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NRP Natural Resource Partners

Filed: 6 Aug 21, 7:02am

Exhibit 99.1


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Natural Resource Partners L.P.
1201 Louisiana St., Suite 3400, Houston, TX 77002
NEWS RELEASE
Natural Resource Partners L.P. Reports Second Quarter 2021 Results and
Declares Second Quarter 2021 Distributions

HOUSTON, August 6, 2021 - Natural Resource Partners L.P. (NYSE:NRP) today reported second quarter 2021 results as follows:
For the Three Months EndedLast Twelve Months Ended
(In thousands) (Unaudited)June 30, 2021
Net income$15,382 $45,666 
Asset impairments16 7,661 
Net income excluding asset impairments (1)
$15,398 $53,327 
Adjusted EBITDA (1)
27,351 100,233 
Cash flow provided by (used in) continuing operations:
Operating activities13,384 74,062
Investing activities657 2,365 
Financing activities(12,900)(89,347)
Free cash flow (1)
12,925 75,136 
Cash flow cushion (last twelve months) (1)
(12,522)
(1)See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.
"NRP saw continued strength in demand for steel, glass and electricity in the second quarter of 2021, resulting in stable free cash flow generation and strong liquidity. We are continuing to reduce debt, maintain robust liquidity and maximize unitholder value as we navigate the ongoing effects of the COVID-19 pandemic," said Craig Nunez, NRP's President and Chief Operating Officer.

NRP's liquidity was $197.9 million at June 30, 2021, consisting of $97.9 million of cash and $100.0 million of borrowing capacity available under its revolving credit facility.

NRP announced today that the Board of Directors of its general partner declared a second quarter 2021 cash distribution of $0.45 per common unit of NRP to be paid on August 26, 2021 to unitholders of record on August 19, 2021. In addition, the Board declared a $7.8 million distribution on the preferred units, which will be paid one-half in cash and one-half in kind through the issuance of additional preferred units. The preferred unit distribution includes interest on previously paid-in-kind units and will be paid one-half in cash and one-half in kind through the issuance of additional preferred units.
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Segment Performance
Coal Royalty and Other
In the second quarter of 2021 net income increased $134.4 million as compared to the prior year period primarily due to a $132.3 million non-cash asset impairment expense recorded in the second quarter of 2020 that was primarily related to weakened coal markets compounded by the COVID-19 pandemic. Free cash flow was relatively flat in the second quarter of 2021 as compared to the prior year period as increased coal royalty cash flow due to stronger coal demand in the second quarter of 2021 was offset by $5 million of increased cash flow in the second quarter of 2020 related to the emergence of a lessee from bankruptcy. Approximately 65% of coal royalty revenues and approximately 50% of coal royalty sales volumes were derived from metallurgical coal in the second quarter of 2021.
Metallurgical coal markets have rebounded from the lows seen in 2020 and the outlook remains strong as steel demand driven by global economic recovery is more than offsetting challenges related to the COVID-19 pandemic. Domestic and export thermal coal markets have significantly improved from the lows seen in 2020, but still face ongoing negative effects of the COVID-19 pandemic and the long-term challenges of lower electricity demand, competition from natural gas, and the secular shift to renewable energy. However, NRP does not have significant sensitivity to thermal coal price movements this year since the substantial majority of NRP's thermal cash flows are fixed through 2021 pursuant to a contract with Foresight Energy that went into effect as they emerged from bankruptcy last year.
In addition to actively managing its currently producing coal and hard mineral properties over the last year, NRP continues working to identify alternative revenue sources across its large portfolio of land, mineral and timber assets. The types of opportunities NRP is exploring include the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar and wind energy. While the timing and likelihood of cash flows being realized from any of these activities is highly uncertain, NRP believes its large ownership footprint throughout the United States will provide opportunities to create value in this regard with minimal capital investment by NRP.
Soda Ash
Net income in the second quarter of 2021 increased $5.7 million as compared to the prior year period primarily as a result of increased sales volumes as demand for soda ash continued to rebound from its lows in 2020 caused by the global COVID-19 pandemic. Free cash flow was lower by $7.1 million as compared to the prior year period as a result of Ciner Wyoming's decision in August of 2020 to suspend its quarterly distributions in an effort to achieve greater financial and liquidity flexibility as a result of the COVID-19 pandemic. NRP does not expect Ciner Wyoming to resume regular cash distributions until they have greater visibility and confidence in the sustainability of the continuing improvement in global soda ash demand. 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.

NRP continues to believe Ciner Wyoming's facility is competitively positioned as one of the lowest cost producers of soda ash in the world, however, NRP expects the market to remain volatile as a result of ongoing uncertainties with COVID-19.
Corporate and Financing
Corporate and financing costs in the second quarter of 2021 improved $0.9 million as compared to the prior year period primarily due to lower interest expense as a result of less debt outstanding in 2021. Free cash flow improved $0.5 million in the second quarter of 2021 as compared to the prior year period primarily due to lower cash paid for interest as a result of less debt outstanding in 2021.
As noted earlier, NRP declared a second quarter 2021 preferred unit distribution of $7.8 million which will be paid one-half in cash and one-half in kind. The indenture governing the 2025 parent company notes restricts NRP from paying more than one-half of the quarterly distribution on the preferred units in cash if NRP's consolidated leverage ratio exceeds 3.75x, and as of June 30, 2021, NRP's leverage ratio was 4.6x. NRP expects its leverage ratio to begin a sustained long-term decline as NRP continues to pay down debt. Under the terms of the partnership agreement, if NRP’s consolidated leverage ratio remains above 3.75x into 2022 and NRP remains unable to redeem any outstanding paid-in-kind preferred units, NRP would be required to temporarily suspend distributions on its common units until the leverage ratio drops below 3.75x and the outstanding paid-in-kind preferred 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.
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Conference Call
A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link http://www.directeventreg.com/registration/event/2296424. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website.
Withholding Information for Foreign Investors
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of NRP's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, NRP's distributions to foreign investors are subject to federal income tax withholding at the highest applicable rate.

Company Profile

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of mineral properties in the United States including interests in coal, industrial minerals and other natural resources. In addition, NRP owns an equity investment in Ciner Wyoming LLC, a trona ore mining and soda ash production business.
For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the Partnership’s website at http://www.nrplp.com.

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Forward-Looking Statements

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees, including Foresight Energy; Ciner Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment, 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 or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.
“Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures 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, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.
“Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures, 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. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.
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"Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions and common unit distributions. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units.
"Return on capital employed" or "ROCE" is a non-GAAP financial measure that we define as net income (loss) operations plus financing costs (interest expense plus loss on extinguishment of debt) divided by the sum of equity excluding equity of discontinued operations, and debt. Return on capital employed should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. Return on capital employed is a supplemental performance measure used by our management team that measures our profitability and efficiency with which our capital is employed. The measure provides an indication of operating performance before the impact of leverage in the capital structure.



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

Consolidated Statements of Comprehensive Income (Loss)
For the Three Months EndedFor the Six Months Ended
 June 30,March 31,June 30,
(In thousands, except per unit data)20212020202120212020
Revenues and other income
Coal royalty and other$33,611 $31,666 $32,927 $66,538 $63,099 
Transportation and processing services2,182 1,938 2,192 4,374 4,447 
Equity (loss) in earnings of Ciner Wyoming2,601 (3,058)1,973 4,574 3,214 
Gain on asset sales and disposals116 465 59 175 465 
Total revenues and other income$38,510 $31,011 $37,151 $75,661 $71,225 
Operating expenses
Operating and maintenance expenses$5,170 $8,217 $5,552 $10,722 $13,419 
Depreciation, depletion and amortization4,871 2,062 5,092 9,963 4,074 
General and administrative expenses3,388 3,621 4,110 7,498 7,534 
Asset impairments16 132,283 4,043 4,059 132,283 
Total operating expenses$13,445 $146,183 $18,797 $32,242 $157,310 
Income (loss) from operations$25,065 $(115,172)$18,354 $43,419 $(86,085)
Interest expense, net$(9,683)$(10,329)$(9,973)$(19,656)$(20,637)
Net income (loss)$15,382 $(125,501)$8,381 $23,763 $(106,722)
Less: income attributable to preferred unitholders(7,842)(7,613)(7,727)(15,569)(15,113)
Net income (loss) attributable to common unitholders and the general partner$7,540 $(133,114)$654 $8,194 $(121,835)
Net income (loss) attributable to common unitholders$7,389 $(130,452)$641 $8,030 $(119,398)
Net income (loss) attributable to the general partner151 (2,662)13 164 (2,437)
Net income (loss) per common unit
Basic$0.60 $(10.64)$0.05 $0.65 $(9.74)
Diluted0.56 (10.64)0.05 0.65 (9.74)
Net income (loss)$15,382 $(125,501)$8,381 $23,763 $(106,722)
Comprehensive income from unconsolidated investment and other2,533 1,359 732 3,265 336 
Comprehensive income (loss)$17,915 $(124,142)$9,113 $27,028 $(106,386)
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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
Consolidated Statements of Cash Flows
For the Three Months EndedFor the Six Months Ended
 June 30,March 31,June 30,
(In thousands)20212020202120212020
Cash flows from operating activities
Net income (loss)$15,382 $(125,501)$8,381 $23,763 $(106,722)
Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization4,871 2,062 5,092 9,963 4,074 
Distributions from unconsolidated investment— 7,105 3,920 3,920 14,210 
Equity earnings from unconsolidated investment(2,601)3,058 (1,973)(4,574)(3,214)
Gain on asset sales and disposals(116)(465)(59)(175)(465)
Asset impairments16 132,283 4,043 4,059 132,283 
Bad debt expense(737)3,847 383 (354)3,657 
Unit-based compensation expense593 924 1,126 1,719 1,653 
Amortization of debt issuance costs and other977 (1,534)269 1,246 (1,086)
Change in operating assets and liabilities:
Accounts receivable162 8,446 (3,331)(3,169)3,373 
Accounts payable(83)(44)(10)(93)49 
Accrued liabilities1,838 (915)(3,034)(1,196)(3,776)
Accrued interest(7,424)(7,351)7,133 (291)(291)
Deferred revenue677 2,202 (146)531 10,467 
Other items, net(171)(4,182)1,406 1,235 (4,122)
Net cash provided by operating activities of continuing operations$13,384 $19,935 $23,200 $36,584 $50,090 
Net cash provided by operating activities of discontinued operations— — — — 1,706 
Net cash provided by operating activities$13,384 $19,935 $23,200 $36,584 $51,796 
Cash flows from investing activities
Proceeds from asset sales and disposals$116 $507 $59 $175 $507 
Return of long-term contract receivable541 858 541 1,082 1,130 
Acquisition of non-controlling interest in BRP— (1,000)— — (1,000)
Net cash provided by investing activities of continuing operations$657 $365 $600 $1,257 $637 
Net cash used in investing activities of discontinued operations— — — — (66)
Net cash provided by investing activities$657 $365 $600 $1,257 $571 
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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
Cash flows from financing activities
Debt repayments$(2,365)$(2,365)$(16,696)$(19,061)$(19,061)
Distributions to common unitholders and the general partner(5,672)— (5,630)(11,302)(5,630)
Distributions to preferred unitholders(3,864)(7,613)(3,806)(7,670)(15,113)
Contributions from discontinued operations— — — — 1,640 
Acquisition of non-controlling interest in BRP(1,000)— — (1,000)— 
Other items— (691)(690)— 
Net cash used in financing activities of continuing operations$(12,900)$(9,978)$(26,823)$(39,723)$(38,164)
Net cash used in financing activities of discontinued operations— — — — (1,640)
Net cash used in financing activities$(12,900)$(9,978)$(26,823)$(39,723)$(39,804)
Net increase (decrease) in cash and cash equivalents$1,141 $10,322 $(3,023)$(1,882)$12,563 
Cash and cash equivalents at beginning of period96,767 100,506 99,790 99,790 98,265 
Cash and cash equivalents at end of period$97,908 $110,828 $96,767 $97,908 $110,828 
Supplemental cash flow information:
Cash paid for interest$16,611 $17,183 $2,320 $18,931 $20,222 
Non-cash investing and financing activities:
Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities$— $924 $992 $— $924 
Preferred unit distributions paid-in-kind3,863 — 3,806 7,669 — 


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Natural Resource Partners L.P.
Financial Tables

Consolidated Balance Sheets
June 30,December 31,
(In thousands, except unit data)20212020
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents$97,908 $99,790 
Accounts receivable, net15,322 12,322 
Other current assets, net4,038 5,080 
Total current assets$117,268 $117,192 
Land24,008 24,008 
Mineral rights, net447,155 460,373 
Intangible assets, net16,742 17,459 
Equity in unconsolidated investment266,433 262,514 
Long-term contract receivable, net32,514 33,264 
Other long-term assets, net6,085 7,067 
Total assets$910,205 $921,877 
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable$1,293 $1,385 
Accrued liabilities5,746 7,733 
Accrued interest1,423 1,714 
Current portion of deferred revenue10,293 11,485 
Current portion of long-term debt, net39,060 39,055 
Total current liabilities$57,815 $61,372 
Deferred revenue51,793 50,069 
Long-term debt, net414,099 432,444 
Other non-current liabilities4,819 5,131 
Total liabilities$528,526 $549,016 
Commitments and contingencies
Class A Convertible Preferred Units (261,420 and 253,750 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at June 30, 2021 and $1,700 per unit at December 31, 2020)$176,006 $168,337 
Partners’ capital:
Common unitholders’ interest (12,351,306 and 12,261,199 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively)$134,836 $136,927 
General partner’s interest434 459 
Warrant holders' interest66,816 66,816 
Accumulated other comprehensive income3,587 322 
Total partners’ capital$205,673 $204,524 
Total liabilities and capital$910,205 $921,877 

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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
Consolidated Statements of Partners' Capital
 Common UnitholdersGeneral PartnerWarrant HoldersAccumulated
Other
Comprehensive
Income
Partners' Capital Excluding Non-Controlling InterestNon-Controlling InterestTotal Capital
 
(In thousands)UnitsAmounts
Balance at December 31, 202012,261 $136,927 $459 $66,816 $322 $204,524 $— $204,524 
Net income (1)
— 8,213 168 — — 8,381 — 8,381 
Distributions to common unitholders and the general partner— (5,517)(113)— — (5,630)— (5,630)
Distributions to preferred unitholders— (7,461)(152)— — (7,613)— (7,613)
Issuance of unit-based awards90 — — — — — — — 
Unit-based awards amortization and vesting, net— 215 — — — 215 — 215 
Capital contribution— — 32 — — 32 — 32 
Comprehensive income from unconsolidated investment and other— — — — 732 732 — 732 
Balance at March 31, 202112,351 $132,377 $394 $66,816 $1,054 $200,641 $— $200,641 
Net income (2)
— 15,074 308 — — 15,382 — 15,382 
Distributions to common unitholders and general partner— (5,559)(113)— — (5,672)— (5,672)
Distributions to preferred unitholders— (7,571)(155)— — (7,726)— (7,726)
Unit-based awards amortization and vesting— 515 — — — 515 — 515 
Comprehensive income from unconsolidated investment and other— — — — 2,533 2,533 — 2,533 
Balance at June 30, 202112,351 $134,836 $434 $66,816 $3,587 $205,673 $— $205,673 
(1)Net income includes $7.7 million of income attributable to preferred unitholders that accumulated during the period, of which $7.6 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.
(2)Net income includes $7.8 million of income attributable to preferred unitholders that accumulated during the period, of which $7.7 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.
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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
 Common UnitholdersGeneral PartnerWarrant HoldersAccumulated
Other
Comprehensive
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— (3,833)(78)— — (3,911)— (3,911)
Net income (1)
— 18,403 376 — — 18,779 — 18,779 
Distributions to common unitholders and the 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 
(1)Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.
(2)Net loss includes $7.6 million of income attributable to preferred unitholders that accumulated during the period, of which $7.5 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.




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Natural Resource Partners L.P.
Financial Tables
(Unaudited)
The following tables present NRP's unaudited business results by segment for the three months ended June 30, 2021 and 2020 and March 31, 2021:
Operating Segments
Coal Royalty and OtherCorporate and Financing
(In thousands)Soda AshTotal
For the Three Months Ended June 30, 2021
Revenues$35,793 $2,601 $— $38,394 
Gain on asset sales and disposals116 — — 116 
Total revenues and other income$35,909 $2,601 $— $38,510 
Asset impairments$16 $— $— $16 
Net income (loss)$25,886 $2,566 $(13,070)$15,382 
Adjusted EBITDA (1)
$30,774 $(35)$(3,388)$27,351 
Cash flow provided by (used in) continuing operations:
Operating activities$32,028 $(35)$(18,609)$13,384 
Investing activities$657 $— $— $657 
Financing activities$(1,000)$— $(11,900)$(12,900)
Distributable cash flow (1)
$32,685 $(35)$(18,609)$14,041 
Free cash flow (1)
$31,569 $(35)$(18,609)$12,925 
For the Three Months Ended June 30, 2020
Revenues$33,604 $(3,058)$— $30,546 
Gain on asset sales and disposals465 — — 465 
Total revenues and other income$34,069 $(3,058)$— $31,011 
Asset impairments$132,283 $— $— $132,283 
Net loss$(108,479)$(3,087)$(13,935)$(125,501)
Adjusted EBITDA (1)
$25,881 $7,076 $(3,621)$29,336 
Cash flow provided by (used in) continuing operations:
Operating activities$31,953 $7,077 $(19,095)$19,935 
Investing activities$365 $— $— $365 
Financing activities$— $— $(9,978)$(9,978)
Distributable cash flow (1)
$33,318 $7,077 $(19,095)$21,300 
Free cash flow (1)
$31,811 $7,077 $(19,095)$19,793 
For the Three Months Ended March 31, 2021
Revenues$35,119 $1,973 $— $37,092 
Gain on asset sales and disposals59 — — 59 
Total revenues and other income$35,178 $1,973 $— $37,151 
Asset impairments$4,043 $— $— $4,043 
Net income (loss)$20,488 $1,953 $(14,060)$8,381 
Adjusted EBITDA (1)
$29,646 $3,900 $(4,110)$29,436 
Cash flow provided by (used in) continuing operations:
Operating activities$25,962 $3,888 $(6,650)$23,200 
Investing activities$600 $— $— $600 
Financing activities$(132)$— $(26,691)$(26,823)
Distributable cash flow (1)
$26,562 $3,888 $(6,650)$23,800 
Free cash flow (1)
$26,503 $3,888 $(6,650)$23,741 
(1)See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.
12


Natural Resource Partners L.P.
Financial Tables
(Unaudited)
The following table presents NRP's unaudited business results by segment for the six months ended June 30, 2021 and 2020:
Operating Business Segments
Coal Royalty and OtherCorporate and Financing
(In thousands)Soda AshTotal
For the Six Months Ended June 30, 2021
Revenues$70,912 $4,574 $— $75,486 
Gain on asset sales and disposals175 — — 175 
Total revenues and other income$71,087 $4,574 $— $75,661 
Asset impairments$4,059 $— $— $4,059 
Net income (loss)$46,374 $4,519 $(27,130)$23,763 
Adjusted EBITDA (1)
$60,420 $3,865 $(7,498)$56,787 
Cash flow provided by (used in) continuing operations:
Operating activities$57,990 $3,853 $(25,259)$36,584 
Investing activities$1,257 $— $— $1,257 
Financing activities$(1,132)$— $(38,591)$(39,723)
Distributable cash flow (1)
$59,247 $3,853 $(25,259)$37,841 
Free cash flow (1)
$58,072 $3,853 $(25,259)$36,666 
For the Six Months Ended June 30, 2020
Revenues$67,546 $3,214 $— $70,760 
Gain on asset sales and disposals465 — — 465 
Total revenues and other income$68,011 $3,214 $— $71,225 
Asset impairments$132,283 $— $— $132,283 
Net income (loss)$(81,735)$3,169 $(28,156)$(106,722)
Adjusted EBITDA (1)
$54,637 $14,165 $(7,534)$61,268 
Cash flow provided by (used in) continuing operations:
Operating activities$62,509 $14,166 $(26,585)$50,090 
Investing activities$637 $— $— $637 
Financing activities$— $— $(38,164)$(38,164)
Distributable cash flow (1) (2)
$64,146 $14,166 $(26,585)$51,661 
Free cash flow (1)
$62,639 $14,166 $(26,585)$50,220 
(1)See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.
(2)Includes net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations.
13


Natural Resource Partners L.P.
Financial Tables
(Unaudited)
Operating Statistics - Coal Royalty and Other
For the Three Months EndedFor the Six Months Ended
 June 30,March 31,June 30,
(In thousands, except per ton data)20212020202120212020
Coal sales volumes (tons)
Appalachia
Northern (1)
405 87 120 525 414 
Central2,975 2,463 2,650 5,625 5,396 
Southern316 426 100 416 648 
Total Appalachia3,696 2,976 2,870 6,566 6,458 
Illinois Basin2,640 578 2,658 5,298 1,083 
Northern Powder River Basin185 340 1,059 1,244 867 
Total coal sales volumes6,521 3,894 6,587 13,108 8,408 
Coal royalty revenue per ton
Appalachia
Northern (1)
$4.45 $2.74 $3.64 $4.27 $2.01 
Central4.62 4.04 4.22 4.44 4.47 
Southern7.63 4.96 5.28 7.06 4.68 
Illinois Basin2.01 1.97 2.06 2.04 3.08 
Northern Powder River Basin4.15 3.15 3.37 3.49 3.75 
Combined average coal royalty revenue per ton3.69 3.73 3.22 3.45 4.11 
Coal royalty revenues
Appalachia
Northern (1)
$1,804 $238 $437 $2,241 $831 
Central13,756 9,951 11,195 24,951 24,124 
Southern2,410 2,111 528 2,938 3,034 
Total Appalachia17,970 12,300 12,160 30,130 27,989 
Illinois Basin5,300 1,137 5,483 10,783 3,336 
Northern Powder River Basin768 1,071 3,573 4,341 3,248 
Unadjusted coal royalty revenues24,038 14,508 21,216 45,254 34,573 
Coal royalty adjustment for minimum leases (2)
(5,740)(3,661)(5,851)(11,591)(4,624)
Total coal royalty revenues$18,298 $10,847 $15,365 $33,663 $29,949 
Other revenues
Production lease minimum revenues (2)
$3,556 $8,485 $3,450 $7,006 $9,287 
Minimum lease straight-line revenues (2)
4,869 4,987 6,096 10,965 8,796 
Property tax revenues1,587 761 1,469 3,056 2,360 
Wheelage revenues1,844 1,584 1,781 3,625 3,788 
Coal overriding royalty revenues976 683 1,859 2,835 2,005 
Lease amendment revenues772 890 868 1,640 1,733 
Aggregates royalty revenues456 271 454 910 847 
Oil and gas royalty revenues900 2,742 1,366 2,266 3,845 
Other revenues353 416 219 572 489 
Total other revenues$15,313 $20,819 $17,562 $32,875 $33,150 
Coal royalty and other$33,611 $31,666 $32,927 $66,538 $63,099 
Transportation and processing services revenues2,182 1,938 2,192 4,374 4,447 
Gain on asset sales and disposals116 465 59 175 465 
Total Coal Royalty and Other segment revenues and other income$35,909 $34,069 $35,178 $71,087 $68,011 
(1)Northern Appalachia includes NRP's Hibbs Run property that has significant sales volumes, but a low fixed rate per ton.
(2)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 Resources LLC that fixed consideration paid to us over a two-year period.
14


Natural Resource Partners L.P.
Financial Tables
(Unaudited)


Adjusted EBITDA
Coal Royalty and OtherCorporate and Financing
(In thousands)Soda AshTotal
For the Three Months Ended June 30, 2021
Net income (loss)$25,886 $2,566 $(13,070)$15,382 
Less: equity earnings from unconsolidated investment— (2,601)— (2,601)
Add: total distributions from unconsolidated investment— — — — 
Add: interest expense, net— 9,682 9,683 
Add: depreciation, depletion and amortization4,871 — — 4,871 
Add: asset impairments16 — — 16 
Adjusted EBITDA$30,774 $(35)$(3,388)$27,351 
For the Three Months Ended June 30, 2020
Net loss$(108,479)$(3,087)$(13,935)$(125,501)
Less: equity earnings from unconsolidated investment— 3,058 — 3,058 
Add: total distributions from unconsolidated investment— 7,105 — 7,105 
Add: interest expense, net15 — 10,314 10,329 
Add: depreciation, depletion and amortization2,062— — 2,062 
Add: asset impairments132,283 — — 132,283 
Adjusted EBITDA$25,881 $7,076 $(3,621)$29,336 
For the Three Months Ended March 31, 2021
Net income (loss)$20,488 $1,953 (14,060)$8,381 
Less: equity earnings from unconsolidated investment— (1,973)— (1,973)
Add: total distributions from unconsolidated investment— 3,920 — 3,920 
Add: interest expense, net23 — 9,950 9,973 
Add: depreciation, depletion and amortization5,092 — — 5,092 
Add: asset impairments4,043 — — 4,043 
Adjusted EBITDA$29,646 $3,900 $(4,110)$29,436 

15


Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
Adjusted EBITDA
Coal Royalty and OtherCorporate and Financing
(In thousands)Soda AshTotal
For the Six Months Ended June 30, 2021
Net income (loss)$46,374 $4,519 $(27,130)$23,763 
Less: equity earnings from unconsolidated investment— (4,574)— (4,574)
Add: total distributions from unconsolidated investment— 3,920 — 3,920 
Add: interest expense, net24 — 19,632 19,656 
Add: depreciation, depletion and amortization9,963 — — 9,963 
Add: asset impairments4,059 — — 4,059 
Adjusted EBITDA$60,420 $3,865 $(7,498)$56,787 
For the Six Months Ended June 30, 2020
Net income (loss)$(81,735)$3,169 $(28,156)$(106,722)
Less: equity earnings from unconsolidated investment— (3,214)— (3,214)
Add: total distributions from unconsolidated investment— 14,210 — 14,210 
Add: interest expense, net15 — 20,622 20,637 
Add: depreciation, depletion and amortization4,074 — — 4,074 
Add: asset impairments132,283 — — 132,283 
Adjusted EBITDA$54,637 $14,165 $(7,534)$61,268 

16


Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
Distributable Cash Flow and Free Cash Flow
Coal Royalty and OtherCorporate and Financing
(In thousands)Soda AshTotal
For the Three Months Ended June 30, 2021
Net cash provided by (used in) operating activities of continuing operations$32,028 $(35)$(18,609)$13,384 
Add: proceeds from asset sales and disposals116 — — 116 
Add: return of long-term contract receivable541 — — 541 
Distributable cash flow$32,685 $(35)$(18,609)$14,041 
Less: proceeds from asset sales and disposals(116)— — (116)
Less: acquisition costs(1,000)— — (1,000)
Free cash flow$31,569 $(35)$(18,609)$12,925 
For the Three Months Ended June 30, 2020
Net cash provided by (used in) operating activities of continuing operations$31,953 $7,077 $(19,095)$19,935 
Add: proceeds from asset sales and disposals507 — — 507 
Add: return of long-term contract receivable858 — — 858 
Distributable cash flow$33,318 $7,077 $(19,095)$21,300 
Less: proceeds from asset sales and disposals(507)— — (507)
Less: acquisition costs(1,000)— — (1,000)
Free cash flow$31,811 $7,077 $(19,095)$19,793 
For the Three Months Ended March 31, 2021
Net cash provided by (used in) operating activities of continuing operations$25,962 $3,888 $(6,650)$23,200 
Add: proceeds from asset sales and disposals59 — — 59 
Add: return of long-term contract receivable541 — — 541 
Distributable cash flow$26,562 $3,888 $(6,650)$23,800 
Less: proceeds from asset sales and disposals(59)— — (59)
Less: acquisition costs— — — — 
Free cash flow$26,503 $3,888 $(6,650)$23,741 











17


Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
Distributable Cash Flow and Free Cash Flow
Coal Royalty and OtherCorporate and Financing
(In thousands)Soda AshTotal
For the Six Months Ended June 30, 2021
Net cash provided by (used in) operating activities of continuing operations$57,990 $3,853 $(25,259)$36,584 
Add: proceeds from asset sales and disposals175 — — 175 
Add: proceeds from sale of discontinued operations— — — — 
Add: return of long-term contract receivable1,082 — — 1,082 
Distributable cash flow$59,247 $3,853 $(25,259)$37,841 
Less: proceeds from asset sales and disposals(175)— — (175)
Less: acquisition costs(1,000)— — (1,000)
Free cash flow$58,072 $3,853 $(25,259)$36,666 
For the Six Months Ended June 30, 2020
Net cash provided by (used in) operating activities of continuing operations$62,509 $14,166 $(26,585)$50,090 
Add: proceeds from asset sales and disposals507 — — 507 
Add: proceeds from sale of discontinued operations— — — (66)
Add: return of long-term contract receivable1,130 — — 1,130 
Distributable cash flow$64,146 $14,166 $(26,585)$51,661 
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$62,639 $14,166 $(26,585)$50,220 

LTM Free Cash Flow and Cash Flow Cushion
For the Three Months Ended
(In thousands)September 30, 2020December 31, 2020March 31, 2021June 30, 2021Last 12 Months
Net cash provided by operating activities of continuing operations$24,323 $13,155 $23,200 $13,384 $74,062 
Add: proceeds from asset sales and disposals— 116 59 116 291 
Add: proceeds from sale of discontinued operations— — — 
Add: return of long-term contract receivable332 660 541 541 2,074 
Distributable cash flow$24,655 $13,932 $23,800 $14,041 $76,428 
Less: proceeds from asset sales and disposals— (116)(59)(116)(291)
Less: proceeds from sale of discontinued operations— (1)— — (1)
Less: acquisition costs— — — (1,000)(1,000)
Free cash flow$24,655 $13,815 $23,741 $12,925 $75,136 
Less: mandatory Opco debt repayments(6,780)(20,335)(16,696)(2,365)(46,176)
Less: preferred unit distributions(7,500)(3,750)(3,806)(3,864)(18,920)
Less: common unit distributions(5,630)(5,630)(5,630)(5,672)(22,562)
Cash flow cushion$4,745 $(15,900)$(2,391)$1,024 $(12,522)
18


Natural Resource Partners L.P.
Reconciliation of Non-GAAP Measures
(Unaudited)
Leverage Ratio
For the Three Months Ended
(In thousands)September 30, 2020December 31, 2020March 31, 2021June 30, 2021Last 12 Months
Net income$7,216 $14,687 $8,381 $15,382 $45,666 
Less: equity earnings from unconsolidated investment(1,986)(5,528)(1,973)(2,601)(12,088)
Add: total distributions from unconsolidated investment— — 3,920 — 3,920 
Add: interest expense, net10,254 10,077 9,973 9,683 39,987 
Add: depreciation, depletion and amortization2,111 3,013 5,092 4,871 15,087 
Add: asset impairments934 2,668 4,043 16 7,661 
Adjusted EBITDA$18,529 $24,917 $29,436 $27,351 $100,233 
Debt—at June 30, 2021$458,819 
Leverage Ratio (1)
4.6 x
(1)Leverage Ratio is calculated as the outstanding principal of NRP's debt as of June 30, 2021 divided by the last twelve months' Adjusted EBITDA. Note that Adjusted EBITDA under the indenture governing NRP's 2025 parent company notes may be different than the amount shown above. However, NRP's last twelve months Leverage ratio as of June 30, 2021, was 4.6x as calculated under the indenture governing NRP's 2025 parent company notes.

Return on Capital Employed ("ROCE")
Coal Royalty and OtherCorporate and Financing
(In thousands)Soda AshTotal
LTM Ended June 30, 2021
Net income (loss)$87,929 $11,893 $(54,156)$45,666 
Financing costs94 — 39,955 40,049 
Return$88,023 $11,893 $(14,201)$85,715 
As of June 30, 2020
Total assets$688,828 $252,420 $2,317 $943,565 
Less: total current liabilities excluding current debt(14,202)— (3,936)(18,138)
Less: total long-term liabilities excluding long-term debt(57,886)— (446)(58,332)
Capital employed$616,740 $252,420 $(2,065)$867,095 
Total partners' capital$616,740 $252,420 $(664,539)$204,621 
Class A convertible preferred units— — 164,587 164,587 
Debt— — 497,887 497,887 
Capital employed$616,740 $252,420 $(2,065)$867,095 
ROCE14.3%4.7%N/A9.9%
Excluding asset impairments:
Return$88,023 $11,893 $(14,201)$85,715 
Add: asset impairments7,661 — — 7,661 
Return excluding asset impairments$95,684 $11,893 $(14,201)$93,376 
ROCE excluding asset impairments15.5%4.7%N/A10.8%

-end-
19