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 ~~March 31,~~September 30, 2023 or

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

		Commission file number:	001-31465

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

Delaware

35-2164875

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1415 Louisiana Street, Suite 3325

Houston, Texas 77002

(Address of principal executive offices)

(Zip Code)

(713) 751-7507

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Units representing limited partner interests		NRP		New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

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

Table of Contents

NATURAL RESOURCE PARTNERS, L.P.

TABLE OF CONTENTS

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PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED BALANCE SHEETS

	*March 31,*			*December 31,*		*September 30,*		*December 31,*
	*2023*			*2022*		*2023*		*2022*
(In thousands, except unit data)	(Unaudited)					(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	17,655		$	39,091	$	18,411	$	39,091
Accounts receivable, net		36,513			42,701		38,569		42,701
Other current assets, net		3,216			1,822		2,570		1,822
Total current assets	$	57,384		$	83,614	$	59,550	$	83,614
Land		24,008			24,008		24,008		24,008
Mineral rights, net		408,371			412,312		400,548		412,312
Intangible assets, net		14,613			14,713		14,014		14,713
Equity in unconsolidated investment		295,361			306,470		282,491		306,470
Long-term contract receivable, net		28,309			28,946		26,997		28,946
Other long-term assets, net		7,622			7,068		7,601		7,068
Total assets	$	835,668		$	877,131	$	815,209	$	877,131
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable	$	1,452		$	1,992	$	1,143	$	1,992
Accrued liabilities		3,466			11,916		6,511		11,916
Accrued interest		1,252			989		1,224		989
Current portion of deferred revenue		7,450			6,256		6,399		6,256
Current portion of long-term debt, net		39,055			39,076		36,780		39,076
Total current liabilities	$	52,675		$	60,229	$	52,057	$	60,229
Deferred revenue		38,833			40,181		35,076		40,181
Long-term debt, net		133,821			129,205		170,735		129,205
Other non-current liabilities		6,124			5,472		6,833		5,472
Total liabilities	$	231,453		$	235,087	$	264,701	$	235,087
Commitments and contingencies (see Note 13)
Class A Convertible Preferred Units (202,501 and 250,000 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at March 31, 2023 and December 31, 2022) (See Note 3)	$	133,316		$	164,587
Class A Convertible Preferred Units (71,666 and 250,000 units issued and outstanding at September 30, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at September 30, 2023 and December 31, 2022) (See Note 3)						$	47,181	$	164,587
Partners’ capital
Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively)	$	417,401		$	404,799
Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at September 30, 2023 and December 31, 2022, respectively)						$	461,043	$	404,799
General partner’s interest		6,400			5,977		7,196		5,977
Warrant holders’ interest		47,964			47,964		32,843		47,964
Accumulated other comprehensive income (loss)		(866	)		18,717
Accumulated other comprehensive income							2,245		18,717
Total partners’ capital	$	470,899		$	477,457	$	503,327	$	477,457
Total liabilities and partners' capital	$	835,668		$	877,131	$	815,209	$	877,131

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

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	*For the Three Months Ended March 31,*						*For the Three Months Ended September 30,*						*For the Nine Months Ended September 30,*
(In thousands, except per unit data)	*2023*			*2022*			*2023*			*2022*			*2023*			*2022*
Revenues and other income
Royalty and other mineral rights	$	76,271		$	71,083		$	68,533		$	81,379		$	205,811		$	231,795
Transportation and processing services		3,598			3,796			4,579			5,969			11,447			15,377
Equity in earnings of Sisecam Wyoming		19,254			14,837			12,401			14,556			58,633			44,036
Gain on asset sales and disposals		96			—			854			354			955			699
Total revenues and other income	$	99,219		$	89,716		$	86,367		$	102,258		$	276,846		$	291,907

Operating expenses
Operating and maintenance expenses	$	7,163		$	8,076		$	8,358		$	7,898		$	23,451		$	25,989
Depreciation, depletion and amortization		4,083			3,868			4,594			6,850			12,469			16,565
General and administrative expenses		5,845			4,467			5,669			4,518			17,157			14,037
Asset impairments		—			19			63			812			132			874
Total operating expenses	$	17,091		$	16,430		$	18,684		$	20,078		$	53,209		$	57,465

Income from operations	$	82,128		$	73,286		$	67,683		$	82,180		$	223,637		$	234,442

Other expenses, net
Interest expense, net	$	(2,853	)	$	(9,387	)	$	(3,837	)	$	(5,141	)	$	(10,182	)	$	(22,636	)
Loss on extinguishment of debt								—			(2,484	)		—			(6,532	)
Total other expenses, net							$	(3,837	)	$	(7,625	)	$	(10,182	)	$	(29,168	)

Net income	$	79,275		$	63,899		$	63,846		$	74,555		$	213,455		$	205,274
Less: income attributable to preferred unitholders		(6,661	)		(7,500	)		(2,936	)		(7,500	)		(14,568	)		(22,500	)
Less: redemption of preferred units		(16,228	)		—			(17,083	)		—			(60,929	)		—
Net income attributable to common unitholders and the general partner	$	56,386		$	56,399		$	43,827		$	67,055		$	137,958		$	182,774

Net income attributable to common unitholders	$	55,258		$	55,271		$	42,951		$	65,714		$	135,199		$	179,119
Net income attributable to the general partner		1,128			1,128			876			1,341			2,759			3,655

Net income per common unit (see Note 5)
Basic	$	4.40		$	4.45		$	3.40		$	5.25		$	10.72		$	14.36
Diluted		3.44			3.11			2.91			3.71			8.88			10.24

Net income	$	79,275		$	63,899		$	63,846		$	74,555		$	213,455		$	205,274
Comprehensive income (loss) from unconsolidated investment and other		(19,583	)		2,545			2,200			289			(16,472	)		(1,179	)
Comprehensive income	$	59,692		$	66,444		$	66,046		$	74,844		$	196,983		$	204,095

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

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)

											*Accumulated*																	*Accumulated*
											*Other*			*Total*														*Other*			*Total*
	*Common Unitholders*					*General*			*Warrant*		*Comprehensive*			*Partners'*			*Common Unitholders*					*General*			*Warrant*			*Comprehensive*			*Partners'*
(In thousands)	*Units*		*Amounts*			*Partner*			*Holders*		*Income (Loss)*			*Capital*			*Units*		*Amounts*			*Partner*			*Holders*			*Income (Loss)*			*Capital*
Balance at December 31, 2022		12,506	$	404,799		$	5,977		$	47,964	$	18,717		$	477,457			12,506	$	404,799		$	5,977		$	47,964		$	18,717		$	477,457
Net income ⁽¹⁾		—		77,690			1,585			—		—			79,275			—		77,690			1,585			—			—			79,275
Redemption of preferred units		—		(15,904	)		(324	)		—		—			(16,228	)		—		(15,904	)		(324	)		—			—			(16,228	)
Distributions to common unitholders and the general partner		—		(40,082	)		(818	)		—		—			(40,900	)		—		(40,082	)		(818	)		—			—			(40,900	)
Distributions to preferred unitholders		—		(7,924	)		(162	)		—		—			(8,086	)		—		(7,924	)		(162	)		—			—			(8,086	)
Issuance of unit-based awards		129		—			—			—		—			—			129		—			—			—			—			—
Unit-based awards amortization and vesting, net		—		(1,178	)		—			—		—			(1,178	)		—		(1,178	)		—			—			—			(1,178	)
Capital contribution		—		—			142			—		—			142			—		—			142			—			—			142
Comprehensive loss from unconsolidated investment and other		—		—			—			—		(19,583	)		(19,583	)		—		—			—			—			(19,583	)		(19,583	)
Balance at March 31, 2023		12,635	$	417,401		$	6,400		$	47,964	$	(866	)	$	470,899			12,635	$	417,401		$	6,400		$	47,964		$	(866	)	$	470,899
Net income ⁽²⁾																		—		68,927			1,407			—			—			70,334
Redemption of preferred units																		—		(27,065	)		(553	)		—			—			(27,618	)
Distributions to common unitholders and the general partner																		—		(9,476	)		(193	)		—			—			(9,669	)
Distributions to preferred unitholders																		—		(7,248	)		(148	)		—			—			(7,396	)
Unit-based awards amortization and vesting																		—		2,299			—			—			—			2,299
Comprehensive income from unconsolidated investment and other																		—		—			—			—			911			911
Balance at June 30, 2023																		12,635	$	444,838		$	6,913		$	47,964		$	45		$	499,760
Net income ⁽³⁾																		—		62,569			1,277			—			—			63,846
Redemption of preferred units																		—		(16,741	)		(342	)		—			—			(17,083	)
Distributions to common unitholders and the general partner																		—		(9,475	)		(194	)		—			—			(9,669	)
Distributions to preferred unitholders																		—		(4,349	)		(88	)		—			—			(4,437	)
Unit-based awards amortization and vesting																		—		2,318			—			—			—			2,318
Warrant settlement																		—		(18,117	)		(370	)		(15,121	)		—			(33,608	)
Comprehensive income from unconsolidated investment and other																		—		—			—			—			2,200			2,200
Balance at September 30, 2023																		12,635	$	461,043		$	7,196		$	32,843		$	2,245		$	503,327

⁽¹⁾	Net income includes $6.7 million of income attributable to preferred unitholders that accumulated during the period, of which $6.5 million is allocated to the common unitholders and $0.1 million is allocated to the general partner.
⁽²⁾	Net income includes $5.0 million of income attributable to preferred unitholders that accumulated during the period, of which $4.9 million is allocated to the common unitholders and $0.1 million is allocated to the general partner.
⁽³⁾	Net income includes $2.9 million of income attributable to preferred unitholders that accumulated during the period, of which $2.9 million is allocated to the common unitholders and $0.1 million is allocated to the general partner.

Accumulated

Other

Total

Common Unitholders

General

Warrant

Comprehensive

Partners'

(In thousands)

Units

Amounts

Partner

Holders

Income

Capital

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

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)

											*Accumulated*
											*Other*			*Total*
	*Common Unitholders*					*General*			*Warrant*		*Comprehensive*			*Partners'*
(In thousands)	*Units*		*Amounts*			*Partner*			*Holders*		*Income*			*Capital*
Balance at December 31, 2021		12,351	$	203,062		$	1,787		$	47,964	$	3,211		$	256,024
Net income ⁽¹⁾		—		62,621			1,278			—		—			63,899
Distributions to common unitholders and the general partner		—		(5,559	)		(113	)		—		—			(5,672	)
Distributions to preferred unitholders		—		(7,603	)		(155	)		—		—			(7,758	)
Issuance of unit-based awards		155		—			—			—		—			—
Unit-based awards amortization and vesting, net		—		(1,754	)		—			—		—			(1,754	)
Capital contribution		—		—			112			—		—			112
Comprehensive income from unconsolidated investment and other		—		—			—			—		2,545			2,545
Balance at March 31, 2022		12,506	$	250,767		$	2,909		$	47,964	$	5,756		$	307,396
Net income ⁽¹⁾		—		65,484			1,336			—		—			66,820
Distributions to common unitholders and the general partner		—		(9,379	)		(191	)		—		—			(9,570	)
Distributions to preferred unitholders		—		(7,350	)		(150	)		—		—			(7,500	)
Unit-based awards amortization and vesting		—		1,231			—			—		—			1,231
Comprehensive loss from unconsolidated investment and other		—		—			—			—		(4,013	)		(4,013	)
Balance at June 30, 2022		12,506	$	300,753		$	3,904		$	47,964	$	1,743		$	354,364
Net income ⁽¹⁾		—		73,064			1,491			—		—			74,555
Distributions to common unitholders and the general partner		—		(9,380	)		(191	)		—		—			(9,571	)
Distributions to preferred unitholders		—		(7,350	)		(150	)		—		—			(7,500	)
Unit-based awards amortization and vesting		—		1,245			—			—		—			1,245
Comprehensive income from unconsolidated investment and other		—		—			—			—		289			289
Balance at September 30, 2022		12,506	$	358,332		$	5,054		$	47,964	$	2,032		$	413,382

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

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

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NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	*For the Three Months Ended March 31,*						*For the Nine Months Ended September 30,*
(In thousands)	*2023*			*2022*			*2023*			*2022*
Cash flows from operating activities
Net income	$	79,275		$	63,899		$	213,455		$	205,274
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		4,083			3,868			12,469			16,565
Distributions from unconsolidated investment		10,780			13,230			66,140			34,055
Equity earnings from unconsolidated investment		(19,254	)		(14,837	)		(58,633	)		(44,036	)
Gain on asset sales and disposals		(96	)		—			(955	)		(699	)
Loss on extinguishment of debt								—			6,532
Asset impairments		—			19			132			874
Bad debt expense		(610	)		1,028			813			641
Unit-based compensation expense		2,491			1,448			7,903			4,216
Amortization of debt issuance costs and other		25			375			1,043			1,887
Change in operating assets and liabilities:
Accounts receivable		7,061			(7,579	)		4,090			(10,118	)
Accounts payable		(541	)		(60	)		(850	)		223
Accrued liabilities		(8,805	)		(7,156	)		(6,288	)		(4,831	)
Accrued interest		263			7,250			235			3,014
Deferred revenue		(154	)		(7,316	)		(4,963	)		(17,094	)
Other items, net		(1,618	)		(1,838	)		(1,399	)		1,447
Net cash provided by operating activities	$	72,900		$	52,331		$	233,192		$	197,950

Cash flows from investing activities
Proceeds from asset sales and disposals	$	101		$	—		$	961		$	699
Return of long-term contract receivable		598			—			1,830			1,138
Capital expenditures		(2	)		—			(10	)		(59	)
Net cash provided by investing activities	$	697		$	—		$	2,781		$	1,778

Cash flows from financing activities
Debt borrowings	$	94,200		$	—		$	215,034		$	—
Debt repayments		(89,696	)		(16,697	)		(176,061	)		(197,665	)
Distributions to common unitholders and the general partner		(40,900	)		(5,672	)		(60,238	)		(24,813	)
Distributions to preferred unitholders		(7,500	)		(7,500	)		(19,919	)		(22,758	)
Redemption of preferred units		(48,085	)		—			(178,334	)		—
Redemption of preferred units paid-in-kind		—			(19,579	)		—			(19,321	)
Warrant settlement								(33,608	)		—
Other items, net		(3,052	)		(2,813	)		(3,527	)		(9,754	)
Net cash used in financing activities	$	(95,033	)	$	(52,261	)	$	(256,653	)	$	(274,311	)

Net increase (decrease) in cash and cash equivalents	$	(21,436	)	$	70
Net decrease in cash and cash equivalents							$	(20,680	)	$	(74,583	)
Cash and cash equivalents at beginning of period		39,091			135,520			39,091			135,520
Cash and cash equivalents at end of period	$	17,655		$	135,590		$	18,411		$	60,937

Supplemental cash flow information:
Cash paid for interest	$	2,474		$	1,644		$	9,484		$	18,501

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

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Nature of Business

Natural Resource Partners L.P. (the "Partnership") engages principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and owns a non-controlling 49% interest in Sisecam Wyoming LLC ("Sisecam Wyoming"), a trona ore mining and soda ash production business. The Partnership is organized into two operating segments further described in Note 6. Segment Information. The Partnership’s operations are conducted through, and its operating assets are owned by, its subsidiaries. The Partnership owns its subsidiaries through one wholly owned operating company, NRP (Operating) LLC ("Opco"). As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context.

Principles of Consolidation and Reporting

The accompanying unaudited Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2022 and notes thereto included in the Partnership's Annual Report on Form 10-K, which was filed with the SEC on March 3, 2023. Reclassifications have been made to prior year amounts in the Consolidated Financial Statements to conform with current year presentation. These reclassifications had no impact on previously reported total assets, total liabilities, partners' capital, net income, or cash flows from operating, investing or financing activities.

Recently Adopted Accounting Standard

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

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

2. Revenues from Contracts with Customers

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

	*For the Three Months Ended March 31,*				*For the Three Months Ended September 30,*				*For the Nine Months Ended September 30,*
(In thousands)	*2023*		*2022*		*2023*		*2022*		*2023*		*2022*
Coal royalty revenues	$	58,023	$	55,449	$	55,544	$	52,381	$	161,527	$	170,775
Production lease minimum revenues		613		1,592		850		1,885		2,025		3,542
Minimum lease straight-line revenues		4,503		4,783		4,464		4,778		13,414		14,235
Carbon neutral initiative revenues		2,118		—		681		8,600		2,914		8,600
Property tax revenues		1,470		1,472		1,770		1,360		4,710		4,527
Wheelage revenues		3,869		3,717		2,385		2,977		9,538		11,073
Coal overriding royalty revenues		188		258		827		1,367		1,165		2,307
Lease amendment revenues		851		880		623		759		2,322		2,450
Aggregates royalty revenues		753		770		736		884		2,175		2,691
Oil and gas royalty revenues		3,588		1,814		324		6,170		5,126		10,890
Other revenues		295		348		329		218		895		705
Royalty and other mineral rights revenues	$	76,271	$	71,083	$	68,533	$	81,379	$	205,811	$	231,795
Transportation and processing services revenues ⁽¹⁾		3,598		3,796		4,579		5,969		11,447		15,377
Total Mineral Rights segment revenues	$	79,869	$	74,879	$	73,112	$	87,348	$	217,258	$	247,172

⁽¹⁾

Transportation and processing services revenues from contracts with customers as defined under ASC 606 was ~~$2.9~~$3.9 million and ~~$3.1~~$4.9 million for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively and $9.5 million and $12.9 million for the nine months ended September 30,2023 and 2022, respectively. The remaining transportation and processing services revenues of ~~$0.7~~$0.6 million and ~~$0.7~~$1.1 million for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively, and $1.9 million and $2.5 million for the nine months ended September 30,2023 and 2022, respectively, related to other NRP-owned infrastructure leased to and operated by third-party operators accounted for under other guidance. See Note 15. Financing Transaction for more information.

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

	*March 31,*		*December 31,*		*September 30,*		*December 31,*
(In thousands)	*2023*		*2022*		*2023*		*2022*
Receivables
Accounts receivable, net	$	32,706	$	39,004	$	34,775	$	39,004
Other current assets, net ⁽¹⁾		1,947		—		2,382		—
Other long-term assets, net ⁽²⁾		75		75		—		75

Contract liabilities
Current portion of deferred revenue	$	7,450	$	6,256	$	6,399	$	6,256
Deferred revenue		38,833		40,181		35,076		40,181

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

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

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

	*For the Three Months Ended March 31,*						*For the Nine Months Ended September 30,*
(In thousands)	*2023*			*2022*			*2023*			*2022*
Balance at beginning of period (current and non-current)	$	46,437		$	61,862		$	46,437		$	61,862
Increase due to minimums and lease amendment fees		7,770			5,059			11,525			11,309
Recognition of previously deferred revenue		(7,924	)		(12,375	)		(16,487	)		(28,403	)
Balance at end of period (current and non-current)	$	46,283		$	54,546		$	41,475		$	44,768

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

Lease Term ⁽¹⁾	*Weighted Average Remaining Years*	*Annual Minimum Payments*		*Weighted Average Remaining Years*		*Annual Minimum Payments*
0 - 5 years	1.9	$	21,939		1.7	$	19,867
5 - 10 years	3.3		7,547		4.8		10,417
10+ years	12.3		27,121		12.0		27,129
Total	7.1	$	56,607		7.2	$	57,413

⁽¹⁾	Lease term does not include renewal periods.

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

3. Class A Convertible Preferred Units and Warrants

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

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

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

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

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

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

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

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

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

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

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

Accounting for the Preferred Units and Warrants

Classification

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

Initial Measurement

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

Subsequent Measurement

Preferred Units

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

In February 2023, the Partnership received a notice from holders of the Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 47,499 Class A Preferred Units. The Partnership chose to redeem the preferred units for $47.5 million in cash rather than issuing common units. In May 2023, the Partnership received a notice from holders of the Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 35,834 Class A Preferred Units. The Partnership chose to redeem the preferred units for $35.8 million in cash rather than issuing common units. In June 2023, the Partnership executed a negotiated transaction with holders of the Class A Preferred Units pursuant to which it repurchased and retired an aggregate of 45,000 Class A Preferred Units for $45.0 million in cash. In August 2023, the Partnership executed a negotiated transaction with holders of the Class A Preferred Units pursuant to which it repurchased and retired an aggregate of 35,000 Class A Preferred Units for $35.0 million in cash. In September 2023, the Partnership executed a negotiated transaction with holders of the Class A Preferred Units pursuant to which it repurchased and retired an aggregate of 15,001 Class A Preferred Units for $15.0 million in cash. Of the originally issued 250,000 Class A Preferred Units, ~~202,501~~71,666 Class A Preferred Units remain outstanding as of ~~March 31,~~ September 30,2023. Following these repurchases, the Subject units were retired and are no longer outstanding, and all rights of Blackstone thereof have ceased with respect to the subject units, therefore, Blackstone's board designee resigned from the board of the Partnership's general partner.

Activity related to the preferred units is as follows:

	*Units*			*Financial*			*Units*			*Financial*
(In thousands, except unit data)	*Outstanding*			*Position*			*Outstanding*			*Position*
Balance at December 31, 2021		269,321		$	183,908			269,321		$	183,908
Redemption of preferred units paid-in-kind		(19,321	)		(19,321	)		(19,321	)		(19,321	)
Balance at December 31, 2022		250,000		$	164,587			250,000		$	164,587
Redemption of preferred units		(47,499	)		(31,271	)		(178,334	)		(117,406	)
Balance at March 31, 2023		202,501		$	133,316
Balance at September 30, 2023								71,666		$	47,181

Warrants

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

On September 18, 2023 (the "exercise date"), the Partnership negotiated a transaction with holders of the Partnership's warrants pursuant to which the Partnership repurchased and retired an aggregate of 752,500 warrants with an exercise price of $22.81 and 60,000 warrants with an exercise price of $34.00 for approximately $33.6 million in cash. As of September 30, 2023 there were 2.19 million warrants to purchase common units with a strike price of $34.00 outstanding and no warrants to purchase common units with a strike price of $22.81 outstanding. As of December 31, 2022 there were 3.0 million warrants outstanding, which included warrants to purchase 0.75 million common units at a strike price of $22.81 and warrants to purchase 2.25 million common units with a strike price of $34.00. These warrants had a $32.8 million carrying value included in warrant holders' interest within partners' capital on the Partnership's Consolidated Balance Sheets at September 30,2023 and $48.0 million at December 31, 2022.

Activity related to the warrants is as follows:

	*Warrants*			*Financial*
(In thousands, except warrant data)	*Outstanding*			*Position*
Balance at December 31, 2021 and 2022		3,002,500		$	47,964
Warrant settlement		(812,500	)		(15,121	)
Balance at September 30, 2023		2,190,000		$	32,843

Embedded Features

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

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

4. Common and Preferred Unit Distributions

The Partnership makes cash distributions to common and preferred unitholders on a quarterly basis, subject to approval by the Board of Directors of GP Natural Resource Partners LLC (the "Board of Directors"). NRP recognizes both common unit and preferred unit distributions on the date the distribution is declared.

Distributions made on the common units and the general partner's general partner ("GP") interest are made on a pro-rata basis in accordance with their relative percentage interests in the Partnership. The general partner is entitled to receive 2% of such distributions.

Income available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income available to common unitholders and the general partner by ~~$6.7~~$2.9 million and $7.5 million during the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively, and $14.6 million and $22.5 million during the nine months ended September 30,2023 and 2022, respectively, as a result of accumulated preferred unit distributions earned during the period. Of the $6.7 million in accumulated preferred unit distributions earned during the three months ended March 31, 2023, $0.6 million was paid in February 2023 in connection with the preferred units that were ~~redeemed.~~redeemed in February. Of the $5.0 million in accumulated preferred unit distributions earned during the three months ended June 30, 2023, $0.4 million was paid in May 2023 and $0.9 million was paid in June 2023 in connection with the preferred units that were redeemed during those months. Of the $2.9 million in accumulated preferred unit distributions earned during the three months ended September 30,2023, $0.4 million was paid in August 2023 and $0.4 million was paid in September 2023 in connection with the preferred units that were redeemed during those months. Income available to common unitholders and the general partner is also reduced by the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred units. As such, NRP reduced net income available to common unitholders and the general partner by ~~$16.2~~$17.1 million and $60.9 million during the three and ninemonths ended ~~March 31, 2023.~~September 30,2023, respectively.

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

Common Units

Preferred Units

Total Distribution ⁽¹⁾

Total Distribution

Month Paid

Period Covered by Distribution

Distribution per Unit

(In thousands)

Distribution per Unit

(In thousands)

2023

February 2023

October 1 - December 31, 2022
$ 0.75 $ 9,571 $ 30.00 $ 7,500
February 2023 ⁽²⁾

January 1 - February 8, 2023
— — 12.33 586
March 2023 ⁽³⁾

Special Distribution
2.43 31,329 — —

2022

February 2022

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


		*Common Units*				*Preferred Units*
Month Paid	*Period Covered by Distribution*	*Distribution per Unit*		*Total Distribution (1) (In thousands)*		*Distribution per Unit*		*Total Distribution (In thousands)*
2023
February	October 1 - December 31, 2022	$	0.75	$	9,571	$	30.00	$	7,500
February⁽²⁾	January 1 - February 8, 2023		—		—		12.33		586
March ⁽³⁾	Special Distribution		2.43		31,329		—		—
May	January 1 - March 31, 2023		0.75		9,669		30.00		6,075
May ⁽⁴⁾	April 1 - May 5, 2023		—		—		11.33		406
June ⁽⁵⁾	April 1 - June 2, 2023		—		—		20.33		915
August	April 1 - June 30, 2023		0.75		9,669		30.00		3,650
August ⁽⁶⁾	June 30 - August 8, 2023		—		—		12.33		432
September ⁽⁷⁾	June 30 - September 12, 2023		—		—		23.67		355

2022
February	October 1 - December 31, 2021	$	0.45	$	5,672	$	30.00	$	7,500
February ⁽⁸⁾	January 1 - February 8, 2022		—		—		13.35		258
May	January 1 - March 31, 2022		0.75		9,570		30.00		7,500
August	April 1 - June 30, 2022		0.75		9,571		30.00		7,500

⁽¹⁾	Totals include the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.
⁽²⁾	Relates to accrued distribution paid upon the redemption of 47,499 preferred units in February 2023.
⁽³⁾	Special distribution was made to help cover unitholder tax liabilities associated with owning NRP's common units during 2022.
⁽⁴⁾	Relates to accrued distribution paid upon the redemption of 35,834 preferred units in May 2023.
⁽⁵⁾	Relates to accrued distribution paid upon the redemption of 45,000 preferred units in June 2023.
⁽⁶⁾	Relates to accrued distribution paid upon the redemption of 35,000 preferred units in August 2023.
⁽⁷⁾	Relates to accrued distribution paid upon the redemption of 15,001 preferred units in September 2023.
⁽⁸⁾	Relates to accrued distribution paid upon the redemption of 19,321 preferred units paid-in-kind in February 2022.

910

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NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

5. Net Income Per Common Unit

Basic net income per common unit is computed by dividing net income, after considering income attributable to preferred unitholders, the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred units and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income per common unit includes the effect of NRP's preferred units, warrants, and unvested unit-based awards if the inclusion of these items is dilutive.

The dilutive effect of the preferred units is calculated using the if-converted method. Under the if-converted method, the preferred units are assumed to be converted at the beginning of the period, and the resulting common units are included in the denominator of the diluted net income per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the preferred units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation. The calculation of diluted net income per common unit for the three and ninemonths ended ~~March 31,~~September 30, 2023 includes the assumed conversion of the remaining preferred units while it does not include the assumed conversion of the preferred units that were redeemed during the ~~first~~three ~~quarter of~~and nine months ended September 30, 2023 as the inclusion of these units would be anti-dilutive. The calculation of diluted net income per common unit for the three and ninemonths ended ~~March 31,~~ September 30,2022includes the assumed conversion of the preferred units.

The dilutive effect of the warrants is calculated using the treasury stock method, which assumes that the proceeds from the exercise of these instruments are used to purchase common units at the average market price for the period. The calculation of diluted net income per common unit for the three and ninemonths ended ~~March 31,~~September 30, 2023 ~~and~~ ~~2022~~includes the net settlement of warrants to purchase ~~0.75 million common units at a strike price of $22.81 and the net settlement of warrants to purchase 2.25~~2.19 million common units with a strike price of $34.00. The calculation of diluted net income per common unit for the three and nine months ended September 30, 2022 includes the net settlement of warrants to purchase 0.75 million common units at a strike price of $22.81 and the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00.

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

For the Three Months Ended March 31,

(In thousands, except per unit data)

2023

2022

Basic net income per common unit

Net income attributable to common unitholders
$ 55,258 $ 55,271
Weighted average common units—basic
12,570 12,415
Basic net income per common unit
$ 4.40 $ 4.45

Diluted net income per common unit

Weighted average common units—basic
12,570 12,415
Plus: dilutive effect of preferred units
3,778 6,974
Plus: dilutive effect of warrants
1,255 531
Plus: dilutive effect of unvested unit-based awards
209 240
Weighted average common units—diluted
17,812 20,160

Net income
$ 79,275 $ 63,899
Less: income attributable to preferred unitholders
(586 ) —
Less: redemption of preferred units
(16,228 ) —
Diluted net income attributable to common unitholders and the general partner
$ 62,461 $ 63,899
Less: diluted net income attributable to the general partner
(1,249 ) (1,278 )
Diluted net income attributable to common unitholders
$ 61,212 $ 62,621

Diluted net income per common unit
$ 3.44 $ 3.11

	*For the Three Months Ended September 30,*						*For the Nine Months Ended September 30,*
(In thousands, except per unit data)	*2023*			*2022*			*2023*			*2022*
Basic net income per common unit
Net income attributable to common unitholders	$	42,951		$	65,714		$	135,199		$	179,119
Weighted average common units—basic		12,635			12,506			12,613			12,476
Basic net income per common unit	$	3.40		$	5.25		$	10.72		$	14.36

Diluted net income per common unit
Weighted average common units—basic		12,635			12,506			12,613			12,476
Plus: dilutive effect of preferred units		1,104			6,210			2,434			6,210
Plus: dilutive effect of warrants		1,492			807			1,296			759
Plus: dilutive effect of unvested unit-based awards		240			195			190			204
Weighted average common units—diluted		15,471			19,718			16,533			19,649

Net income	$	63,846		$	74,555		$	213,455		$	205,274
Less: income attributable to preferred unitholders		(786	)		—			(2,693	)		—
Less: redemption of preferred units		(17,083	)		—			(60,929	)		—
Diluted net income attributable to common unitholders and the general partner	$	45,977		$	74,555		$	149,833		$	205,274
Less: diluted net income attributable to the general partner		(920	)		(1,491	)		(2,997	)		(4,105	)
Diluted net income attributable to common unitholders	$	45,057		$	73,064		$	146,836		$	201,169

Diluted net income per common unit	$	2.91		$	3.71		$	8.88		$	10.24

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

6. Segment Information

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

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

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

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

Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment and are included in general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income.

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

Operating Segments

(In thousands)

Mineral Rights

Soda Ash

Corporate and Financing

Total

For the Three Months Ended March 31, 2023

Revenues
$ 79,869 $ 19,254 $ — $ 99,123
Gain on asset sales and disposals
96 — — 96
Operating and maintenance expenses
7,005 158 — 7,163
Depreciation, depletion and amortization
4,079 — 4 4,083
General and administrative expenses
— — 5,845 5,845
Asset impairments
— — — —
Interest expense, net
— — 2,853 2,853
Net income (loss)
68,881 19,096 (8,702 ) 79,275

For the Three Months Ended March 31, 2022

Revenues
$ 74,879 $ 14,837 $ — $ 89,716
Operating and maintenance expenses
8,025 51 — 8,076
Depreciation, depletion and amortization
3,868 — — 3,868
General and administrative expenses
— — 4,467 4,467
Asset impairments
19 — — 19
Interest expense, net
— — 9,387 9,387
Net income (loss)
62,967 14,786 (13,854 ) 63,899

	*Operating Segments*
(In thousands)	*Mineral Rights*		*Soda Ash*		*Corporate and Financing*			*Total*
For the Three Months Ended September 30, 2023
Revenues	$	73,112	$	12,401	$	—		$	85,513
Gain on asset sales and disposals		854		—		—			854
Operating and maintenance expenses		8,305		53		—			8,358
Depreciation, depletion and amortization		4,589		—		5			4,594
General and administrative expenses		—		—		5,669			5,669
Asset impairments		63		—		—			63
Other expenses, net		—		—		3,837			3,837
Net income (loss)		61,009		12,348		(9,511	)		63,846

For the Three Months Ended September 30, 2022
Revenues	$	87,348	$	14,556	$	—		$	101,904
Gain on asset sales and disposals		354		—		—			354
Operating and maintenance expenses		7,867		31		—			7,898
Depreciation, depletion and amortization		6,850		—		—			6,850
General and administrative expenses		—		—		4,518			4,518
Asset impairments		812		—		—			812
Other expenses, net		—		—		7,625			7,625
Net income (loss)		72,173		14,525		(12,143	)		74,555

For the Nine Months Ended September 30, 2023
Revenues	$	217,258	$	58,633	$	—		$	275,891
Gain on asset sales and disposals		955		—		—			955
Operating and maintenance expenses		23,226		225		—			23,451
Depreciation, depletion and amortization		12,455		—		14			12,469
General and administrative expenses		—		—		17,157			17,157
Asset impairments		132		—		—			132
Other expenses, net		—		—		10,182			10,182
Net income (loss)		182,400		58,408		(27,353	)		213,455

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

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(Unaudited)

7. Equity Investment

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

	*For the Three Months Ended March 31,*						*For the Three Months Ended September 30,*						*For the Nine Months Ended September 30,*
(In thousands)	*2023*			*2022*			*2023*			*2022*			*2023*			*2022*
Balance at beginning of period	$	306,470		$	276,004		$	290,900		$	280,300		$	306,470		$	276,004
Income allocation to NRP’s equity interests ⁽¹⁾		20,364			16,065			13,608			15,732			62,184			47,601
Amortization of basis difference		(1,110	)		(1,228	)		(1,207	)		(1,176	)		(3,551	)		(3,565	)
Other comprehensive income (loss)		(19,583	)		2,545			2,200			289			(16,472	)		(1,179	)
Distribution		(10,780	)		(13,230	)		(23,010	)		(10,339	)		(66,140	)		(34,055	)
Balance at end of period	$	295,361		$	280,156		$	282,491		$	284,806		$	282,491		$	284,806

⁽¹⁾

Amounts reclassified into income out of accumulated other comprehensive loss were ~~$20.6~~$0.9 million and ~~$1.7~~$(1.2) million for the three months ended ~~March 31,~~September 30, 2023 and 2022,, respectively, and $(17.4) million and $(5.7) million for the nine months ended September 30, 2023 and 2022, respectively.

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

	*For the Three Months Ended March 31,*				*For the Three Months Ended September 30,*				*For the Nine Months Ended September 30,*
(In thousands)	*2023*		*2022*		*2023*		*2022*		*2023*		*2022*
Net sales	$	207,128	$	163,437	$	180,232	$	190,450	$	588,725	$	542,955
Gross profit		49,055		39,765		34,454		39,679		148,063		119,723
Net income		41,560		32,786		27,772		32,105		126,906		97,144

8. Mineral Rights, Net

The Partnership’s mineral rights consist of the following:

	*March 31, 2023*							*December 31, 2022*							*September 30, 2023*							*December 31, 2022*
(In thousands)	*Carrying Value*		*Accumulated Depletion*			*Net Book Value*		*Carrying Value*		*Accumulated Depletion*			*Net Book Value*		*Carrying Value*		*Accumulated Depletion*			*Net Book Value*		*Carrying Value*		*Accumulated Depletion*			*Net Book Value*
Coal properties	$	661,812	$	(272,743	)	$	389,069	$	661,812	$	(269,037	)	$	392,775	$	661,680	$	(279,988	)	$	381,692	$	661,812	$	(269,037	)	$	392,775
Aggregates properties		8,655		(3,520	)		5,135		8,655		(3,410	)		5,245		8,655		(3,723	)		4,932		8,655		(3,410	)		5,245
Oil and gas royalty properties		12,354		(9,720	)		2,634		12,354		(9,600	)		2,754		12,354		(9,962	)		2,392		12,354		(9,600	)		2,754
Other		13,145		(1,612	)		11,533		13,150		(1,612	)		11,538		13,144		(1,612	)		11,532		13,150		(1,612	)		11,538
Total mineral rights, net	$	695,966	$	(287,595	)	$	408,371	$	695,971	$	(283,659	)	$	412,312	$	695,833	$	(295,285	)	$	400,548	$	695,971	$	(283,659	)	$	412,312

Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income and totaled ~~$3.9~~$4.1 million and ~~$3.7~~$6.4 million for the three months ended ~~March 31,~~ September 30,2023 and 2022, respectively and $11.6 million and $15.5 million for the nine months ended September 30,2023and 2022, respectively.

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. As a result of the ~~analysis, the Partnership did~~ ~~not~~ ~~have any asset impairments~~Partnership's analyses, NRP recorded immaterial impairment expenses during the three ~~months ended~~and ~~March 31, 2023~~ ~~and recorded an immaterial impairment expense during the~~ ~~three~~nine months ended ~~March 31,~~September 30,2023 and September 30, 2022.

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(Unaudited)

9. Debt, Net

The Partnership's debt consists of the following:

	*March 31,*			*December 31,*			*September 30,*			*December 31,*
(In thousands)	*2023*			*2022*			*2023*			*2022*
Opco credit facility	$	91,200		$	70,000
Opco Credit Facility							$	128,034		$	70,000
Opco Senior Notes
5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023	$	2,366		$	2,366		$	—		$	2,366
4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023		6,004			6,004			6,004			6,004
5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024		12,684			25,368			12,684			25,368
8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024		4,011			8,023			4,011			8,023
5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026		45,683			45,683			45,683			45,683
5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026		11,643			11,643			11,643			11,643
Total Opco Senior Notes	$	82,391		$	99,087		$	80,025		$	99,087
Total debt at face value	$	173,591		$	169,087		$	208,059		$	169,087
Net unamortized debt issuance costs		(715	)		(806	)		(544	)		(806	)
Total debt, net	$	172,876		$	168,281		$	207,515		$	168,281
Less: current portion of long-term debt		(39,055	)		(39,076	)		(36,780	)		(39,076	)
Total long-term debt, net	$	133,821		$	129,205		$	170,735		$	129,205

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 ~~March 31,~~September 30, 2023 and December 31, 2022, Opco was in compliance with the terms of the financial covenants contained in its debt agreements.

Opco Credit Facility

In ~~August 2022,~~May 2023, the Partnership entered into the ~~Fifth~~Sixth Amendment (the ~~"Fifth~~"Sixth Amendment) to the Opco Credit Facility (the "Opco Credit Facility"). The ~~Fifth~~Sixth Amendment ~~extended~~maintained the term of the Opco Credit Facility until August 2027. Lender commitments under the Opco Credit Facility increased from $130.0 million to ~~$130.0 million.~~$155.0 million, with the ability to expand such commitments to $200.0 million with the addition of future commitments. The Sixth Amendment also includes modifications to Opco’s ability to declare and make certain restricted payments. The Opco Credit Facility contains financial covenants requiring Opco to maintain:

•

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

•

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

As of December 31, 2022, the Partnership had $70.0 million in borrowings outstanding under the Opco Credit Facility. During the ~~three~~nine months ended ~~March 31,~~ September 30,2023,the Partnership borrowed ~~$94.2~~$215.0 million and repaid ~~$73.0~~$157.0 million, resulting in ~~$91.2~~$128.0 million in borrowings outstanding under the Opco Credit Facility as of ~~March 31,~~ September 30,2023.The weighted average interest rate for the borrowings outstanding under the Opco Credit Facility for the three and ninemonths ended ~~March 31,~~ September 30,2023was ~~8.14%.~~8.85% and 8.61%, respectively. During the three and ninemonths ended ~~March 31,~~ September 30,2022,the Partnership did not have any borrowings outstanding under the Opco Credit Facility. The Partnership had ~~$38.8~~$27.0 million and $60.0 million of available borrowing capacity as of ~~March 31,~~ September 30,2023and December 31, 2022, respectively.

The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of ~~$323.0~~$321.6 million and $326.4 million classified as mineral rights, net and other long-term assets, net and $27.0 million and $28.9 million classified as long-term contract receivable, net on the Partnership’s Consolidated Balance Sheets as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

Opco Senior Notes

Opco has issued several series of private placement senior notes (the "Opco Senior Notes") with various interest rates and principal due dates. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the Opco Senior Notes had cumulative principal balances of ~~$82.4~~$80.0 million and $99.1 million, respectively. Opco made mandatory principal payments of ~~$16.7~~$19.1 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022.

The 8.92% Opco Senior Notes also provides that in the event that Opco’s leverage ratio of consolidated indebtedness to consolidated EBITDDA (as defined in the Note Purchase Agreements) exceeds 3.75 to 1.00 at the end of any fiscal quarter, then in addition to all other interest accruing on these notes, additional interest in the amount of 2.00% per annum shall accrue on the notes for the two succeeding quarters and for as long thereafter as the leverage ratio remains above 3.75 to 1.00. Opco has not exceeded the 3.75 to 1.00 ratio at the end of any fiscal quarter through ~~March 31,~~September 30, 2023.

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(Unaudited)

10. Fair Value Measurements

Fair Value of Financial Assets and Liabilities

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

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

			*March 31, 2023*				*December 31, 2022*						*September 30, 2023*				*December 31, 2022*
	*Fair Value*		*Carrying*		*Estimated*		*Carrying*		*Estimated*		*Fair Value*		*Carrying*		*Estimated*		*Carrying*		*Estimated*
(In thousands)	*Hierarchy Level*		*Value*		*Fair Value*		*Value*		*Fair Value*
(In thousands)											*Hierarchy Level*		*Value*		*Fair Value*		*Value*		*Fair Value*
Debt:
Opco Senior Notes ⁽¹⁾		3	$	81,676	$	77,587	$	98,281	$	96,060		3	$	79,481	$	75,815	$	98,281	$	96,060
Opco Credit Facility ⁽²⁾		3		91,200		91,200		70,000		70,000		3		128,034		128,034		70,000		70,000

Assets:
Contract receivable, net (current and long-term) ⁽³⁾		3	$	30,783	$	25,615	$	31,371	$	24,833		3	$	29,570	$	24,880	$	31,371	$	24,833

⁽¹⁾	The fair value of the Opco Senior Notes at ~~March 31,~~September 30, 2023 and December 31, 2022 were estimated by management utilizing the present value replacement method incorporating the interest rate of the Opco Credit facility at ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.
⁽²⁾	The fair value of the Opco Credit Facility approximates the outstanding borrowing amount because the interest rates are variable and reflective of market rates and the terms of the credit facility allow the Partnership to repay the debt at any time without penalty.

⁽³⁾	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 ~~March 31,~~September 30, 2023 and December 31, 2022.

NRP has embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that are accounted for separately from the preferred units as assets and liabilities at fair value on the Partnership's Consolidated Balance Sheets. Level 3 valuation of the embedded derivatives are based on numerous factors including the likelihood of the event occurring. The embedded derivatives are revalued quarterly and changes in their fair value would be recorded in other expenses, net on the Partnership's Consolidated Statements of Comprehensive Income. The embedded derivatives had zero value as of ~~March 31,~~September 30, 2023 and December 31, 2022.

11. Related Party Transactions

Affiliates of our General Partner

The Partnership’s general partner does not receive any management fee or other compensation for its management of NRP. However, in accordance with the partnership agreement, the general partner and its affiliates are reimbursed for services provided to the Partnership and for expenses incurred on the Partnership’s behalf. Employees of Quintana Minerals Corporation ("QMC") and Western Pocahontas Properties Limited Partnership ("WPPLP"), affiliates of the Partnership, provide their services to manage the Partnership's business. QMC and WPPLP charge the Partnership the portion of their employee salary and benefits costs related to their employee services provided to NRP. These QMC and WPPLP employee management service costs are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income. NRP also reimburses overhead costs incurred by its affiliates, including Quintana Infrastructure Development ("QID"), to manage the Partnership's business. These overhead costs include certain rent, information technology, administration of employee benefits and other corporate services incurred by or on behalf of the Partnership’s general partner and its affiliates and are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income.

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

	*For the Three Months Ended March 31,*				*For the Three Months Ended September 30,*				*For the Nine Months Ended September 30,*
(In thousands)	*2023*		*2022*		*2023*		*2022*		*2023*		*2022*
Operating and maintenance expenses	$	1,719	$	1,659	$	1,663	$	1,687	$	5,094	$	5,044
General and administrative expenses		1,320		1,240		1,287		1,195		3,860		3,660

The Partnership had accounts payable to QMC of $0.4 million on its Consolidated Balance Sheets at both ~~March 31,~~September 30, 2023 and December 31, 2022, and ~~$0.8~~$0.3 million and $1.0 million of accounts payable to WPPLP at ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

During the three months ended ~~March 31,~~September 30, 2023 and 2022, the Partnership recognized ~~$2.0~~$1.1 million and ~~$1.6~~$2.2 million, respectively, in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to an overriding royalty agreement with WPPLP.

~~Corbin J. Robertson, Jr. owns 85% of~~ These amounts were $5.1 million and $6.5 million during the ~~general partner of Great Northern Properties Limited Partnership ("GNP"), a privately held company primarily engaged in owning and managing mineral properties and surface leases. At both~~ ~~March 31,~~ nine months ended September 30,2023 and ~~December 31,~~ 2022, the Partnership had $0.03 million of accounts receivable from GNP included in accounts receivable, net on its Consolidated Balance Sheets related to amounts collected for surface leases that belong to NRP.

respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

12. Major Customers

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

	*For the Three Months Ended March 31,*										*For the Three Months Ended September 30,*										*For the Nine Months Ended September 30,*
	*2023*					*2022*					*2023*					*2022*					*2023*					*2022*
(In thousands)	*Revenues*		*Percent*			*Revenues*		*Percent*			*Revenues*		*Percent*			*Revenues*		*Percent*			*Revenues*		*Percent*			*Revenues*		*Percent*
Alpha Metallurgical Resources, Inc. ⁽¹⁾	$	24,218		24	%	$	27,743		31	%	$	17,219		20	%	$	21,000		21	%	$	61,122		22	%	$	81,638		28	%
Foresight Energy Resources LLC ("Foresight") ⁽¹⁾	$	12,529		13	%	$	11,250		13	%	$	18,600		22	%	$	19,334		19	%	$	43,453		16	%	$	47,081		16	%

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

13. Commitments and Contingencies

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

14. Unit-Based Compensation

During the ~~three~~nine months ended ~~March 31,~~ September 30,2023,the Partnership granted service, performance and market-based awards under its 2017 Long-Term Incentive Plan and during the ~~three~~nine months ended ~~March 31,~~ September 30,2022,the Partnership granted service-based awards. The Partnership's service and performance-based awards are valued using the closing price of NRP's common units as of the grant date while the Partnership's market-based awards are valued using a Monte Carlo simulation. The grant date fair value of these awards granted during ~~the~~ ~~three~~nine months ended ~~March 31,~~ September 30,2023and 2022 was ~~$15.9~~$16.0 million and $7.9 million, respectively. Total unit-based compensation expense associated with these awards was ~~$2.5~~$2.7 million and $1.4 million for the three months ended ~~March 31,~~ September 30,2023 and 2022, respectively, and $7.9 million and $4.2 million for the nine months ended September 30,2023and 2022, respectively, and is included in general and administrative expenses and operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income. The unamortized cost associated with unvested outstanding awards as of ~~March 31,~~September 30, 2023 is ~~$20.2~~$15.8 million, which is to be recognized over a weighted average period of ~~2.5~~2.1 years. The unamortized cost associated with unvested outstanding awards as of December 31, 2022 was $6.3 million.

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

(In thousands)

Common Units

Weighted Average Grant Date Fair Value per Common Unit

Outstanding at January 1, 2023
386 $ 28.96
Granted
278 $ 56.94
Fully vested and issued
(184 ) $ 26.30
Outstanding at March 31, 2023
480 $ 46.20

(In thousands)	*Common Units*			*Weighted Average Grant Date Fair Value per Common Unit*
Outstanding at January 1, 2023		386		$	28.96
Granted		281		$	56.84
Fully vested and issued		(184	)	$	26.30
Outstanding at September 30, 2023		483		$	46.21

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

15. Financing Transaction

The Partnership owns rail loadout and associated infrastructure at the Sugar Camp mine in the Illinois Basin operated by a subsidiary of Foresight. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight and is accounted for as a financing transaction (the "Sugar Camp lease"). The Sugar Camp lease expires in 2032 with renewal options for up to 80 additional years. Minimum payments are $5.0 million per year through the end of the lease term. The Partnership is also entitled to variable payments in the form of throughput fees ~~determined~~ based on the amount of coal transported and processed utilizing the Partnership's assets. In the event the Sugar Camp lease is renewed beyond 2032, payments become a fixed ~~$10~~ten thousand dollars per year for the remainder of the renewed term.

16. Credit Losses

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

As of ~~March 31,~~September 30, 2023 and December 31, 2022, NRP had the following current expected credit loss (“CECL”) allowance related to its receivables and long-term contract receivable:

	*March 31, 2023*							*December 31, 2022*							*September 30, 2023*							*December 31, 2022*
(In thousands)	*Gross*		*CECL Allowance*			*Net*		*Gross*		*CECL Allowance*			*Net*		*Gross*		*CECL Allowance*			*Net*		*Gross*		*CECL Allowance*			*Net*
Receivables	$	42,410	$	(3,874	)	$	38,536	$	47,237	$	(4,461	)	$	42,776	$	46,294	$	(5,343	)	$	40,951	$	47,237	$	(4,461	)	$	42,776
Long-term contract receivable		29,325		(1,016	)		28,309		29,984		(1,038	)		28,946		27,965		(968	)		26,997		29,984		(1,038	)		28,946
Total	$	71,735	$	(4,890	)	$	66,845	$	77,221	$	(5,499	)	$	71,722	$	74,259	$	(6,311	)	$	67,948	$	77,221	$	(5,499	)	$	71,722

NRP recorded ~~($0.6 million)~~$1.6 million and ~~$1.0~~$0.0 million inof operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to the change in the CECL allowance during the three months ended ~~March 31,~~ September 30,2023 and 2022, respectively and $0.8 million and $0.6 million during the nine months ended September 30,2023and 2022, respectively.

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

17. Subsequent Events

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

Common Unit and Preferred Unit Distributions

In ~~May~~November 2023, the Board of Directors declared a distribution of $0.75 per common unit with respect to the ~~first~~third quarter of 2023. The Board of Directors also declared a ~~$6.1~~$2.15 million cash distribution on NRP's outstanding preferred units with respect to the ~~first~~third quarter of 2023.

Warrant Repurchases

On October 6, 2023, the Partnership executed a negotiated transaction with holders of the warrants pursuant to which the Partnership repurchased and retired an aggregate of 300,000 warrants with an exercise price of $34.00 for approximately $11.4 million in cash. On October 26, 2023, the Partnership executed another negotiated transaction with holders of the warrants pursuant to which the Partnership repurchased and retired an aggregate of 350,000 warrants with an exercise price of $34.00 for approximately $11.1 million in cash. Following these transactions, 1.54 million warrants with an exercise price of $34.00 remain outstanding. As a result of these repurchases, warrant holders' interest on the Partnership's Statement of Partners' Capital decreased by $9.7 million during the month of October 2023.

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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 ~~March 31,~~September 30, 2023 and 2022 should be read in conjunction with our Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in this Form 10-Q and with the Consolidated Financial Statements, Notes to Consolidated Financial Statements and Management’s Discussion and Analysis included in the Natural Resource Partners L.P. Annual Report on Form 10-K for the year ended December 31, 2022.

As used herein, unless the context otherwise requires: "we," "our," "us" and the "Partnership" refer to Natural Resource Partners L.P. and, where the context requires, our subsidiaries. References to "NRP" and "Natural Resource Partners" refer to Natural Resource Partners L.P. only, and not to NRP (Operating) LLC or any of Natural Resource Partners L.P.’s subsidiaries. References to "Opco" refer to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. NRP Finance Corporation ("NRP Finance") is a wholly owned subsidiary of NRP and was a co-issuer with NRP on the 9.125% senior notes due 2025 (the "2025 Senior Notes").

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Statements included in this 10-Q may constitute forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are also forward-looking statements. Such forward-looking statements include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on our common and preferred units; our business strategy; our liquidity and access to capital and financing sources; our financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by our lessees; Sisecam Wyoming LLC’s ("Sisecam Wyoming's") trona mining and soda ash refinery operations; distributions from our soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us, and of scheduled or potential regulatory or legal changes; and global and U.S. economic conditions.

These forward-looking statements speak only as of the date hereof and are made based upon our current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. You should not put undue reliance on any forward-looking statements. See "Item 1A. Risk Factors" included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2022 for important factors that could cause our actual results of operations or our actual financial condition to differ.

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. For a description of Opco's debt agreements, see Note 9. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note 11. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, 2022. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

Distributable Cash Flow

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

Leverage Ratio

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

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Introduction

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

• Executive Overview

• Results of Operations

• Liquidity and Capital Resources

• Off-Balance Sheet Transactions

• Related Party Transactions

• Summary of Critical Accounting Estimates

• Recent Accounting Standards

Executive Overview

We are a diversified natural resource company engaged principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and own a non-controlling 49% interest in Sisecam Wyoming, a trona ore mining and soda ash production business. Our common units trade on the New York Stock Exchange under the symbol "NRP." Our business is organized into two operating segments:

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

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

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

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

	Operating Segments											Operating Segments
(In thousands)	Mineral Rights			Soda Ash		Corporate and Financing			Total			Mineral Rights			Soda Ash		Corporate and Financing			Total
Revenues and other income	$	79,965		$	19,254	$	—		$	99,219		$	218,213		$	58,633	$	—		$	276,846
Net income (loss)	$	68,881		$	19,096	$	(8,702	)	$	79,275		$	182,400		$	58,408	$	(27,353	)	$	213,455
Adjusted EBITDA ⁽¹⁾	$	72,960		$	10,622	$	(5,845	)	$	77,737		$	194,987		$	65,915	$	(17,157	)	$	243,745

Cash flow provided by (used in) continuing operations
Operating activities	$	73,858		$	10,617	$	(11,575	)	$	72,900		$	189,836		$	65,901	$	(22,545	)	$	233,192
Investing activities	$	699		$	—	$	(2	)	$	697		$	2,791		$	—	$	(10	)	$	2,781
Financing activities	$	(583	)	$	—	$	(94,450	)	$	(95,033	)	$	(583	)	$	—	$	(256,070	)	$	(256,653	)
Distributable cash flow ⁽¹⁾	$	74,557		$	10,617	$	(11,577	)	$	73,597		$	192,627		$	65,901	$	(22,555	)	$	235,973
Free cash flow ⁽¹⁾	$	74,456		$	10,617	$	(11,577	)	$	73,496		$	191,666		$	65,901	$	(22,555	)	$	235,012

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

Table of Contents

Current Results/Market Commentary

Financial Results and Quarterly Distributions

We generated ~~$72.9~~$233.2 million of operating cash flow and ~~$73.5~~$235.0 million of free cash flow during the ~~three~~nine months ended ~~March 31,~~September 30, 2023, and ended the quarter with ~~$56.5~~$45.4 million of liquidity consisting of ~~$17.7~~$18.4 million of cash and cash equivalents and ~~$38.8~~$27.0 million of borrowing capacity under our Opco Credit Facility. As of ~~March 31,~~September 30, 2023 our leverage ratio was ~~0.5~~0.7 x.

In ~~February~~May 2023, we declared and paid a cash distribution of $0.75 per common unit of NRP with respect to the ~~fourth~~first quarter of ~~2022~~2023 as well as a ~~$7.5~~$6.1 million cash distribution on the preferred units with respect to the ~~fourth~~first quarter of ~~2022.~~2023. In ~~March~~August 2023, we declared and paid a ~~special~~ cash distribution of ~~$2.43~~$0.75 per common unit of NRP with respect to ~~help cover unitholder tax liabilities associated~~the second quarter of 2023 as well as a $3.7 million cash distribution on the preferred units with ~~owning NRP's common units during 2022.~~respect to the second quarter of 2023. Future distributions on our common and preferred units will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs.

In February 2023, we received a notice from holders of ~~our~~the Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 47,499 Class A Preferred Units. We chose to redeem the preferred units for $47.5 million in cash rather than issuing common units. In May 2023, we received a notice from holders of our Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 35,834 Class A Preferred Units. We chose to redeem the preferred units for $35.8 million in cash rather than issuing common units. In June 2023, we executed a negotiated transaction with holders of our Class A Preferred Units pursuant to which we repurchased and retired an aggregate of 45,000 Class A Preferred Units for $45.0 million in cash. In August 2023, we executed a negotiated transaction with holders of the Class A Preferred Units pursuant to which we repurchased and retired an aggregate of 35,000 Class A Preferred Units for $35.0 million in cash. In September 2023, we executed a negotiated transaction with holders of the Class A Preferred Units pursuant to which we repurchased and retired an aggregate of 15,001 Class A Preferred Units for $15.0 million in cash. Of the originally issued 250,000 Class A Preferred Units, ~~202,501~~71,666 Class A Preferred Units remain ~~outstanding.~~outstanding as of September 30, 2023. In connection with these repurchases and effective September 2023, Blackstone no longer holds any Class A Preferred Units and as such, all rights of Blackstone thereof have ceased with respect to the Class A Preferred Units and Blackstone's board designee resigned from the board of the Partnership's general partner.

In September 2023, we negotiated a transaction with holders of the warrants to purchase common units (the "warrants") pursuant to which we repurchased and retired an aggregate of 752,500 warrants with an exercise price of $22.81 and 60,000 warrants with an exercise price of $34.00 for approximately $33.6 million in cash. In October 2023, we executed two negotiated transactions with holders of the warrants pursuant to which we repurchased and retired an aggregate of 650,000 warrants with an exercise price of $34.00 for approximately $22.5 million in cash. Following these transactions, 1.54 million warrants with an exercise price of $34.00 remain outstanding.

~~Table of Contents~~

Mineral Rights Business Segment

Revenues and other income in the first ~~quarter~~nine months of 2023 ~~increased $5.1~~decreased $29.7 million, or 7%12%, as compared to the prior year period primarily due to ~~increased~~decreased metallurgical coal sales ~~volumes~~prices and ~~revenue~~decreased revenues from oil and gas royalties and certain carbon neutral ~~initiatives.~~ initiative transactions entered into in 2022. Cash provided by operating activities and free cash flow ~~increased $25.7~~decreased $4.6 million and ~~$26.3~~$3.9 million, respectively, compared to the prior year ~~quarter~~period primarily due to the ~~timing~~lower revenues during the first nine months of ~~minimum and royalty payments and~~2023 as compared to the prior year ~~recoupments.~~period.

Metallurgical coal prices ~~remain strong relative to~~improved, and thermal coal prices remained relatively flat during the third quarter of 2023. Both metallurgical and thermal coal prices were above historical norms ~~although pricing has declined from~~but below the record highs seen in 2022. ~~Continued~~We expect continued price support for ~~pricing is expected~~coal as ~~operators are~~ limited ~~in their~~access to capital, labor shortages and inflationary pressures limit operators' ability to increase production due to ongoing labor shortages, transportation and logistics challenges, difficulty of new mine permitting, and limited access to capital. While metallurgical prices have pulled back from the peaks reached last year, we continue to believe met prices will remain well-supported for the foreseeable future. production.

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

We continue to explore ~~and identify~~ carbon neutral revenue opportunities across our large asset portfolio, ~~of land, mineral, and timber assets,~~ including the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar and wind energy. ~~In the first quarter of 2023, we executed a new solar lease.~~

Soda Ash Business Segment

Revenues and other income in the first ~~quarter~~nine months of ~~2023 increased $4.4~~2023increased$14.6 million, or ~~30%~~33%, as compared to the prior year period primarily due to ~~increased~~higher sales ~~prices.~~ prices driven by strong demand in domestic and international markets, partially offset by lower soda ash production and sales volumes. Cash provided by operating activities and free cash flow in the first ~~quarter~~nine months of ~~2023 decreased $2.6~~2023increased$32.0 million as compared to the prior year period asdue to higher distributions received from Sisecam Wyoming ~~paid a higher regular quarterly distribution~~in 2023 stemming from Sisecam Wyoming's strong operating performance in the first ~~quarter~~half of ~~2022 as~~the year.

International soda ash prices were significantly lower in the third quarter compared to the first ~~quarter~~half of ~~2023.~~

~~International~~the year primarily due to new supply from China. We believe lower international prices ~~remained strong in~~will persist throughout the ~~first quarter~~remainder of ~~2023 reflecting a continued supply constrained~~the year and into next year as the market absorbs the additional supply. Sisecam Wyoming’s domestic soda ash sales prices are expected to remain above the spot market for ~~soda ash. Domestic soda ash prices were also strong during~~ the ~~first quarter~~rest of ~~2023 versus the prior~~this year ~~quarter due to~~as a result of negotiated 2023 domestic sales contracts entered into at the end of 2022. As domestic sales contracts for 2024 begin to be negotiated, we believe contracted sales prices ~~converging to international soda ash prices.~~will be set at lower levels as the market contends with recessionary headwinds and new supply entering the export markets.

Results of Operations

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

Revenues and Other Income

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

	For the Three Months Ended March 31,						Percentage			For the Three Months Ended September 30,							Percentage
Operating Segment (In thousands)	2023		2022		Increase		Change			2023		2022		Decrease			Change
Mineral Rights	$	79,965	$	74,879	$	5,086		7	%	$	73,966	$	87,702	$	(13,736	)		(16	)%
Soda Ash		19,254		14,837		4,417		30	%		12,401		14,556		(2,155	)		(15	)%
Total	$	99,219	$	89,716	$	9,503		11	%	$	86,367	$	102,258	$	(15,891	)		(16	)%

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

1920

Table of Contents

Mineral Rights

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

For the Three Months Ended March 31,

Increase

Percentage

(In thousands, except per ton data)

2023

2022

(Decrease)

Change

Coal sales volumes (tons)

Appalachia

Northern
379 428 (49 ) (11 )%
Central
3,609 3,251 358 11 %
Southern
582 361 221 61 %
Total Appalachia
4,570 4,040 530 13 %
Illinois Basin
1,310 1,502 (192 ) (13 )%
Northern Powder River Basin
1,085 1,238 (153 ) (12 )%
Gulf Coast
58 69 (11 ) (16 )%
Total coal sales volumes
7,023 6,849 174 3 %

Coal royalty revenue per ton

Appalachia

Northern
$ 9.86 $ 10.14 $ (0.28 ) (3 )%
Central
9.92 11.37 (1.45 ) (13 )%
Southern
14.94 17.56 (2.62 ) (15 )%
Illinois Basin
3.57 2.20 1.37 62 %
Northern Powder River Basin
4.68 3.74 0.94 25 %
Gulf Coast
0.57 0.55 0.02 4 %
Combined average coal royalty revenue per ton
8.26 8.12 0.14 2 %

Coal royalty revenues

Appalachia

Northern
$ 3,737 $ 4,341 $ (604 ) (14 )%
Central
35,806 36,980 (1,174 ) (3 )%
Southern
8,697 6,340 2,357 37 %
Total Appalachia
48,240 47,661 579 1 %
Illinois Basin
4,675 3,303 1,372 42 %
Northern Powder River Basin
5,075 4,632 443 10 %
Gulf Coast
33 38 (5 ) (13 )%
Unadjusted coal royalty revenues
58,023 55,634 2,389 4 %
Coal royalty adjustment for minimum leases
— (185 ) 185 100 %
Total coal royalty revenues
$ 58,023 $ 55,449 $ 2,574 5 %

Other revenues

Production lease minimum revenues
$ 613 $ 1,592 $ (979 ) (61 )%
Minimum lease straight-line revenues
4,503 4,783 (280 ) (6 )%
Carbon neutral initiative revenues
2,118 — 2,118 100 %
Wheelage revenues
3,869 3,717 152 4 %
Property tax revenues
1,470 1,472 (2 ) (0 )%
Coal overriding royalty revenues
188 258 (70 ) (27 )%
Lease amendment revenues
851 880 (29 ) (3 )%
Aggregates royalty revenues
753 770 (17 ) (2 )%
Oil and gas royalty revenues
3,588 1,814 1,774 98 %
Other revenues
295 348 (53 ) (15 )%
Total other revenues
$ 18,248 $ 15,634 $ 2,614 17 %
Royalty and other mineral rights
$ 76,271 $ 71,083 $ 5,188 7 %
Transportation and processing services revenues
3,598 3,796 (198 ) (5 )%
Gain on asset sales and disposals
96 — 96 100 %
Total Mineral Rights segment revenues and other income
$ 79,965 $ 74,879 $ 5,086 7 %

	For the Three Months Ended September 30,						Increase			Percentage
(In thousands, except per ton data)	2023			2022			(Decrease)			Change
Coal sales volumes (tons)
Appalachia
Northern		284			440			(156	)		(35	)%
Central		3,429			3,503			(74	)		(2	)%
Southern		741			498			243			49	%
Total Appalachia		4,454			4,441			13			0	%
Illinois Basin		2,541			3,490			(949	)		(27	)%
Northern Powder River Basin		1,364			835			529			63	%
Gulf Coast		479			188			291			155	%
Total coal sales volumes		8,838			8,954			(116	)		(1	)%

Coal royalty revenue per ton
Appalachia
Northern	$	5.54		$	6.74		$	(1.20	)		(18	)%
Central		8.20			9.04			(0.84	)		(9	)%
Southern		11.88			9.78			2.10			21	%
Illinois Basin		3.98			2.57			1.41			55	%
Northern Powder River Basin		4.86			4.56			0.30			7	%
Gulf Coast		0.69			0.59			0.10			17	%
Combined average coal royalty revenue per ton		6.29			5.85			0.44			8	%

Coal royalty revenues
Appalachia
Northern	$	1,573		$	2,965		$	(1,392	)		(47	)%
Central		28,111			31,680			(3,569	)		(11	)%
Southern		8,806			4,872			3,934			81	%
Total Appalachia		38,490			39,517			(1,027	)		(3	)%
Illinois Basin		10,108			8,967			1,141			13	%
Northern Powder River Basin		6,627			3,805			2,822			74	%
Gulf Coast		330			111			219			197	%
Unadjusted coal royalty revenues		55,555			52,400			3,155			6	%
Coal royalty adjustment for minimum leases		(11	)		(19	)		8			42	%
Total coal royalty revenues	$	55,544		$	52,381		$	3,163			6	%

Other revenues
Production lease minimum revenues	$	850		$	1,885		$	(1,035	)		(55	)%
Minimum lease straight-line revenues		4,464			4,778			(314	)		(7	)%
Carbon neutral initiative revenues		681			8,600			(7,919	)		(92	)%
Wheelage revenues		2,385			2,977			(592	)		(20	)%
Property tax revenues		1,770			1,360			410			30	%
Coal overriding royalty revenues		827			1,367			(540	)		(40	)%
Lease amendment revenues		623			759			(136	)		(18	)%
Aggregates royalty revenues		736			884			(148	)		(17	)%
Oil and gas royalty revenues		324			6,170			(5,846	)		(95	)%
Other revenues		329			218			111			51	%
Total other revenues	$	12,989		$	28,998		$	(16,009	)		(55	)%
Royalty and other mineral rights	$	68,533		$	81,379		$	(12,846	)		(16	)%
Transportation and processing services revenues		4,579			5,969			(1,390	)		(23	)%
Gain on asset sales and disposals		854			354			500			141	%
Total Mineral Rights segment revenues and other income	$	73,966		$	87,702		$	(13,736	)		(16	)%

2021

Table of Contents

Coal Royalty Revenues

Approximately ~~75%~~60% of coal royalty revenues and approximately ~~55%~~45% of coal royalty sales volumes were derived from metallurgical coal during the three months ended ~~March 31,~~September 30, 2023. Total coal royalty revenues increased ~~$2.6~~$3.2 million as compared to the prior year quarter. The discussion by region is as follows:

•

Appalachia: Coal royalty revenues ~~were essentially flat period-over-period as increased sales volumes more than offset the decrease in~~decreased $1.0 million primarily due to decreased metallurgical coal sales prices induring the ~~Southern Appalachia region.~~ three months ended September 30, 2023, as compared to the prior year quarter.

•

Illinois Basin: Coal royalty revenues increased ~~$1.4~~$1.1 million primarily due to increased sales prices during the three months ended ~~March 31,~~September 30, 2023, as compared to the prior year quarter.

•

Northern Powder River Basin: Coal royalty revenues increased $2.8 million primarily due to increased sales volumes during the three months ended September 30, 2023, as compared to the prior year quarter as our lessee mined more on our property during the third quarter of 2023 as compared to the third quarter of 2022 in accordance with its mine plan.

Other Revenues

Total other revenues ~~increased $2.6~~decreased $16.0 million during the three months ended ~~March 31,~~September 30, 2023, as compared to the prior year quarter primarily due to a ~~$2.1~~$7.9 million ~~increase~~decrease in carbon neutral initiative revenues and a $5.8 million decrease in oil and gas royalty revenues. Carbon neutral initiative revenues recognized induring the three months ended September 30, 2023 primarily related to athe sale of forest carbon offset credits and carbon neutral initiative revenues recognized during the three months ended September 30, 2022 primarily related to carbon neutral transactions that included subsurface CO₂storage ~~transaction.~~and geothermal energy production. Oil and gas royalty revenues decreased during the three months ended September 30, 2023 primarily as a result of decreased natural gas production and prices as compared to the prior year quarter.

Soda Ash

Revenues and other income related to our Soda Ash segment ~~increased $4.4~~decreased $2.2 million as compared to the prior year quarter primarily ~~as a result of~~due to lower international sales prices and an increased sales ~~prices~~mix into the lower priced international market in the three months ended September 30, 2023 as compared to the prior year ~~quarter.~~period.

Operating and Other Expenses

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

	For the Three Months Ended March 31,				Increase			Percentage			For the Three Months Ended September 30,				Increase			Percentage
(In thousands)	2023		2022		(Decrease)			Change			2023		2022		(Decrease)			Change
Operating expenses
Operating and maintenance expenses	$	7,163	$	8,076	$	(913	)		(11	)%	$	8,358	$	7,898	$	460			6	%
Depreciation, depletion and amortization		4,083		3,868		215			6	%		4,594		6,850		(2,256	)		(33	)%
General and administrative expenses		5,845		4,467		1,378			31	%		5,669		4,518		1,151			25	%
Asset impairments		—		19		(19	)		(100	)%		63		812		(749	)		(92	)%
Total operating expenses	$	17,091	$	16,430	$	661			4	%	$	18,684	$	20,078	$	(1,394	)		(7	)%

Other expenses, net
Interest expense, net											$	3,837	$	5,141	$	(1,304	)		(25	)%
Loss on extinguishment of debt												—		2,484		(2,484	)		(100	)%
Total other expenses, net											$	3,837	$	7,625	$	(3,788	)		(50	)%

Total operating expenses ~~were essentially flat period-over-period. The~~decreased $1.4 million ~~increase in general and administrative expenses,~~as compared to the prior year quarter primarily ~~related to increased incentive compensation expense, was partially offset by a $0.9 million decrease in operating and maintenance expenses, primarily driven by~~due a decrease in ~~bad debt expense.~~depreciation, depletion and amortization driven by lower Illinois Basin coal sales volumes during the three months ended September 30, 2023 as compared to the prior year quarter.

~~Interest Expense, Net~~

~~Interest expense,~~Total other expenses, net decreased ~~$6.5~~$3.8 million as a result of the loss on extinguishment of debt recognized in 2022 related to the partial retirement of the 2025 Senior Notes during the third quarter of 2022 in addition a decrease in interest expense, net primarily due to less debt outstanding as compared to the prior year quarter.

2122

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Adjusted EBITDA (Non-GAAP Financial Measure)

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

	Operating Segments											Operating Segments
For the Three Months Ended (In thousands)	Mineral Rights		Soda Ash			Corporate and Financing			Total			Mineral Rights		Soda Ash			Corporate and Financing			Total
March 31, 2023
September 30, 2023
Net income (loss)	$	68,881	$	19,096		$	(8,702	)	$	79,275		$	61,009	$	12,348		$	(9,511	)	$	63,846
Less: equity earnings from unconsolidated investment		—		(19,254	)		—			(19,254	)		—		(12,401	)		—			(12,401	)
Add: total distributions from unconsolidated investment		—		10,780			—			10,780			—		23,010			—			23,010
Add: interest expense, net		—		—			2,853			2,853			—		—			3,837			3,837
Add: depreciation, depletion and amortization		4,079		—			4			4,083			4,589		—			5			4,594
Add: asset impairments		—		—			—			—			63		—			—			63
Adjusted EBITDA	$	72,960	$	10,622		$	(5,845	)	$	77,737		$	65,661	$	22,957		$	(5,669	)	$	82,949

March 31, 2022
September 30, 2022
Net income (loss)	$	62,967	$	14,786		$	(13,854	)	$	63,899		$	72,173	$	14,525		$	(12,143	)	$	74,555
Less: equity earnings from unconsolidated investment		—		(14,837	)		—			(14,837	)		—		(14,556	)		—			(14,556	)
Add: total distributions from unconsolidated investment		—		13,230			—			13,230			—		10,339			—			10,339
Add: interest expense, net		—		—			9,387			9,387			—		—			5,141			5,141
Add: loss on extinguishment of debt													—		—			2,484			2,484
Add: depreciation, depletion and amortization		3,868		—			—			3,868			6,850		—			—			6,850
Add: asset impairments		19		—			—			19			812		—			—			812
Adjusted EBITDA	$	66,854	$	13,179		$	(4,467	)	$	75,566		$	79,835	$	10,308		$	(4,518	)	$	85,625

Net income ~~increased $15.4~~decreased $10.7 million as compared to the prior year quarter primarily due to the decrease in ~~interest expense, net and increase in~~ revenues and other income, partially offset by the decrease in operating and other expenses, net, both discussed above. Adjusted EBITDA ~~increased $2.2~~decreased $2.7 million as compared to the prior year quarter primarily due to a ~~$6.1~~$14.2 million ~~increase~~decrease in Adjusted EBITDA within our Mineral Rights segment primarily as a result of ~~higher~~lower revenues and other income ~~and lower operating and maintenance expenses, both~~as discussed above. ~~The increase in Adjusted EBITDA within our Mineral Rights segment~~This decrease was partially offset by a ~~$2.6~~$12.6 million ~~decrease~~increase in Adjusted EBITDA within our Soda Ash segment ~~primarily~~ due to a higher distribution received from Sisecam Wyoming ~~paying a higher quarterly distribution~~driven by their strong operating performance in the first ~~quarter~~half of ~~2022 as discussed above and a $1.4 decrease in Adjusted EBITDA within our Corporate and Financing segment due to higher general and administrative expenses as discussed above.~~2023.

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

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

Operating Segments

For the Three Months Ended (In thousands)

Mineral Rights

Soda Ash

Corporate and Financing

Total

March 31, 2023

Cash flow provided by (used in)

Operating activities
$ 73,858 $ 10,617 $ (11,575 ) $ 72,900
Investing activities
699 — (2 ) 697
Financing activities
(583 ) — (94,450 ) (95,033 )

March 31, 2022

Cash flow provided by (used in)

Operating activities
$ 48,176 $ 13,195 $ (9,040 ) $ 52,331
Investing activities
— — — —
Financing activities
(614 ) — (51,647 ) (52,261 )

	Operating Segments
For the Three Months Ended (In thousands)	Mineral Rights		Soda Ash		Corporate and Financing			Total
September 30, 2023
Cash flow provided by (used in)
Operating activities	$	60,938	$	22,958	$	(4,954	)	$	78,942
Investing activities		1,477		—		—			1,477
Financing activities		—		—		(72,738	)		(72,738	)

September 30, 2022
Cash flow provided by (used in)
Operating activities	$	75,948	$	10,309	$	(3,761	)	$	82,496
Investing activities		928		—		(59	)		869
Financing activities		—		—		(81,784	)		(81,784	)

2223

Table of Contents

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

	Operating Segments											Operating Segments
For the Three Months Ended (In thousands)	Mineral Rights			Soda Ash		Corporate and Financing			Total			Mineral Rights			Soda Ash		Corporate and Financing			Total
March 31, 2023
September 30, 2023
Net cash provided by (used in) operating activities	$	73,858		$	10,617	$	(11,575	)	$	72,900		$	60,938		$	22,958	$	(4,954	)	$	78,942
Add: proceeds from asset sales and disposals		101			—		—			101			855			—		—			855
Add: return of long-term contract receivable		598			—		—			598			622			—		—			622
Less: maintenance capital expenditures		—			—		(2	)		(2	)		—			—		—			—
Distributable cash flow	$	74,557		$	10,617	$	(11,577	)	$	73,597		$	62,415		$	22,958	$	(4,954	)	$	80,419
Less: proceeds from asset sales and disposals		(101	)		—		—			(101	)		(855	)		—		—			(855	)
Free cash flow	$	74,456		$	10,617	$	(11,577	)	$	73,496		$	61,560		$	22,958	$	(4,954	)	$	79,564

March 31, 2022
September 30, 2022
Net cash provided by (used in) operating activities	$	48,176		$	13,195	$	(9,040	)	$	52,331		$	75,948		$	10,309	$	(3,761	)	$	82,496
Add: proceeds from asset sales and disposals		—			—		—			—			353			—		—			353
Add: return of long-term contract receivable		—			—		—			—			575			—		—			575
Less: maintenance capital expenditures													—			—		(59	)		(59	)
Distributable cash flow	$	48,176		$	13,195	$	(9,040	)	$	52,331		$	76,876		$	10,309	$	(3,820	)	$	83,365
Less: proceeds from asset sales and disposals		—			—		—			—			(353	)		—		—			(353	)
Free cash flow	$	48,176		$	13,195	$	(9,040	)	$	52,331		$	76,523		$	10,309	$	(3,820	)	$	83,012

Operating cash flow, DCF and FCF ~~increased $20.6~~decreased $3.6 million, ~~$21.3~~$2.9 million and ~~$21.2~~$3.4 million, respectively, as compared to the prior year quarter primarily due to ~~an increase~~a decrease in cash flow within our Mineral Rights segment, partially offset by ~~a decrease~~an increase in cash flow within our Soda Ash ~~and Corporate and Financing segments.~~segment. The discussion by segment is as follows:

•

Mineral Rights Segment

◦

Operating cash flow, DCF and FCF ~~increased $25.7~~decreased $15.0 million, ~~$26.4~~$14.5 million and ~~$26.3~~$15.0 million, respectively, primarily ~~due~~driven by cash received from certain carbon neutral initiatives entered into in the third quarter of 2022 and lower natural gas production and prices in the third quarter of 2023 as compared to the ~~timing of minimum and royalty payments and~~ prior year ~~recoupments.~~quarter.

•

Soda Ash Segment

◦

Operating cash flow, DCF and FCF increased $12.6 million as compared to the prior year quarter primarily due to a higher distribution received from Sisecam Wyoming driven by Sisecam Wyoming's strong operating performance in the first half of 2023.

First Nine Months of 2023 and 2022 Compared

Revenues and Other Income

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

		For the Nine Months Ended September 30,			Increase			Percentage
Operating Segment (In thousands)	2023		2022		(Decrease)			Change
Mineral Rights	$	218,213	$	247,871	$	(29,658	)		(12	)%
Soda Ash		58,633		44,036		14,597			33	%
Total	$	276,846	$	291,907	$	(15,061	)		(5	)%

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

Table of Contents

Mineral Rights

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

	For the Nine Months Ended September 30,						Increase			Percentage
(In thousands, except per ton data)	2023			2022			(Decrease)			Change
Coal sales volumes (tons)
Appalachia
Northern		1,053			1,260			(207	)		(16	)%
Central		10,390			10,238			152			1	%
Southern		2,016			1,171			845			72	%
Total Appalachia		13,459			12,669			790			6	%
Illinois Basin		5,482			8,395			(2,913	)		(35	)%
Northern Powder River Basin		3,330			2,772			558			20	%
Gulf Coast		676			324			352			109	%
Total coal sales volumes		22,947			24,160			(1,213	)		(5	)%

Coal royalty revenue per ton
Appalachia
Northern	$	7.59		$	9.48		$	(1.89	)		(20	)%
Central		8.89			10.85			(1.96	)		(18	)%
Southern		12.41			14.28			(1.87	)		(13	)%
Illinois Basin		3.63			2.30			1.33			58	%
Northern Powder River Basin		4.74			4.24			0.50			12	%
Gulf Coast		0.68			0.58			0.10			17	%
Combined average coal royalty revenue per ton		7.04			7.08			(0.04	)		(1	)%

Coal royalty revenues
Appalachia
Northern	$	7,991		$	11,946		$	(3,955	)		(33	)%
Central		92,362			111,121			(18,759	)		(17	)%
Southern		25,024			16,725			8,299			50	%
Total Appalachia		125,377			139,792			(14,415	)		(10	)%
Illinois Basin		19,924			19,331			593			3	%
Northern Powder River Basin		15,768			11,751			4,017			34	%
Gulf Coast		461			187			274			147	%
Unadjusted coal royalty revenues		161,530			171,061			(9,531	)		(6	)%
Coal royalty adjustment for minimum leases		(3	)		(286	)		283			99	%
Total coal royalty revenues	$	161,527		$	170,775		$	(9,248	)		(5	)%

Other revenues
Production lease minimum revenues	$	2,025		$	3,542		$	(1,517	)		(43	)%
Minimum lease straight-line revenues		13,414			14,235			(821	)		(6	)%
Carbon neutral initiative revenues		2,914			8,600			(5,686	)		(66	)%
Wheelage revenues		9,538			11,073			(1,535	)		(14	)%
Property tax revenues		4,710			4,527			183			4	%
Coal overriding royalty revenues		1,165			2,307			(1,142	)		(50	)%
Lease amendment revenues		2,322			2,450			(128	)		(5	)%
Aggregates royalty revenues		2,175			2,691			(516	)		(19	)%
Oil and gas royalty revenues		5,126			10,890			(5,764	)		(53	)%
Other revenues		895			705			190			27	%
Total other revenues	$	44,284		$	61,020		$	(16,736	)		(27	)%
Royalty and other mineral rights	$	205,811		$	231,795		$	(25,984	)		(11	)%
Transportation and processing services revenues		11,447			15,377			(3,930	)		(26	)%
Gain on asset sales and disposals		955			699			256			37	%
Total Mineral Rights segment revenues and other income	$	218,213		$	247,871		$	(29,658	)		(12	)%

Table of Contents

Coal Royalty Revenues

Approximately 70% of coal royalty revenues and approximately 50% of coal royalty sales volumes were derived from metallurgical coal during the nine months ended September 30, 2023. Total coal royalty revenues decreased $9.2 million as compared to the prior year period. The discussion by region is as follows:

•

Appalachia: Coal royalty revenues decreased ~~$2.6~~$14.4 million primarily due to decreased metallurgical coal sales prices during the nine months ended September 30, 2023, as compared to the prior year period.

•

Illinois Basin: Coal royalty revenues increased $0.6 million during the nine months ended September 30, 2023, as compared to the prior year period primarily due to higher coal sales prices, partially offset by lower coal sales volumes as compared to the prior year period.

•

Northern Powder River Basin: Coal royalty revenues increased $4.0 million primarily due to increased sales volumes during the nine months ended September 30, 2023, as compared to the prior year period as our lessee mined more on our property during the first nine months of 2023 as compared to the first nine months of 2022 in accordance with its mine plan.

Other Revenues

Total other revenues decreased $16.7 million during the nine months ended September 30, 2023, as compared to the prior year period primarily due a $5.8 million decrease in oil and gas royalty revenues and a $5.7 million decrease in carbon neutral initiative revenues. Oil and gas royalty revenues decreased during the nine months ended September 30, 2023 primarily as a result of decreased natural gas production and prices as compared to the prior year period. Carbon neutral initiative revenues recognized during the nine months ended September 30, 2023 primarily related to subsurface CO₂ storage and forest carbon offset credits. Carbon neutral initiative revenues recognized during the nine months ended September 30, 2022 primarily related to subsurface CO₂ storage and geothermal energy transactions.

Transportation and Processing Services Revenues

Transportation and processing services revenues decreased $3.9 million during the nine months ended September 30, 2023, as compared to the prior year period primarily due to a temporary relocation of certain production off of NRP's coal reserves. The fee per ton associated with the transportation and processing of the non-NRP coal is less than the fee per ton associated with the transportation and processing of NRP coal.

Soda Ash

Revenues and other income related to our Soda Ash segment increased $14.6 million during the nine months ended September 30, 2023 as compared to the prior year period primarily due to higher sales prices driven by strong demand in domestic and international markets, partially offset by lower soda ash production and sales volumes.

Operating and Other Expenses

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

	For the Nine Months Ended September 30,				Increase			Percentage
(In thousands)	2023		2022		(Decrease)			Change
Operating expenses
Operating and maintenance expenses	$	23,451	$	25,989	$	(2,538	)		(10	)%
Depreciation, depletion and amortization		12,469		16,565		(4,096	)		(25	)%
General and administrative expenses		17,157		14,037		3,120			22	%
Asset impairments		132		874		(742	)		(85	)%
Total operating expenses	$	53,209	$	57,465	$	(4,256	)		(7	)%

Other expenses, net
Interest expense, net	$	10,182	$	22,636	$	(12,454	)		(55	)%
Loss on extinguishment of debt		—		6,532		(6,532	)		(100	)%
Total other expenses, net	$	10,182	$	29,168	$	(18,986	)		(65	)%

Total operating expenses decreased $4.3 million primarily due to a $4.1 million decrease in depreciation, depletion and amortization and a $2.5 million decrease in operating and maintenance expenses, partially offset by a $3.1 million increase in general and administrative expenses. The decrease in depreciation, depletion and amortization was primarily driven by lower Illinois Basin coal sales volumes as compared to the prior year period. The decrease in operating and maintenance expenses was primarily driven by lower overriding royalty expense from an agreement with WPPLP in the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. This overriding royalty expense is fully offset by coal royalty revenue we receive from this property. The increase in general and administrative expenses was primarily due to increased incentive compensation expense as compared to theprior year period.

Total other expenses, net decreased $19.0 million as a result of less debt outstanding as compared to the prior year period, in addition to the loss on extinguishment of debt recognized in 2022 related to the partial retirement of the 2025 Senior Notes during the second and third quarters of 2022.

Table of Contents

Adjusted EBITDA (Non-GAAP Financial Measure)

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

	Operating Segments
For the Nine Months Ended (In thousands)	Mineral Rights		Soda Ash			Corporate and Financing			Total
September 30, 2023
Net income (loss)	$	182,400	$	58,408		$	(27,353	)	$	213,455
Less: equity earnings from unconsolidated investment		—		(58,633	)		—			(58,633	)
Add: total distributions from unconsolidated investment		—		66,140			—			66,140
Add: interest expense, net		—		—			10,182			10,182
Add: depreciation, depletion and amortization		12,455		—			14			12,469
Add: asset impairments		132		—			—			132
Adjusted EBITDA	$	194,987	$	65,915		$	(17,157	)	$	243,745

September 30, 2022
Net income (loss)	$	204,548	$	43,931		$	(43,205	)	$	205,274
Less: equity earnings from unconsolidated investment		—		(44,036	)		—			(44,036	)
Add: total distributions from unconsolidated investment		—		34,055			—			34,055
Add: interest expense, net		—		—			22,636			22,636
Add: loss on extinguishment of debt		—		—			6,532			6,532
Add: depreciation, depletion and amortization		16,565		—			—			16,565
Add: asset impairments		874		—			—			874
Adjusted EBITDA	$	221,987	$	33,950		$	(14,037	)	$	241,900

Net income increased $8.2 million during the first nine months of 2023 as compared to the prior year period primarily due to the decrease in operating and other expenses, net, partially offset by the decrease in revenues and other income, both discussed above. Adjusted EBITDA decreased $1.8 million as compared to the prior year period primarily due to a $27.0 million decrease in Adjusted EBITDA within our Mineral Rights segment as a result of lower revenues and other income as discussed above and a $3.1 million decrease in Adjusted EBITDA within our Corporate and Financing segment as a result of the increase in general and administrative expenses as discussed above. These decreases in Adjusted EBITDA were partially offset by a $32.0 million increase in Adjusted EBITDA within our Soda Ash segment due to higher distributions received from Sisecam Wyoming driven by Sisecam Wyoming's strong operating performance in the first nine months of 2023.

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

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

	Operating Segments
For the Nine Months Ended (In thousands)	Mineral Rights			Soda Ash		Corporate and Financing			Total
September 30, 2023
Cash flow provided by (used in)
Operating activities	$	189,836		$	65,901	$	(22,545	)	$	233,192
Investing activities		2,791			—		(10	)		2,781
Financing activities		(583	)		—		(256,070	)		(256,653	)

September 30, 2022
Cash flow provided by (used in)
Operating activities	$	194,475		$	33,934	$	(30,459	)	$	197,950
Investing activities		1,837			—		(59	)		1,778
Financing activities		(614	)		—		(273,697	)		(274,311	)

Table of Contents

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

	Operating Segments
For the Nine Months Ended (In thousands)	Mineral Rights			Soda Ash		Corporate and Financing			Total
September 30, 2023
Net cash provided by (used in) operating activities	$	189,836		$	65,901	$	(22,545	)	$	233,192
Add: proceeds from asset sales and disposals		961			—		—			961
Add: return of long-term contract receivable		1,830			—		—			1,830
Less: maintenance capital expenditures		—			—		(10	)		(10	)
Distributable cash flow	$	192,627		$	65,901	$	(22,555	)	$	235,973
Less: proceeds from asset sales and disposals		(961	)		—		—			(961	)
Free cash flow	$	191,666		$	65,901	$	(22,555	)	$	235,012

September 30, 2022
Net cash provided by (used in) operating activities	$	194,475		$	33,934	$	(30,459	)	$	197,950
Add: proceeds from asset sales and disposals		699			—		—			699
Add: return of long-term contract receivable		1,138			—		—			1,138
Less: maintenance capital expenditures		—			—		(59	)		(59	)
Distributable cash flow	$	196,312		$	33,934	$	(30,518	)	$	199,728
Less: proceeds from asset sales and disposals		(699	)		—		—			(699	)
Free cash flow	$	195,613		$	33,934	$	(30,518	)	$	199,029

Operating cash flow, DCF and FCF increased $35.2 million, $36.2 million and $36.0 million, respectively, as compared to the prior year period due to increased cash flow within our Soda Ash and Corporate and Financing segments, partially offset by decreased cash flow within our Mineral Rights segment. The discussion by segment is as follows:

•

Mineral Rights Segment

◦

Operating cash flow, DCF and FCF decreased $4.6 million, $3.7 million and $3.9 million, respectively, primarily due to lower revenues and other income in the nine months ended September 30, 2023 as compared to the prior year period primarily due to decreased metallurgical coal sales prices and decreased revenues from oil and gas royalties and certain carbon neutral initiative transactions entered into in 2022.

•

Soda Ash Segment

◦

Operating cash flow, DCF and FCF increased $32.0 million as compared to the prior year period primarily due to higher distributions received from Sisecam Wyoming ~~paying a higher quarterly distribution~~driven by Sisecam Wyoming's strong operating performance in the first ~~quarter~~half of ~~2022 as discussed above.~~ 2023.

•

Corporate and Financing Segment

◦

Operating cash flow, DCF and FCF ~~decreased $2.5~~increased $7.9 million, $8.0 million and $8.0 million, respectively, primarily due to ~~increased cash paid for incentive compensation in the first quarter of 2023 because of the improved business performance in 2022 and higher~~lower cash paid for interest ~~on credit facility borrowings~~as a result of the retirement of the 2025 Senior Notes in ~~2023.~~ 2022.

Liquidity and Capital Resources

Current Liquidity

As of ~~March 31,~~September 30, 2023, we had total liquidity of ~~$56.5~~$45.4 million, consisting of ~~$17.7~~$18.4 million of cash and cash equivalents and ~~$38.8~~$27.0 million of borrowing capacity under our Opco Credit Facility. We have debt service obligations, including approximately ~~$23~~$20 million of principal repayments on Opco’s senior notes, throughout the remainder of 2023. The following table calculates our leverage ratio as of ~~March 31,~~September 30, 2023:

For the Three Months Ended

(In thousands)

June 30, 2022

September 30, 2022

December 31, 2022

March 31, 2023

Last 12 Months

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

Debt—at March 31, 2023
$ 173,591

Leverage Ratio

0.5 x

	For the Three Months Ended
(In thousands)	December 31, 2022			March 31, 2023			June 30, 2023			September 30, 2023			Last 12 Months
Net income	$	63,218		$	79,275		$	70,334		$	63,846		$	276,673
Less: equity earnings from unconsolidated investment		(15,759	)		(19,254	)		(26,978	)		(12,401	)		(74,392	)
Add: total distributions from unconsolidated investment		10,780			10,780			32,350			23,010			76,920
Add: interest expense, net		3,638			2,853			3,492			3,837			13,820
Add: loss on extinguishment of debt		3,933			—			—			—			3,933
Add: depreciation, depletion and amortization		5,954			4,083			3,792			4,594			18,423
Add: asset impairments		3,583			—			69			63			3,715
Adjusted EBITDA	$	75,347		$	77,737		$	83,059		$	82,949		$	319,092

Debt—at September 30, 2023													$	208,059

Leverage Ratio													0.7 x

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Cash Flows

Cash flows provided by operating activities increased ~~$20.6~~$35.2 million, from ~~$52.3~~$198.0 million in the ~~three~~nine months ended ~~March 31,~~September 30, 2022 to ~~$72.9~~$233.2 million in the ~~three~~nine months ended ~~March 31,~~September 30, 2023 ~~primarily~~ , due to increased cash ~~provided by operating activities within our Mineral Rights segment, partially offset by decreased cash provided by operating activities~~flow within our Soda Ash and Corporate and Financing segments, partially offset by decreased cash flow within our Mineral Rights segment, all discussed above.

Cash ~~flows~~ used in financing activities ~~increased $42.8~~decreased $17.7 million, from ~~$52.3~~$274.3 million used in the ~~three~~nine months ended ~~March 31,~~September 30, 2022 to ~~$95.0~~$256.7 million used in the ~~three~~nine months ended ~~March 31,~~September 30, 2023, primarily due to the following:

	•	$~~73.0~~215.0 million of borrowings on the Opco Credit Facility in 2023;
	•	$178.6 million of cash used to retire a portion of the 2025 Senior Notes in 2022;
	•	$19.3 million of cash used to redeem the preferred units paid-in-kind during the first quarter of 2022;

•

$6.2 million of decreased cash used for other items, net primarily due to the premiums paid related to the repayment of the 2025 Senior Notes during the nine months ended September 30, 2022; and

•

$2.8 million of decreased cash used for preferred unit distributions as a result of the redemption of preferred units in 2023.

These decreases in cash flow used were partially offset by the following:

	•	$178.3 million of cash used to redeem the preferred units in 2023;
	•	$157.0 million of cash used to repay a portion of the Opco Credit Facility in ~~the first quarter of~~ 2023;

	•	$~~48.1 million of cash used to redeem the preferred units the first quarter of 2023; and~~
	•	~~$35.2~~35.4 million of increased cash distributions to common unitholders and the general partner as a result of increasing our quarterly cash distribution to $0.75/unit beginning in the second quarter of 2022 in addition to the special distribution paid in the first quarter of 2023; and

•

$33.6 million of cash used to settle the warrants in the third quarter of 2023.

These increases in cash flow used were partially offset by $94.2 million of borrowings on our Opco Credit Facility in the first quarter of 2023 and $19.6 million of cash used to redeem the preferred units paid-in-kind during the first quarter of 2022.

Capital Resources and Obligations

Debt, Net

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

	March 31,		December 31,		September 30,		December 31,
(In thousands)	2023		2022		2023		2022
Current portion of long-term debt, net	$	39,055	$	39,076	$	36,780	$	39,076
Long-term debt, net		133,821		129,205		170,735		129,205
Total debt, net	$	172,876	$	168,281	$	207,515	$	168,281

We have been and continue to be in compliance with the terms of the financial covenants contained in our debt agreements. For additional information regarding our debt and the agreements governing our debt, including the covenants contained therein, see Note 9. Debt, Net to the Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Off-Balance Sheet Transactions

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

Related Party Transactions

The information required set forth under Note 11. Related Party Transactions to the Consolidated Financial Statements is incorporated herein by reference.

Summary of Critical Accounting Estimates

The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Recent Accounting Standards

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

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Commodity Price Risk

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

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

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

Interest Rate Risk

Our exposure to changes in interest rates results from our borrowings under the Opco Credit Facility, which is subject to variably interest rates based upon SOFR. At ~~March 31,~~September 30, 2023, we had ~~$91.2~~$128.0 million in borrowings outstanding under the Opco Credit Facility. If interest rates were to increase by 1%, annual interest expense would increase approximately ~~$0.9~~$1.3 million, assuming the same principal amount remained outstanding during the year.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

Changes in the Partnership’s Internal Control Over Financial Reporting

There were no material changes in the Partnership’s internal control over financial reporting during the first ~~three~~nine months of 2023 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, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number		Description
3.1		Fifth Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated as of March 2, 2017 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on March 6, 2017).
3.2		Fifth Amended and Restated Agreement of Limited Partnership of NRP (GP) LP, dated as of December 16, 2011 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 16, 2011).
3.3		Fifth Amended and Restated Limited Liability Company Agreement of GP Natural Resource Partners LLC, dated as of October 31, 2013 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on October 31, 2013).
3.4		Certificate of Limited Partnership of Natural Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed April 19, 2002, File No. 333-86582).
10.1		Sixth Amendment to the Third Amended and Restated Credit Agreement, dated as of May 11, 2023, by and among NRP (Operating) LLC, the lenders party thereto and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on May 15, 2023).
10.2		New Lender Agreement, dated as of May 11, 2023, by and among NRP (Operating) LLC, Zions Bancorporation, N.A. dba Amegy Bank, and Gulf Capital Bank (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on May 15, 2023).
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

2631

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

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

2732

		Page
Part I. Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Statements of Partners’ Capital	3
	Consolidated Statements of Cash Flows	45
	Notes to Consolidated Financial Statements	56
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1718
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2530
Item 4.	Controls and Procedures	2530
Part II. Other Information
Item 1.	Legal Proceedings	2631
Item 1A.	Risk Factors	2631
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2631
Item 3.	Defaults Upon Senior Securities	2631
Item 4.	Mine Safety Disclosures	2631
Item 5.	Other Information	2631
Item 6.	Exhibits	2631
	Signatures	2732


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

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

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

Debt—at March 31, 2023													$	173,591

Leverage Ratio													0.5 x