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NRP Natural Resource Partners

Filed: 5 Nov 20, 1:00pm

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, 2020 or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-31465
nrp-20200930_g1.gif
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.)
1201 Louisiana Street, Suite 3400
Houston, Texas 77002
(Address of principal executive offices)
(Zip Code)
(713) 751-7507
(Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Units representing limited partner interestsNRPNew 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 and post such files).    Yes     No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of "accelerated filer", "large accelerated filer", "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated Filer 
Non-accelerated Filer
  (Do not check if a smaller reporting company)
Smaller Reporting Company 
Emerging Growth Company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes      No  
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


NATURAL RESOURCE PARTNERS, L.P.
TABLE OF CONTENTS




i

PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
September 30,December 31,
(In thousands, except unit data)20202019
ASSETS(Unaudited)
Current assets
Cash and cash equivalents$115,573 $98,265 
Accounts receivable, net17,462 30,869 
Other current assets, net3,972 1,244 
Current assets of discontinued operations1,706 
Total current assets$137,007 $132,084 
Land24,008 24,008 
Mineral rights, net465,870 605,096 
Intangible assets, net17,601 17,687 
Equity in unconsolidated investment256,834 263,080 
Long-term contract receivable, net33,791 36,963 
Other long-term assets, net7,447 6,989 
Total assets$942,558 $1,085,907 
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable$1,372 $1,179 
Accrued liabilities6,859 8,764 
Accrued interest9,273 2,316 
Current portion of deferred revenue11,035 4,608 
Current portion of long-term debt, net39,072 45,776 
Current liabilities of discontinued operations65 
Total current liabilities$67,611 $62,708 
Deferred revenue50,980 47,213 
Long-term debt, net452,401 470,422 
Other non-current liabilities5,020 4,949 
Total liabilities$576,012 $585,292 
Commitments and contingencies (see Note 12)
Class A Convertible Preferred Units (250,000 units issued and outstanding at September 30, 2020 and December 31, 2019, at $1,000 par value per unit; liquidation preference of $1,700 per unit at September 30, 2020 and $1,500 per unit at December 31, 2019)
$164,587 $164,587 
Partners’ capital
Common unitholders’ interest (12,261,199 units issued and outstanding at September 30, 2020 and December 31, 2019)$134,545 $271,471 
General partner’s interest428 3,270 
Warrant holders’ interest66,816 66,816 
Accumulated other comprehensive income (loss)170 (2,594)
Total partners’ capital$201,959 $338,963 
Non-controlling interest(2,935)
Total capital$201,959 $336,028 
Total liabilities and capital$942,558 $1,085,907 
The accompanying notes are an integral part of these consolidated financial statements.
1

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 For the Three Months Ended
September 30,
For the Nine Months Ended September 30,
(In thousands, except per unit data)2020201920202019
Revenues and other income
Coal royalty and other$25,740 $39,919 $88,839 $154,037 
Transportation and processing services2,204 3,865 6,651 14,740 
Equity in earnings of Ciner Wyoming1,986 13,818 5,200 36,833 
Gain on asset sales and disposals6,107 465 6,609 
Total revenues and other income$29,930 $63,709 $101,155 $212,219 
Operating expenses
Operating and maintenance expenses$5,781 $5,994 $19,200 $26,813 
Depreciation, depletion and amortization2,111 3,384 6,185 11,746 
General and administrative expenses3,634 4,253 11,168 12,799 
Asset impairments934 484 133,217 484 
Total operating expenses$12,460 $14,115 $169,770 $51,842 
Income (loss) from operations$17,470 $49,594 $(68,615)$160,377 
Other expenses, net
Interest expense, net$(10,254)$(10,431)$(30,891)$(37,061)
Loss on extinguishment of debt(29,282)
Total other expenses, net$(10,254)$(10,431)$(30,891)$(66,343)
Net income (loss) from continuing operations$7,216 $39,163 $(99,506)$94,034 
Income from discontinued operations206 
Net income (loss)$7,216 $39,170 $(99,506)$94,240 
Less: income attributable to preferred unitholders(7,500)(7,500)(22,613)(22,500)
Net income (loss) attributable to common unitholders and general partner$(284)$31,670 $(122,119)$71,740 
Net income (loss) attributable to common unitholders$(279)$31,036 $(119,677)$70,305 
Net income (loss) attributable to the general partner(5)634 (2,442)1,435 
Income (loss) from continuing operations per common unit (see Note 4)
Basic$(0.02)$2.53 $(9.76)$5.72 
Diluted(0.02)1.66 (9.76)3.91 
Net income (loss) per common unit (see Note 4)
Basic$(0.02)$2.53 $(9.76)$5.73 
Diluted(0.02)1.66 (9.76)3.92 
Net income (loss)$7,216 $39,170 $(99,506)$94,240 
Comprehensive income (loss) from unconsolidated investment and other2,428 (520)2,764 (340)
Comprehensive income (loss)$9,644 $38,650 $(96,742)$93,900 
The accompanying notes are an integral part of these consolidated financial statements.
2

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(Unaudited)

 Common UnitholdersGeneral PartnerWarrant HoldersAccumulated
Other
Comprehensive Income (Loss)
Partners' Capital Excluding Non-Controlling InterestNon-Controlling InterestTotal Capital
 
(In thousands)UnitsAmounts
Balance at December 31, 201912,261 $271,471 $3,270 $66,816 $(2,594)$338,963 $(2,935)$336,028 
Cumulative effect of adoption of accounting standard (see Note 15)— (3,833)(78)— — (3,911)— (3,911)
Net income (1)
— 18,403 376 — — 18,779 — 18,779 
Distributions to common unitholders and general partner— (5,517)(113)— — (5,630)— (5,630)
Distributions to preferred unitholders— (7,350)(150)— — (7,500)— (7,500)
Unit-based awards amortization and vesting— 673 — — — 673 — 673 
Comprehensive loss from unconsolidated investment and other— — — — (1,023)(1,023)— (1,023)
Balance at March 31, 202012,261 $273,847 $3,305 $66,816 $(3,617)$340,351 $(2,935)$337,416 
Net loss (2)
— (122,991)(2,510)— — (125,501)— (125,501)
Distributions to preferred unitholders— (7,461)(152)— — (7,613)— (7,613)
Acquisition of non-controlling interest in BRP— (4,747)(97)— — (4,844)2,935 (1,909)
Unit-based awards amortization and vesting— 869 — — — 869 — 869 
Comprehensive income from unconsolidated investment and other— — — — 1,359 1,359 — 1,359 
Balance at June 30, 202012,261 $139,517 $546 $66,816 $(2,258)$204,621 $$204,621 
Net income (1)
— 7,072 144 — — 7,216 — 7,216 
Distributions to common unitholders and general partner— (5,518)(112)— — (5,630)— (5,630)
Distributions to preferred unitholders— (7,350)(150)— — (7,500)— (7,500)
Unit-based awards amortization and vesting— 824 — — — 824 — 824 
Comprehensive income from unconsolidated investment and other— — — — 2,428 2,428 — 2,428 
Balance at September 30, 202012,261 $134,545 $428 $66,816 $170 $201,959 $$201,959 
(1)Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.
(2)Net loss includes $7.6 million attributable to preferred unitholders that accumulated during the period, of which $7.46 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.
3

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(Unaudited)

 Common UnitholdersGeneral PartnerWarrant HoldersAccumulated
Other
Comprehensive
Loss
Partners' Capital Excluding Non-Controlling InterestNon-Controlling InterestTotal Capital
 
(In thousands)UnitsAmounts
Balance at December 31, 201812,249 $355,113 $5,014 $66,816 $(3,462)$423,481 $(2,935)$420,546 
Net income (1)
— 35,005 714 — — 35,719 — 35,719 
Distributions to common unitholders and general partner— (5,513)(112)— — (5,625)— (5,625)
Distributions to preferred unitholders— (7,350)(150)— — (7,500)— (7,500)
Issuance of unit-based awards12 486 — — — 486 — 486 
Unit-based awards amortization and vesting— 399 — — — 399 — 399 
Comprehensive income from unconsolidated investment and other— — 10 — 1,005 1,015 — 1,015 
Balance at March 31, 201912,261 $378,140 $5,476 $66,816 $(2,457)$447,975 $(2,935)$445,040 
Net income (1)
— 18,964 387 — — 19,351 19,351 
Distributions to common unitholders and general partner— (15,939)(326)— — (16,265)— (16,265)
Distributions to preferred unitholders— (7,350)(150)— — (7,500)— (7,500)
Unit-based awards amortization and vesting— 460 — — — 460 — 460 
Comprehensive loss from unconsolidated investment and other— — — — (825)(825)— (825)
Balance at June 30, 201912,261 $374,275 $5,387 $66,816 $(3,282)$443,196 $(2,935)$440,261 
Net income (1)
— 38,386 784 — — 39,170 — 39,170 
Distributions to common unitholders and general partner— (5,518)(112)— — (5,630)— (5,630)
Distributions to preferred unitholders— (7,350)(150)— — (7,500)— (7,500)
Unit-based awards amortization and vesting— 473 — — — 473 — 473 
Comprehensive loss from unconsolidated investment and other— — — — (520)(520)— (520)
Balance at September 30, 201912,261 $400,266 $5,909 $66,816 $(3,802)$469,189 $(2,935)$466,254 
(1)Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.
The accompanying notes are an integral part of these consolidated financial statements.
4

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


 For the Nine Months Ended September 30,
(In thousands)20202019
Cash flows from operating activities
Net income (loss)$(99,506)$94,240 
Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization6,185 11,746 
Distributions from unconsolidated investment14,210 25,480 
Equity earnings from unconsolidated investment(5,200)(36,833)
Gain on asset sales and disposals(465)(6,609)
Loss on extinguishment of debt29,282 
Income from discontinued operations(206)
Asset impairments133,217 484 
Bad debt expense3,915 6,842 
Unit-based compensation expense2,566 1,842 
Amortization of debt issuance costs and other491 3,223 
Change in operating assets and liabilities:
Accounts receivable7,994 (2,111)
Accounts payable193 (822)
Accrued liabilities(2,985)(5,083)
Accrued interest6,957 19 
Deferred revenue10,194 (3,920)
Other items, net(3,353)351 
Net cash provided by operating activities of continuing operations$74,413 $117,925 
Net cash provided by (used in) operating activities of discontinued operations1,706 (4)
Net cash provided by operating activities$76,119 $117,921 
Cash flows from investing activities
Proceeds from asset sales and disposals$507 $6,611 
Return of long-term contract receivable1,462 1,351 
Acquisition of non-controlling interest in BRP(1,000)
Net cash provided by investing activities of continuing operations$969 $7,962 
Net cash used in investing activities of discontinued operations(66)(556)
Net cash provided by investing activities$903 $7,406 
Cash flows from financing activities
Debt borrowings$$300,000 
Debt repayments(25,841)(442,747)
Distributions to common unitholders and general partner(11,260)(27,520)
Distributions to preferred unitholders(22,613)(22,500)
Contributions from (to) discontinued operations1,640 (560)
Debt issuance costs and other(26,427)
Net cash used in financing activities of continuing operations$(58,074)$(219,754)
Net cash provided by (used in) financing activities of discontinued operations(1,640)560 
Net cash used in financing activities$(59,714)$(219,194)
5

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


 For the Nine Months Ended September 30,
(In thousands)20202019
Net increase (decrease) in cash and cash equivalents$17,308 $(93,867)
Cash and cash equivalents at beginning of period98,265 206,030 
Cash and cash equivalents at end of period$115,573 $112,163 
Supplemental cash flow information:
Cash paid during the period for interest$22,712 $36,270 
Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities$947 $
The accompanying notes are an integral part of these consolidated financial statements.
6

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1.    Basis of Presentation
Nature of Business
Natural Resource Partners L.P. (the "Partnership") engages principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and owns a non-controlling 49% interest in Ciner Wyoming LLC ("Ciner Wyoming"), a trona ore mining and soda ash production business. The Partnership is organized into 2 operating segments further described in Note 5. Segment Information. As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context.
Principles of Consolidation and Reporting
The accompanying unaudited Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2019 and notes thereto included in the Partnership's Annual Report on Form 10-K, which was filed with the SEC on February 27, 2020.
Recently Adopted Accounting Standards
Credit Losses
On January 1, 2020, the Partnership adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), and all the related amendments ("the new credit loss standard"). The Partnership recognized a $3.9 million cumulative effect of adoption in the opening balance of partners' capital on January 1, 2020 as a result of the adoption of the new credit loss standard. See Note 15. Credit Losses for more information.
7

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 Coal Royalty and Other segment revenues by major source:
For the Three Months Ended
September 30,
For the Nine Months Ended September 30,
(In thousands)2020201920202019
Coal royalty revenues (1)
$10,610 $24,727 $40,559 $87,561 
Production lease minimum revenues (1)
4,267 2,752 13,554 21,331 
Minimum lease straight-line revenues (1)
3,553 3,982 12,349 11,152 
Property tax revenues1,896 1,606 4,256 4,416 
Wheelage revenues1,680 1,675 5,468 5,035 
Coal overriding royalty revenues1,314 2,189 3,319 10,163 
Lease amendment revenues858 1,535 2,591 6,720 
Aggregates royalty revenues221 954 1,068 3,655 
Oil and gas royalty revenues1,078 374 4,923 2,575 
Other revenues263 125 752 1,429 
Coal royalty and other revenues$25,740 $39,919 $88,839 $154,037 
Transportation and processing services revenues (2)
2,204 3,865 6,651 14,740 
Total coal royalty and other segment revenues$27,944 $43,784 $95,490 $168,777 
(1)Effective January 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications to certain leases that fixed consideration paid to the Partnership over a two year period.
(2)Transportation and processing services revenues from contracts with customers as defined under ASC 606 was $1.2 million and $1.7 million for the three months ended September 30, 2020 and 2019, respectively and $3.7 million and $7.3 million for the nine months ended September 30, 2020 and 2019, respectively. The remaining transportation and processing services revenues of $1.0 million and $2.2 million for the three months ended September 30, 2020 and 2019, respectively, and $2.9 million and $7.5 million for the nine months ended September 30, 2020 and 2019, respectively, related to other NRP-owned infrastructure leased to and operated by third-party operators accounted for under other guidance. See Note 14. Financing Transaction for more information.
The following table details the Partnership's Coal Royalty and Other segment receivables and liabilities resulting from contracts with customers:
September 30,December 31,
(In thousands)20202019
Receivables
Accounts receivable, net$15,371 $27,915 
Other current assets, net (1)
3,696 90 
Other long-term assets, net (2)
691 
Contract liabilities
Current portion of deferred revenue$11,035 $4,608 
Deferred revenue50,980 47,213 
(1)Other current assets, net includes short-term notes receivables from contracts with customers.
(2)Other long-term assets, net includes long-term notes receivables from contracts with customers.
8

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The following table shows the activity related to the Partnership's Coal Royalty and Other segment deferred revenue:
For the Nine Months Ended September 30,
(In thousands)20202019
Balance at beginning of period (current and non-current)$51,821 $52,553 
Increase due to minimums and lease amendment fees38,005 37,315 
Recognition of previously deferred revenue(27,811)(41,234)
Balance at end of period (current and non-current)$62,015 $48,634 

The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty and overriding royalty leases are as follows as of September 30, 2020 (in thousands):
Lease Term (1)
Weighted Average Remaining Years
Annual Minimum Payments (2)
0 - 5 years3.7$14,792 
5 - 10 years5.77,478 
10+ years13.530,922 
Total9.3$53,192 
(1)Lease term does not include renewal periods.
(2)Annual minimum payments do not include $40.0 million of annual fixed consideration owed to NRP in 2020 and 2021 resulting from contract modifications entered into during the second quarter of 2020. Additionally, $5.0 million of this $40.0 million annual fixed consideration amount relates to a coal infrastructure lease that is accounted for as a financing transaction. See Note 14. Financing Transaction for more information.

3.    Common and Preferred Unit Distributions
The Partnership makes cash distributions to common and preferred unitholders on a quarterly basis, subject to approval by the Board of Directors of GP Natural Resource Partners LLC (the "Board of Directors"). NRP recognizes both common unit and preferred unit distributions on the date the distribution is declared.
Distributions made on the common units and the general partner's general partner ("GP") interest are made on a pro-rata basis in accordance with their relative percentage interests in the Partnership. The general partner is entitled to receive 2% of such distributions.

Income (loss) available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income (loss) available to common unitholders and the general partner by $7.5 million during the three months ended September 30, 2020 and 2019, and $22.6 million and $22.5 million during the nine months ended September 30, 2020 and 2019, respectively, as a result of accumulated preferred unit distributions earned during the period. In May 2020, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended March 31, 2020. In June 2020, the Partnership redeemed all of the outstanding preferred units paid in kind.

9

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The following table shows the cash distributions declared and paid to common and preferred unitholders during the nine months ended September 30, 2020 and 2019, respectively:
Common UnitsPreferred Units
Date PaidPeriod Covered by DistributionDistribution per Unit
Total Distribution (1)
(In thousands)
Distribution per UnitTotal Distribution
(In thousands)
2020
February 2020October 1 - December 31, 2019$0.45 $5,630 $30.00 $7,500 
May 2020January 1 - March 31, 202015.00 3,750 
June 2020 (2)
January 1 - March 31, 2020— — 15.45 3,863 
August 2020April 1 - June 30, 20200.45 5,630 30.00 7,500 
2019
February 2019October 1 - December 31, 2018$0.45 $5,625 $30.00 $7,500 
May 2019January 1 - March 31, 20190.45 5,630 30.00 7,500 
May 2019 (3)
Special Distribution0.85 10,635 — — 
August 2019April 1 - June 30, 20190.45 5,630 30.00 7,500 
(1)Total common unit distribution includes the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.
(2)Redemption of preferred units paid in kind plus accrued interest.
(3)Special distribution was made to cover the common unitholders’ tax liability resulting from the sale of NRP’s construction aggregates business in December 2018.

4.    Net Income (Loss) Per Common Unit
Basic net income (loss) per common unit is computed by dividing net income (loss), after considering income attributable to preferred unitholders and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income (loss) per common unit includes the effect of NRP's preferred units, warrants, and unvested unit-based awards if the inclusion of these items is dilutive.
The dilutive effect of the preferred units is calculated using the if-converted method. Under the if-converted method, the preferred units are assumed to be converted at the beginning of the period, and the resulting common units are included in the denominator of the diluted net income (loss) per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the preferred units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation. The calculation of diluted net income (loss) per common unit for the three and nine months ended September 30, 2020 does not include the assumed conversion of the preferred units because the impact would have been anti-dilutive. The calculation of diluted net income per common unit for the three and nine months ended September 30, 2019 includes the assumed conversion of the preferred units.
The dilutive effect of the warrants is calculated using the treasury stock method, which assumes that the proceeds from the exercise of these instruments are used to purchase common units at the average market price for the period. The calculation of diluted net income (loss) per common unit for the three and nine months ended September 30, 2020 did not include the net settlement of warrants to purchase 1.75 million common units at a strike price of $22.81 or the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive. The calculation of the dilutive effect of the warrants for the three months ended September 30, 2019 includes the net settlement of warrants to purchase 1.75 million common units with a strike price of $22.81 but did not include the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive. The calculation of the dilutive effect of the warrants for the nine months ended September 30, 2019 includes both the net settlement of warrants to purchase 1.75 million common units with 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.
10

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The following tables reconcile the numerator and denominator of the basic and diluted net income (loss) per common unit computations and calculates basic and diluted net income (loss) per common unit:
 For the Three Months Ended
September 30,
For the Nine Months Ended September 30,
(In thousands, except per unit data)2020201920202019
Allocation of net income (loss)
Net income (loss) from continuing operations$7,216 $39,163 $(99,506)$94,034 
Less: income attributable to preferred unitholders(7,500)(7,500)(22,613)(22,500)
Net income (loss) from continuing operations attributable to common unitholders and general partner$(284)$31,663 $(122,119)$71,534 
Add (less): net loss (income) from continuing operations attributable to the general partner(634)2,442 (1,431)
Net income (loss) from continuing operations attributable to common unitholders$(279)$31,029 $(119,677)$70,103 
Net income from discontinued operations$$$$206 
Less: net income from discontinued operations attributable to the general partner(4)
Net income from discontinued operations attributable to common unitholders$$$$202 
Net income (loss)$7,216 $39,170 $(99,506)$94,240 
Less: income attributable to preferred unitholders(7,500)(7,500)(22,613)(22,500)
Net income (loss) attributable to common unitholders and general partner$(284)$31,670 $(122,119)$71,740 
Add (less): net loss (income) attributable to the general partner(634)2,442 (1,435)
Net income (loss) attributable to common unitholders$(279)$31,036 $(119,677)$70,305 
Basic net income (loss) per common unit
Weighted average common units—basic12,261 12,261 12,261 12,259 
Basic net income (loss) from continuing operations per common unit$(0.02)$2.53 $(9.76)$5.72 
Basic net income from discontinued operations per common unit$0.00 $0.00 $0.00 $0.02 
Basic net income (loss) per common unit$(0.02)$2.53 $(9.76)$5.73 
11

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

 For the Three Months Ended
September 30,
For the Nine Months Ended September 30,
(In thousands, except per unit data)2020201920202019
Diluted income (loss) per common unit
Weighted average common units—basic12,261 12,261 12,261 12,259 
Plus: dilutive effect of preferred units10,494 10,494 
Plus: dilutive effect of warrants389 800 
Plus: dilutive effect of unvested unit-based awards— 13 — 31 
Weighted average common units—diluted12,261 23,157 12,261 23,584 
Net income (loss) from continuing operations$7,216 $39,163 $(99,506)$94,034 
Less: income attributable to preferred unitholders(7,500)(22,613)
Diluted net income (loss) from continuing operations attributable to common unitholders and general partner$(284)$39,163 $(122,119)$94,034 
Add (less): diluted net loss (income) from continuing operations attributable to the general partner(784)2,442 (1,881)
Diluted net income (loss) from continuing operations attributable to common unitholders$(279)$38,379 $(119,677)$92,153 
Diluted net income from discontinued operations attributable to common unitholders$$$$202 
Net income (loss)$7,216 $39,170 $(99,506)$94,240 
Less: income attributable to preferred unitholders(7,500)(22,613)
Diluted net income (loss) attributable to common unitholders and general partner$(284)$39,170 $(122,119)$94,240 
Add (less): diluted net loss (income) attributable to the general partner(784)2,442 (1,885)
Diluted net income (loss) attributable to common unitholders$(279)$38,386 $(119,677)$92,355 
Diluted net income (loss) from continuing operations per common unit$(0.02)$1.66 $(9.76)$3.91 
Diluted net income from discontinued operations per common unit$0.00 $0.00 $0.00 $0.01 
Diluted net income (loss) per common unit$(0.02)$1.66 $(9.76)$3.92 


12

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

5.    Segment Information
The Partnership's segments are strategic business units that offer distinct products and services to different customers in different geographies within the U.S. and that are managed accordingly. NRP has the following 2 operating segments:
Coal Royalty and Other—consists primarily of coal royalty properties and coal-related transportation and processing assets. Other assets include industrial mineral royalty properties, aggregates royalty properties, oil and gas royalty properties and timber. The Partnership's coal reserves are primarily located in Appalachia, the Illinois Basin and the Northern Powder River Basin in the United States. The Partnership's industrial minerals and aggregates properties are located in various states across the United States. The Partnership's oil and gas royalty assets are primarily located in Louisiana and its timber assets are primarily located in West Virginia.
Soda Ash—consists of the Partnership's 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining operation and soda ash refinery in the Green River Basin of Wyoming. Ciner Resources LP, the Partnership's operating partner, mines the trona, processes it into soda ash, and distributes the soda ash both domestically and internationally to the glass and chemicals industries.
Direct segment costs and certain other costs incurred at the corporate level that are identifiable and that benefit the Partnership's segments are allocated to the operating segments accordingly. These allocated costs generally include salaries and benefits, insurance, property taxes, legal, royalty, information technology and shared facilities services and are included in operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss).
Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment and are included in general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss).




13

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The following table summarizes certain financial information for each of the Partnership's business segments:
Operating Segments
(In thousands)Coal Royalty and OtherSoda AshCorporate and FinancingTotal
For the Three Months Ended September 30, 2020
Revenues$27,944 $1,986 $$29,930 
Operating and maintenance expenses5,685 96 5,781 
Depreciation, depletion and amortization2,111 2,111 
General and administrative expenses3,634 3,634 
Asset impairments934 934 
Other expenses, net41 10,213 10,254 
Net income (loss) from continuing operations19,173 1,890 (13,847)7,216 
For the Three Months Ended September 30, 2019
Revenues$43,784 $13,818 $$57,602 
Gain on asset sales and disposals6,107 6,107 
Operating and maintenance expenses5,771 223 5,994 
Depreciation, depletion and amortization3,384 3,384 
General and administrative expenses4,253 4,253 
Asset impairments484 484 
Other expenses, net10,431 10,431 
Net income (loss) from continuing operations40,252 13,595 (14,684)39,163 
Income from discontinued operations
For the Nine Months Ended September 30, 2020
Revenues$95,490 $5,200 $$100,690 
Gain on asset sales and disposals465 465 
Operating and maintenance expenses19,059 141 19,200 
Depreciation, depletion and amortization6,185 6,185 
General and administrative expenses11,168 11,168 
Asset impairments133,217 133,217 
Other expenses, net56 30,835 30,891 
Net income (loss) from continuing operations(62,562)5,059 (42,003)(99,506)
For the Nine Months Ended September 30, 2019
Revenues$168,777 $36,833 $$205,610 
Gain on asset sales and disposals6,609 6,609 
Operating and maintenance expenses26,590 223 26,813 
Depreciation, depletion and amortization11,746 11,746 
General and administrative expenses12,799 12,799 
Asset impairments484 484 
Other expenses, net66,343 66,343 
Net income (loss) from continuing operations136,566 36,610 (79,142)94,034 
Income from discontinued operations206 

14

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

6.    Equity Investment
The Partnership accounts for its 49% investment in Ciner Wyoming using the equity method of accounting. Activity related to this investment is as follows:
For the Three Months Ended
September 30,
For the Nine Months Ended September 30,
(In thousands)2020201920202019
Balance at beginning of period$252,420 $251,135 $263,080 $247,051 
Income allocation to NRP’s equity interests3,004 15,068 8,450 40,511 
Amortization of basis difference(1,018)(1,250)(3,250)(3,678)
Other comprehensive income (loss)2,428 (520)2,764 (341)
Distribution(6,370)(14,210)(25,480)
Balance at end of period$256,834 $258,063 $256,834 $258,063 
The following table represents summarized financial information for Ciner Wyoming as derived from their respective unaudited financial statements for the three and nine months ended September 30, 2020 and 2019:
For the Three Months Ended
September 30,
For the Nine Months Ended September 30,
(In thousands)2020201920202019
Net sales$98,197 $137,148 $288,804 $397,378 
Gross profit11,704 36,747 35,363 103,382 
Net income6,130 30,750 17,245 82,675 


15

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

7.    Mineral Rights, Net
The Partnership’s mineral rights consist of the following:
 September 30, 2020December 31, 2019
(In thousands)Carrying ValueAccumulated DepletionNet Book ValueCarrying ValueAccumulated DepletionNet Book Value
Coal properties$798,870 $(354,843)$444,027 $981,352 $(420,448)$560,904 
Aggregates properties9,102 (2,741)6,361 41,486 (13,357)28,129 
Oil and gas royalty properties12,354 (8,416)3,938 12,395 (7,887)4,508 
Other13,156 (1,612)11,544 13,156 (1,601)11,555 
Total mineral rights, net$833,482 $(367,612)$465,870 $1,048,389 $(443,293)$605,096 
Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income (Loss) and totaled $2.1 million and $2.8 million for the three months ended September 30, 2020 and 2019, respectively, and $6.0 million and $9.5 million for the nine months ended September 30, 2020 and 2019, respectively.
The Partnership recorded $0.9 million and $133.2 million of expense to fully impair certain properties during the three and nine months ended September 30, 2020, respectively, primarily related to weakened coal markets that resulted in termination of certain coal leases, changes to lessee mine plans resulting in permanent moves off certain of our coal properties and decreased oil and gas drilling activity which negatively impacted the outlook for NRP's frac sand properties. 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, 2020 incorporated an estimated impact of the global COVID-19 pandemic, there is significant uncertainty as to the severity and duration of this disruption. If the impact is worse than we currently estimate, an additional impairment charge may be recognized in future periods.


16

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

8.    Debt, Net
The Partnership's debt consists of the following:
September 30,December 31,
(In thousands)20202019
NRP LP debt:
9.125% senior notes, with semi-annual interest payments in June and December, due June 2025, issued at par ("2025 Senior Notes")$300,000 $300,000 
Opco debt:
Revolving credit facility$$
Senior Notes
5.05% with semi-annual interest payments in January and July, with annual principal payments in July, due July 2020$$6,780 
5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 20237,094 9,458 
4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 202324,016 24,016 
5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 202450,738 63,423 
8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 202416,047 20,059 
5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 202679,945 79,945 
5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 202620,375 20,375 
Total Opco Senior Notes$198,215 $224,056 
Total debt at face value$498,215 $524,056 
Net unamortized debt issuance costs(6,742)(7,858)
Total debt, net$491,473 $516,198 
Less: current portion of long-term debt(39,072)(45,776)
Total long-term debt, net$452,401 $470,422 

NRP LP Debt
2025 Senior Notes
The 2025 Senior Notes were issued under an Indenture dated as of April 29, 2019 (the "2025 Indenture"), bear interest at 9.125% per year and mature on June 30, 2025. Interest is payable semi-annually on June 30 and December 30.
NRP and NRP Finance have the option to redeem the 2025 Senior Notes, in whole or in part, at any time on or after October 30, 2021, at the redemption prices (expressed as percentages of principal amount) of 104.563% for the 12-month period beginning October 30, 2021, 102.281% for the 12-month period beginning October 30, 2022, and thereafter at 100.000%, together, in each case, with any accrued and unpaid interest to the date of redemption. Furthermore, before October 30, 2021, NRP may on any one or more occasions redeem up to 35% of the aggregate principal amount of the 2025 Senior Notes with the net proceeds of certain public or private equity offerings at a redemption price of 109.125% of the principal amount of 2025 Senior Notes, plus any accrued and unpaid interest, if any, to the date of redemption, if at least 65% of the aggregate principal amount of the 2025 Senior Notes issued under the 2025 Indenture remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering. In the event of a change of control, as defined in the 2025 Indenture, the holders of the 2025 Senior Notes may require us to purchase their 2025 Senior Notes at a purchase price equal to 101% of the principal amount of the 2025 Senior Notes, plus accrued and unpaid interest, if any. The 2025 Senior Notes were issued at par.
17

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The 2025 Senior Notes are the senior unsecured obligations of NRP and NRP Finance. The 2025 Senior Notes rank equal in right of payment to all existing and future senior unsecured debt of NRP and NRP Finance and senior in right of payment to any of NRP's subordinated debt. The 2025 Senior Notes are effectively subordinated in right of payment to all future secured debt of NRP and NRP Finance to the extent of the value of the collateral securing such indebtedness and are structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries, including the Opco Credit Facility and each series of Opco’s existing senior notes. None of NRP's subsidiaries guarantee the 2025 Senior Notes. As of September 30, 2020 and December 31, 2019, NRP and NRP Finance were in compliance with the terms of the Indenture relating to their 2025 Senior Notes.
2022 Senior Notes
During the second quarter of 2019, the Partnership redeemed the 2022 Senior Notes at a redemption price equal to 105.250% of the principal amount of the 2022 Senior Notes, plus accrued and unpaid interest. In connection with the early redemption, the Partnership paid an $18.1 million call premium and wrote off $10.4 million of unamortized debt issuance costs and debt discount. These expenses are included in loss on extinguishment of debt on the Partnership's Consolidated Statements of Comprehensive Income (Loss).
Opco Debt
All of Opco’s debt is guaranteed by its wholly owned subsidiaries and is secured by certain of the assets of Opco and its wholly owned subsidiaries other than NRP Trona LLC. As of September 30, 2020 and December 31, 2019, Opco was in compliance with the terms of the financial covenants contained in its debt agreements.
Opco Credit Facility
In April 2019, the Partnership entered into the Fourth Amendment (the “Fourth Amendment”) to the Opco Credit Facility (the "Opco Credit Facility"). The Fourth Amendment extended the term of the Opco Credit Facility until April 2023. Lender commitments under the Opco Credit Facility remain at $100.0 million. The Opco Credit Facility contains financial covenants requiring Opco to maintain:
A leverage ratio of consolidated indebtedness to EBITDDA (as defined in the Opco Credit Facility) not to exceed 4.0x; provided, however, that if the Partnership increases its quarterly distribution to its common unitholders above $0.45 per common unit, the maximum leverage ratio under the Opco Credit Facility will permanently decrease from 4.0x to 3.0x; and
a fixed charge coverage ratio of consolidated EBITDDA to consolidated fixed charges (consisting of consolidated interest expense and consolidated lease expense) of not less than 3.5 to 1.0.
During the three and nine months ended September 30, 2020 and 2019, the Partnership did not have any borrowings outstanding under the Opco Credit Facility and had $100 million in available borrowing capacity at both September 30, 2020 and December 31, 2019.
The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of $366.8 million and $399.7 million classified as mineral rights, net and other long-term assets, net on the Partnership’s Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, respectively.
Opco Senior Notes   
Opco has issued several series of private placement senior notes (the "Opco Senior Notes") with various interest rates and principal due dates. As of September 30, 2020 and December 31, 2019, the Opco Senior Notes had cumulative principal balances of $198.2 million and $224.1 million, respectively. Opco made mandatory principal payments of $25.8 million during the nine months ended September 30, 2020 and $97.1 million during the nine months ended September 30, 2019, which included a $49.3 million pre-payment as a result of the sale of the Partnership's construction aggregates business.
18

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The 8.92% Opco Senior Notes also provides that in the event that Opco’s leverage ratio of consolidated indebtedness to consolidated EBITDDA (as defined in the Note Purchase Agreements) exceeds 3.75 to 1.00 at the end of any fiscal quarter, then in addition to all other interest accruing on these notes, additional interest in the amount of 2.00% per annum shall accrue on the notes for the two succeeding quarters and for as long thereafter as the leverage ratio remains above 3.75 to 1.00. Opco has not exceeded the 3.75 to 1.00 ratio at the end of any fiscal quarter through September 30, 2020.
9.    Fair Value Measurements
Fair Value of Financial Assets and Liabilities
The Partnership’s financial assets and liabilities consist of cash and cash equivalents, a contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents approximate fair value due to their short-term nature. The Partnership uses available market data and valuation methodologies to estimate the fair value of its debt and contract receivable.
The following table shows the carrying value and estimated fair value of the Partnership's debt and contract receivable:
 September 30, 2020December 31, 2019
(In thousands)Fair Value Hierarchy LevelCarrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Debt:
NRP 2025 Senior Notes1$294,891 $263,250 $294,084 $269,250 
Opco Senior Notes (1)
3196,582 173,934 222,114 201,090 
Opco Credit Facility3
Assets:
Contract receivable (current and long-term) (2)
3$35,800 $27,255 $38,945 $33,460 
(1)The fair value of the Opco Senior Notes are estimated by management using quotations obtained for the NRP 2025 Senior Notes on the closing trading prices near period end, which were at 88% of par value at September 30, 2020.
(2)The fair value of the Partnership's contract receivable is determined based on the present value of future cash flow projections related to the underlying asset at a discount rate of 15% at September 30, 2020.
NRP has embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that are accounted for separately from the preferred units as assets and liabilities at fair value on the Partnership's Consolidated Balance Sheets. Level 3 valuation of the embedded derivatives are based on numerous factors including the likelihood of the event occurring. The embedded derivatives are revalued quarterly and changes in their fair value would be recorded in other expenses, net on the Partnership's Consolidated Statements of Comprehensive Income (Loss). The embedded derivatives had 0 value as of September 30, 2020 and December 31, 2019.

19

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

10.    Related Party Transactions
Affiliates of our General Partner
The Partnership’s general partner does not receive any management fee or other compensation for its management of NRP. However, in accordance with the partnership agreement, the general partner and its affiliates are reimbursed for services provided to the Partnership and for expenses incurred on the Partnership’s behalf. Employees of Quintana Minerals Corporation ("QMC") and Western Pocahontas Properties Limited Partnership ("WPPLP"), affiliates of the Partnership, provide their services to manage the Partnership's business. QMC and WPPLP charge the Partnership the portion of their employee salary and benefits costs related to their employee services provided to NRP. These QMC and WPPLP employee management service costs are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss). NRP also reimburses overhead costs incurred by its affiliates to manage the Partnership's business. These overhead costs include certain rent, information technology, administration of employee benefits and other corporate services incurred by or on behalf of the Partnership’s general partner and its affiliates and are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss).
Direct general and administrative expenses charged to the Partnership by QMC and WPPLP are included on the Partnership's Consolidated Statement of Comprehensive Income (Loss) as follows:
For the Three Months Ended
September 30,
For the Nine Months Ended September 30,
(In thousands)2020201920202019
Operating and maintenance expenses$1,562 $1,598 $4,729 $4,806 
General and administrative expenses878 855 2,657 2,704 
The Partnership had accounts payable to QMC of $0.4 million at both September 30, 2020 and December 31, 2019 and $0.2 million and $0.1 million to WPPLP on its Consolidated Balance Sheets at September 30, 2020 and December 31, 2019, respectively.
During the three months ended September 30, 2020 and 2019, the Partnership recognized $0.2 million and $0.3 million in operating and maintenance expenses, respectively, on its Consolidated Statements of Comprehensive Income (Loss) related to an overriding royalty agreement with WPPLP. These amounts were $0.3 million and $3.8 million during the nine months ended September 30, 2020 and 2019, respectively. At September 30, 2020, the Partnership had $0.4 million of other long-term assets on its Consolidated Balance Sheet related to a prepaid royalty for this agreement and at December 31, 2019, the Partnership had $0.1 million of accounts payable to WPPLP related to this agreement.
Industrial Minerals Group LLC
Corbin J. Robertson, III, a Director of GP Natural Resource Partners LLC, owned a minority ownership interest in Industrial Minerals Group LLC (“Industrial Minerals”), which, through its subsidiaries, leases two of NRP's coal royalty properties in Central Appalachia. As of December 31, 2019, Mr. Robertson no longer held an equity interest in Industrial Minerals; accordingly, revenues are no longer classified as related party revenues as of such date. Coal royalty related revenues from Industrial Minerals totaled $0.4 million and $0.9 million for the three and nine months ended September 30, 2019, respectively. The Partnership had accounts receivable from Industrial Minerals of $0.7 million on its Consolidated Balance Sheet as of December 31, 2019.
Quinwood Coal Company
In May 2017, a subsidiary of Alpha Natural Resources assigned two coal leases with us to Quinwood Coal Company ("Quinwood"), an entity wholly owned by Corbin J. Robertson III. Coal related revenues from Quinwood totaled $0.0 million and $0.2 million for the three and nine months ended September 30, 2019, respectively.

20

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

11.    Major Customers
Revenues from customers that exceeded 10 percent of total revenues for any of the periods presented below are as follows:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
(In thousands)RevenuesPercentRevenuesPercentRevenuesPercentRevenuesPercent
Foresight Energy (1) (2)
$8,592 29 %$12,375 21 %$27,052 27 %$44,604 22 %
Contura Energy (1)
7,143 24 %9,190 16 %23,164 23 %32,915 16 %
(1)Revenues from Foresight Energy and Contura Energy are included within the Partnership's Coal Royalty and Other segment.
(2)In June 2020, the Partnership entered into lease amendments with Foresight Energy pursuant to which Foresight agreed to pay NRP fixed cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between the Partnership and Foresight Energy for calendar years 2020 and 2021.
12.    Commitments and Contingencies
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.
13.    Unit-Based Compensation
The Partnership's unit-based awards granted in 2020 and 2019 were valued using the closing price of NRP's units as of the grant date. The grant date fair value of these awards granted during the nine months ended September 30, 2020 and 2019 were $3.5 million and $5.4 million, respectively. Total unit-based compensation expense associated with these awards was $0.9 million and $0.5 million for the three months ended September 30, 2020 and 2019, respectively, and $2.6 million and $1.8 million for the nine months ended September 30, 2020 and 2019, respectively, and is included in general and administrative expenses and operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income (Loss). The unamortized cost associated with unvested outstanding awards as of September 30, 2020 is $4.4 million, which is to be recognized over a weighted average period of 1.8 years. The unamortized cost associated with unvested outstanding awards as of December 31, 2019 was $3.5 million.
A summary of the unit activity in the outstanding grants during 2020 is as follows:
(In thousands)Common UnitsWeighted Average Exercise Price
Outstanding at January 1, 2020157 $37.48 
Granted203 $17.20 
Fully vested and issued$
Forfeitures(5)$17.20 
Outstanding at September 30, 2020355 $26.20 

21

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

14.    Financing Transaction
The Partnership owns rail loadout and associated infrastructure at the Sugar Camp mine in the Illinois Basin operated by a subsidiary of Foresight Energy. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight Energy and is accounted for as a financing transaction (the "Sugar Camp lease"). The Sugar Camp lease expires in 2032 with renewal options for up to 80 additional years. Minimum payments are $5.0 million per year through the end of the lease term. The $5.0 million due to the Partnership in 2020 and 2021 is included in the fixed cash payments from Foresight Energy resulting from contract modifications entered into during the second quarter of 2020 as discussed in Note 11. Major Customers. The Partnership is also entitled to variable payments in the form of throughput fees determined based on the amount of coal transported and processed utilizing the Partnership's assets. In the event the Sugar Camp lease is renewed beyond 2032, payments become a fixed $10 thousand per year for the remainder of the renewed term.
The following table shows certain amounts related to the Partnership's Sugar Camp lease through 2032:
September 30,December 31,
(In thousands)20202019
Accounts receivable, net$$540 
Contract receivable, net (current and long-term)35,800 38,945 
Unearned income19,704 21,889 
Projected remaining payments, net$55,504 $61,374 

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

As of September 30, 2020, NRP recorded the following current expected credit loss (“CECL”) related to its receivables and long-term contract receivable:
(In thousands)GrossCECL AllowanceNet
Receivables$24,172 $(2,324)$21,848 
Long-term contract receivable35,370 (1,579)33,791 
Total$59,542 $(3,903)$55,639 

NRP recorded $0.3 million and $0.0 million in operating and maintenance expenses on its Consolidated Statement of Comprehensive Income (Loss) related to the change in CECL allowance during the three and nine months ended September 30, 2020, respectively. In addition, the Partnership recorded $0.0 million and $3.9 million of bad debt expense due to balances deemed to be non-collectible in the three and nine months ended September 30, 2020, respectively.

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


22

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

16.    Leases
Lessee Accounting
As of September 30, 2020, the Partnership had one operating lease for an office building that is owned by WPPLP. On January 1, 2019, the Partnership entered into a new lease of the building with a five-year base term and five additional five-year renewal options. Upon lease commencement and as of September 30, 2020, the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance Sheets using the present value of the future lease payments over 30 years. The Partnership's right-of-use asset and lease liability included within other long-term assets, net and other non-current liabilities, respectively, on its Consolidated Balance Sheets totaled $3.5 million at both September 30, 2020 and December 31, 2019. During the three and nine months ended September 30, 2020 and 2019, the Partnership incurred total operating lease expense of $0.1 million and $0.4 million, respectively, included in both operating and maintenance expenses and general and administrative expenses on its Consolidated Statements of Comprehensive Income (Loss).
The following table details the maturity analysis of the Partnership's operating lease liability and reconciles the undiscounted cash flows to the operating lease liability included on its Consolidated Balance Sheet:
Remaining Annual Lease Payments (In thousands)As of September 30, 2020
2020$121 
2021483 
2022483 
2023483 
2024483 
After 202411,597 
Total lease payments (1)
$13,650 
Less: present value adjustment (2)
(10,150)
Total operating lease liability$3,500 
(1)The remaining lease term of the Partnership's operating lease is 28.25 years.
(2)The present value of the operating lease liability on the Partnership's Consolidated Balance Sheets was calculated using a 13.5% discount rate which represents the Partnership's estimated incremental borrowing rate under the lease. As the Partnership's lease does not provide an implicit rate, the Partnership estimated the incremental borrowing rate at the time the lease was entered into by utilizing the rate of the Partnership's secured debt and adjusting it for factors that reflect the profile of borrowing over the 30-year expected lease term.
17.    Subsequent Events
The following represents material events that have occurred subsequent to September 30, 2020 through the time of the Partnership’s filing of its Quarterly Report on Form 10-Q with the SEC:
Common Unit and Preferred Unit Distributions
In November 2020, the Board of Directors declared a distribution of $0.45 per common unit with respect to the third quarter of 2020. The Board of Directors also declared a distribution on NRP's preferred units with respect to the third quarter of 2020 to be paid one-half in cash equal to $3.75 million and one-half in kind through the issuance of 3,750 additional preferred units.



23

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, 2020 and 2019 should be read in conjunction with our consolidated financial statements and the notes to consolidated financial statements included in this Form 10-Q and with the consolidated financial statements, notes to consolidated financial statements and management’s discussion and analysis included in the Natural Resource Partners L.P. Annual Report on Form 10-K for the year ended December 31, 2019.
As used herein, unless the context otherwise requires: "we," "our," "us" and the "Partnership" refer to Natural Resource Partners L.P. and, where the context requires, our subsidiaries. References to "NRP" and "Natural Resource Partners" refer to Natural Resource Partners L.P. only, and not to NRP (Operating) LLC or any of Natural Resource Partners L.P.’s subsidiaries. References to "Opco" refer to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. NRP Finance Corporation ("NRP Finance") is a wholly owned subsidiary of NRP and a co-issuer with NRP on the 9.125% senior notes due 2025 (the "2025 Senior Notes").
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Statements included in this 10-Q may constitute forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are also forward-looking statements. Such forward-looking statements include, among other things, statements regarding: the effects of the global COVID-19 pandemic; our business strategy; our liquidity and access to capital and financing sources; our financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected production levels by our lessees; Ciner Wyoming LLC’s ("Ciner Wyoming's") trona mining and soda ash refinery operations; distributions from our soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us, and of scheduled or potential regulatory or legal changes; and global and U.S. economic conditions.
These forward-looking statements speak only as of the date hereof and are made based upon our current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. You should not put undue reliance on any forward-looking statements. See "Item 1A. Risk Factors" included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2019 for important factors that could cause our actual results of operations or our actual financial condition to differ.
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) from continuing operations less equity earnings (loss) from unconsolidated investment, net income attributable to non-controlling interest and gain on reserve swap; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income (loss), the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. For a description of Opco's debt agreements, see Note 8. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note 12. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, 2019. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

24

Distributable Cash Flow
Distributable cash flow ("DCF") represents net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivables; less maintenance capital expenditures and distributions to non-controlling interest. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, DCF presented below is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. DCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to asses our ability to make cash distributions and repay debt.
Free Cash Flow
Free cash flow ("FCF") represents net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivables; less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as investing or financing activities and distributions to non-controlling interest. FCF is calculated before mandatory debt repayments. FCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. FCF may not be calculated the same for us as for other companies. FCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.
Introduction
The following discussion and analysis presents management's view of our business, financial condition and overall performance. Our discussion and analysis consists of the following subjects:
Executive Overview
Results of Operations
Liquidity and Capital Resources
Off-Balance Sheet Transactions
Related Party Transactions
Summary of Critical Accounting Estimates
Recent Accounting Standards
25

Executive Overview
We are a diversified natural resource company engaged principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and own a non-controlling 49% interest in Ciner Wyoming LLC ("Ciner Wyoming"), a trona ore mining and soda ash production business. Our common units trade on the New York Stock Exchange under the symbol "NRP." Our business is organized into two operating segments:
Coal Royalty and Other—consists primarily of coal royalty properties and coal-related transportation and processing assets. Other assets include industrial mineral royalty properties, aggregates royalty properties, oil and gas royalty properties and timber. Our coal reserves are primarily located in Appalachia, the Illinois Basin and the Northern Powder River Basin in the United States. Our industrial minerals and aggregates properties are located in various states across the United States, our oil and gas royalty assets are primarily located in Louisiana and our timber assets are primarily located in West Virginia.
Soda Ash—consists of our 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining and soda ash production business located in the Green River Basin of Wyoming. Ciner Resources LP, our operating partner, mines the trona, processes it into soda ash, and distributes the soda ash both domestically and internationally into the glass and chemicals industries.
Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment.
Our financial results by segment for the nine months ended September 30, 2020 are as follows:
Operating Segments
(In thousands)Coal Royalty and OtherSoda AshCorporate and FinancingTotal
Revenues and other income$95,955 $5,200 $— $101,155 
Net income (loss) from continuing operations$(62,562)$5,059 $(42,003)$(99,506)
Adjusted EBITDA (1)
$76,896 $14,069 $(11,168)$79,797 
Cash flow provided by (used in) continuing operations
Operating activities$91,082 $14,091 $(30,760)$74,413 
Investing activities$969 $— $— $969 
Financing activities$— $— $(58,074)$(58,074)
Distributable cash flow (1)
$93,051 $14,091 $(30,760)$76,316 
Free cash flow (1)
$91,544 $14,091 $(30,760)$74,875 
(1)See "—Results of Operations" below for reconciliations to the most comparable GAAP financial measures.
26

Current Results/Market Commentary
Business Outlook and Quarterly Distributions
The global COVID-19 pandemic has had a significant negative impact on demand for steel, electricity and glass, which translates to lower demand for the coal and soda ash that our properties produce. While demand for metallurgical and thermal coals and soda ash began to rebound during the third quarter, prices remain below pre-pandemic levels. We continue to employ remote work protocols and are conducting business as usual despite the pandemic. Although we are unable to predict the ultimate severity or duration of the COVID-19 pandemic or its impact on our business, we ended the third quarter with $215.6 million of liquidity consisting of $115.6 million of cash and cash equivalents and $100.0 million of borrowing capacity under our Opco Credit Facility and generated $74.9 million of free cash flow during the nine months ended September 30, 2020. As a result, we believe we have the financial flexibility to navigate the effects of the pandemic on our business.
Despite our liquidity level at the end of the third quarter, our consolidated leverage ratio has risen since the onset of the COVID-19 pandemic and was 4.2x at September 30, 2020. The indenture governing our 2025 parent company notes restricts us from paying more than one-half of the quarterly distribution on our preferred units in cash if our consolidated leverage ratio exceeds 3.75x. Accordingly, the Board of Directors of our general partner declared a distribution on our preferred units for the third quarter of 2020 to be paid one-half in cash equal to $3.75 million and one-half in kind through the issuance of 3,750 additional preferred units. The Board also declared a cash distribution of $0.45 per common unit for the third quarter of 2020. To the extent our leverage ratio continues to exceed 3.75x, which we expect for the foreseeable future, we will be required to continue to pay one-half of the required preferred distributions in kind (“PIK units”) and will be unable to redeem any PIK units until our consolidated leverage ratio falls below 3.75x. Distributions on the outstanding PIK units will accrue and accumulate at 12% per year until such PIK units are redeemed.

Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs.

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

Our lessees sold 12.1 million tons of coal from our properties in the first nine months of 2020 and we derived approximately 70% of our coal royalty revenues and approximately 65% of our coal royalty sales volumes from metallurgical coal during the same period. Revenues and other income in the first nine months of 2020 were lower by $79.4 million as compared to the prior year period. This decrease is primarily a result of a weakened market for metallurgical coal as compared to the prior year period due to a decline in global steel demand. As a result, both sales volumes and prices for metallurgical coal sold were lower in the first nine months of 2020 compared to the prior year period. Prices for metallurgical coal have rebounded from the lows seen in the second quarter, but are not currently above pre-pandemic levels.

In addition, weaker domestic and export thermal coal markets compared to the prior year period resulted in lower revenues from our thermal coal properties. Domestic and export thermal coal markets remained challenged by lower utility demand, continued low natural gas prices and the secular shift to renewable energy. Although natural gas prices are forecasted to rise above $3/MMBtu this winter, stockpile levels at domestic utilities remain high, which we expect will temper the increased thermal coal demand that would normally result from higher natural gas prices. Our thermal coal business results are largely dependent on our various lease agreements with Foresight Energy. In June 2020, we entered into lease amendments with Foresight Energy pursuant to which Foresight agreed to pay us fixed cash payments of $48.75 million in 2020 and $42.0 million in 2021 to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between us and Foresight Energy for calendar years 2020 and 2021. These amendments provide us cash flow certainty for our thermal coal business through 2021. Through the first nine months of 2020, we received $35.0 million of the $48.75 million due to us in 2020.
27


Soda Ash Business Segment
Ciner Wyoming has been negatively impacted by the COVID-19 pandemic as lower activity in the global auto, container and construction industries reduced demand for glass and soda ash. Revenues and other income in the third quarter of 2020 were lower by $11.8 million compared to the prior year quarter primarily due to a combination of lower pricing and volumes sold. However, demand for glass began to rebound in the third quarter and the outlook for our soda ash business has improved. While Ciner Wyoming has yet to recover to pre-COVID levels, overall sales volumes increased 26.7% and overall production volumes increased 1.5% over second quarter 2020 results, though global prices remain depressed. While we believe our facility is competitively positioned as one of the lowest cost producers of soda ash in the world, we expect the market to remain volatile as a result of ongoing uncertainties with the COVID-19 pandemic.

In order to have financial flexibility during the COVID-19 pandemic, Ciner Wyoming suspended its quarterly distribution in August 2020 and accordingly, did not pay quarterly distributions for the second or third quarters of 2020. Ciner Wyoming will continue to evaluate, on a quarterly basis, whether to reinstate the distribution. Ciner Wyoming’s ability to pay future quarterly distributions will be dependent in part on its cash reserves, liquidity, total debt levels and anticipated capital expenditures. In addition, Ciner Wyoming continues to develop plans for a significant capacity expansion capital project. However, they have delayed the timing of significant costs related to this project until they have more visibility into the impact of the COVID-19 pandemic on their business

Results of Operations
Third Quarter of 2020 and 2019 Compared
Revenues and Other Income
The following table includes our revenues and other income by operating segment:
For the Three Months Ended September 30,DecreasePercentage
Change
Operating Segment (In thousands)20202019
Coal Royalty and Other$27,944 $49,891 $(21,947)(44)%
Soda Ash1,986 13,818 (11,832)(86)%
Total$29,930 $63,709 $(33,779)(53)%

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

28

Coal Royalty and Other
The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:
 For the Three Months Ended September 30,Increase
(Decrease)
Percentage
Change
(In thousands, except per ton data)20202019
Coal sales volumes (tons)
Appalachia
Northern102 290 (188)(65)%
Central2,247 3,222 (975)(30)%
Southern172 438 (266)(61)%
Total Appalachia2,521 3,950 (1,429)(36)%
Illinois Basin758 551 207 38 %
Northern Powder River Basin365 532 (167)(31)%
Total coal sales volumes3,644 5,033 (1,389)(28)%
Coal royalty revenue per ton
Appalachia
Northern$3.06 $2.54 $0.52 20 %
Central3.83 5.25 (1.42)(27)%
Southern4.78 5.99 (1.21)(20)%
Illinois Basin1.63 4.82 (3.19)(66)%
Northern Powder River Basin3.46 4.69 (1.23)(26)%
Combined average coal royalty revenue per ton3.36 5.05 (1.69)(33)%
Coal royalty revenues
Appalachia
Northern$312 $735 $(423)(58)%
Central8,602 16,929 (8,327)(49)%
Southern823 2,626 (1,803)(69)%
Total Appalachia9,737 20,290 (10,553)(52)%
Illinois Basin1,234 2,658 (1,424)(54)%
Northern Powder River Basin1,262 2,492 (1,230)(49)%
Unadjusted coal royalty revenues12,233 25,440 (13,207)(52)%
Coal royalty adjustment for minimum leases (1)
(1,623)(713)(910)(128)%
Total coal royalty revenues$10,610 $24,727 $(14,117)(57)%
Other revenues
Production lease minimum revenues (1)
$4,267 $2,752 $1,515 55 %
Minimum lease straight-line revenues (1)
3,553 3,982 (429)(11)%
Property tax revenues1,896 1,606 290 18 %
Wheelage revenues1,680 1,675 — %
Coal overriding royalty revenues1,314 2,189 (875)(40)%
Lease amendment revenues858 1,535 (677)(44)%
Aggregates royalty revenues221 954 (733)(77)%
Oil and gas royalty revenues1,078 374 704 188 %
Other revenues263 125 138 110 %
Total other revenues$15,130 $15,192 $(62)— %
Coal royalty and other$25,740 $39,919 $(14,179)(36)%
Transportation and processing services revenues2,204 3,865 (1,661)(43)%
Gain on asset sales and disposals— 6,107 (6,107)(100)%
Total Coal Royalty and Other segment revenues and other income$27,944 $49,891 $(21,947)(44)%
(1)Beginning April 1, 2020 and effective January 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight Energy that fixed consideration paid to us over a two-year period.
29

Coal Royalty Revenues
Approximately 70% of coal royalty revenues and approximately 65% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, 2020. Coal royalty revenues decreased $14.1 million period-over-period primarily driven by the weakened coal markets that resulted in lower coal sales volumes and prices. The discussion of these decreases by region is as follows:
Appalachia: Sales volumes decreased 36% and coal royalty revenues decreased $10.6 million primarily due to weakened coal demand compounded by the COVID-19 pandemic.
Illinois Basin: Sales volumes increased 38% due to increased activity at the Hillsboro and Williamson mines, while coal royalty revenues decreased $1.4 million primarily due to the idling of our Macoupin property. As mentioned above, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight Energy that fixed consideration paid to us over a two-year period.
Northern Powder River Basin: Sales volumes decreased 31% and coal royalty revenues decreased $1.2 million primarily due to our lessee mining off of our property in accordance with its mine plan in 2020.
Transportation and Processing Services Revenues
Transportation and processing services revenues decreased $1.7 million primarily due to idling of the Macoupin mine where we own loadout and other transportation assets.
Gain on Asset Sales and Disposals
Gain on asset sales and disposals decreased $6.1 million primarily due to the disposal of certain mineral right assets during the third quarter of 2019.
Soda Ash
Revenues and other income related to our Soda Ash segment decreased $11.8 million primarily due to a combination of lower pricing and volumes sold. Ciner Wyoming was negatively impacted by the COVID-19 pandemic as lower activity in the global auto, container and construction industries reduced demand for glass and soda ash.
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
(Decrease)
Percentage
Change
(In thousands)20202019
Operating expenses
Operating and maintenance expenses$5,781 $5,994 $(213)(4)%
Depreciation, depletion and amortization2,111 3,384 (1,273)(38)%
General and administrative expenses3,634 4,253 (619)(15)%
Asset impairments934 484 450 93 %
Total operating expenses$12,460 $14,115 $(1,655)(12)%
Other expenses, net
Interest expense, net$10,254 $10,431 $(177)(2)%
Total other expenses, net$10,254 $10,431 $(177)(2)%

Total operating expenses decreased $1.7 million primarily due to a $1.3 million decrease in depreciation, depletion and amortization expense as a result of lower coal sales volumes at certain properties.

30

Adjusted EBITDA (Non-GAAP Financial Measure)
The following table reconciles net income (loss) from continuing operations (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:
Operating Segments
For the Three Months Ended (In thousands)Coal Royalty and OtherSoda AshCorporate and FinancingTotal
September 30, 2020
Net income (loss) from continuing operations$19,173 $1,890 $(13,847)$7,216 
Less: equity earnings from unconsolidated investment— (1,986)— (1,986)
Add: interest expense, net41 — 10,213 10,254 
Add: depreciation, depletion and amortization2,111 — — 2,111 
Add: asset impairments934 — — 934 
Adjusted EBITDA$22,259 $(96)$(3,634)$18,529 
September 30, 2019
Net income (loss) from continuing operations$40,252 $13,595 $(14,684)$39,163 
Less: equity earnings from unconsolidated investment— (13,818)— (13,818)
Add: total distributions from unconsolidated investment— 6,370 — 6,370 
Add: interest expense, net— — 10,431 10,431 
Add: depreciation, depletion and amortization3,384 — — 3,384 
Add: asset impairments484 — — 484 
Adjusted EBITDA$44,120 $6,147 $(4,253)$46,014 

Adjusted EBITDA decreased $27.5 million primarily due to the following:
Coal Royalty and Other Segment
Adjusted EBITDA decreased $21.9 million primarily as a result of the weakened coal markets in the third quarter of 2020.
Soda Ash Segment
Adjusted EBITDA decreased $6.2 million as a result of the suspended cash distribution from Ciner Wyoming in the third quarter of 2020 as compared to the $6.4 million distribution received during the third quarter of 2019.

31

Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)
The following table presents the three major categories of the statement of cash flows by business segment:
Operating Segments
For the Three Months Ended (In thousands)Coal Royalty and OtherSoda AshCorporate and FinancingTotal
September 30, 2020
Cash flow provided by (used in) continuing operations
Operating activities$28,573 $(75)$(4,175)$24,323 
Investing activities332 — — 332 
Financing activities— — (19,910)(19,910)
September 30, 2019
Cash flow provided by (used in) continuing operations
Operating activities$41,094 $6,147 $(5,507)$41,734 
Investing activities6,567 — — 6,567 
Financing activities— — (21,913)(21,913)
The following table reconciles net cash provided by (used in) operating activities of continuing operations (the most comparable GAAP financial measure) by business segment to DCF and FCF:
Operating Segments
For the Three Months Ended (In thousands)Coal Royalty and OtherSoda AshCorporate and FinancingTotal
September 30, 2020
Net cash provided by (used in) operating activities of continuing operations$28,573 $(75)$(4,175)$24,323 
Add: return of long-term contract receivable332 — — 332 
Distributable cash flow and free cash flow$28,905 $(75)$(4,175)$24,655 
September 30, 2019
Net cash provided by (used in) operating activities of continuing operations$41,094 $6,147 $(5,507)$41,734 
Add: proceeds from sale of assets6,108 — — 6,108 
Add: proceeds from sale of discontinued operations— — — (122)
Add: return of long-term contract receivable459 — — 459 
Distributable cash flow$47,661 $6,147 $(5,507)$48,179 
Less: proceeds from sale of assets(6,108)— — (6,108)
Less: proceeds from sale of discontinued operations— — — 122 
Free cash flow$41,553 $6,147 $(5,507)$42,193 

DCF and FCF decreased $23.5 million and $17.5 million, respectively, primarily due to the following:
Coal Royalty and Other Segment
DCF and FCF decreased $18.8 million and $12.6 million, respectively, primarily as a result of the weakened coal markets in the third quarter of 2020. DCF was also impacted by $6.1 million in asset sale proceeds received in the third quarter of 2019.
Soda Ash Segment
DCF and FCF decreased $6.2 million as a result of the suspended cash distribution from Ciner Wyoming in the third quarter of 2020 as compared to the $6.4 million distribution received during the third quarter of 2019.
32


Results of Operations
First Nine Months of 2020 and 2019 Compared
Revenues and Other Income
The following table includes our revenues and other income by operating segment:
For the Nine Months Ended September 30,DecreasePercentage
Change
Operating Segment (In thousands)20202019
Coal Royalty and Other$95,955 $175,386 $(79,431)(45)%
Soda Ash5,200 36,833 (31,633)(86)%
Total$101,155 $212,219 $(111,064)(52)%

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

33

Coal Royalty and Other
The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:
 For the Nine Months Ended September 30,Increase
(Decrease)
Percentage
Change
(In thousands, except per ton data)20202019
Coal sales volumes (tons)
Appalachia
Northern516 2,774 (2,258)(81)%
Central7,643 10,469 (2,826)(27)%
Southern820 1,172 (352)(30)%
Total Appalachia8,979 14,415 (5,436)(38)%
Illinois Basin1,841 1,646 195 12 %
Northern Powder River Basin1,232 1,979 (747)(38)%
Total coal sales volumes12,052 18,040 (5,988)(33)%
Coal royalty revenue per ton
Appalachia
Northern$2.22 $2.23 $(0.01)— %
Central4.28 5.79 (1.51)(26)%
Southern4.70 7.00 (2.30)(33)%
Illinois Basin2.48 4.70 (2.22)(47)%
Northern Powder River Basin3.66 3.21 0.45 14 %
Combined average coal royalty revenue per ton3.88 4.94 (1.06)(21)%
Coal royalty revenues
Appalachia
Northern$1,143 $6,173 $(5,030)(81)%
Central32,726 60,628 (27,902)(46)%
Southern3,857 8,204 (4,347)(53)%
Total Appalachia37,726 75,005 (37,279)(50)%
Illinois Basin4,570 7,739 (3,169)(41)%
Northern Powder River Basin4,510 6,347 (1,837)(29)%
Unadjusted coal royalty revenues46,806 89,091 (42,285)(47)%
Coal royalty adjustment for minimum leases (1)
(6,247)(1,530)(4,717)(308)%
Total coal royalty revenues$40,559 $87,561 $(47,002)(54)%
Other revenues
Production lease minimum revenues (1)
$13,554 $21,331 $(7,777)(36)%
Minimum lease straight-line revenues (1)
12,349 11,152 1,197 11 %
Property tax revenues4,256 4,416 (160)(4)%
Wheelage revenues5,468 5,035 433 %
Coal overriding royalty revenues3,319 10,163 (6,844)(67)%
Lease amendment revenues2,591 6,720 (4,129)(61)%
Aggregates royalty revenues1,068 3,655 (2,587)(71)%
Oil and gas royalty revenues4,923 2,575 2,348 91 %
Other revenues752 1,429 (677)(47)%
Total other revenues$48,280 $66,476 $(18,196)(27)%
Coal royalty and other$88,839 $154,037 $(65,198)(42)%
Transportation and processing services revenues6,651 14,740 (8,089)(55)%
Gain on asset sales and disposals465 6,609 (6,144)(93)%
Total Coal Royalty and Other segment revenues and other income$95,955 $175,386 $(79,431)(45)%
(1)Beginning April 1, 2020 and effective January 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight Energy that fixed consideration paid to us over a two-year period.
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Coal Royalty Revenues
Total coal royalty revenues decreased $47.0 million from 2019 to 2020 primarily driven by weakened coal markets that resulted in lower coal sales volumes and pricing. The discussion of these decreases by region is as follows:
Appalachia: Sales volumes decreased 38% and revenues decreased $37.3 million primarily due to weakened coal demand compounded by the COVID-19 pandemic.
Illinois Basin: Sales volumes increased 12% due to increased activity at the Hillsboro and Williamson mines, while coal royalty revenues decreased $3.2 million primarily due to the idling of our Macoupin property. As mentioned above, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight Energy that fixed consideration paid to us over a two-year period.
Northern Powder River Basin: Sales volumes decreased 38% and coal royalty revenues decreased $1.8 million primarily due to our lessee mining off of our property in accordance with its mine plan in 2020, partially offset by a 14% increase in sales prices as compared to the prior year.
Other Revenues
Other revenues decreased $18.2 million primarily due to the following:
A $7.8 million decrease in production lease minimum revenues primarily as a result of the Macoupin lease amendment and lessee forfeitures of recoupable balances in the second quarter of 2019 from minimums paid in prior periods;
A $6.8 million decrease in coal overriding royalty revenues primarily as a result of production at the Williamson mine moving off NRP's overriding royalty interest and back onto NRP's coal reserves. As a result, this decrease in coal overriding royalty revenues was offset by an increase in coal royalty revenues.
A $4.1 million decrease in lease amendment revenues year-over-year.
Transportation and Processing Services Revenues
Transportation and processing services revenues decreased $8.1 million primarily due to idling of the Macoupin mine where we own loadout and other transportation assets.
Gain on Asset Sales and Disposals
Gain on asset sales and disposals decreased $6.1 million primarily due to the disposal of certain mineral right assets during the third quarter of 2019.
Soda Ash

Revenues and other income related to our Soda Ash segment decreased $31.6 million compared to the prior year primarily due to a combination of lower pricing and volumes sold. Ciner Wyoming was negatively impacted by the COVID-19 pandemic as lower activity in the global auto, container and construction industries reduced demand for glass and soda ash.


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Operating and Other Expenses
The following table presents the significant categories of our consolidated operating and other expenses:
For the Nine Months Ended September 30,Increase (Decrease)Percentage
Change
(In thousands)20202019
Operating expenses
Operating and maintenance expenses$19,200 $26,813 $(7,613)(28)%
Depreciation, depletion and amortization6,185 11,746 (5,561)(47)%
General and administrative expenses11,168 12,799 (1,631)(13)%
Asset impairments133,217 484 132,733 27,424 %
Total operating expenses$169,770 $51,842 $117,928 227 %
Other expenses, net
Interest expense, net$30,891 $37,061 $(6,170)(17)%
Loss on extinguishment of debt— 29,282 (29,282)(100)%
Total other expenses, net$30,891 $66,343 $(35,452)(53)%

Total operating expenses increased $117.9 million primarily due to the following:
Asset impairments increased $132.7 million due to weakened coal markets that resulted in termination of certain coal leases, changes to lessee mine plans resulting in permanent moves off certain of our coal properties and decreased oil and gas drilling activity which negatively impacted the outlook for NRP's frac sand properties.
This increase in operating expense was partially offset by:
Operating and maintenance expenses include costs to manage the Coal Royalty and Other and Soda Ash segments and primarily consist of royalty, tax, employee-related and legal costs and bad debt expense. These costs decreased $7.6 million primarily due to a decrease in bad debt expense in addition to lower royalty fees related to an overriding royalty agreement with Western Pocahontas Properties Limited Partnership ("WPPLP"). The coal royalty expense NRP pays to WPPLP is fully offset by the coal royalty revenue NRP receives from this property.
Depreciation, depletion and amortization expense decreased $5.6 million primarily due to lower coal sales volumes at certain properties.
Total other expenses, net decreased $35.5 million primarily due to the following:
Loss on extinguishment of debt of $29.3 million in 2019 related to the 105.25% premium paid to redeem the 2022 Senior Notes in the second quarter of 2019 as well as the write-off of unamortized debt issuance costs and debt discount related to the 2022 Senior Notes.
Interest expense, net decreased $6.2 million primarily due to lower debt balances during the first nine months of 2020 as a result of debt repayments made over the past twelve months.

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Adjusted EBITDA (Non-GAAP Financial Measure)
The following table reconciles net income (loss) from continuing operations (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:
Operating Segments
For the Nine Months Ended (In thousands)Coal Royalty and OtherSoda AshCorporate and FinancingTotal
September 30, 2020
Net income (loss) from continuing operations$(62,562)$5,059 $(42,003)$(99,506)
Less: equity earnings from unconsolidated investment— (5,200)— (5,200)
Add: total distributions from unconsolidated investment— 14,210 — 14,210 
Add: interest expense, net56 — 30,835 30,891 
Add: depreciation, depletion and amortization6,185 — — 6,185 
Add: asset impairments133,217 — — 133,217 
Adjusted EBITDA$76,896 $14,069 $(11,168)$79,797 
September 30, 2019
Net income (loss) from continuing operations$136,566 $36,610 $(79,142)$94,034 
Less: equity earnings from unconsolidated investment— (36,833)— (36,833)
Add: total distributions from unconsolidated investment— 25,480 — 25,480 
Add: interest expense, net— — 37,061 37,061 
Add: loss on extinguishment of debt— — 29,282 29,282 
Add: depreciation, depletion and amortization11,746 — — 11,746 
Add: asset impairments484 — — 484 
Adjusted EBITDA$148,796 $25,257 $(12,799)$161,254 

Adjusted EBITDA decreased $81.5 million primarily due to the following:
Coal Royalty and Other Segment
Adjusted EBITDA decreased $71.9 million primarily as a result of weakened coal markets in the first nine months of 2020.
Soda Ash Segment
Adjusted EBITDA decreased $11.2 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2020.

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Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)
The following table presents the three major categories of the statement of cash flows by business segment:
Operating Segments
For the Nine Months Ended (In thousands)Coal Royalty and OtherSoda AshCorporate and FinancingTotal
September 30, 2020
Cash flow provided by (used in) continuing operations
Operating activities$91,082 $14,091 $(30,760)$74,413 
Investing activities969 — — 969 
Financing activities— — (58,074)(58,074)
September 30, 2019
Cash flow provided by (used in) continuing operations
Operating activities$139,821 $25,257 $(47,153)$117,925 
Investing activities7,962 — — 7,962 
Financing activities— — (219,754)(219,754)

The following table reconciles net cash provided by (used in) operating activities of continuing operations (the most comparable GAAP financial measure) by business segment to DCF and FCF:
Operating Segments
For the Nine Months Ended (In thousands)Coal Royalty and OtherSoda AshCorporate and FinancingTotal
September 30, 2020
Net cash provided by (used in) operating activities of continuing operations$91,082 $14,091 $(30,760)$74,413 
Add: proceeds from asset sales and disposals507 — — 507 
Add: proceeds from sale of discontinued operations— — — (66)
Add: return of long-term contract receivable1,462 — — 1,462 
Distributable cash flow$93,051 $14,091 $(30,760)$76,316 
Less: proceeds from asset sales and disposals(507)— — (507)
Less: proceeds from sale of discontinued operations— — — 66 
Less: acquisition costs(1,000)— — (1,000)
Free cash flow$91,544 $14,091 $(30,760)$74,875 
September 30, 2019
Net cash provided by (used in) operating activities of continuing operations$139,821 $25,257 $(47,153)$117,925 
Add: proceeds from asset sales and disposals6,611 — — 6,611 
Add: proceeds from sale of discontinued operations— — — (556)
Add: return of long-term contract receivable1,351 — — 1,351 
Distributable cash flow$147,783 $25,257 $(47,153)$125,331 
Less: proceeds from asset sales and disposals(6,611)— — (6,611)
Less: proceeds from sale of discontinued operations— — — 556 
Free cash flow$141,172 $25,257 $(47,153)$119,276 

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DCF and FCF decreased $49.0 million and $44.4 million, respectively, primarily due to the following:
Coal Royalty and Other Segment
DCF and FCF decreased $54.7 million and $49.6 million, respectively, primarily as a result of the weakened coal markets in the first nine months of 2020. DCF was also impacted by a $6.1 million decrease in asset sale proceeds compared to the third quarter of 2019.
Soda Ash Segment
DCF and FCF decreased $11.2 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2020.
Corporate and Financing Segment
DCF and FCF increased $16.4 million primarily due to lower cash paid for interest as a result of less outstanding debt in the first nine months of 2020.
Liquidity and Capital Resources
Current Liquidity
As of September 30, 2020, we had total liquidity of $215.6 million, consisting of $115.6 million of cash and cash equivalents and $100.0 million of borrowing capacity under our Opco Credit Facility.
Cash Flows
Cash flows provided by operating activities decreased $41.8 million, from $117.9 million in the nine months ended September 30, 2019 to $76.1 million in the nine months ended September 30, 2020 primarily related to lower operating cash flow as a result of the weakened coal markets in addition to lower cash distributions received from Ciner Wyoming in the first nine months of 2020, partially offset by less cash paid for interest in the first nine months of 2020 due to less debt outstanding.
Cash flows provided by investing activities decreased $6.5 million, from $7.4 million provided in the nine months ended September 30, 2019 to $0.9 million in the nine months ended September 30, 2020 primarily due to a $6.1 million decrease in asset sale proceeds compared to the third quarter of 2019.
Cash flows used in financing activities decreased $159.5 million, from $219.2 million in the nine months ended September 30, 2019 to $59.7 million in the nine months ended September 30, 2020 primarily due to the following:
$345.6 million used for the redemption of our 2022 Senior Notes in the second quarter of 2019;
The $49.3 million pre-payment in the first quarter of 2019 related to the sale of our construction aggregates business;
$26.4 million in debt issuance costs and other in 2019 primarily related to 2019 debt refinancings; and
$16.1 million in lower cash distributions in the first nine months of 2020 as a result of the special common unit distribution paid in 2019 and suspending the common unit distribution in the second quarter of 2020.
These decreases in cash flows used were partially offset by:
$300 million provided by the issuance of the 2025 Senior Notes in the second quarter of 2019.
Capital Resources and Obligations
Debt, Net
We had the following debt outstanding as of September 30, 2020 and December 31, 2019:
September 30,December 31,
(In thousands)20202019
Current portion of long-term debt, net$39,072 $45,776 
Long-term debt, net452,401 470,422 
Total debt, net$491,473 $516,198 
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We have been and continue to be in compliance with the terms of the financial covenants contained in our debt agreements. For additional information regarding our debt and the agreements governing our debt, including the covenants contained therein, see Note 8. Debt, Net to the Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

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

Related Party Transactions
The information required set forth under Note 10. Related Party Transactions to the Consolidated Financial Statements is incorporated herein by reference.

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, 2019.
Recent Accounting Standards
The information set forth under Note 1. Basis of Presentation to the Consolidated Financial Statements is incorporated herein by reference.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk, which includes adverse changes in commodity prices and interest rates as discussed below:
Commodity Price Risk
Our revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prevailing commodity prices. Historically, coal prices have been volatile, with prices fluctuating widely, and they are likely to continue to be volatile. Depressed prices in the future would have a negative impact on our future financial results. In particular, substantially lower prices would significantly reduce revenues and could potentially trigger an impairment of our coal properties or a violation of certain financial debt covenants. Because substantially all of our reserves are coal, changes in coal prices have a more significant impact on our financial results.
We are dependent upon the effective marketing of the coal mined by our lessees. Our lessees sell the coal under various long-term and short-term contracts as well as on the spot market. Current conditions in the coal industry may make it difficult for our lessees to extend existing contracts or enter into supply contracts with terms of one year or more. Our lessees’ failure to negotiate long-term contracts could adversely affect the stability and profitability of our lessees’ operations and adversely affect our future financial results. If more coal is sold on the spot market, coal royalty revenues may become more volatile due to fluctuations in spot coal prices. The market price of soda ash and energy costs directly affects the profitability of Ciner Wyoming’s operations. If the market price for soda ash declines, Ciner Wyoming’s sales revenues will decrease. Historically, the global market and, to a lesser extent, the domestic market for soda ash have been volatile and are likely to remain volatile in the future.
The uncertainty that exists with respect to the economic impact of the global COVID-19 pandemic has introduced significant volatility in the financial markets subsequent to our quarter ended September 30, 2020. The impacts of such volatility on the Partnership cannot be predicted with confidence or reasonably estimated at this time.
40

Interest Rate Risk
Our exposure to changes in interest rates results from our borrowings under the Opco Credit Facility, which is subject to variable interest rates based upon LIBOR. At September 30, 2020, we did not have any borrowings outstanding under the Opco Credit Facility.
41

ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
NRP carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of NRP management, including the Chief Executive Officer and Chief Financial Officer of the general partner of the general partner of NRP. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective in providing reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (b) such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in the Partnership’s Internal Control Over Financial Reporting
There were no material changes in the Partnership’s internal control over financial reporting during the first nine months of 2020 that materially affected, or were reasonably likely to materially affect, the Partnership’s internal control over financial reporting.


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PART II
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are involved in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, we believe these ordinary course matters will not have a material effect on our financial position, liquidity or operations.
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, 2019 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None. 

ITEM 4. MINE SAFETY DISCLOSURES
None.

ITEM 5. OTHER INFORMATION
None.
43

ITEM 6. EXHIBITS
Exhibit
Number
 Description
Purchase and Sale Agreement dated as of November 16, 2018, by and between NRP (Operating) LLC and VantaCore Intermediate Holdings LLC (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on November 20, 2018).
Fifth Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated as of March 2, 2017 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on March 6, 2017).
Fifth Amended and Restated Agreement of Limited Partnership of NRP (GP) LP, dated as of December 16, 2011 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 16, 2011).
Fifth Amended and Restated Limited Liability Company Agreement of GP Natural Resource Partners LLC, dated as of October 31, 2013 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on October 31, 2013).
 Certificate of Limited Partnership of Natural Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed April 19, 2002, File No. 333-86582).
Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley.
Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley.
Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350.
Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350.
101.INS*Inline XBRL Instance Document
101.SCH*Inline XBRL Taxonomy Extension Schema Document
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
*Filed herewith
**Furnished herewith



44

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 5, 2020
By: /s/     CORBIN J. ROBERTSON, JR.
 Corbin J. Robertson, Jr.
 Chairman of the Board and
 Chief Executive Officer
 (Principal Executive Officer)
Date: November 5, 2020
By: /s/     CHRISTOPHER J. ZOLAS
 Christopher J. Zolas
 Chief Financial Officer and Treasurer
 (Principal Financial and Accounting Officer)


45