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~~2021 or

☐

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

Commission file number:

001-31465


NATURAL RESOURCE PARTNERS LP
						(Exact name of registrant as specified in its charter)


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

1201 Louisiana Street, Suite 3400

Houston, Texas 77002

(Address of principal executive offices)

(Zip Code)

(713) 751-7507

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Units representing limited partner interests

NRP

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 Filer

☐

Accelerated 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.

Table of Contents

NATURAL RESOURCE PARTNERS, L.P.

TABLE OF CONTENTS

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED BALANCE SHEETS

September 30, December 31,
(In thousands, except unit data) 2020 2019
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 115,573 $ 98,265
Accounts receivable, net 17,462 30,869
Other current assets, net 3,972 1,244
Current assets of discontinued operations 0 1,706
Total current assets $ 137,007 $ 132,084
Land 24,008 24,008
Mineral rights, net 465,870 605,096
Intangible assets, net 17,601 17,687
Equity in unconsolidated investment 256,834 263,080
Long-term contract receivable, net 33,791 36,963
Other long-term assets, net 7,447 6,989
Total assets $ 942,558 $ 1,085,907
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable $ 1,372 $ 1,179
Accrued liabilities 6,859 8,764
Accrued interest 9,273 2,316
Current portion of deferred revenue 11,035 4,608
Current portion of long-term debt, net 39,072 45,776
Current liabilities of discontinued operations 0 65
Total current liabilities $ 67,611 $ 62,708
Deferred revenue 50,980 47,213
Long-term debt, net 452,401 470,422
Other non-current liabilities 5,020 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 interest 428 3,270
Warrant holders’ interest 66,816 66,816
Accumulated other comprehensive income (loss) 170 (2,594)
Total partners’ capital $ 201,959 $ 338,963
Non-controlling interest 0 (2,935)
Total capital $ 201,959 $ 336,028
Total liabilities and capital $ 942,558 $ 1,085,907


	September 30,		December 31,
(In thousands, except unit data)	2021		2020
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	118,989	$	99,790

Accounts receivable, net	23,231		12,322
Other current assets, net	1,010		5,080

Total current assets	$	143,230	$	117,192
Land	24,008		24,008

Mineral rights, net	442,454		460,373
Intangible assets, net	16,243		17,459
Equity in unconsolidated investment	277,309		262,514
Long-term contract receivable, net	31,948		33,264
Other long-term assets, net	5,814		7,067
Total assets	$	941,006	$	921,877
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable	$	1,474	$	1,385
Accrued liabilities	6,228		7,733
Accrued interest	8,685		1,714
Current portion of deferred revenue	11,201		11,485
Current portion of long-term debt, net	39,082		39,055

Total current liabilities	$	66,670	$	61,372
Deferred revenue	48,232		50,069
Long-term debt, net	414,437		432,444
Other non-current liabilities	4,920		5,131
Total liabilities	$	534,259	$	549,016
Commitments and contingencies (see Note 12)	0		0
Class A Convertible Preferred Units (265,341 and 253,750 units issued and outstanding at September 30, 2021 and December 31, 2020, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at September 30, 2021 and $1,700 per unit at December 31, 2020)	$	179,927	$	168,337
Partners’ capital
Common unitholders’ interest (12,351,306 and 12,261,199 units issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	$	151,459	$	136,927
General partner’s interest	754		459
Warrant holders’ interest	66,816		66,816
Accumulated other comprehensive income	7,791		322
Total partners’ capital	$	226,820	$	204,524


Total liabilities and partners' capital	$	941,006	$	921,877

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

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands, except per unit data)	(In thousands, except per unit data)	2020		2019		2020		2019		(In thousands, except per unit data)	2021		2020		2021		2020
Revenues and other income	Revenues and other income									Revenues and other income
Coal royalty and other	Coal royalty and other	$	25,740	$	39,919	$	88,839	$	154,037	Coal royalty and other	$	47,884	$	25,740	$	114,422	$	88,839
Transportation and processing services	Transportation and processing services	2,204		3,865		6,651		14,740		Transportation and processing services	2,171		2,204		6,545		6,651
Equity in earnings of Ciner Wyoming	Equity in earnings of Ciner Wyoming	1,986		13,818		5,200		36,833		Equity in earnings of Ciner Wyoming	6,672		1,986		11,246		5,200
Gain on asset sales and disposals	Gain on asset sales and disposals	0		6,107		465		6,609		Gain on asset sales and disposals	68		—		243		465
Total revenues and other income	Total revenues and other income	$	29,930	$	63,709	$	101,155	$	212,219	Total revenues and other income	$	56,795	$	29,930	$	132,456	$	101,155

Operating expenses	Operating expenses									Operating expenses
Operating and maintenance expenses	Operating and maintenance expenses	$	5,781	$	5,994	$	19,200	$	26,813	Operating and maintenance expenses	$	8,354	$	5,781	$	19,076	$	19,200
Depreciation, depletion and amortization	Depreciation, depletion and amortization	2,111		3,384		6,185		11,746		Depreciation, depletion and amortization	5,182		2,111		15,145		6,185
General and administrative expenses	General and administrative expenses	3,634		4,253		11,168		12,799		General and administrative expenses	4,052		3,634		11,550		11,168
Asset impairments	Asset impairments	934		484		133,217		484		Asset impairments	57		934		4,116		133,217
Total operating expenses	Total operating expenses	$	12,460	$	14,115	$	169,770	$	51,842	Total operating expenses	$	17,645	$	12,460	$	49,887	$	169,770

Income (loss) from operations	Income (loss) from operations	$	17,470	$	49,594	$	(68,615)	$	160,377	Income (loss) from operations	$	39,150	$	17,470	$	82,569	$	(68,615)

Other expenses, net

Interest expense, net	Interest expense, net	$	(10,254)	$	(10,431)	$	(30,891)	$	(37,061)	Interest expense, net	$	(9,652)	$	(10,254)	$	(29,308)	$	(30,891)

Loss on extinguishment of debt		0		0		0		(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 operations		0		7		0		206

Net income (loss)	Net income (loss)	$	7,216	$	39,170	$	(99,506)	$	94,240	Net income (loss)	$	29,498	$	7,216	$	53,261	$	(99,506)

Less: income attributable to preferred unitholders	Less: income attributable to preferred unitholders	(7,500)		(7,500)		(22,613)		(22,500)		Less: income attributable to preferred unitholders	(7,961)		(7,500)		(23,530)		(22,613)
Net income (loss) attributable to common unitholders and general partner		$	(284)	$	31,670	$	(122,119)	$	71,740
Net income (loss) attributable to common unitholders and the general partner										Net income (loss) attributable to common unitholders and the general partner	$	21,537	$	(284)	$	29,731	$	(122,119)

Net income (loss) attributable to common unitholders	Net income (loss) attributable to common unitholders	$	(279)	$	31,036	$	(119,677)	$	70,305	Net income (loss) attributable to common unitholders	$	21,106	$	(279)	$	29,136	$	(119,677)
Net income (loss) attributable to the general partner	Net income (loss) attributable to the general partner	(5)		634		(2,442)		1,435		Net income (loss) attributable to the general partner	431		(5)		595		(2,442)

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)	Net income (loss) per common unit (see Note 4)									Net income (loss) per common unit (see Note 4)
Basic	Basic	$	(0.02)	$	2.53	$	(9.76)	$	5.73	Basic	$	1.71	$	(0.02)	$	2.36	$	(9.76)
Diluted	Diluted	(0.02)		1.66		(9.76)		3.92		Diluted	1.10		(0.02)		1.98		(9.76)

Net income (loss)	Net income (loss)	$	7,216	$	39,170	$	(99,506)	$	94,240	Net income (loss)	$	29,498	$	7,216	$	53,261	$	(99,506)
Comprehensive income (loss) from unconsolidated investment and other		2,428		(520)		2,764		(340)
Comprehensive income from unconsolidated investment and other										Comprehensive income from unconsolidated investment and other	4,204		2,428		7,469		2,764
Comprehensive income (loss)	Comprehensive income (loss)	$	9,644	$	38,650	$	(96,742)	$	93,900	Comprehensive income (loss)	$	33,702	$	9,644	$	60,730	$	(96,742)

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

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)


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

(In thousands)	(In thousands)	Units	Amounts														(In thousands)	Units	Amounts
Balance at December 31, 2019		12,261	$	271,471	$	3,270	$	66,816	$	(2,594)	$	338,963	$	(2,935)	$	336,028
Cumulative effect of adoption of accounting standard (see Note 15)		—	(3,833)		(78)		—		—		(3,911)		—		(3,911)
Balance at December 31, 2020																	Balance at December 31, 2020	12,261	$	136,927	$	459	$	66,816	$	322	$	204,524	$	—	$	204,524
Net income (1)	Net income (1)	—	18,403		376		—		—		18,779		—		18,779		Net income (1)	—	8,213		168		—		—		8,381		—		8,381
Distributions to common unitholders and general partner		—	(5,517)		(113)		—		—		(5,630)		—		(5,630)
Distributions to common unitholders and the general partner																	Distributions to common unitholders and the general partner	—	(5,517)		(113)		—		—		(5,630)		—		(5,630)
Distributions to preferred unitholders																	Distributions to preferred unitholders	—	(7,461)		(152)		—		—		(7,613)		—		(7,613)
Issuance of unit-based awards																	Issuance of unit-based awards	90	—		—		—		—		—		—		—
Unit-based awards amortization and vesting, net																	Unit-based awards amortization and vesting, net	—	215		—		—		—		215		—		215
Capital contribution																	Capital contribution	—	—		32		—		—		32		—		32

Comprehensive income from unconsolidated investment and other																	Comprehensive income from unconsolidated investment and other	—	—		—		—		732		732		—		732
Balance at March 31, 2021																	Balance at March 31, 2021	12,351	$	132,377	$	394	$	66,816	$	1,054	$	200,641	$	—	$	200,641
Net income (2)																	Net income (2)	—	15,074		308		—		—		15,382		—		15,382
Distributions to common unitholders and the general partner																	Distributions to common unitholders and the general partner	—	(5,559)		(113)		—		—		(5,672)		—		(5,672)
Distributions to preferred unitholders	Distributions to preferred unitholders	—	(7,350)		(150)		—		—		(7,500)		—		(7,500)		Distributions to preferred unitholders	—	(7,571)		(155)		—		—		(7,726)		—		(7,726)

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, 2020		12,261	$	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, 2020		12,261	$	139,517	$	546	$	66,816	$	(2,258)	$	204,621	$	0	$	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	Unit-based awards amortization and vesting	—	824		—		—		—		824		—		824		Unit-based awards amortization and vesting	—	515		—		—		—		515		—		515
Comprehensive income from unconsolidated investment and other	Comprehensive income from unconsolidated investment and other	—	—		—		—		2,428		2,428		—		2,428		Comprehensive income from unconsolidated investment and other	—	—		—		—		2,533		2,533		—		2,533
Balance at September 30, 2020		12,261	$	134,545	$	428	$	66,816	$	170	$	201,959	$	0	$	201,959
Balance at June 30, 2021																	Balance at June 30, 2021	12,351	$	134,836	$	434	$	66,816	$	3,587	$	205,673	$	—	$	205,673
Net income (3)																	Net income (3)	—	28,909		589		—		—		29,498		—		29,498
Distributions to common unitholders and the general partner																	Distributions to common unitholders and the general partner	—	(5,558)		(113)		—		—		(5,671)		—		(5,671)
Distributions to preferred unitholders																	Distributions to preferred unitholders	—	(7,687)		(156)		—		—		(7,843)		—		(7,843)
Issuance of unit-based awards																	Issuance of unit-based awards	—	—		—		—		—		—		—		—
Unit-based awards amortization and vesting																	Unit-based awards amortization and vesting	—	959		—		—		—		959		—		959
Comprehensive income from unconsolidated investment and other																	Comprehensive income from unconsolidated investment and other	—	—		—		—		4,204		4,204		—		4,204
Balance at September 30, 2021																	Balance at September 30, 2021	12,351	$	151,459	$	754	$	66,816	$	7,791	$	226,820	$	—	$	226,820

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

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

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

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

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)


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

(In thousands)	Units	Amounts
Balance at December 31, 2019	12,261	$	271,471	$	3,270	$	66,816	$	(2,594)	$	338,963	$	(2,935)	$	336,028
Cumulative effect of adoption of accounting standard (see Note 15)	—	(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, 2020	12,261	$	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, 2020	12,261	$	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 the 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, 2020	12,261	$	134,545	$	428	$	66,816	$	170	$	201,959	$	—	$	201,959

(1)Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which ~~$7.35~~$7.4 million is allocated to the common unitholders and ~~$0.15~~$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 ~~$7.46~~$7.5 million is allocated to the common unitholders and ~~$0.15~~$0.2 million is allocated to the general partner.

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL~~

~~(Unaudited)~~

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

(In thousands) Units Amounts
Balance at December 31, 2018 12,249 $ 355,113 $ 5,014 $ 66,816 $ (3,462) $ 423,481 $ (2,935) $ 420,546
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 awards 12 486 — — — 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, 2019 12,261 $ 378,140 $ 5,476 $ 66,816 $ (2,457) $ 447,975 $ (2,935) $ 445,040
Net income (1)
— 18,964 387 — — 19,351 0 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, 2019 12,261 $ 374,275 $ 5,387 $ 66,816 $ (3,282) $ 443,196 $ (2,935) $ 440,261
Net income (1)
— 38,386 784 — — 39,170 — 39,170
Distributions to common unitholders and general partner — (5,518) (112) — — (5,630) — (5,630)
Distributions to preferred unitholders — (7,350) (150) — — (7,500) — (7,500)
Unit-based awards amortization and vesting — 473 — — — 473 — 473
Comprehensive loss from unconsolidated investment and other — — — — (520) (520) — (520)
Balance at September 30, 2019 12,261 $ 400,266 $ 5,909 $ 66,816 $ (3,802) $ 469,189 $ (2,935) $ 466,254

~~(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.

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		For the Nine Months Ended September 30,					For the Nine Months Ended September 30,
(In thousands)	(In thousands)	2020		2019		(In thousands)	2021		2020
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income (loss)	Net income (loss)	$	(99,506)	$	94,240	Net income (loss)	$	53,261	$	(99,506)
Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:	Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:					Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization	Depreciation, depletion and amortization	6,185		11,746		Depreciation, depletion and amortization	15,145		6,185
Distributions from unconsolidated investment	Distributions from unconsolidated investment	14,210		25,480		Distributions from unconsolidated investment	3,920		14,210
Equity earnings from unconsolidated investment	Equity earnings from unconsolidated investment	(5,200)		(36,833)		Equity earnings from unconsolidated investment	(11,246)		(5,200)
Gain on asset sales and disposals	Gain on asset sales and disposals	(465)		(6,609)		Gain on asset sales and disposals	(243)		(465)

Loss on extinguishment of debt		0		29,282
Income from discontinued operations		0		(206)

Asset impairments	Asset impairments	133,217		484		Asset impairments	4,116		133,217
Bad debt expense	Bad debt expense	3,915		6,842		Bad debt expense	1,715		3,915
Unit-based compensation expense	Unit-based compensation expense	2,566		1,842		Unit-based compensation expense	2,837		2,566
Amortization of debt issuance costs and other	Amortization of debt issuance costs and other	491		3,223		Amortization of debt issuance costs and other	1,899		491
Change in operating assets and liabilities:	Change in operating assets and liabilities:					Change in operating assets and liabilities:
Accounts receivable	Accounts receivable	7,994		(2,111)		Accounts receivable	(12,332)		7,994
Accounts payable	Accounts payable	193		(822)		Accounts payable	89		193
Accrued liabilities	Accrued liabilities	(2,985)		(5,083)		Accrued liabilities	(839)		(2,985)
Accrued interest	Accrued interest	6,957		19		Accrued interest	6,971		6,957
Deferred revenue	Deferred revenue	10,194		(3,920)		Deferred revenue	(2,121)		10,194
Other items, net	Other items, net	(3,353)		351		Other items, net	3,471		(3,353)
Net cash provided by operating activities of continuing operations	Net cash provided by operating activities of continuing operations	$	74,413	$	117,925	Net cash provided by operating activities of continuing operations	$	66,643	$	74,413
Net cash provided by (used in) operating activities of discontinued operations		1,706		(4)
Net cash provided by operating activities of discontinued operations						Net cash provided by operating activities of discontinued operations	—		1,706
Net cash provided by operating activities	Net cash provided by operating activities	$	76,119	$	117,921	Net cash provided by operating activities	$	66,643	$	76,119

Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities

Proceeds from asset sales and disposals	Proceeds from asset sales and disposals	$	507	$	6,611	Proceeds from asset sales and disposals	$	249	$	507
Return of long-term contract receivable	Return of long-term contract receivable	1,462		1,351		Return of long-term contract receivable	1,622		1,462
Acquisition of non-controlling interest in BRP	Acquisition of non-controlling interest in BRP	(1,000)		0		Acquisition of non-controlling interest in BRP	—		(1,000)

Net cash provided by investing activities of continuing operations	Net cash provided by investing activities of continuing operations	$	969	$	7,962	Net cash provided by investing activities of continuing operations	$	1,871	$	969
Net cash used in investing activities of discontinued operations	Net cash used in investing activities of discontinued operations	(66)		(556)		Net cash used in investing activities of discontinued operations	—		(66)
Net cash provided by investing activities	Net cash provided by investing activities	$	903	$	7,406	Net cash provided by investing activities	$	1,871	$	903

Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities

Debt borrowings		$	0	$	300,000

Debt repayments	Debt repayments	(25,841)		(442,747)		Debt repayments	$	(19,061)	$	(25,841)
Distributions to common unitholders and general partner		(11,260)		(27,520)
Distributions to common unitholders and the general partner						Distributions to common unitholders and the general partner	(16,973)		(11,260)
Distributions to preferred unitholders	Distributions to preferred unitholders	(22,613)		(22,500)		Distributions to preferred unitholders	(11,591)		(22,613)

Contributions from (to) discontinued operations		1,640		(560)
Debt issuance costs and other		0		(26,427)
Contributions from discontinued operations						Contributions from discontinued operations	—		1,640
Acquisition of non-controlling interest in BRP						Acquisition of non-controlling interest in BRP	(1,000)		—
Other items						Other items	(690)		—
Net cash used in financing activities of continuing operations	Net cash used in financing activities of continuing operations	$	(58,074)	$	(219,754)	Net cash used in financing activities of continuing operations	$	(49,315)	$	(58,074)
Net cash provided by (used in) financing activities of discontinued operations		(1,640)		560
Net cash used in financing activities of discontinued operations						Net cash used in financing activities of discontinued operations	—		(1,640)
Net cash used in financing activities	Net cash used in financing activities	$	(59,714)	$	(219,194)	Net cash used in financing activities	$	(49,315)	$	(59,714)

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		For the Nine Months Ended September 30,					For the Nine Months Ended September 30,
(In thousands)	(In thousands)	2020		2019		(In thousands)	2021		2020
Net increase in cash and cash equivalents						Net increase in cash and cash equivalents	$	19,199	$	17,308

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

Cash and cash equivalents at beginning of period		98,265		206,030
Cash and cash equivalents of continuing operations at beginning of period						Cash and cash equivalents of continuing operations at beginning of period	99,790		98,265

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	115,573	$	112,163	Cash and cash equivalents at end of period	$	118,989	$	115,573

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Cash paid during the period for interest		$	22,712	$	36,270
Cash paid for interest						Cash paid for interest	$	20,829	$	22,712

Non-cash investing and financing activities:						Non-cash investing and financing activities:
Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities						Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities	$	—	$	947
Preferred unit distributions paid-in-kind						Preferred unit distributions paid-in-kind	11,591		—

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

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

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Nature of Business

Natural Resource Partners L.P. (the "Partnership") engages principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and owns a non-controlling 49% interest in 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~~2020 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 adoptionMarch 15, 2021. Certain reclassifications have been made to prior year amounts in the ~~opening balance of~~Notes to Consolidated Financial Statements to conform with current year presentation. These reclassifications had no impact on previously reported total assets, total liabilities, 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.~~

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~net income (loss) or cash flows from operating, investing or financing activities.

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,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020		2021		2020
Coal royalty revenues ~~(1)~~	Coal royalty revenues ~~(1)~~	$	10,610	$	24,727	$	40,559	$	87,561	Coal royalty revenues ~~(1)~~	$	32,432	$	10,610	$	66,095	$	40,559
Production lease minimum revenues ~~(1)~~	Production lease minimum revenues ~~(1)~~	4,267		2,752		13,554		21,331		Production lease minimum revenues ~~(1)~~	3,235		4,267		10,241		13,554
Minimum lease straight-line revenues ~~(1)~~	Minimum lease straight-line revenues ~~(1)~~	3,553		3,982		12,349		11,152		Minimum lease straight-line revenues ~~(1)~~	4,808		3,553		15,773		12,349
Property tax revenues	Property tax revenues	1,896		1,606		4,256		4,416		Property tax revenues	1,466		1,896		4,522		4,256
Wheelage revenues	Wheelage revenues	1,680		1,675		5,468		5,035		Wheelage revenues	1,964		1,680		5,589		5,468
Coal overriding royalty revenues	Coal overriding royalty revenues	1,314		2,189		3,319		10,163		Coal overriding royalty revenues	757		1,314		3,592		3,319
Lease amendment revenues	Lease amendment revenues	858		1,535		2,591		6,720		Lease amendment revenues	1,519		858		3,159		2,591
Aggregates royalty revenues	Aggregates royalty revenues	221		954		1,068		3,655		Aggregates royalty revenues	429		221		1,339		1,068
Oil and gas royalty revenues	Oil and gas royalty revenues	1,078		374		4,923		2,575		Oil and gas royalty revenues	1,154		1,078		3,420		4,923
Other revenues	Other revenues	263		125		752		1,429		Other revenues	120		263		692		752
Coal royalty and other revenues	Coal royalty and other revenues	$	25,740	$	39,919	$	88,839	$	154,037	Coal royalty and other revenues	$	47,884	$	25,740	$	114,422	$	88,839
Transportation and processing services revenues ~~(2)~~(1)	Transportation and processing services revenues ~~(2)~~(1)	2,204		3,865		6,651		14,740		Transportation and processing services revenues ~~(2)~~(1)	2,171		2,204		6,545		6,651
Total coal royalty and other segment revenues	Total coal royalty and other segment revenues	$	27,944	$	43,784	$	95,490	$	168,777	Total coal royalty and other segment revenues	$	50,055	$	27,944	$	120,967	$	95,490

(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 for the three months ended September 30, 2021 and ~~$1.7~~2020, and $3.7 million for the nine months ended September 30, 2021 and 2020. The remaining transportation and processing services revenues of $0.9 million and $1.0 million for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$3.7~~$2.8 million and ~~$7.3~~$2.9 million for the nine months ended September 30, ~~2020~~2021 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~~Trans action for more information.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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


		September 30,		December 31,			September 30,		December 31,
(In thousands)	(In thousands)	2020		2019		(In thousands)	2021		2020
Receivables	Receivables					Receivables
Accounts receivable, net	Accounts receivable, net	$	15,371	$	27,915	Accounts receivable, net	$	20,999	$	10,193
Other current assets, net (1)	Other current assets, net (1)	3,696		90		Other current assets, net (1)	871		3,307
Other long-term assets, net (2)	Other long-term assets, net (2)	691		0		Other long-term assets, net (2)	250		525

Contract liabilities	Contract liabilities					Contract liabilities
Current portion of deferred revenue	Current portion of deferred revenue	$	11,035	$	4,608	Current portion of deferred revenue	$	11,201	$	11,485
Deferred revenue	Deferred revenue	50,980		47,213		Deferred revenue	48,232		50,069

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

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

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

The following table shows the activity related to the Partnership's Coal Royalty and Other segment deferred revenue:


		For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
(In thousands)	(In thousands)		2020		2019		(In thousands)		2021		2020

Balance at beginning of period (current and non-current)	Balance at beginning of period (current and non-current)		$	51,821	$	52,553	Balance at beginning of period (current and non-current)		$	61,554	$	51,821
Increase due to minimums and lease amendment fees	Increase due to minimums and lease amendment fees		38,005		37,315		Increase due to minimums and lease amendment fees		6,411		38,005
Recognition of previously deferred revenue	Recognition of previously deferred revenue		(27,811)		(41,234)		Recognition of previously deferred revenue		(8,532)		(27,811)
Balance at end of period (current and non-current)	Balance at end of period (current and non-current)		$	62,015	$	48,634	Balance at end of period (current and non-current)		$	59,433	$	62,015

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~~2021 (in thousands):


Lease Term (1)	Lease Term (1)	Weighted Average Remaining Years	Annual Minimum Payments (2)		Lease Term (1)	Weighted Average Remaining Years	Annual Minimum Payments (2)
0 - 5 years	0 - 5 years	3.7	$	14,792	0 - 5 years	4.3	$	16,302
5 - 10 years	5 - 10 years	5.7	7,478		5 - 10 years	4.5	7,529
10+ years	10+ years	13.5	30,922		10+ years	13.7	27,363
Total	Total	9.3	$	53,192	Total	8.7	$	51,194

(1)Lease term does not include renewal periods.

(2)Annual minimum payments do not include ~~$40.0~~$4.8 million of ~~annual~~the $10.0 million of fixed consideration owed to NRP ~~in 2020 and~~for the remainder of 2021 resulting from contract modifications entered into during the second quarter of 2020. Additionally, ~~$5.0~~$1.3 million of this ~~$40.0~~remaining $4.8 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.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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 $8.0 million and $7.5 million during the three months ended September 30, 2021 and 2020, respectively, and ~~2019,~~$23.5 million and $22.6 ~~million and $22.5~~ million during the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, as a result of accumulated preferred unit distributions earned during the period. In August 2021, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended June 30, 2021, which resulted in the issuance of an additional 3,921 preferred units during the three months ended September 30, 2021. In May 2021, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended March 31, 2021, which resulted in the issuance of an additional 3,863 preferred units during the three months ended June 30, 2021. In February 2021, the Partnership paid in kind one-half of the preferred unit distribution related to the three months ended December 31, 2020, which resulted in the issuance of an additional 3,806 preferred units during the three months ended March 31, 2021. 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~~and then redeemed all of ~~the~~these outstanding paid in kind preferred units ~~paid in kind.~~on June 30, 2020.

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

The following table shows the cash distributions declared and paid to common and preferred unitholders during the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively:


			Common Units				Preferred Units						Common Units				Preferred Units
Date Paid	Date Paid	Period Covered by Distribution	Distribution per Unit		Total Distribution (1) (In thousands)		Distribution per Unit		Total Distribution (In thousands)		Date Paid	Period Covered by Distribution	Distribution per Unit		Total Distribution (1) (In thousands)		Distribution per Unit		Total Distribution (In thousands)
2021											2021
February 2021											February 2021	October 1 - December 31, 2020	$	0.45	$	5,630	$	15.00	$	3,806
May 2021											May 2021	January 1 - March 31, 2021	0.45		5,672		15.00		3,864
August 2021											August 2021	April 1 - June 30, 2020	0.45		5,671		15.00		3,921

2020	2020										2020
February 2020	February 2020	October 1 - December 31, 2019	$	0.45	$	5,630	$	30.00	$	7,500	February 2020	October 1 - December 31, 2019	$	0.45	$	5,630	$	30.00	$	7,500
May 2020	May 2020	January 1 - March 31, 2020	0		0		15.00		3,750		May 2020	January 1 - March 31, 2020	—		—		15.00		3,750
June 2020 (2)	June 2020 (2)	January 1 - March 31, 2020	—		—		15.45		3,863		June 2020 (2)	January 1 - March 31, 2020	—		—		15.45		3,863
August 2020	August 2020	April 1 - June 30, 2020	0.45		5,630		30.00		7,500		August 2020	April 1 - June 30, 2020	0.45		5,630		30.00		7,500

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

(1)~~Total common unit distribution includes~~Totals include 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 per common unit for the three and nine months ended September 30, 2021 includes the assumed conversion of the preferred units. 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~~

Table 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.~~Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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, 2021 and 2020 ~~did~~does not include the net settlement of warrants to purchase 1.75 million common units at a strike price of $22.81 or the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive. ~~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.

~~Table of Contents~~

~~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) 2020 2019 2020 2019
Allocation of net income (loss)
Net income (loss) from continuing operations $ 7,216 $ 39,163 $ (99,506) $ 94,034
Less: income attributable to preferred unitholders (7,500) (7,500) (22,613) (22,500)
Net income (loss) from continuing operations attributable to common unitholders and general partner $ (284) $ 31,663 $ (122,119) $ 71,534
Add (less): net loss (income) from continuing operations attributable to the general partner 5 (634) 2,442 (1,431)
Net income (loss) from continuing operations attributable to common unitholders $ (279) $ 31,029 $ (119,677) $ 70,103
Net income from discontinued operations $ 0 $ 7 $ 0 $ 206
Less: net income from discontinued operations attributable to the general partner 0 0 0 (4)
Net income from discontinued operations attributable to common unitholders $ 0 $ 7 $ 0 $ 202
Net income (loss) $ 7,216 $ 39,170 $ (99,506) $ 94,240
Less: income attributable to preferred unitholders (7,500) (7,500) (22,613) (22,500)
Net income (loss) attributable to common unitholders and general partner $ (284) $ 31,670 $ (122,119) $ 71,740
Add (less): net loss (income) attributable to the general partner 5 (634) 2,442 (1,435)
Net income (loss) attributable to common unitholders $ (279) $ 31,036 $ (119,677) $ 70,305
Basic net income (loss) per common unit
Weighted average common units—basic 12,261 12,261 12,261 12,259
Basic net income (loss) from continuing operations per common unit $ (0.02) $ 2.53 $ (9.76) $ 5.72
Basic net income from discontinued operations per common unit $ 0.00 $ 0.00 $ 0.00 $ 0.02
Basic net income (loss) per common unit $ (0.02) $ 2.53 $ (9.76) $ 5.73

~~Table of Contents~~

~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands, except per unit data)	(In thousands, except per unit data)	2020		2019		2020		2019		(In thousands, except per unit data)	2021		2020		2021		2020
Diluted income (loss) per common unit
Allocation of net income (loss)										Allocation of net income (loss)

Net income (loss)										Net income (loss)	$	29,498	$	7,216	$	53,261	$	(99,506)

Less: income attributable to preferred unitholders										Less: income attributable to preferred unitholders	(7,961)		(7,500)		(23,530)		(22,613)
Net income (loss) attributable to common unitholders and the general partner										Net income (loss) attributable to common unitholders and the general partner	$	21,537	$	(284)	$	29,731	$	(122,119)
Add (less): net loss (income) attributable to the general partner										Add (less): net loss (income) attributable to the general partner	(431)		5		(595)		2,442
Net income (loss) attributable to common unitholders										Net income (loss) attributable to common unitholders	$	21,106	$	(279)	$	29,136	$	(119,677)

Basic net income (loss) per common unit										Basic net income (loss) per common unit
Weighted average common units—basic										Weighted average common units—basic	12,351		12,261		12,332		12,261

Basic net income (loss) per common unit										Basic net income (loss) per common unit	$	1.71	$	(0.02)	$	2.36	$	(9.76)

Diluted net income (loss) per common unit										Diluted net income (loss) per common unit
Weighted average common units—basic	Weighted average common units—basic	12,261		12,261		12,261		12,259		Weighted average common units—basic	12,351		12,261		12,332		12,261
Plus: dilutive effect of preferred units	Plus: dilutive effect of preferred units	0		10,494		0		10,494		Plus: dilutive effect of preferred units	13,835		—		13,835		—
Plus: dilutive effect of warrants		0		389		0		800

Plus: dilutive effect of unvested unit-based awards	Plus: dilutive effect of unvested unit-based awards	—		13		—		31		Plus: dilutive effect of unvested unit-based awards	188		—		144		—
Weighted average common units—diluted	Weighted average common units—diluted	12,261		23,157		12,261		23,584		Weighted average common units—diluted	26,374		12,261		26,311		12,261

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

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

Net income (loss)	Net income (loss)	$	7,216	$	39,170	$	(99,506)	$	94,240	Net income (loss)	$	29,498	$	7,216	$	53,261	$	(99,506)
Less: income attributable to preferred unitholders	Less: income attributable to preferred unitholders	(7,500)		0		(22,613)		0		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
Diluted net income (loss) attributable to common unitholders and the general partner										Diluted net income (loss) attributable to common unitholders and the general partner	$	29,498	$	(284)	$	53,261	$	(122,119)
Add (less): diluted net loss (income) attributable to the general partner	Add (less): diluted net loss (income) attributable to the general partner	5		(784)		2,442		(1,885)		Add (less): diluted net loss (income) attributable to the general partner	(589)		5		(1,065)		2,442
Diluted net income (loss) attributable to common unitholders	Diluted net income (loss) attributable to common unitholders	$	(279)	$	38,386	$	(119,677)	$	92,355	Diluted net income (loss) attributable to common unitholders	$	28,909	$	(279)	$	52,196	$	(119,677)

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	Diluted net income (loss) per common unit	$	(0.02)	$	1.66	$	(9.76)	$	3.92	Diluted net income (loss) per common unit	$	1.10	$	(0.02)	$	1.98	$	(9.76)

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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,~~Wyoming mines ~~the~~ trona and processes it into soda ash ~~and distributes the soda ash~~that is sold both domestically and internationally to the glass and chemicals industries.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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


		Operating Segments									Operating Segments
(In thousands)	(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total		(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
For the Three Months Ended September 30, 2021										For the Three Months Ended September 30, 2021
Revenues										Revenues	$	50,055	$	6,672	$	—	$	56,727

Gain on asset sales and disposals										Gain on asset sales and disposals	68		—		—		68
Operating and maintenance expenses										Operating and maintenance expenses	8,278		76		—		8,354
Depreciation, depletion and amortization										Depreciation, depletion and amortization	5,182		—		—		5,182
General and administrative expenses										General and administrative expenses	—		—		4,052		4,052
Asset impairments										Asset impairments	57		—		—		57
Interest expense, net										Interest expense, net	—		—		9,652		9,652
Net income (loss)										Net income (loss)	36,606		6,596		(13,704)		29,498

For the Three Months Ended September 30, 2020	For the Three Months Ended September 30, 2020									For the Three Months Ended September 30, 2020
Revenues	Revenues	$	27,944	$	1,986	$	0	$	29,930	Revenues	$	27,944	$	1,986	$	—	$	29,930

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

For the Three Months Ended September 30, 2019
For the Nine Months Ended September 30, 2021										For the Nine Months Ended September 30, 2021
Revenues	Revenues	$	43,784	$	13,818	$	0	$	57,602	Revenues	$	120,967	$	11,246	$	—	$	132,213

Gain on asset sales and disposals	Gain on asset sales and disposals	6,107		0		0		6,107		Gain on asset sales and disposals	243		—		—		243
Operating and maintenance expenses	Operating and maintenance expenses	5,771		223		0		5,994		Operating and maintenance expenses	18,945		131		—		19,076
Depreciation, depletion and amortization	Depreciation, depletion and amortization	3,384		0		0		3,384		Depreciation, depletion and amortization	15,145		—		—		15,145
General and administrative expenses	General and administrative expenses	0		0		4,253		4,253		General and administrative expenses	—		—		11,550		11,550
Asset impairments	Asset impairments	484		0		0		484		Asset impairments	4,116		—		—		4,116
Other expenses, net		0		0		10,431		10,431
Net income (loss) from continuing operations		40,252		13,595		(14,684)		39,163
Income from discontinued operations		0		0		0		7
Interest expense, net										Interest expense, net	24		—		29,284		29,308
Net income (loss)										Net income (loss)	82,980		11,115		(40,834)		53,261

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

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

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

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

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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,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020		2021		2020
Balance at beginning of period	Balance at beginning of period	$	252,420	$	251,135	$	263,080	$	247,051	Balance at beginning of period	$	266,433	$	252,420	$	262,514	$	263,080
Income allocation to NRP’s equity interests	Income allocation to NRP’s equity interests	3,004		15,068		8,450		40,511		Income allocation to NRP’s equity interests	7,989		3,004		15,060		8,450
Amortization of basis difference	Amortization of basis difference	(1,018)		(1,250)		(3,250)		(3,678)		Amortization of basis difference	(1,317)		(1,018)		(3,814)		(3,250)
Other comprehensive income (loss)		2,428		(520)		2,764		(341)
Other comprehensive income										Other comprehensive income	4,204		2,428		7,469		2,764
Distribution	Distribution	0		(6,370)		(14,210)		(25,480)		Distribution	—		—		(3,920)		(14,210)
Balance at end of period	Balance at end of period	$	256,834	$	258,063	$	256,834	$	258,063	Balance at end of period	$	277,309	$	256,834	$	277,309	$	256,834

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~~2021 and ~~2019:~~2020:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020		2021		2020
Net sales	Net sales	$	98,197	$	137,148	$	288,804	$	397,378	Net sales	$	135,648	$	98,197	$	384,129	$	288,804
Gross profit	Gross profit	11,704		36,747		35,363		103,382		Gross profit	23,530		11,704		50,317		35,363
Net income	Net income	6,130		30,750		17,245		82,675		Net income	16,304		6,130		30,734		17,245

~~Table of Contents~~

~~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, 2020						December 31, 2019							September 30, 2021						December 31, 2020
(In thousands)	(In thousands)	Carrying Value		Accumulated Depletion		Net Book Value		Carrying Value		Accumulated Depletion		Net Book Value		(In thousands)	Carrying Value		Accumulated Depletion		Net Book Value		Carrying Value		Accumulated Depletion		Net Book Value
Coal properties	Coal properties	$	798,870	$	(354,843)	$	444,027	$	981,352	$	(420,448)	$	560,904	Coal properties	$	781,363	$	(359,683)	$	421,680	$	785,623	$	(346,773)	$	438,850
Aggregates properties	Aggregates properties	9,102		(2,741)		6,361		41,486		(13,357)		28,129		Aggregates properties	8,952		(3,084)		5,868		9,039		(2,819)		6,220
Oil and gas royalty properties	Oil and gas royalty properties	12,354		(8,416)		3,938		12,395		(7,887)		4,508		Oil and gas royalty properties	12,354		(8,985)		3,369		12,354		(8,593)		3,761
Other	Other	13,156		(1,612)		11,544		13,156		(1,601)		11,555		Other	13,149		(1,612)		11,537		13,154		(1,612)		11,542
Total mineral rights, net	Total mineral rights, net	$	833,482	$	(367,612)	$	465,870	$	1,048,389	$	(443,293)	$	605,096	Total mineral rights, net	$	815,818	$	(373,364)	$	442,454	$	820,170	$	(359,797)	$	460,373

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~~$4.6 million and ~~$2.8~~$2.1 million for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$6.0~~$13.8 million and ~~$9.5~~$6.0 million for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

~~The~~

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

During the three and nine months ended September 30, 2021, the Partnership recorded ~~$0.9~~$0.1 million and ~~$133.2~~$4.1 million of impairment expense, respectively. Impairment expense during the year was primarily due to ~~fully impair certain properties during~~lease termination that resulted in the full impairment of a coal property. During the three and nine months ended September 30, 2020, the Partnership recorded $0.9 million and $133.2 million, respectively, of expense to fully impair certain properties, primarily related to weakened coal markets that resulted in termination of certain coal leases, changes to lessee ~~mine~~mining 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~~2021 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.

~~Table of Contents~~

~~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,			September 30,		December 31,
(In thousands)	(In thousands)	2020		2019		(In thousands)	2021		2020
NRP LP debt:	NRP LP debt:					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")	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	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:	Opco debt:					Opco debt:
Revolving credit facility	Revolving credit facility	$	0	$	0	Revolving credit facility	$	—	$	—
Senior Notes	Senior Notes					Senior Notes
5.05% with semi-annual interest payments in January and July, with annual principal payments in July, due July 2020		$	0	$	6,780

5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023	5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023	7,094		9,458		5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023	$	4,730	$	7,094
4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023	4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023	24,016		24,016		4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023	18,013		18,013
5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	50,738		63,423		5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	38,053		50,738
8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	16,047		20,059		8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	12,035		16,047
5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	79,945		79,945		5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	68,524		68,524
5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	20,375		20,375		5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	17,464		17,464

Total Opco Senior Notes	Total Opco Senior Notes	$	198,215	$	224,056	Total Opco Senior Notes	$	158,819	$	177,880

Total debt at face value	Total debt at face value	$	498,215	$	524,056	Total debt at face value	$	458,819	$	477,880

Net unamortized debt issuance costs	Net unamortized debt issuance costs	(6,742)		(7,858)		Net unamortized debt issuance costs	(5,300)		(6,381)
Total debt, net	Total debt, net	$	491,473	$	516,198	Total debt, net	$	453,519	$	471,499
Less: current portion of long-term debt	Less: current portion of long-term debt	(39,072)		(45,776)		Less: current portion of long-term debt	(39,082)		(39,055)
Total long-term debt, net	Total long-term debt, net	$	452,401	$	470,422	Total long-term debt, net	$	414,437	$	432,444

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.

Table of Contents

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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

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~~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. "Opco" refers to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. None of NRP's subsidiaries guarantee the 2025 Senior Notes. As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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 BRP LLC and NRP Trona LLC. As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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~~2021 and ~~2019,~~2020, the Partnership did not have any borrowings outstanding under the Opco Credit Facility and had ~~$100~~$100.0 million in available borrowing capacity at both September 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of ~~$366.8~~ $352.1 million and ~~$399.7~~$364.5 million classified as mineral rights, net and other long-term assets, net on the Partnership’s ~~Consolidated~~Consolidated Balance Sheets as of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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~~2021 and December 31, ~~2019,~~2020, the Opco Senior Notes had cumulative principal balances of ~~$198.2~~$158.8 million and ~~$224.1~~$177.9 million, respectively. Opco made mandatory principal payments of $19.1 million and $25.8 million during the nine months ended September 30, 2021 and 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.~~

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~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

respectively.

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.~~2021.

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, 2020				December 31, 2019						September 30, 2021				December 31, 2020
(In thousands)	(In thousands)	Fair Value Hierarchy Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		(In thousands)	Fair Value Hierarchy Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Debt:	Debt:										Debt:
NRP 2025 Senior Notes	NRP 2025 Senior Notes	1	$	294,891	$	263,250	$	294,084	$	269,250	NRP 2025 Senior Notes	1	$	295,966	$	303,750	$	295,160	$	274,500

Opco Senior Notes (1)	Opco Senior Notes (1)	3	196,582		173,934		222,114		201,090		Opco Senior Notes (1)	3	157,553		160,804		176,339		162,760
Opco Credit Facility	Opco Credit Facility	3	0		0		0		0		Opco Credit Facility	3	—		—		—		—

Assets:	Assets:										Assets:

Contract receivable (current and long-term) (2)		3	$	35,800	$	27,255	$	38,945	$	33,460
Contract receivable, net (current and long-term) (2)											Contract receivable, net (current and long-term) (2)	3	$	34,145	$	26,278	$	35,313	$	27,025

(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%~~101% and 92% of par value at September 30, ~~2020.~~2021 and December 31, 2020, respectively.

(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, 2021 and December 31, 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 0zero value as of September 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

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

Direct general and administrative expenses charged to the Partnership by QMC, WPPLP and ~~WPPLP~~QID 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,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020		2021		2020
Operating and maintenance expenses	Operating and maintenance expenses	$	1,562	$	1,598	$	4,729	$	4,806	Operating and maintenance expenses	$	1,661	$	1,628	$	4,913	$	4,928
General and administrative expenses	General and administrative expenses	878		855		2,657		2,704		General and administrative expenses	1,185		1,135		3,486		3,456

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 of $0.4 million to QMC and $0.3 million to WPPLP at both September 30, ~~2020~~2021 and December 31, ~~2019, respectively.~~2020.

During the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Partnership recognized $0.9 million and $0.2 million, ~~and $0.3 million~~respectively, 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~~$2.1 million and ~~$3.8~~$0.3 million during the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. At ~~September 30,~~December 31, 2020 the Partnership had ~~$0.4~~$0.3 million of other long-term assets, net on its Consolidated Balance ~~Sheet~~Sheets 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.

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


	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2021				2020				2021				2020
(In thousands)	Revenues		Percent		Revenues		Percent		Revenues		Percent		Revenues		Percent
Foresight Energy Resources LLC ("Foresight") (1) (2)	$	8,552	15	%	$	8,592	29	%	$	25,686	19	%	$	27,052	27	%
Alpha Metallurgical Resources, Inc. (1)	12,854		23	%	7,143		24	%	29,748		23	%	23,164		23	%

(1)Revenues from Foresight ~~Energy~~ and Alpha Metallurgical Resources, Inc. (formerly Contura Energy Inc.) 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.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

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~~2021 and ~~2019~~2020 were valued using the closing price of NRP's common units as of the grant date. The grant date fair value of these awards granted during the nine months ended September 30, 2021 and 2020 ~~and 2019~~ were ~~$3.5~~$3.8 million and ~~$5.4~~$3.5 million, respectively. Total unit-based compensation expense associated with these awards was ~~$0.9~~$1.1 million and ~~$0.5~~$0.9 million for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$2.6~~$2.8 million and ~~$1.8~~$2.6 million for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, 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~~2021 is ~~$4.4~~$4.2 million, which is to be recognized over a weighted average period of ~~1.8~~1.7 years. The unamortized cost associated with unvested outstanding awards as of December 31, ~~2019~~2020 was ~~$3.5~~$3.7 million.

A summary of the unit activity in the outstanding grants during ~~2020~~2021 is as follows:


(In thousands)	(In thousands)	Common Units	Weighted Average Exercise Price		(In thousands)	Common Units	Weighted Average Exercise Price
Outstanding at January 1, 2020		157	$	37.48
Outstanding at January 1, 2021					Outstanding at January 1, 2021	355	$	26.20
Granted	Granted	203	$	17.20	Granted	219	$	17.31
Fully vested and issued	Fully vested and issued	0	$	0	Fully vested and issued	(129)	$	21.38
Forfeitures	Forfeitures	(5)	$	17.20	Forfeitures	(34)	$	26.00
Outstanding at September 30, 2020		355	$	26.20
Outstanding at September 30, 2021					Outstanding at September 30, 2021	411	$	23.00

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~~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.~~Foresight. 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) 2020 2019
Accounts receivable, net $ 0 $ 540
Contract receivable, net (current and long-term) 35,800 38,945
Unearned income 19,704 21,889
Projected remaining payments, net $ 55,504 $ 61,374

15. Credit Losses

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

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

As of September 30, 2021 and December 31, 2020, NRP ~~recorded~~had the following current expected credit loss (“CECL”) allowance related to its receivables and long-term contract receivable:


									September 30, 2021						December 31, 2020
(In thousands)	(In thousands)	Gross		CECL Allowance		Net		(In thousands)	Gross		CECL Allowance		Net		Gross		CECL Allowance		Net
Receivables	Receivables	$	24,172	$	(2,324)	$	21,848	Receivables	$	26,932	$	(2,581)	$	24,351	$	18,512	$	(2,358)	$	16,154
Long-term contract receivable	Long-term contract receivable	35,370		(1,579)		33,791		Long-term contract receivable	33,094		(1,146)		31,948		34,818		(1,554)		33,264
Total	Total	$	59,542	$	(3,903)	$	55,639	Total	$	60,026	$	(3,727)	$	56,299	$	53,330	$	(3,912)	$	49,418

NRP recorded ~~$0.3~~$0.5 million and ~~$0.0~~$0.3 million in operating and maintenance expenses on its Consolidated ~~Statement~~Statements of Comprehensive Income (Loss) related to the change in the CECL allowance during the three months ended September 30, 2021 and 2020, respectively, and $(0.2) million and $0.0 million during the nine months ended September 30, ~~2020, respectively. In addition, the Partnership recorded $0.0 million~~2021 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,~~reconciliation, bankruptcy monitoring, lessee audits and dispute resolution. The Partnership may employ legal counsel or collection specialists to pursue recovery of defaulted receivables.

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~~NATURAL RESOURCE PARTNERS L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(Unaudited)~~

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
2021 483
2022 483
2023 483
2024 483
After 2024 11,597
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~~2021 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,~~2021, the Board of Directors declared a distribution of $0.45 per common unit with respect to the third quarter of ~~2020.~~2021. The Board of Directors also declared a distribution on NRP's preferred units with respect to the third quarter of ~~2020~~2021 to be paid one-half in cash equal to ~~$3.75~~$3.98 million and one-half in kind through the issuance of ~~3,750~~3,980 additional preferred units.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following review of operations for the three and nine month periods ended September 30, ~~2020~~2021 and ~~2019~~2020 should be read in conjunction with our ~~consolidated financial statements~~Consolidated Financial Statements and the ~~notes~~Notes to ~~consolidated financial statements~~Consolidated Financial Statements included in this Form 10-Q and with the ~~consolidated financial statements, notes~~Consolidated Financial Statements, Notes to ~~consolidated financial statements~~Consolidated Financial Statements and ~~management’s discussion~~Management’s Discussion and ~~analysis~~Analysis included in the Natural Resource Partners L.P. Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

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~~"Item 1A. Risk ~~Factors"~~Factors" included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 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.~~11. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

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Distributable Cash Flow

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

Introduction

The following discussion and analysis presents management's view of our business, financial condition and overall performance. Our discussion and analysis consists of the following subjects:

•Executive Overview

•Results of Operations

•Liquidity and Capital Resources

•Off-Balance Sheet Transactions

•Related Party Transactions

•Summary of Critical Accounting Estimates

•Recent Accounting Standards

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Executive Overview

We are a diversified natural resource company engaged principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and own a non-controlling 49% interest in Ciner Wyoming, ~~LLC ("Ciner Wyoming"),~~ a 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,~~Wyoming mines the trona and processes it into soda ash ~~and distributes the soda ash~~that is sold both domestically and internationally into the glass and chemicals industries.

In addition to actively managing our producing coal and hard mineral properties, we continue to identify alternative revenue sources across our large portfolio of land, mineral and timber assets. The types of opportunities include the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar and wind energy. In the fourth quarter of this year, we were able to execute on one such project through the issuance and subsequent sale of 1.1 million forest carbon offset credits for $13.8 million. The offset credits were issued to us by the California Air Resources Board under its cap-and-trade program and represent 1.1 million tonnes of carbon sequestered from approximately 39,000 acres of our forest assets in West Virginia. This is an encouraging first step in our ability to create value through alternative revenue sources. While the timing and likelihood of additional cash flows being realized from further activities is uncertain, we believe our large ownership footprint throughout the United States will provide additional opportunities to create value in this regard with minimal capital investment.

Our financial results by segment for the nine months ended September 30, ~~2020~~2021 are as follows:


		Operating Segments									Operating Segments
(In thousands)	(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total		(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
Revenues and other income	Revenues and other income	$	95,955	$	5,200	$	—	$	101,155	Revenues and other income	$	121,210	$	11,246	$	—	$	132,456
Net income (loss) from continuing operations		$	(62,562)	$	5,059	$	(42,003)	$	(99,506)
Net income (loss)										Net income (loss)	$	82,980	$	11,115	$	(40,834)	$	53,261
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	76,896	$	14,069	$	(11,168)	$	79,797	Adjusted EBITDA (1)	$	102,265	$	3,789	$	(11,550)	$	94,504

Cash flow provided by (used in) continuing operations	Cash flow provided by (used in) continuing operations									Cash flow provided by (used in) continuing operations
Operating activities	Operating activities	$	91,082	$	14,091	$	(30,760)	$	74,413	Operating activities	$	91,958	$	3,817	$	(29,132)	$	66,643
Investing activities	Investing activities	$	969	$	—	$	—	$	969	Investing activities	$	1,871	$	—	$	—	$	1,871
Financing activities	Financing activities	$	—	$	—	$	(58,074)	$	(58,074)	Financing activities	$	(1,132)	$	—	$	(48,183)	$	(49,315)
Distributable cash flow (1)	Distributable cash flow (1)	$	93,051	$	14,091	$	(30,760)	$	76,316	Distributable cash flow (1)	$	93,829	$	3,817	$	(29,132)	$	68,514
Free cash flow (1)	Free cash flow (1)	$	91,544	$	14,091	$	(30,760)	$	74,875	Free cash flow (1)	$	92,580	$	3,817	$	(29,132)	$	67,265

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

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Current Results/Market ~~Commentary~~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

We generated $67.3 million of free cash flow during the ~~third quarter, prices remain below pre-pandemic levels. We continue to employ remote work protocols~~nine months ended September 30, 2021, 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~~$219.0 million of liquidity consisting of ~~$115.6~~$119.0 million of cash and cash equivalents and $100.0 million of borrowing capacity under our Opco Credit ~~Facility~~Facility.

Our liquidity has remained steady 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~~decreased to 3.8x at September 30, ~~2020.~~2021. 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 has 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~~units (“PIK units”) for the ~~third quarter of 2020. To the extent~~past five quarters. While our leverage ratio ~~continues to exceed~~is currently above the 3.75x ~~which~~threshold, as a result of the strong coal and soda ash pricing expected in the fourth quarter and the forest carbon offset transaction described above, we expect ~~for~~our leverage ratio to be below the ~~foreseeable future,~~3.75x threshold by December 31, 2021. If this occurs, we ~~will be required to continue to pay one-half of the required preferred distributions in kind (“PIK units”) and will be unable~~plan to redeem ~~any PIK~~our outstanding paid-in-kind preferred units ~~until~~ and continue paying cash distributions to our common unitholders. If our consolidated leverage ratio ~~falls~~were to remain above 3.75x and we remain unable to redeem our outstanding paid-in-kind preferred units, we would be required to temporarily suspend distributions on our common units until the leverage ratio drops below ~~3.75x. Distributions on~~3.75x and the outstanding ~~PIK units will accrue and accumulate at 12% per year until such PIK~~paid-in-kind preferred units are redeemed.

Additionally, we expect our leverage ratio to continue its long-term decline as we pay down debt.

Future distributions on ~~NRP's~~our common and preferred units and decisions regarding paid-in-kind preferred unit redemptions 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, covenants in our debt and partnership agreements, 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~~Metallurgical coal markets have rebounded significantly from the lows seen in 2020 to ~~rebound in the third quarter~~record highs and the outlook ~~for our coal businesses has improved, though sales volumes~~remains strong as steel demand driven by global economic recovery is more than offsetting challenges related to the COVID-19 pandemic. Domestic and ~~prices for coal sold from our properties in the third quarter remained below pre-pandemic levels. We expect~~export thermal coal markets have also significantly improved from the lows seen in 2020, however we do not have meaningful sensitivity to ~~remain volatile~~thermal coal price movements this year since the substantial majority of our thermal cash flows are fixed through 2021 pursuant to a contract with Foresight Energy ("Foresight") that went into effect as ~~a result~~they emerged from bankruptcy in 2020. While there is potential for us to capture upside from improved thermal coal demand and pricing in 2022, thermal coal markets still face the long-term challenges of ~~ongoing uncertainties with~~lower electricity demand, competition from natural gas and the ~~COVID-19 pandemic.~~secular shift to renewable energy.

Our lessees sold ~~12.1~~21.1 million tons of coal from our properties in the first nine months of ~~2020~~2021 and we derived approximately ~~70%~~60% of our coal royalty revenues and approximately ~~65%~~45% 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.

~~Table of Contents~~

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 ashWyoming's business ~~has improved. While Ciner Wyoming has yet~~continues 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.~~pre-COVID-19 levels. While we believe ~~our~~Ciner Wyoming's 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.

Revenues and other income in the first nine months of 2021 were higher by $6.0 million compared to the prior year period as demand for soda ash continues to improve globally from the lows caused by the COVID-19 pandemic.

We received a special distribution of $3.9 million in the first nine months of 2021 as compared to $14.2 million of regular quarterly distributions received in the first nine months of 2020. 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~~regular quarterly distributions ~~for~~in the ~~second or~~ third ~~quarters~~quarter of 2020. As a result of the continued improvement in global soda ash demand and pricing, Ciner Wyoming reinstated its quarterly cash distribution and NRP will ~~continue to evaluate, on a quarterly basis, whether to reinstate~~receive $7.4 million in the ~~distribution.~~fourth quarter of 2021.

Table of Contents

When considering the significant investment required by Ciner Wyoming’s ~~ability~~previously announced expansion project and the infrastructure improvements designed to ~~pay future quarterly distributions will be dependent in part~~increase overall efficiency, combined with the COVID-19 pandemic’s negative impact on ~~its cash reserves, liquidity, total debt levels and anticipated capital expenditures. In addition,~~Ciner Wyoming’s financial results, Ciner Wyoming ~~continues to develop plans for a significant capacity expansion capital project. However, they have delayed~~has reprioritized the timing of the significant ~~costs related~~capital expenditure items in order to ~~this project~~increase financial and liquidity flexibility until ~~they have~~it has more clarity and visibility into the ongoing impact of the COVID-19 pandemic on ~~their business~~its business.

Results of Operations

Third Quarter of ~~2020~~2021 and ~~2019~~2020 Compared

Revenues and Other Income

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


		For the Three Months Ended September 30,				Decrease		Percentage Change			For the Three Months Ended September 30,				Increase		Percentage Change
Operating Segment (In thousands)	Operating Segment (In thousands)	2020		2019						Operating Segment (In thousands)	2021		2020
Coal Royalty and Other	Coal Royalty and Other	$	27,944	$	49,891	$	(21,947)	(44)	%	Coal Royalty and Other	$	50,123	$	27,944	$	22,179	79	%
Soda Ash	Soda Ash	1,986		13,818		(11,832)		(86)	%	Soda Ash	6,672		1,986		4,686		236	%
Total	Total	$	29,930	$	63,709	$	(33,779)	(53)	%	Total	$	56,795	$	29,930	$	26,865	90	%

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

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Coal Royalty and Other

The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:

For the Three Months Ended September 30, Increase
(Decrease) Percentage
Change
(In thousands, except per ton data) 2020 2019
Coal sales volumes (tons)
Appalachia
Northern 102 290 (188) (65) %
Central 2,247 3,222 (975) (30) %
Southern 172 438 (266) (61) %
Total Appalachia 2,521 3,950 (1,429) (36) %
Illinois Basin 758 551 207 38 %
Northern Powder River Basin 365 532 (167) (31) %
Total coal sales volumes 3,644 5,033 (1,389) (28) %
Coal royalty revenue per ton
Appalachia
Northern $ 3.06 $ 2.54 $ 0.52 20 %
Central 3.83 5.25 (1.42) (27) %
Southern 4.78 5.99 (1.21) (20) %
Illinois Basin 1.63 4.82 (3.19) (66) %
Northern Powder River Basin 3.46 4.69 (1.23) (26) %
Combined average coal royalty revenue per ton 3.36 5.05 (1.69) (33) %
Coal royalty revenues
Appalachia
Northern $ 312 $ 735 $ (423) (58) %
Central 8,602 16,929 (8,327) (49) %
Southern 823 2,626 (1,803) (69) %
Total Appalachia 9,737 20,290 (10,553) (52) %
Illinois Basin 1,234 2,658 (1,424) (54) %
Northern Powder River Basin 1,262 2,492 (1,230) (49) %
Unadjusted coal royalty revenues 12,233 25,440 (13,207) (52) %
Coal royalty adjustment for minimum leases (1)
(1,623) (713) (910) (128) %
Total coal royalty revenues $ 10,610 $ 24,727 $ (14,117) (57) %
Other revenues
Production lease minimum revenues (1)
$ 4,267 $ 2,752 $ 1,515 55 %
Minimum lease straight-line revenues (1)
3,553 3,982 (429) (11) %
Property tax revenues 1,896 1,606 290 18 %
Wheelage revenues 1,680 1,675 5 — %
Coal overriding royalty revenues 1,314 2,189 (875) (40) %
Lease amendment revenues 858 1,535 (677) (44) %
Aggregates royalty revenues 221 954 (733) (77) %
Oil and gas royalty revenues 1,078 374 704 188 %
Other revenues 263 125 138 110 %
Total other revenues $ 15,130 $ 15,192 $ (62) — %
Coal royalty and other $ 25,740 $ 39,919 $ (14,179) (36) %
Transportation and processing services revenues 2,204 3,865 (1,661) (43) %
Gain on asset sales and disposals — 6,107 (6,107) (100) %
Total Coal Royalty and Other segment revenues and other income $ 27,944 $ 49,891 $ (21,947) (44) %


	For the Three Months Ended September 30,				Increase (Decrease)		Percentage Change
(In thousands, except per ton data)	2021		2020
Coal sales volumes (tons)
Appalachia
Northern	422		102		320		314	%
Central	3,199		2,247		952		42	%
Southern	642		172		470		273	%
Total Appalachia	4,263		2,521		1,742		69	%
Illinois Basin	2,689		758		1,931		255	%
Northern Powder River Basin	1,047		365		682		187	%
Gulf Coast	13		—		13		100	%
Total coal sales volumes	8,012		3,644		4,368		120	%

Coal royalty revenue per ton
Appalachia
Northern	$	7.18	$	3.06	$	4.12	135	%
Central	5.74		3.83		1.91		50	%
Southern	11.61		4.78		6.83		143	%

Illinois Basin	2.33		1.63		0.70		43	%
Northern Powder River Basin	3.71		3.46		0.25		7	%
Gulf Coast	0.54		—		0.54		100	%
Combined average coal royalty revenue per ton	4.87		3.36		1.51		45	%

Coal royalty revenues
Appalachia
Northern	$	3,031	$	312	$	2,719	871	%
Central	18,357		8,602		9,755		113	%
Southern	7,452		823		6,629		805	%
Total Appalachia	28,840		9,737		19,103		196	%
Illinois Basin	6,261		1,234		5,027		407	%
Northern Powder River Basin	3,881		1,262		2,619		208	%
Gulf Coast	7		—		7		100	%
Unadjusted coal royalty revenues	38,989		12,233		26,756		219	%
Coal royalty adjustment for minimum leases	(6,557)		(1,623)		(4,934)		(304)	%
Total coal royalty revenues	$	32,432	$	10,610	$	21,822	206	%

Other revenues
Production lease minimum revenues	$	3,235	$	4,267	$	(1,032)	(24)	%
Minimum lease straight-line revenues	4,808		3,553		1,255		35	%
Property tax revenues	1,466		1,896		(430)		(23)	%
Wheelage revenues	1,964		1,680		284		17	%
Coal overriding royalty revenues	757		1,314		(557)		(42)	%
Lease amendment revenues	1,519		858		661		77	%

Aggregates royalty revenues	429		221		208		94	%
Oil and gas royalty revenues	1,154		1,078		76		7	%
Other revenues	120		263		(143)		(54)	%
Total other revenues	$	15,452	$	15,130	$	322	2	%
Coal royalty and other	$	47,884	$	25,740	$	22,144	86	%
Transportation and processing services revenues	2,171		2,204		(33)		(1)	%
Gain on asset sales and disposals	68		—		68		100	%
Total Coal Royalty and Other segment revenues and other income	$	50,123	$	27,944	$	22,179	79	%

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

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Coal Royalty Revenues

Approximately ~~70%~~65% of coal royalty revenues and approximately ~~65%~~45% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, ~~2020. Coal~~2021. Total coal royalty revenues ~~decreased $14.1~~increased $21.8 million ~~period-over-period primarily driven by~~as compared to the ~~weakened coal markets that resulted in lower coal sales volumes~~prior year quarter as a result of increased demand and ~~prices.~~pricing for both metallurgical and thermal coals. The discussion ~~of these decreases~~ by region is as follows:

•Appalachia: ~~Sales volumes decreased 36% and coal~~Coal royalty revenues ~~decreased $10.6~~increased $19.1 million primarily due to ~~weakened coal demand compounded by~~a 69% increase in sales volumes in addition to higher sales prices as compared to the ~~COVID-19 pandemic.~~prior year quarter.

•Illinois Basin: ~~Sales volumes increased 38% due to increased activity at the Hillsboro and Williamson mines, while coal~~Coal royalty revenues ~~decreased $1.4~~increased $5.0 million primarily due to a 255% increase in sales volumes and a 43% increase in sales prices for the three months ended September 30, 2021 as compared to the prior year quarter. In the second quarter of 2020, we~~idling of our Macoupin property. As mentioned above,~~ ~~certain revenues previously classified as coal royalty revenues are classified as production~~ entered into lease ~~minimum revenues or minimum lease straight-line revenues due to contract modifications~~amendments with Foresight ~~Energy that~~pursuant to which Foresight agreed to pay us fixed ~~consideration paid~~cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between us ~~over~~and Foresight for calendar years 2020 and 2021. As a ~~two-year period.~~result of these amendments, actual revenues recognized from Foresight were flat period-over-period.

•Northern Powder River Basin: ~~Sales volumes decreased 31% and coal~~Coal royalty revenues ~~decreased $1.2~~increased $2.6 million primarily due to a 187% increase in sales volumes as our lessee ~~mining off~~mined on our property more during the third quarter of ~~our property~~2021 as compared to the prior year quarter in accordance with its mine plan in ~~2020.~~

~~Transportation and Processing Services Revenues~~

~~Transportation and processing services revenues decreased $1.7 million primarily due~~addition to ~~idling of the Macoupin mine where we own loadout and other transportation assets.~~

~~Gain on Asset Sales and Disposals~~

~~Gain on asset~~a 7% increase in sales ~~and disposals decreased $6.1 million primarily due~~prices as compared to the ~~disposal of certain mineral right assets during the third quarter of 2019.~~prior year quarter.

Soda Ash

Revenues and other income related to our Soda Ash segment ~~decreased $11.8~~increased $4.7 million ~~primarily due~~compared to ~~a combination of lower pricing and volumes sold. Ciner Wyoming was negatively impacted~~the prior year quarter as demand for soda ash continues to improve globally from the lows caused by the COVID-19 ~~pandemic as lower activity in the global auto, container and construction industries reduced demand for glass and soda ash.~~pandemic.

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) 2020 2019
Operating expenses
Operating and maintenance expenses $ 5,781 $ 5,994 $ (213) (4) %
Depreciation, depletion and amortization 2,111 3,384 (1,273) (38) %
General and administrative expenses 3,634 4,253 (619) (15) %
Asset impairments 934 484 450 93 %
Total operating expenses $ 12,460 $ 14,115 $ (1,655) (12) %
Other expenses, net
Interest expense, net $ 10,254 $ 10,431 $ (177) (2) %
Total other expenses, net $ 10,254 $ 10,431 $ (177) (2) %


	For the Three Months Ended September 30,				Increase (Decrease)		Percentage Change
(In thousands)	2021		2020
Operating expenses
Operating and maintenance expenses	$	8,354	$	5,781	$	2,573	45	%
Depreciation, depletion and amortization	5,182		2,111		3,071		145	%
General and administrative expenses	4,052		3,634		418		12	%
Asset impairments	57		934		(877)		(94)	%
Total operating expenses	$	17,645	$	12,460	$	5,185	42	%

Total operating expenses ~~decreased $1.7~~increased $5.2 million primarily due to a ~~$1.3~~$3.1 million ~~decrease~~increase in depreciation, depletion and amortization expense as a result of ~~lower coal sales volumes~~increased production at certain Illinois Basin coal properties.

Additionally, operating and maintenance expenses increased $2.6 million primarily due to an increase in bad debt expense as compared to the prior year quarter.

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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									Operating Segments
For the Three Months Ended (In thousands)	For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total		For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
September 30, 2020
Net income (loss) from continuing operations		$	19,173	$	1,890	$	(13,847)	$	7,216
September 30, 2021										September 30, 2021
Net income (loss)										Net income (loss)	$	36,606	$	6,596	$	(13,704)	$	29,498
Less: equity earnings from unconsolidated investment	Less: equity earnings from unconsolidated investment	—		(1,986)		—		(1,986)		Less: equity earnings from unconsolidated investment	—		(6,672)		—		(6,672)

Add: interest expense, net	Add: interest expense, net	41		—		10,213		10,254		Add: interest expense, net	—		—		9,652		9,652

Add: depreciation, depletion and amortization	Add: depreciation, depletion and amortization	2,111		—		—		2,111		Add: depreciation, depletion and amortization	5,182		—		—		5,182
Add: asset impairments	Add: asset impairments	934		—		—		934		Add: asset impairments	57		—		—		57
Adjusted EBITDA	Adjusted EBITDA	$	22,259	$	(96)	$	(3,634)	$	18,529	Adjusted EBITDA	$	41,845	$	(76)	$	(4,052)	$	37,717

September 30, 2019
Net income (loss) from continuing operations		$	40,252	$	13,595	$	(14,684)	$	39,163
September 30, 2020										September 30, 2020
Net loss										Net loss	$	19,173	$	1,890	$	(13,847)	$	7,216
Less: equity earnings from unconsolidated investment	Less: equity earnings from unconsolidated investment	—		(13,818)		—		(13,818)		Less: equity earnings from unconsolidated investment	—		(1,986)		—		(1,986)

Add: total distributions from unconsolidated investment		—		6,370		—		6,370

Add: interest expense, net	Add: interest expense, net	—		—		10,431		10,431		Add: interest expense, net	41		—		10,213		10,254

Add: depreciation, depletion and amortization	Add: depreciation, depletion and amortization	3,384		—		—		3,384		Add: depreciation, depletion and amortization	2,111		—		—		2,111
Add: asset impairments	Add: asset impairments	484		—		—		484		Add: asset impairments	934		—		—		934
Adjusted EBITDA	Adjusted EBITDA	$	44,120	$	6,147	$	(4,253)	$	46,014	Adjusted EBITDA	$	22,259	$	(96)	$	(3,634)	$	18,529

Adjusted EBITDA ~~decreased $27.5~~increased $19.2 million primarily due to ~~the following:~~

•a $19.6 million increase in Adjusted EBITDA within our Coal Royalty and Other ~~Segment~~

◦~~Adjusted EBITDA decreased $21.9 million primarily~~segment 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.

~~Table of Contents~~

higher revenues and other income, partially offset by higher operating and maintenance expenses, both discussed above.

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

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


		Operating Segments									Operating Segments
For the Three Months Ended (In thousands)	For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total		For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
September 30, 2021										September 30, 2021
Cash flow provided by (used in) continuing operations										Cash flow provided by (used in) continuing operations
Operating activities										Operating activities	$	33,968	$	(36)	$	(3,873)	$	30,059
Investing activities										Investing activities	614		—		—		614
Financing activities										Financing activities	—		—		(9,592)		(9,592)

September 30, 2020	September 30, 2020									September 30, 2020
Cash flow provided by (used in) continuing operations	Cash flow provided by (used in) continuing operations									Cash flow provided by (used in) continuing operations
Operating activities	Operating activities	$	28,573	$	(75)	$	(4,175)	$	24,323	Operating activities	$	28,573	$	(75)	$	(4,175)	$	24,323
Investing activities	Investing activities	332		—		—		332		Investing activities	332		—		—		332
Financing activities	Financing activities	—		—		(19,910)		(19,910)		Financing activities	—		—		(19,910)		(19,910)

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

Table of Contents

The following table reconciles net cash provided by (used in) operating activities of continuing operations (the most comparable GAAP financial measure) by business segment to DCF and FCF:


		Operating Segments									Operating Segments
For the Three Months Ended (In thousands)	For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total		For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
September 30, 2021										September 30, 2021
Net cash provided by (used in) operating activities of continuing operations										Net cash provided by (used in) operating activities of continuing operations	$	33,968	$	(36)	$	(3,873)	$	30,059

Add: proceeds from asset sales and disposals										Add: proceeds from asset sales and disposals	74		—		—		74

Add: return of long-term contract receivable										Add: return of long-term contract receivable	540		—		—		540

Distributable cash flow										Distributable cash flow	$	34,582	$	(36)	$	(3,873)	$	30,673
Less: proceeds from asset sales and disposals										Less: proceeds from asset sales and disposals	(74)		—		—		(74)

Free cash flow										Free cash flow	$	34,508	$	(36)	$	(3,873)	$	30,599

September 30, 2020	September 30, 2020									September 30, 2020
Net cash provided by (used in) operating activities of continuing operations	Net cash provided by (used in) operating activities of continuing operations	$	28,573	$	(75)	$	(4,175)	$	24,323	Net cash provided by (used in) operating activities of continuing operations	$	28,573	$	(75)	$	(4,175)	$	24,323

Add: return of long-term contract receivable	Add: return of long-term contract receivable	332		—		—		332		Add: return of long-term contract receivable	332		—		—		332

Distributable cash flow and free cash flow	Distributable cash flow and free cash flow	$	28,905	$	(75)	$	(4,175)	$	24,655	Distributable cash flow and free cash flow	$	28,905	$	(75)	$	(4,175)	$	24,655

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

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

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

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

DCF and FCF ~~decreased $23.5~~increased $6.0 million and ~~$17.5~~$5.9 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~~increased coal royalty cash flow as a result of ~~the weakened~~stronger metallurgical coal ~~markets~~ demand and pricing 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.~~2021.

•~~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.

~~Table of Contents~~

Results of Operations

First Nine Months of ~~2020~~2021 and ~~2019~~2020 Compared

Revenues and Other Income

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


		For the Nine Months Ended September 30,				Decrease		Percentage Change			For the Nine Months Ended September 30,				Increase		Percentage Change
Operating Segment (In thousands)	Operating Segment (In thousands)	2020		2019						Operating Segment (In thousands)	2021		2020
Coal Royalty and Other	Coal Royalty and Other	$	95,955	$	175,386	$	(79,431)	(45)	%	Coal Royalty and Other	$	121,210	$	95,955	$	25,255	26	%
Soda Ash	Soda Ash	5,200		36,833		(31,633)		(86)	%	Soda Ash	11,246		5,200		6,046		116	%
Total	Total	$	101,155	$	212,219	$	(111,064)	(52)	%	Total	$	132,456	$	101,155	$	31,301	31	%

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

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Coal Royalty and Other

The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:

For the Nine Months Ended September 30, Increase
(Decrease) Percentage
Change
(In thousands, except per ton data) 2020 2019
Coal sales volumes (tons)
Appalachia
Northern 516 2,774 (2,258) (81) %
Central 7,643 10,469 (2,826) (27) %
Southern 820 1,172 (352) (30) %
Total Appalachia 8,979 14,415 (5,436) (38) %
Illinois Basin 1,841 1,646 195 12 %
Northern Powder River Basin 1,232 1,979 (747) (38) %
Total coal sales volumes 12,052 18,040 (5,988) (33) %
Coal royalty revenue per ton
Appalachia
Northern $ 2.22 $ 2.23 $ (0.01) — %
Central 4.28 5.79 (1.51) (26) %
Southern 4.70 7.00 (2.30) (33) %
Illinois Basin 2.48 4.70 (2.22) (47) %
Northern Powder River Basin 3.66 3.21 0.45 14 %
Combined average coal royalty revenue per ton 3.88 4.94 (1.06) (21) %
Coal royalty revenues
Appalachia
Northern $ 1,143 $ 6,173 $ (5,030) (81) %
Central 32,726 60,628 (27,902) (46) %
Southern 3,857 8,204 (4,347) (53) %
Total Appalachia 37,726 75,005 (37,279) (50) %
Illinois Basin 4,570 7,739 (3,169) (41) %
Northern Powder River Basin 4,510 6,347 (1,837) (29) %
Unadjusted coal royalty revenues 46,806 89,091 (42,285) (47) %
Coal royalty adjustment for minimum leases (1)
(6,247) (1,530) (4,717) (308) %
Total coal royalty revenues $ 40,559 $ 87,561 $ (47,002) (54) %
Other revenues
Production lease minimum revenues (1)
$ 13,554 $ 21,331 $ (7,777) (36) %
Minimum lease straight-line revenues (1)
12,349 11,152 1,197 11 %
Property tax revenues 4,256 4,416 (160) (4) %
Wheelage revenues 5,468 5,035 433 9 %
Coal overriding royalty revenues 3,319 10,163 (6,844) (67) %
Lease amendment revenues 2,591 6,720 (4,129) (61) %
Aggregates royalty revenues 1,068 3,655 (2,587) (71) %
Oil and gas royalty revenues 4,923 2,575 2,348 91 %
Other revenues 752 1,429 (677) (47) %
Total other revenues $ 48,280 $ 66,476 $ (18,196) (27) %
Coal royalty and other $ 88,839 $ 154,037 $ (65,198) (42) %
Transportation and processing services revenues 6,651 14,740 (8,089) (55) %
Gain on asset sales and disposals 465 6,609 (6,144) (93) %
Total Coal Royalty and Other segment revenues and other income $ 95,955 $ 175,386 $ (79,431) (45) %


	For the Nine Months Ended September 30,				Increase (Decrease)		Percentage Change
(In thousands, except per ton data)	2021		2020
Coal sales volumes (tons)
Appalachia
Northern	947		516		431		84	%
Central	8,824		7,643		1,181		15	%
Southern	1,058		820		238		29	%
Total Appalachia	10,829		8,979		1,850		21	%
Illinois Basin	7,987		1,841		6,146		334	%
Northern Powder River Basin	2,291		1,232		1,059		86	%
Gulf Coast	13		—		13		100	%
Total coal sales volumes	21,120		12,052		9,068		75	%

Coal royalty revenue per ton
Appalachia
Northern	$	5.57	$	2.22	$	3.35	151	%
Central	4.91		4.28		0.63		15	%
Southern	9.82		4.70		5.12		109	%

Illinois Basin	2.13		2.48		(0.35)		(14)	%
Northern Powder River Basin	3.59		3.66		(0.07)		(2)	%
Gulf Coast	0.54		—		0.54		100	%
Combined average coal royalty revenue per ton	3.99		3.88		0.11		3	%

Coal royalty revenues
Appalachia
Northern	$	5,272	$	1,143	$	4,129	361	%
Central	43,308		32,726		10,582		32	%
Southern	10,390		3,857		6,533		169	%
Total Appalachia	58,970		37,726		21,244		56	%
Illinois Basin	17,044		4,570		12,474		273	%
Northern Powder River Basin	8,222		4,510		3,712		82	%
Gulf Coast	7		—		7		100	%
Unadjusted coal royalty revenues	84,243		46,806		37,437		80	%
Coal royalty adjustment for minimum leases	(18,148)		(6,247)		(11,901)		(191)	%
Total coal royalty revenues	$	66,095	$	40,559	$	25,536	63	%

Other revenues
Production lease minimum revenues	$	10,241	$	13,554	$	(3,313)	(24)	%
Minimum lease straight-line revenues	15,773		12,349		3,424		28	%
Property tax revenues	4,522		4,256		266		6	%
Wheelage revenues	5,589		5,468		121		2	%
Coal overriding royalty revenues	3,592		3,319		273		8	%
Lease amendment revenues	3,159		2,591		568		22	%

Aggregates royalty revenues	1,339		1,068		271		25	%
Oil and gas royalty revenues	3,420		4,923		(1,503)		(31)	%
Other revenues	692		752		(60)		(8)	%
Total other revenues	$	48,327	$	48,280	$	47	—	%
Coal royalty and other	$	114,422	$	88,839	$	25,583	29	%
Transportation and processing services revenues	6,545		6,651		(106)		(2)	%
Gain on asset sales and disposals	243		465		(222)		(48)	%
Total Coal Royalty and Other segment revenues and other income	$	121,210	$	95,955	$	25,255	26	%

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Coal Royalty Revenues

~~Total~~Approximately 60% of coal royalty revenues ~~decreased $47.0 million from 2019 to 2020 primarily driven by weakened~~and approximately 45% of coal ~~markets that resulted in lower coal~~royalty sales volumes were derived from metallurgical coal during the nine months ended September 30, 2021. Total coal royalty revenues increased $25.5 million during the nine months ended September 30, 2021 as compared to the prior year period primarily as a result of increased demand for both metallurgical and ~~pricing.~~thermal coals from their lows in 2020 caused by the global COVID-19 pandemic. The discussion ~~of these decreases~~ by region is as follows:

•Appalachia: ~~Sales volumes decreased 38% and~~Coal royalty revenues ~~decreased $37.3~~increased $21.2 million primarily due to ~~weakened coal demand compounded by~~a 21% increase in sales volumes in addition to higher sales prices as compared to the ~~COVID-19 pandemic~~.prior year period.

•Illinois Basin: ~~Sales volumes increased 12%~~ ~~due to increased activity at the Hillsboro and Williamson mines, while~~ ~~coal~~Coal royalty revenues ~~decreased $3.2~~increased $12.5 million primarily due to a 334% increase in sales volumes, partially offset by a 14% decrease in sales prices as compared to the ~~idling of our Macoupin property.~~prior year period. As previously mentioned, ~~above,~~ in 2020 we~~certain revenues previously classified as coal royalty revenues are classified as production~~ entered into lease ~~minimum revenues or minimum lease straight-line revenues due to contract modifications~~amendments with Foresight ~~Energy that~~pursuant to which Foresight agreed to pay us fixed ~~consideration paid~~cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between the us ~~over~~and Foresight for calendar years 2020 and 2021 and as a ~~two-year period.~~result actual revenues from Foresight were flat period-over-period.

•Northern Powder River Basin: ~~Sales volumes decreased 38% and coal~~Coal royalty revenues ~~decreased $1.8~~increased $3.7 million primarily due to an 86% increase in sales volumes as our lessee ~~mining off of~~mined on our property more during 2021 as compared to the prior year period in accordance with its mine plan, ~~in 2020,~~ partially offset by a ~~14% increase~~2% decrease in sales prices as compared to the prior ~~year.~~year period.

~~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 revenu~~es 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~~increased $6.0 million compared to the prior year ~~primarily due~~compared to ~~a combination of lower pricing and volumes sold. Ciner Wyoming was negatively impacted~~the prior year period as demand for soda ash continues to improve globally from the lows caused by the COVID-19 ~~pandemic as lower activity in the global auto, container and construction industries reduced demand for glass and soda ash.~~

pandemic.

~~Table of Contents~~

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			For the Nine Months Ended September 30,				Increase (Decrease)		Percentage Change
(In thousands)	(In thousands)	2020		2019						(In thousands)	2021		2020
Operating expenses	Operating expenses									Operating expenses
Operating and maintenance expenses	Operating and maintenance expenses	$	19,200	$	26,813	$	(7,613)	(28)	%	Operating and maintenance expenses	$	19,076	$	19,200	$	(124)	(1)	%
Depreciation, depletion and amortization	Depreciation, depletion and amortization	6,185		11,746		(5,561)		(47)	%	Depreciation, depletion and amortization	15,145		6,185		8,960		145	%
General and administrative expenses	General and administrative expenses	11,168		12,799		(1,631)		(13)	%	General and administrative expenses	11,550		11,168		382		3	%
Asset impairments	Asset impairments	133,217		484		132,733		27,424	%	Asset impairments	4,116		133,217		(129,101)		(97)	%
Total operating expenses	Total operating expenses	$	169,770	$	51,842	$	117,928	227	%	Total operating expenses	$	49,887	$	169,770	$	(119,883)	(71)	%

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~~decreased $119.9 million primarily due to ~~the following:~~

•a $129.1 million decrease in asset impairments. Asset impairments ~~increased $132.7 million~~in the first nine months of 2021 primarily related to a lease termination while asset impairments in the first nine months of 2020 were 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~~decrease 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 $7.6by a $9.0 million ~~primarily due to a decrease~~increase 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,~~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.~~increased production at certain Illinois Basin coal properties.

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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									Operating Segments
For the Nine Months Ended (In thousands)	For the Nine Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total		For the Nine Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
September 30, 2020
Net income (loss) from continuing operations		$	(62,562)	$	5,059	$	(42,003)	$	(99,506)
September 30, 2021										September 30, 2021
Net income (loss)										Net income (loss)	$	82,980	$	11,115	$	(40,834)	$	53,261
Less: equity earnings from unconsolidated investment	Less: equity earnings from unconsolidated investment	—		(5,200)		—		(5,200)		Less: equity earnings from unconsolidated investment	—		(11,246)		—		(11,246)

Add: total distributions from unconsolidated investment	Add: total distributions from unconsolidated investment	—		14,210		—		14,210		Add: total distributions from unconsolidated investment	—		3,920		—		3,920
Add: interest expense, net	Add: interest expense, net	56		—		30,835		30,891		Add: interest expense, net	24		—		29,284		29,308

Add: depreciation, depletion and amortization	Add: depreciation, depletion and amortization	6,185		—		—		6,185		Add: depreciation, depletion and amortization	15,145		—		—		15,145
Add: asset impairments	Add: asset impairments	133,217		—		—		133,217		Add: asset impairments	4,116		—		—		4,116
Adjusted EBITDA	Adjusted EBITDA	$	76,896	$	14,069	$	(11,168)	$	79,797	Adjusted EBITDA	$	102,265	$	3,789	$	(11,550)	$	94,504

September 30, 2019
Net income (loss) from continuing operations		$	136,566	$	36,610	$	(79,142)	$	94,034
September 30, 2020										September 30, 2020
Net income (loss)										Net income (loss)	$	(62,562)	$	5,059	$	(42,003)	$	(99,506)
Less: equity earnings from unconsolidated investment	Less: equity earnings from unconsolidated investment	—		(36,833)		—		(36,833)		Less: equity earnings from unconsolidated investment	—		(5,200)		—		(5,200)

Add: total distributions from unconsolidated investment	Add: total distributions from unconsolidated investment	—		25,480		—		25,480		Add: total distributions from unconsolidated investment	—		14,210		—		14,210
Add: interest expense, net	Add: interest expense, net	—		—		37,061		37,061		Add: interest expense, net	56		—		30,835		30,891

Add: loss on extinguishment of debt		—		—		29,282		29,282

Add: depreciation, depletion and amortization	Add: depreciation, depletion and amortization	11,746		—		—		11,746		Add: depreciation, depletion and amortization	6,185		—		—		6,185
Add: asset impairments	Add: asset impairments	484		—		—		484		Add: asset impairments	133,217		—		—		133,217
Adjusted EBITDA	Adjusted EBITDA	$	148,796	$	25,257	$	(12,799)	$	161,254	Adjusted EBITDA	$	76,896	$	14,069	$	(11,168)	$	79,797

Adjusted EBITDA ~~decreased $81.5~~increased $14.7 million primarily due to ~~the following:~~

•a $25.4 million increase in Adjusted EBITDA within our Coal Royalty and Other ~~Segment~~

◦~~Adjusted EBITDA decreased $71.9 million primarily~~segment as a result of ~~weakened coal markets~~higher revenues and other income as discussed above, partially offset by a $10.3 million decrease in ~~the first nine months of 2020.~~

•Adjusted EBITDA within our Soda Ash ~~Segment~~

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

~~Table of Contents~~

2021 as compared to the prior year period.

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

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


		Operating Segments									Operating Segments
For the Nine Months Ended (In thousands)	For the Nine Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total		For the Nine Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
September 30, 2021										September 30, 2021
Cash flow provided by (used in) continuing operations										Cash flow provided by (used in) continuing operations
Operating activities										Operating activities	$	91,958	$	3,817	$	(29,132)	$	66,643
Investing activities										Investing activities	1,871		—		—		1,871
Financing activities										Financing activities	(1,132)		—		(48,183)		(49,315)

September 30, 2020	September 30, 2020									September 30, 2020
Cash flow provided by (used in) continuing operations	Cash flow provided by (used in) continuing operations									Cash flow provided by (used in) continuing operations
Operating activities	Operating activities	$	91,082	$	14,091	$	(30,760)	$	74,413	Operating activities	$	91,082	$	14,091	$	(30,760)	$	74,413
Investing activities	Investing activities	969		—		—		969		Investing activities	969		—		—		969
Financing activities	Financing activities	—		—		(58,074)		(58,074)		Financing activities	—		—		(58,074)		(58,074)

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

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The following table reconciles net cash provided by (used in) operating activities of continuing operations (the most comparable GAAP financial measure) by business segment to DCF and FCF:


		Operating Segments									Operating Segments
For the Nine Months Ended (In thousands)	For the Nine Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total		For the Nine Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing		Total
September 30, 2020
September 30, 2021										September 30, 2021
Net cash provided by (used in) operating activities of continuing operations	Net cash provided by (used in) operating activities of continuing operations	$	91,082	$	14,091	$	(30,760)	$	74,413	Net cash provided by (used in) operating activities of continuing operations	$	91,958	$	3,817	$	(29,132)	$	66,643

Add: proceeds from asset sales and disposals	Add: proceeds from asset sales and disposals	507		—		—		507		Add: proceeds from asset sales and disposals	249		—		—		249
Add: proceeds from sale of discontinued operations		—		—		—		(66)

Add: return of long-term contract receivable	Add: return of long-term contract receivable	1,462		—		—		1,462		Add: return of long-term contract receivable	1,622		—		—		1,622

Distributable cash flow	Distributable cash flow	$	93,051	$	14,091	$	(30,760)	$	76,316	Distributable cash flow	$	93,829	$	3,817	$	(29,132)	$	68,514
Less: proceeds from asset sales and disposals	Less: proceeds from asset sales and disposals	(507)		—		—		(507)		Less: proceeds from asset sales and disposals	(249)		—		—		(249)
Less: proceeds from sale of discontinued operations		—		—		—		66

Less: acquisition costs	Less: acquisition costs	(1,000)		—		—		(1,000)		Less: acquisition costs	(1,000)		—		—		(1,000)

Free cash flow	Free cash flow	$	91,544	$	14,091	$	(30,760)	$	74,875	Free cash flow	$	92,580	$	3,817	$	(29,132)	$	67,265

September 30, 2019
September 30, 2020										September 30, 2020
Net cash provided by (used in) operating activities of continuing operations	Net cash provided by (used in) operating activities of continuing operations	$	139,821	$	25,257	$	(47,153)	$	117,925	Net cash provided by (used in) operating activities of continuing operations	$	91,082	$	14,091	$	(30,760)	$	74,413
Add: proceeds from asset sales and disposals	Add: proceeds from asset sales and disposals	6,611		—		—		6,611		Add: proceeds from asset sales and disposals	507		—		—		507
Add: proceeds from sale of discontinued operations	Add: proceeds from sale of discontinued operations	—		—		—		(556)		Add: proceeds from sale of discontinued operations	—		—		—		(66)
Add: return of long-term contract receivable	Add: return of long-term contract receivable	1,351		—		—		1,351		Add: return of long-term contract receivable	1,462		—		—		1,462
Distributable cash flow	Distributable cash flow	$	147,783	$	25,257	$	(47,153)	$	125,331	Distributable cash flow	$	93,051	$	14,091	$	(30,760)	$	76,316
Less: proceeds from asset sales and disposals	Less: proceeds from asset sales and disposals	(6,611)		—		—		(6,611)		Less: proceeds from asset sales and disposals	(507)		—		—		(507)
Less: proceeds from sale of discontinued operations	Less: proceeds from sale of discontinued operations	—		—		—		556		Less: proceeds from sale of discontinued operations	—		—		—		66
Less: acquisition costs										Less: acquisition costs	(1,000)		—		—		(1,000)
Free cash flow	Free cash flow	$	141,172	$	25,257	$	(47,153)	$	119,276	Free cash flow	$	91,544	$	14,091	$	(30,760)	$	74,875

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DCF and FCF decreased ~~$49.0~~$7.8 million and ~~$44.4~~$7.6 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~~$10.3 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of ~~2020.~~2021 as compared to the prior year period.

This decrease was partially offset by:

•Corporate and Financing Segment

◦DCF and FCF increased ~~$16.4~~$1.6 million primarily due to lower cash paid for interest as our debt balance continues to decline.

•Coal Royalty and Other Segment

◦DCF and FCF increased $0.8 million and $1.0 million, respectively, primarily due to increased cash flow in 2021 as a result of ~~less outstanding debt~~the rebounding of coal demand from its low in 2020 caused by the global COVID-19 pandemic, partially offset by one-time lease amendment fee and past due payments received in the ~~first~~ nine months ofended September 30, 2020.

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Liquidity and Capital Resources

Current Liquidity

As of September 30, ~~2020,~~2021, we had total liquidity of ~~$215.6~~$219.0 million, consisting of ~~$115.6~~$119.0 million of cash and cash equivalents and $100.0 million of borrowing capacity under our Opco Credit Facility. We have significant debt service obligations, including approximately $20 million of principal repayments on Opco’s senior notes throughout the remainder of 2021. We believe our liquidity position provides us with the flexibility to continue paying down debt and manage our business through the current market environment.

Cash Flows

Cash flows provided by operating activities decreased ~~$41.8~~$9.5 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 to $66.6 million in the nine months ended September 30, 2021, primarily related to ~~lower operating cash flow as a result~~$10.3 million 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~~2021 as compared to the ~~first nine months of 2020~~prior year period and certain one-time lease amendment fee and past due ~~to less debt outstanding.~~

~~Cash flows provided by investing activities decreased $6.5 million, from $7.4 million provided~~payments received in the nine months ended September 30, ~~2019~~2020. These decreases were partially offset by increased coal royalty cash flow in 2021 primarily as a result of the rebounding of coal demand from its low in 2020 caused by the global COVID-19 pandemic in addition to ~~$0.9~~$1.9 million of lower cash paid for interest as our debt balance continues to decline.

Cash flows used in financing activities decreased $10.4 million from $59.7 million used in the nine months ended September 30, 2020 to $49.3 million used in the nine months ended September 30, 2021, primarily due to an $11.0 million decrease in cash distributions to preferred unitholders as we paid one-half of our preferred unit distributions in kind through the issuance of 11.6 million preferred units in the nine months ended September 30, 2021. Additionally, debt repayments decreased $6.8 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~~2021 as one of ~~2019.~~

~~Cash flows used in financing activities decreased $159.5 million, from $219.2 million in~~our Opco Senior Notes was fully repaid during the nine months ended September 30, ~~2019~~2020. These decreases in cash flow used were partially offset by a $5.7 million increase in distributions to ~~$59.7 million in~~common unitholders and the ~~nine months ended September 30, 2020 primarily due to~~general partner as the ~~following:~~

•~~$345.6 million used for the redemption of our 2022 Senior Notes~~common unit distribution was suspended 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~~2021 and December 31, ~~2019:~~2020:

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

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	September 30,		December 31,
(In thousands)	2021		2020
Current portion of long-term debt, net	$	39,082	$	39,055
Long-term debt, net	414,437		432,444
Total debt, net	$	453,519	$	471,499

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.

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Summary of Critical Accounting Estimates

The preparation of ~~consolidated financial statements~~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.~~2020.

Recent Accounting Standards

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

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

WeAs a smaller reporting company, we are ~~exposed~~not required to ~~market risk, which includes adverse changes~~include this disclosure 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 inour Form 10-Q for 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~~quarterly period ended September 30, ~~2020. The impacts of such volatility on the Partnership cannot be predicted with confidence or reasonably estimated at this time.~~

~~Table of Contents~~2021.

~~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.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

NRP carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of NRP management, including the Chief Executive Officer and Chief Financial Officer of the general partner of the general partner of NRP. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective in providing reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (b) such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in the Partnership’s Internal Control Over Financial Reporting

There were no material changes in the Partnership’s internal control over financial reporting during the first nine months of ~~2020~~2021 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.

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ITEM 6. EXHIBITS

Exhibit
Number

Description

~~2.1~~

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

3.1

Fifth Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated as of March 2, 2017 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on March 6, 2017).

3.2

Fifth Amended and Restated Agreement of Limited Partnership of NRP (GP) LP, dated as of December 16, 2011 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 16, 2011).

3.3

Fifth Amended and Restated Limited Liability Company Agreement of GP Natural Resource Partners LLC, dated as of October 31, 2013 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on October 31, 2013).

3.4

Certificate of Limited Partnership of Natural Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed April 19, 2002, File No. 333-86582).

31.1*

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

31.2*

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

32.1**

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

32.2**

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

101.INS*

Inline XBRL Instance Document

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

Filed herewith

Furnished herewith

4437

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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~~
3, 2021	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~~
3, 2021	By:	/s/ CHRISTOPHER J. ZOLAS
		Christopher J. Zolas
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

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		Page
Part I. Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive Income (L ~~oss)~~(Loss)	2
	Consolidated Statements of Partners’ Capital	3
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2420
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4034
Item 4.	Controls and Procedures	4235
Part II. Other Information
Item 1.	Legal Proceedings	4336
Item 1A.	Risk Factors	4336
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4336
Item 3.	Defaults Upon Senior Securities	4336
Item 4.	Mine Safety Disclosures	4336
Item 5.	Other Information	4336
Item 6.	Exhibits	4437
	Signatures	4538


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