provide additional support for prices. We expect these factors to keep thermal prices elevated relative to historical levels for the ~~same period.~~foreseeable future.

We continue to explore and identify ~~alternative~~carbon neutral revenue ~~sources~~opportunities across our large portfolio of land, mineral, and ~~mineral assets. We own~~timber assets, including the ~~rights to sequester~~sequestration of carbon dioxide ~~("CO~~₂~~") on approximately 3.5 million acres~~underground and in standing forests, and the generation of ~~pore space in the southern United States. As announced previously, in~~electricity using geothermal, solar, and wind energy. In the first quarter of ~~2022~~2023, we executed ~~our first subsurface CO~~₂ ~~sequestration lease on 75,000 acres of underground pore space we own in southwest Alabama with the potential to store over 300 million metric tons of CO~~₂~~. In October of 2022, we announced our second subsurface CO~~₂ ~~transaction with the execution of~~ a ~~lease for approximately 65,000 acres of pore space we control near southeast Texas with estimated storage capacity of at least 500 million metric tons of CO~~₂~~. In total, we have approximately 140,000 acres of pore space under lease for carbon sequestration with estimated CO~~₂ storage capacity of 800 million metric tons. While the timing and likelihood of additional cash flows being realized from these activities is uncertain, we believe our large ownership footprint throughout the United States will provide additional opportunities to create value in this regard and position us as a key beneficiary of the transitional energy economy with minimal capital investment.new solar lease.

Soda Ash Business Segment

Revenues and other income in the first ~~nine months~~quarter of ~~2022 were higher by $32.8~~2023 increased $4.4 million, or 30%, as compared to the prior year period primarily ~~as a result of~~due to increased ~~international~~ sales prices. ~~Free~~Cash provided by operating activities and free cash flow in the first ~~nine months~~quarter of ~~2022 increased $30.1~~2023 decreased $2.6 million as compared to the prior year period ~~due to~~as Sisecam Wyoming ~~reinstating its~~paid a higher regular quarterly ~~cash distributions beginning~~distribution in the ~~fourth~~first quarter of ~~2021.~~2022 as compared to the first quarter of 2023.

~~Supply interruptions~~International prices remained strong in ~~China and input cost inflation which significantly increased~~ the ~~global marginal cost~~first quarter of 2023 reflecting a continued supply constrained market for soda ~~ash production led to historically high~~ash. Domestic soda ash prices inwere also strong during the ~~third~~first quarter of ~~2022. Though soda ash demand weakened in many parts of~~2023 versus the ~~world during the third~~prior year quarter due to ~~slowing global economic growth and lower construction activity in China, Sisecam Wyoming remained sold-out as it took advantage of its low-cost position~~negotiated 2023 domestic prices converging to ~~profitably export~~international soda ~~ash. Consequently, Sisecam Wyoming delivered strong financial results in the third quarter of 2022.~~ash prices.

Results of Operations

~~Third~~First Quarter of ~~2022~~2023 and ~~2021~~2022 Compared

Revenues and Other Income

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

	For the Three Months Ended September 30,						Percentage			For the Three Months Ended March 31,						Percentage
Operating Segment (In thousands)	2022		2021		Increase		Change			2023		2022		Increase		Change
Mineral Rights	$	87,702	$	50,123	$	37,579		75	%	$	79,965	$	74,879	$	5,086		7	%
Soda Ash		14,556		6,672		7,884		118	%		19,254		14,837		4,417		30	%
Total	$	102,258	$	56,795	$	45,463		80	%	$	99,219	$	89,716	$	9,503		11	%

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

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Mineral Rights

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			Percentage			For the Three Months Ended March 31,					Increase			Percentage
(In thousands, except per ton data)	2022			2021			(Decrease)			Change			2023		2022			(Decrease)			Change
Coal sales volumes (tons)
Appalachia
Northern		440			422			18			4	%		379		428			(49	)		(11	)%
Central		3,503			3,199			304			10	%		3,609		3,251			358			11	%
Southern		498			642			(144	)		(22	)%		582		361			221			61	%
Total Appalachia		4,441			4,263			178			4	%		4,570		4,040			530			13	%
Illinois Basin		3,490			2,689			801			30	%		1,310		1,502			(192	)		(13	)%
Northern Powder River Basin		835			1,047			(212	)		(20	)%		1,085		1,238			(153	)		(12	)%
Gulf Coast		188			13			175			1346	%		58		69			(11	)		(16	)%
Total coal sales volumes		8,954			8,012			942			12	%		7,023		6,849			174			3	%

Coal royalty revenue per ton
Appalachia
Northern	$	6.74		$	7.18		$	(0.44	)		(6	)%	$	9.86	$	10.14		$	(0.28	)		(3	)%
Central		9.04			5.74			3.30			57	%		9.92		11.37			(1.45	)		(13	)%
Southern		9.78			11.61			(1.83	)		(16	)%		14.94		17.56			(2.62	)		(15	)%
Illinois Basin		2.57			2.33			0.24			10	%		3.57		2.20			1.37			62	%
Northern Powder River Basin		4.56			3.71			0.85			23	%		4.68		3.74			0.94			25	%
Gulf Coast		0.59			0.54			0.05			9	%		0.57		0.55			0.02			4	%
Combined average coal royalty revenue per ton		5.85			4.87			0.98			20	%		8.26		8.12			0.14			2	%

Coal royalty revenues
Appalachia
Northern	$	2,965		$	3,031		$	(66	)		(2	)%	$	3,737	$	4,341		$	(604	)		(14	)%
Central		31,680			18,357			13,323			73	%		35,806		36,980			(1,174	)		(3	)%
Southern		4,872			7,452			(2,580	)		(35	)%		8,697		6,340			2,357			37	%
Total Appalachia		39,517			28,840			10,677			37	%		48,240		47,661			579			1	%
Illinois Basin		8,967			6,261			2,706			43	%		4,675		3,303			1,372			42	%
Northern Powder River Basin		3,805			3,881			(76	)		(2	)%		5,075		4,632			443			10	%
Gulf Coast		111			7			104			1486	%		33		38			(5	)		(13	)%
Unadjusted coal royalty revenues		52,400			38,989			13,411			34	%		58,023		55,634			2,389			4	%
Coal royalty adjustment for minimum leases		(19	)		(6,557	)		6,538			100	%		—		(185	)		185			100	%
Total coal royalty revenues	$	52,381		$	32,432		$	19,949			62	%	$	58,023	$	55,449		$	2,574			5	%

Other revenues
Production lease minimum revenues	$	1,885		$	3,235		$	(1,350	)		(42	)%	$	613	$	1,592		$	(979	)		(61	)%
Minimum lease straight-line revenues		4,778			4,808			(30	)		(1	)%		4,503		4,783			(280	)		(6	)%
Carbon neutral initiative revenues		8,600			—			8,600			100	%		2,118		—			2,118			100	%
Wheelage revenues		2,977			1,964			1,013			52	%		3,869		3,717			152			4	%
Property tax revenues		1,360			1,466			(106	)		(7	)%		1,470		1,472			(2	)		(0	)%
Coal overriding royalty revenues		1,367			757			610			81	%		188		258			(70	)		(27	)%
Lease amendment revenues		759			1,519			(760	)		(50	)%		851		880			(29	)		(3	)%
Aggregates royalty revenues		884			429			455			106	%		753		770			(17	)		(2	)%
Oil and gas royalty revenues		6,170			1,154			5,016			435	%		3,588		1,814			1,774			98	%
Other revenues		218			120			98			82	%		295		348			(53	)		(15	)%
Total other revenues	$	28,998		$	15,452		$	13,546			88	%	$	18,248	$	15,634		$	2,614			17	%
Royalty and other mineral rights	$	81,379		$	47,884		$	33,495			70	%	$	76,271	$	71,083		$	5,188			7	%
Transportation and processing services revenues		5,969			2,171			3,798			175	%		3,598		3,796			(198	)		(5	)%
Gain on asset sales and disposals		354			68			286			421	%		96		—			96			100	%
Total Mineral Rights segment revenues and other income	$	87,702		$	50,123		$	37,579			75	%	$	79,965	$	74,879		$	5,086			7	%

1920

Table of Contents

Coal Royalty Revenues

Approximately ~~65%~~75% of coal royalty revenues and approximately ~~40%~~55% of coal royalty sales volumes were derived from metallurgical coal during the three months ended ~~September 30, 2022.~~March 31, 2023. Total coal royalty revenues increased ~~$19.9~~$2.6 million as compared to the prior year quarter. The discussion by region is as follows:

•

Appalachia: Coal royalty revenues were essentially flat period-over-period as increased ~~$10.7 million primarily due to increased coal~~sales volumes more than offset the decrease in sales prices ~~and volumes~~ in ~~Central~~the Southern Appalachia ~~during the three months ended September 30, 2022, as compared to the prior year quarter.~~region.

•

Illinois Basin: Coal royalty revenues increased ~~$2.7~~$1.4 million primarily due to increased sales ~~volumes and~~ prices during the three months ended ~~September 30, 2022~~March 31, 2023, as compared to the prior year quarter. Revenues recognized from Foresight in 2021 were fixed as a result of the lease amendment the Partnership entered into with Foresight 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. Revenues from Foresight in 2022 represent traditional royalty and minimum payments.

•

~~Northern Powder River Basin:~~ Coal royalty revenues decreased $0.1 million primarily due to decreased sales volumes as our lessee mined less on our property during the third quarter of 2022 as compared to the prior year quarter in accordance with its mine plan.

Other Revenues

Total other revenues increased ~~$13.5~~$2.6 million during the three months ~~September 30, 2022~~ended March 31, 2023, as compared to the prior year quarter primarily due to ~~an $8.6~~a $2.1 million increase in carbon neutral ~~initiatives and a $5.0 million increase~~initiative revenues. Carbon neutral initiative revenues recognized in ~~oil and gas royalty revenues. The increase in carbon neutral initiatives is due to the recognition of revenue~~2023 primarily related to ~~carbon neutral transactions including~~a subsurface CO₂storage ~~and geothermal. The increase in oil and gas royalty revenues is primarily related to new wells and increased natural gas prices as compared to the prior year period.~~

~~Transportation and Processing Services Revenues~~

Transportation and processing services revenues increased $3.8 million during the three months ended September 30, 2022 as compared to the prior year period primarily due to the lease amendment with Foresight whereas transportation and processing revenues were based on the recognition of a fixed amount in 2021. Revenues from Foresight in 2022 represent traditional royalty and minimum payments and were greater than the fixed revenue from 2021.transaction.

Soda Ash

Revenues and other income related to our Soda Ash segment increased ~~$7.9~~$4.4 million compared to the prior year quarter primarily as a result of increased ~~international~~ sales ~~prices.~~prices compared to the prior year quarter.

Operating ~~and Other~~ Expenses

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

	For the Three Months Ended September 30,				Increase			Percentage			For the Three Months Ended March 31,				Increase			Percentage
(In thousands)	2022		2021		(Decrease)			Change			2023		2022		(Decrease)			Change
Operating expenses
Operating and maintenance expenses	$	7,898	$	8,354	$	(456	)		(5	)%	$	7,163	$	8,076	$	(913	)		(11	)%
Depreciation, depletion and amortization		6,850		5,182		1,668			32	%		4,083		3,868		215			6	%
General and administrative expenses		4,518		4,052		466			12	%		5,845		4,467		1,378			31	%
Asset impairments		812		57		755			1325	%		—		19		(19	)		(100	)%
Total operating expenses	$	20,078	$	17,645	$	2,433			14	%	$	17,091	$	16,430	$	661			4	%

Other expenses, net
Interest expense, net	$	5,141	$	9,652	$	(4,511	)		(47	)%
Loss on extinguishment of debt		2,484		—		2,484			100	%
Total other expenses, net	$	7,625	$	9,652	$	(2,027	)		(21	)%

Total operating expenses ~~increased $2.4~~were essentially flat period-over-period. The $1.4 million increase in general and administrative expenses, primarily ~~due~~related to increased ~~depreciation, depletion and amortization~~incentive compensation expense, aswas partially offset by a ~~result of higher Illinois Basin coal royalty sales volumes during the three months ended September 30, 2022, as compared to the prior year period.~~

~~Total other expenses, net decreased $2.0 million primarily due to a $4.5~~$0.9 million decrease in ~~interest~~operating and maintenance expenses, primarily driven by a decrease in bad debt expense.

Interest Expense, Net

Interest expense, net decreased $6.5 million as a result of less debt outstanding as compared to the prior year period, partially offset by a $2.5 million loss on early extinguishment of debt related to the premiums and fees incurred and write-off of debt issuance costs associated with the retirement of the 2025 Senior Notes during the three months ended September 30, 2022.quarter.

2021

Table of Contents

Adjusted EBITDA (Non-GAAP Financial Measure)

The following table reconciles net income (loss) (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:

	Operating Segments											Operating Segments
For the Three Months Ended (In thousands)	Mineral Rights		Soda Ash			Corporate and Financing			Total			Mineral Rights		Soda Ash			Corporate and Financing			Total
September 30, 2022
March 31, 2023
Net income (loss)	$	72,173	$	14,525		$	(12,143	)	$	74,555		$	68,881	$	19,096		$	(8,702	)	$	79,275
Less: equity earnings from unconsolidated investment		—		(14,556	)		—			(14,556	)		—		(19,254	)		—			(19,254	)
Add: total distributions from unconsolidated investment		—		10,339			—			10,339			—		10,780			—			10,780
Add: interest expense, net		—		—			5,141			5,141			—		—			2,853			2,853
Add: loss on extinguishment of debt		—		—			2,484			2,484
Add: depreciation, depletion and amortization		6,850		—			—			6,850			4,079		—			4			4,083
Add: asset impairments		812		—			—			812			—		—			—			—
Adjusted EBITDA	$	79,835	$	10,308		$	(4,518	)	$	85,625		$	72,960	$	10,622		$	(5,845	)	$	77,737

September 30, 2021
March 31, 2022
Net income (loss)	$	36,606	$	6,596		$	(13,704	)	$	29,498		$	62,967	$	14,786		$	(13,854	)	$	63,899
Less: equity earnings from unconsolidated investment		—		(6,672	)		—			(6,672	)		—		(14,837	)		—			(14,837	)
Add: total distributions from unconsolidated investment		—		—			—			—			—		13,230			—			13,230
Add: interest expense, net		—		—			9,652			9,652			—		—			9,387			9,387
Add: loss on extinguishment of debt		—		—			—			—
Add: depreciation, depletion and amortization		5,182		—			—			5,182			3,868		—			—			3,868
Add: asset impairments		57		—			—			57			19		—			—			19
Adjusted EBITDA	$	41,845	$	(76	)	$	(4,052	)	$	37,717		$	66,854	$	13,179		$	(4,467	)	$	75,566

~~Adjusted EBITDA~~Net income increased ~~$47.9~~$15.4 million primarily due to the decrease in interest expense, net and increase in revenues and other income, both discussed above. Adjusted EBITDA increased $2.2 million as compared to the prior year quarter primarily due to a ~~$38.0~~$6.1 million increase in Adjusted EBITDA within our Mineral Rights segment as a result of higher revenues and other income asand lower operating and maintenance expenses, both discussed ~~above,~~above. The increase in ~~addition to~~Adjusted EBITDA within our Mineral Rights segment was partially offset by a ~~$10.4~~$2.6 million ~~increase~~decrease in Adjusted EBITDA within our Soda Ash segment primarily due to Sisecam Wyoming ~~reinstating its regular~~paying a higher quarterly ~~cash distributions beginning~~distribution in the ~~fourth~~first quarter of ~~2021~~2022 as discussed above and a $1.4 decrease in Adjusted EBITDA within our Corporate and Financing segment due to higher general and administrative expenses as discussed above.

Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)

The following table presents the three major categories of the statement of cash flows by business segment:

	Operating Segments											Operating Segments
For the Three Months Ended (In thousands)	Mineral Rights		Soda Ash			Corporate and Financing			Total			Mineral Rights			Soda Ash		Corporate and Financing			Total
September 30, 2022
Cash flow provided by (used in) continuing operations
March 31, 2023
Cash flow provided by (used in)
Operating activities	$	75,948	$	10,309		$	(3,761	)	$	82,496		$	73,858		$	10,617	$	(11,575	)	$	72,900
Investing activities		928		—			(59	)		869			699			—		(2	)		697
Financing activities		—		—			(81,784	)		(81,784	)		(583	)		—		(94,450	)		(95,033	)

September 30, 2021
Cash flow provided by (used in) continuing operations
March 31, 2022
Cash flow provided by (used in)
Operating activities	$	33,968	$	(36	)	$	(3,873	)	$	30,059		$	48,176		$	13,195	$	(9,040	)	$	52,331
Investing activities		614		—			—			614			—			—		—			—
Financing activities		—		—			(9,592	)		(9,592	)		(614	)		—		(51,647	)		(52,261	)

2122

Table of Contents

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												Operating Segments
For the Three Months Ended (In thousands)	Mineral Rights			Soda Ash			Corporate and Financing			Total			Mineral Rights			Soda Ash		Corporate and Financing			Total
September 30, 2022
Net cash provided by (used in) operating activities of continuing operations	$	75,948		$	10,309		$	(3,761	)	$	82,496
March 31, 2023
Net cash provided by (used in) operating activities													$	73,858		$	10,617	$	(11,575	)	$	72,900
Add: proceeds from asset sales and disposals		353			—			—			353			101			—		—			101
Add: return of long-term contract receivable		575			—			—			575			598			—		—			598
Less: maintenance capital expenditures		—			—			(59	)		(59	)		—			—		(2	)		(2	)
Distributable cash flow	$	76,876		$	10,309		$	(3,820	)	$	83,365		$	74,557		$	10,617	$	(11,577	)	$	73,597
Less: proceeds from asset sales and disposals		(353	)		—			—			(353	)		(101	)		—		—			(101	)
Free cash flow	$	76,523		$	10,309		$	(3,820	)	$	83,012		$	74,456		$	10,617	$	(11,577	)	$	73,496

September 30, 2021
Net cash provided by (used in) operating activities of continuing operations	$	33,968		$	(36	)	$	(3,873	)	$	30,059
March 31, 2022
Net cash provided by (used in) operating activities													$	48,176		$	13,195	$	(9,040	)	$	52,331
Add: proceeds from asset sales and disposals		74			—			—			74			—			—		—			—
Add: return of long-term contract receivable		540			—			—			540			—			—		—			—
Distributable cash flow	$	34,582		$	(36	)	$	(3,873	)	$	30,673		$	48,176		$	13,195	$	(9,040	)	$	52,331
Less: proceeds from asset sales and disposals		(74	)		—			—			(74	)		—			—		—			—
Free cash flow	$	34,508		$	(36	)	$	(3,873	)	$	30,599		$	48,176		$	13,195	$	(9,040	)	$	52,331

Operating cash flow, DCF and FCF increased ~~$52.7~~$20.6 million, $21.3 million and ~~$52.4~~$21.2 million, respectively, primarily due to ~~the following:~~an increase in cash flow within our Mineral Rights segment, partially offset by a decrease in cash flow within our Soda Ash and Corporate and Financing segments. The discussion by segment is as follows:

•

Mineral Rights Segment

◦

Operating cash flow, DCF and FCF increased ~~$42.3~~$25.7 million, $26.4 million and ~~$42.0~~$26.3 million, respectively, primarily due to the ~~segment's increase in revenues~~timing of minimum and ~~other income as discussed above.~~royalty payments and prior year recoupments.

•

Soda Ash Segment

◦

Operating cash flow, DCF and FCF ~~increased $10.3 million as a result of Sisecam Wyoming reinstating its regular quarterly cash distributions beginning in the fourth quarter of 2021 as discussed above.~~

~~Results of Operations~~

~~First Nine Months of 2022 and 2021 Compared~~

~~Revenues and Other Income~~

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

For the Nine Months Ended September 30,

Percentage

Operating Segment (In thousands)

2022

2021

Increase

Change

Mineral Rights
$ 247,871 $ 121,210 $ 126,661 104 %
Soda Ash
44,036 11,246 32,790 292 %
Total
$ 291,907 $ 132,456 $ 159,451 120 %

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

~~Table of Contents~~

~~Mineral Rights~~

~~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

Percentage

(In thousands, except per ton data)

2022

2021

(Decrease)

Change

Coal sales volumes (tons)

Appalachia

Northern
1,260 947 313 33 %
Central
10,238 8,824 1,414 16 %
Southern
1,171 1,058 113 11 %
Total Appalachia
12,669 10,829 1,840 17 %
Illinois Basin
8,395 7,987 408 5 %
Northern Powder River Basin
2,772 2,291 481 21 %
Gulf Coast
324 13 311 2392 %
Total coal sales volumes
24,160 21,120 3,040 14 %

Coal royalty revenue per ton

Appalachia

Northern
$ 9.48 $ 5.57 $ 3.91 70 %
Central
10.85 4.91 5.94 121 %
Southern
14.28 9.82 4.46 45 %
Illinois Basin
2.30 2.13 0.17 8 %
Northern Powder River Basin
4.24 3.59 0.65 18 %
Gulf Coast
0.58 0.54 0.04 7 %
Combined average coal royalty revenue per ton
7.08 3.99 3.09 77 %

Coal royalty revenues

Appalachia

Northern
$ 11,946 $ 5,272 $ 6,674 127 %
Central
111,121 43,308 67,813 157 %
Southern
16,725 10,390 6,335 61 %
Total Appalachia
139,792 58,970 80,822 137 %
Illinois Basin
19,331 17,044 2,287 13 %
Northern Powder River Basin
11,751 8,222 3,529 43 %
Gulf Coast
187 7 180 2571 %
Unadjusted coal royalty revenues
171,061 84,243 86,818 103 %
Coal royalty adjustment for minimum leases
(286 ) (18,148 ) 17,862 98 %
Total coal royalty revenues
$ 170,775 $ 66,095 $ 104,680 158 %

Other revenues

Production lease minimum revenues
$ 3,542 $ 10,241 $ (6,699 ) (65 )%
Minimum lease straight-line revenues
14,235 15,773 (1,538 ) (10 )%
Carbon neutral initiative revenues
8,600 — 8,600 100 %
Wheelage revenues
11,073 5,589 5,484 98 %
Property tax revenues
4,527 4,522 5 0 %
Coal overriding royalty revenues
2,307 3,592 (1,285 ) (36 )%
Lease amendment revenues
2,450 3,159 (709 ) (22 )%
Aggregates royalty revenues
2,691 1,339 1,352 101 %
Oil and gas royalty revenues
10,890 3,420 7,470 218 %
Other revenues
705 692 13 2 %
Total other revenues
$ 61,020 $ 48,327 $ 12,693 26 %
Royalty and other mineral rights
$ 231,795 $ 114,422 $ 117,373 103 %
Transportation and processing services revenues
15,377 6,545 8,832 135 %
Gain on asset sales and disposals
699 243 456 188 %
Total Mineral Rights segment revenues and other income
$ 247,871 $ 121,210 $ 126,661 104 %

~~Table of Contents~~

~~Coal Royalty Revenues~~

~~Total coal royalty revenues increased $104.7 million during the nine months ended September 30, 2022, as compared to the prior year period. The discussion by region is as follows:~~

•

~~Appalachia:~~ ~~Coal royalty revenues increased $80.8~~decreased $2.6 million primarily due to ~~increased coal sales prices and volumes during~~Sisecam Wyoming paying a higher quarterly distribution in the ~~nine months ended September 30,~~first quarter of 2022 as ~~compared to the prior year period.~~discussed above.

•

~~Illinois Basin:~~ ~~Coal royalty revenues increased $2.3 million primarily due to higher sales volumes~~Corporate and increased sales prices during the nine months ended September 30, 2022, as compared to the prior year period. Revenues recognized from Foresight in 2021 were fixed as a result of the lease amendment the Partnership entered into with Foresight 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. Revenues from Foresight in 2022 represent traditional royalty and minimum payments.

•

~~Northern Powder River Basin:~~ Coal royalty revenues increased $3.5 million primarily due to increased sales volumes as our lessee mined more on our property during the nine months ended September 30, 2022 as compared to the prior year period in accordance with its mine plan.

~~Other Revenues~~

~~Other revenues increased $12.7 million during the nine months ended September 30, 2022 as compared to the prior year period primarily due to the following:~~

•

~~An $8.6 million increase in carbon neutral initiatives due to the recognition of revenue related to carbon neutral transactions including subsurface CO~~₂ ~~storage and geothermal.~~

•

~~A $7.5 million increase in oil and gas royalty revenues primarily due to new wells and increased natural gas prices.~~

•

~~A $5.5 million increase in wheelage revenues as a result of higher production in 2022 from the properties that pay us a wheelage fee as compared to the prior year period.~~

~~These increases were partially offset by a $6.7 million decrease in production lease minimum revenues primarily as a result of breakage revenues recognized in the first nine months of 2021.~~

~~Transportation and Processing Services Revenues~~

Transportation and processing services revenues increased $8.8 million during the nine months ended September 30, 2022 as compared to the prior year period primarily due to the lease amendment with Foresight whereas transportation and processing revenues were based on the recognition of a fixed amount in 2021. Revenues from Foresight in 2022 represent traditional royalty and minimum payments and were greater than the fixed revenue from 2021.

~~Soda Ash~~

~~Revenues and other income related to our Soda Ash segment increased $32.8 million primarily as a result of increased international sales prices.~~

~~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

Percentage

(In thousands)

2022

2021

(Decrease)

Change

Operating expenses

Operating and maintenance expenses
$ 25,989 $ 19,076 $ 6,913 36 %
Depreciation, depletion and amortization
16,565 15,145 1,420 9 %
General and administrative expenses
14,037 11,550 2,487 22 %
Asset impairments
874 4,116 (3,242 ) (79 )%
Total operating expenses
$ 57,465 $ 49,887 $ 7,578 15 %

Other expenses, net

Interest expense, net
$ 22,636 $ 29,308 $ (6,672 ) (23 )%
Loss on extinguishment of debt
6,532 — 6,532 100 %
Total other expenses, net
$ 29,168 $ 29,308 $ (140 ) (0 )%

Total operating expenses increased $7.6 million primarily due to a $6.9 million increase in operating and maintenance expenses as compared to the prior year period primarily as a result of higher costs related to an overriding royalty agreement with WPPLP, partially offset by a decrease in bad debt expense. The coal royalty expense we pay to WPPLP is fully offset by the coal royalty revenue we receive from this property. Total operating expenses also increased as a result of a $2.5 million increase in general and administrative expenses primarily due to increased long-term incentive expense incurred during the nine months ended September 30, 2022. These increases were partially offset by a $3.2 million decrease in asset impairments as compared to the prior year period. Asset impairments in 2021 primarily related to a lease termination that resulted in the full impairment of a coal property.

Total other expenses, net was essentially flat year-over-year. The $6.7 million decrease in interest expense, net resulting from less debt outstanding was partially offset by a $6.5 million loss on early extinguishment of debt related to the premiums and fees incurred and write-off of debt issuance costs associated with the retirement of the 2025 Senior Notes during the nine months ended September 30, 2022.

~~Table of Contents~~

~~Adjusted EBITDA (Non-GAAP Financial Measure)~~

~~The following table reconciles net income (loss) (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:~~

Operating Segments

For the Nine Months Ended (In thousands)

Mineral Rights

Soda Ash

Corporate and Financing

Total

September 30, 2022

Net income (loss)
$ 204,548 $ 43,931 $ (43,205 ) $ 205,274
Less: equity earnings from unconsolidated investment
— (44,036 ) — (44,036 )
Add: total distributions from unconsolidated investment
— 34,055 — 34,055
Add: interest expense, net
— — 22,636 22,636
Add: loss on extinguishment of debt
— — 6,532 6,532
Add: depreciation, depletion and amortization
16,565 — — 16,565
Add: asset impairments
874 — — 874
Adjusted EBITDA
$ 221,987 $ 33,950 $ (14,037 ) $ 241,900

September 30, 2021

Net income (loss)
$ 82,980 $ 11,115 $ (40,834 ) $ 53,261
Less: equity earnings from unconsolidated investment
— (11,246 ) — (11,246 )
Add: total distributions from unconsolidated investment
— 3,920 — 3,920
Add: interest expense, net
24 — 29,284 29,308
Add: depreciation, depletion and amortization
15,145 — — 15,145
Add: asset impairments
4,116 — — 4,116
Adjusted EBITDA
$ 102,265 $ 3,789 $ (11,550 ) $ 94,504

Adjusted EBITDA increased $147.4 million primarily due to a $119.7 million increase in Adjusted EBITDA within our Mineral Rights segment as a result of higher revenues and other income as discussed above, in addition to a $30.2 million increase in Adjusted EBITDA within our Soda Ash segment as a result of higher distributions received from Sisecam Wyoming in the first nine months of 2022 as compared to the prior year period as discussed above.

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

~~The following table presents the three major categories of the statement of cash flows by business segment:~~

Operating Segments

For the Nine Months Ended (In thousands)

Mineral Rights

Soda Ash

Corporate and Financing

Total

September 30, 2022

Cash flow provided by (used in) continuing operations

Operating activities
$ 194,475 $ 33,934 $ (30,459 ) $ 197,950
Investing activities
1,837 — (59 ) 1,778
Financing activities
(614 ) — (273,697 ) (274,311 )

September 30, 2021

Cash flow provided by (used in) continuing operations

Operating activities
$ 91,958 $ 3,817 $ (29,132 ) $ 66,643
Investing activities
1,871 — — 1,871
Financing activities
(1,132 ) — (48,183 ) (49,315 )

~~Table of Contents~~

~~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)

Mineral Rights

Soda Ash

Corporate and Financing

Total

September 30, 2022

Net cash provided by (used in) operating activities of continuing operations
$ 194,475 $ 33,934 $ (30,459 ) $ 197,950
Add: proceeds from asset sales and disposals
699 — — 699
Add: return of long-term contract receivable
1,138 — — 1,138
Less: maintenance capital expenditures
— — (59 ) (59 )
Distributable cash flow
$ 196,312 $ 33,934 $ (30,518 ) $ 199,728
Less: proceeds from asset sales and disposals
(699 ) — — (699 )
Free cash flow
$ 195,613 $ 33,934 $ (30,518 ) $ 199,029

September 30, 2021

Net cash provided by (used in) operating activities of continuing operations
$ 91,958 $ 3,817 $ (29,132 ) $ 66,643
Add: proceeds from asset sales and disposals
249 — — 249
Add: return of long-term contract receivable
1,622 — — 1,622
Distributable cash flow
$ 93,829 $ 3,817 $ (29,132 ) $ 68,514
Less: proceeds from asset sales and disposals
(249 ) — — (249 )
Less: acquisition costs
(1,000 ) — — (1,000 )
Free cash flow
$ 92,580 $ 3,817 $ (29,132 ) $ 67,265

~~DCF and FCF increased $131.2 million and $131.8 million, respectively, primarily due to the following:~~

•

~~Mineral Rights~~Financing Segment

◦

Operating cash flow, DCF and FCF ~~increased $102.5~~decreased $2.5 million ~~and $103.0 million, respectively,~~ primarily due to ~~the segment's increase in revenues and other income as discussed above.~~

•

~~Soda Ash Segment~~

◦

~~DCF and FCF~~ increased ~~$30.1 million as a result of higher~~ cash ~~distributions received from Sisecam Wyoming~~paid for incentive compensation in the first ~~nine months~~quarter of 2023 because of the improved business performance in 2022 ~~as compared to the prior year period as discussed above.~~and higher cash paid for interest on credit facility borrowings in 2023.

Liquidity and Capital Resources

Current Liquidity

As of ~~September 30, 2022,~~March 31, 2023, we had total liquidity of ~~$190.9~~$56.5 million, consisting of ~~$60.9~~$17.7 million of cash and cash equivalents and ~~$130.0~~$38.8 million of borrowing capacity under our Opco Credit Facility. We have debt service obligations, including approximately ~~$20~~$23 million of principal repayments on Opco’s senior notes, throughout the remainder of ~~2022. As discussed previously, through the date~~2023. The following table calculates our leverage ratio as of ~~this report, we have permanently retired all~~March 31, 2023:

	For the Three Months Ended
(In thousands)	June 30, 2022			September 30, 2022			December 31, 2022			March 31, 2023			Last 12 Months
Net income	$	66,820		$	74,555		$	63,218		$	79,275		$	283,868
Less: equity earnings from unconsolidated investment		(14,643	)		(14,556	)		(15,759	)		(19,254	)		(64,212	)
Add: total distributions from unconsolidated investment		10,486			10,339			10,780			10,780			42,385
Add: interest expense, net		8,108			5,141			3,638			2,853			19,740
Add: loss on extinguishment of debt		4,048			2,484			3,933			—			10,465
Add: depreciation, depletion and amortization		5,847			6,850			5,954			4,083			22,734
Add: asset impairments		43			812			3,583			—			4,438
Adjusted EBITDA	$	80,709		$	85,625		$	75,347		$	77,737		$	319,418

Debt—at March 31, 2023													$	173,591

Leverage Ratio													0.5 x

Table of our 9.125% Senior Notes due 2025 and have $70 million drawn on our Opco Credit Facility. We believe our liquidity position provides us with the flexibility to continue paying down debt and manage our business.

Contents

Cash Flows

Cash flows provided by operating activities increased ~~$131.3~~$20.6 million, from ~~$66.6~~$52.3 million in the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 to ~~$198.0~~$72.9 million in the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, primarily ~~related~~due to increased ~~revenues and other income~~cash provided by operating activities within our Mineral Rights segment, partially offset by decreased cash provided by operating activities within our Soda Ash and ~~$30.1 million of higher cash distributions received from Sisecam Wyoming in the first nine months of 2022 as compared to the prior year period.~~Corporate and Financing segments, all discussed above.

Cash flows used in financing activities increased ~~$225.0~~$42.8 million, from ~~$49.3~~$52.3 million used in the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 to ~~$274.3~~$95.0 million used in the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, primarily due to the following:

	•	$~~178.6~~73.0 million of cash used to ~~retire~~repay a portion of ~~our 2025 Senior Notes during~~ the ~~nine months ended September 30, 2022;~~Opco Credit Facility in the first quarter of 2023;
	•	$~~19.6~~48.1 million of cash used to redeem the preferred units ~~paid-in-kind during~~ the first quarter of ~~2022;~~2023; and
	•	$~~10.9~~35.2 million of increased cash ~~used for preferred unit distributions as a result of paying all of our preferred unit distributions in cash in 2022 as compared to half in kind during the nine months ended September 30, 2021;~~
	•	$9.1 million of increased cash used for other items, net which primarily related to the premiums paid related to the repayment of the 2025 Senior Notes during the nine months ended September 30, 2022; and
	•	~~$7.8 million of increased cash used for~~ distributions to common unitholders and the general partner as a result of increasing our ~~common unit~~quarterly cash distribution to $0.75/unit beginning in the second quarter of ~~2022.~~2022 in addition to the special distribution paid in the first quarter of 2023.

~~Table~~These increases in cash flow used were partially offset by $94.2 million of ~~Contents~~

borrowings on our Opco Credit Facility in the first quarter of 2023 and $19.6 million of cash used to redeem the preferred units paid-in-kind during the first quarter of 2022.

Capital Resources and Obligations

Debt, Net

We had the following debt outstanding as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:

	September 30,		December 31,		March 31,		December 31,
(In thousands)	2022		2021		2023		2022
Current portion of long-term debt, net	$	89,989	$	39,102	$	39,055	$	39,076
Long-term debt, net		148,734		394,443		133,821		129,205
Total debt, net	$	238,723	$	433,545	$	172,876	$	168,281

We have been and continue to be in compliance with the terms of the financial covenants contained in our debt agreements. For additional information regarding our debt and the agreements governing our debt, including the covenants contained therein, see Note 8.9. Debt, Net to the Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Off-Balance Sheet Transactions

We do not have any off-balance sheet arrangements with unconsolidated entities or related parties and accordingly, there are no off-balance sheet risks to our liquidity and capital resources from unconsolidated entities.

Related Party Transactions

The information required set forth under Note ~~10.~~11. Related Party Transactions to the 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 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, ~~2021.~~2022.

Recent Accounting Standards

We do not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

AsWe 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 are likely to continue to be volatile. Depressed prices in the future would have a ~~smaller reporting company,~~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 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.

The market price of soda ash and energy costs directly affects the profitability of Sisecam Wyoming's operations. If the market price for soda ash declines, Sisecam 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.

Interest Rate Risk

Our exposure to changes in interest rates results from our borrowings under the Opco Credit Facility, which is subject to variably interest rates based upon SOFR. At March 31, 2023, we ~~are not required~~had $91.2 million in borrowings outstanding under the Opco Credit Facility. If interest rates were to ~~include this disclosure in our Form 10-Q for~~increase by 1%, annual interest expense would increase approximately $0.9 million, assuming the ~~quarterly period ended September 30, 2022.~~same principal amount remained outstanding during the year.

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~~three months of ~~2022~~2023 that materially affected, or were reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

2725

Table of Contents

PART II

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, we believe these ordinary course matters will not have a material effect on our financial position, liquidity or operations.

ITEM 1A. RISK FACTORS

During the period covered by this report, there were no material changes from the risk factors previously disclosed in Natural Resource Partners L.P.’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

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.

ITEM 6. EXHIBITS

Exhibit Number		Description
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).
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.
~~10.1~~		Master Assignment Agreement and Fifth Amendment to Third Amended Credit Agreement, dated as of August 9, 2022 by and among NRP (Operating) LLC, the Lenders party thereto, the Exiting Lenders, and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent for the Lenders, as Swingline Lender, and as an Issuing Bank (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 11, 2022).
~~10.2~~		New Lender Agreement, dated as of September 1, 2022 by and among NRP (Operating) LLC, the Borrower, Zions Bancorporation, N.A. dba Amegy Bank, in its capacity as administrative agent under the Fifth Amendment to Third Amended Credit Agreement and Prosperity Bank, the New Lender (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on September 8, 2022).
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

*		Filed herewith
**		Furnished herewith

2826

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 3, 2022~~May 4, 2023	By:	/s/ Corbin J. Robertson, Jr.
		Corbin J. Robertson, Jr.
		Chairman of the Board and
		Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 3, 2022~~May 4, 2023	By:	/s/ Christopher J. Zolas
		Christopher J. Zolas
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

2927

		Page
Part I. Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Statements of Partners’ Capital	3
	Consolidated Statements of Cash Flows	54
	Notes to Consolidated Financial Statements	65
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1617
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2725
Item 4.	Controls and Procedures	2725
Part II. Other Information
Item 1.	Legal Proceedings	2826
Item 1A.	Risk Factors	2826
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2826
Item 3.	Defaults Upon Senior Securities	2826
Item 4.	Mine Safety Disclosures	2826
Item 5.	Other Information	2826
Item 6.	Exhibits	2826
	Signatures	2927

		*Cash Distributions*								*Paid-in-kind Distributions*
		*Common Units*				*Preferred Units*
				*Total Distribution (1)*				*Total Distribution*		*Total Distribution*
Month Paid	*Period Covered by Distribution*	*Distribution per Unit*		*(In thousands)*		*Distribution per Unit*		*(In thousands)*		*(In units)*
2022
February 2022	October 1 - December 31, 2021	$	0.45	$	5,672	$	30.00	$	7,500	—
May 2022	January 1 - March 31, 2022		0.75		9,570		30.00		7,500	—
August 2022	April 1 - June 30, 2022		0.75		9,571		30.00		7,500	—

2021
February 2021	October 1 - December 31, 2020	$	0.45	$	5,630	$	15.00	$	3,806	3,806
May 2021	January 1 - March 31, 2021		0.45		5,672		15.00		3,864	3,864
August 2021	April 1 - June 30, 2021		0.45		5,671		15.00		3,921	3,921

	For the Nine Months Ended September 30,						Percentage
Operating Segment (In thousands)	2022		2021		Increase		Change
Mineral Rights	$	247,871	$	121,210	$	126,661		104	%
Soda Ash		44,036		11,246		32,790		292	%
Total	$	291,907	$	132,456	$	159,451		120	%

	Operating Segments
For the Nine Months Ended (In thousands)	Mineral Rights		Soda Ash			Corporate and Financing			Total
September 30, 2022
Net income (loss)	$	204,548	$	43,931		$	(43,205	)	$	205,274
Less: equity earnings from unconsolidated investment		—		(44,036	)		—			(44,036	)
Add: total distributions from unconsolidated investment		—		34,055			—			34,055
Add: interest expense, net		—		—			22,636			22,636
Add: loss on extinguishment of debt		—		—			6,532			6,532
Add: depreciation, depletion and amortization		16,565		—			—			16,565
Add: asset impairments		874		—			—			874
Adjusted EBITDA	$	221,987	$	33,950		$	(14,037	)	$	241,900

September 30, 2021
Net income (loss)	$	82,980	$	11,115		$	(40,834	)	$	53,261
Less: equity earnings from unconsolidated investment		—		(11,246	)		—			(11,246	)
Add: total distributions from unconsolidated investment		—		3,920			—			3,920
Add: interest expense, net		24		—			29,284			29,308
Add: depreciation, depletion and amortization		15,145		—			—			15,145
Add: asset impairments		4,116		—			—			4,116
Adjusted EBITDA	$	102,265	$	3,789		$	(11,550	)	$	94,504