NATURAL RESOURCE PARTNERS LP 10-Q

nrp20220930_10q.htm       UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the quarterly period ended  September 30, 2022 or   ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934               Commission file number:   001-31465   NATURAL RESOURCE PARTNERS LP   (Exact name of registrant as specified in its charter)     Delaware 35-2164875 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1415 Louisiana Street, Suite 2400 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       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 5   Notes to Consolidated Financial Statements 6 Item   2. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 16 Item   3. Quantitative and Qualitative Disclosures About Market Risk 27 Item   4. Controls and Procedures 27 Part II. Other Information Item   1. Legal Proceedings 28 Item   1A. Risk Factors 28 Item   2. Unregistered Sales of Equity Securities and Use of Proceeds 28 Item   3. Defaults Upon Senior Securities 28 Item   4. Mine Safety Disclosures 28 Item   5. Other Information 28 Item   6. Exhibits 28   Signatures 29   i Table of Contents       PART I. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS   NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED BALANCE SHEETS       September 30,     December 31,   (In thousands, except unit data)   2022     2021       (Unaudited)           ASSETS                 Current assets                 Cash and cash equivalents   $ 60,937     $ 135,520   Accounts receivable, net     34,726       24,538   Other current assets, net     1,228       2,723   Total current assets   $ 96,891     $ 162,781   Land     24,008       24,008   Mineral rights, net     421,351       437,697   Intangible assets, net     15,168       16,130   Equity in unconsolidated investment     284,806       276,004   Long-term contract receivable, net     29,570       31,371   Other long-term assets, net     7,216       5,832   Total assets   $ 879,010     $ 953,823   LIABILITIES AND CAPITAL                 Current liabilities                 Accounts payable   $ 2,179     $ 1,956   Accrued liabilities     5,913       10,297   Accrued interest     4,227       1,213   Current portion of deferred revenue     8,886       11,817   Current portion of long-term debt, net     89,989       39,102   Total current liabilities   $ 111,194     $ 64,385   Deferred revenue     35,882       50,045   Long-term debt, net     148,734       394,443   Other non-current liabilities     5,231       5,018   Total liabilities   $ 301,041     $ 513,891   Commitments and contingencies (see Note 12)                     Class A Convertible Preferred Units ( 250,000 and 269,321 units issued and outstanding at September 30, 2022 and December 31, 2021, respectively, at $ 1,000 par value per unit; liquidation preference of $ 1,850 per unit at September 30, 2022 and December 31, 2021)   $ 164,587     $ 183,908   Partners’ capital                 Common unitholders’ interest ( 12,505,996 and 12,351,306 units issued and outstanding at September 30, 2022 and December 31, 2021, respectively)   $ 358,332     $ 203,062   General partner’s interest     5,054       1,787   Warrant holders’ interest     47,964       47,964   Accumulated other comprehensive income     2,032       3,211   Total partners’ capital   $ 413,382     $ 256,024   Total liabilities and partners' capital   $ 879,010     $ 953,823       The accompanying notes are an integral part of these consolidated financial statements.     1 Table of Contents     NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)       For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (In thousands, except per unit data)   2022     2021     2022     2021   Revenues and other income                                 Royalty and other mineral rights   $ 81,379     $ 47,884     $ 231,795     $ 114,422   Transportation and processing services     5,969       2,171       15,377       6,545   Equity in earnings of Sisecam Wyoming     14,556       6,672       44,036       11,246   Gain on asset sales and disposals     354       68       699       243   Total revenues and other income   $ 102,258     $ 56,795     $ 291,907     $ 132,456                                     Operating expenses                                 Operating and maintenance expenses   $ 7,898     $ 8,354     $ 25,989     $ 19,076   Depreciation, depletion and amortization     6,850       5,182       16,565       15,145   General and administrative expenses     4,518       4,052       14,037       11,550   Asset impairments     812       57       874       4,116   Total operating expenses   $ 20,078     $ 17,645     $ 57,465     $ 49,887                                     Income from operations   $ 82,180     $ 39,150     $ 234,442     $ 82,569                                     Other expenses, net                                 Interest expense, net   $ ( 5,141 )   $ ( 9,652 )   $ ( 22,636 )   $ ( 29,308 ) Loss on extinguishment of debt     ( 2,484 )     —       ( 6,532 )     —   Total other expenses, net   $ ( 7,625 )   $ ( 9,652 )   $ ( 29,168 )   $ ( 29,308 )                                   Net income   $ 74,555     $ 29,498     $ 205,274     $ 53,261   Less: income attributable to preferred unitholders     ( 7,500 )     ( 7,961 )     ( 22,500 )     ( 23,530 ) Net income attributable to common unitholders and the general partner   $ 67,055     $ 21,537     $ 182,774     $ 29,731                                     Net income attributable to common unitholders   $ 65,714     $ 21,106     $ 179,119     $ 29,136   Net income attributable to the general partner     1,341       431       3,655       595                                     Net income per common unit (see Note 4)                                 Basic   $ 5.25     $ 1.71     $ 14.36     $ 2.36   Diluted     3.71       1.10       10.24       1.98                                     Net income   $ 74,555     $ 29,498     $ 205,274     $ 53,261   Comprehensive income (loss) from unconsolidated investment and other     289       4,204       ( 1,179 )     7,469   Comprehensive income   $ 74,844     $ 33,702     $ 204,095     $ 60,730       The accompanying notes are an integral part of these consolidated financial statements.     2 Table of Contents     NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED STATEMENTS OF PARTNERS ’ CAPITAL (Unaudited)                                       Accumulated                                               Other     Total       Common Unitholders     General     Warrant     Comprehensive     Partners'   (In thousands)   Units     Amounts     Partner     Holders     Income     Capital   Balance at December 31, 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.     3 Table of Contents   NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED STATEMENTS OF PARTNERS ’ CAPITAL (Unaudited)                                       Accumulated                                               Other     Total       Common Unitholders     General     Warrant     Comprehensive     Partners'   (In thousands)   Units     Amounts     Partner     Holders     Income     Capital   Balance at December 31, 2020     12,261     $ 136,927     $ 459     $ 66,816     $ 322     $ 204,524   Net income (1)     —       8,213       168       —       —       8,381   Distributions to common unitholders and the general partner     —       ( 5,517 )     ( 113 )     —       —       ( 5,630 ) Distributions to preferred unitholders     —       ( 7,461 )     ( 152 )     —       —       ( 7,613 ) Issuance of unit-based awards     90       —       —       —       —       —   Unit-based awards amortization and vesting, net     —       215       —       —       —       215   Capital contribution     —       —       32       —       —       32   Comprehensive income from unconsolidated investment and other     —       —       —       —       732       732   Balance at March 31, 2021     12,351     $ 132,377     $ 394     $ 66,816     $ 1,054     $ 200,641   Net income (2)     —       15,074       308       —       —       15,382   Distributions to common unitholders and the general partner     —       ( 5,559 )     ( 113 )     —       —       ( 5,672 ) Distributions to preferred unitholders     —       ( 7,571 )     ( 155 )     —       —       ( 7,726 ) Unit-based awards amortization and vesting     —       515       —       —       —       515   Comprehensive income from unconsolidated investment and other     —       —       —       —       2,533       2,533   Balance at June 30, 2021     12,351     $ 134,836     $ 434     $ 66,816     $ 3,587     $ 205,673   Net income (3)     —       28,909       589       —       —       29,498   Distributions to common unitholders and the general partner     —       ( 5,558 )     ( 113 )     —       —       ( 5,671 ) Distributions to preferred unitholders     —       ( 7,687 )     ( 156 )     —       —       ( 7,843 ) Unit-based awards amortization and vesting     —       959       —       —       —       959   Comprehensive income from unconsolidated investment and other     —       —       —       —       4,204       4,204   Balance at September 30, 2021     12,351     $ 151,459     $ 754     $ 66,816     $ 7,791     $ 226,820             (1) Net income includes $7.7 million of income attributable to preferred unitholders that accumulated during the period, of which $7.6 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. (2) Net income includes $7.8 million of income attributable to preferred unitholders that accumulated during the period, of which $7.7 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. (3) Net income includes $8.0 million of income attributable to preferred unitholders that accumulated during the period, of which $7.8 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.     The accompanying notes are an integral part of these consolidated financial statements.     4 Table of Contents     NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)         For the Nine Months Ended September 30,   (In thousands)   2022     2021   Cash flows from operating activities                 Net income   $ 205,274     $ 53,261   Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:                 Depreciation, depletion and amortization     16,565       15,145   Distributions from unconsolidated investment     34,055       3,920   Equity earnings from unconsolidated investment     ( 44,036 )     ( 11,246 ) Gain on asset sales and disposals     ( 699 )     ( 243 ) Loss on extinguishment of debt     6,532       —   Asset impairments     874       4,116   Bad debt expense     641       1,715   Unit-based compensation expense     4,216       2,837   Amortization of debt issuance costs and other     1,887       1,899   Change in operating assets and liabilities:                 Accounts receivable     ( 10,118 )     ( 12,332 ) Accounts payable     223       89   Accrued liabilities     ( 4,831 )     ( 839 ) Accrued interest     3,014       6,971   Deferred revenue     ( 17,094 )     ( 2,121 ) Other items, net     1,447       3,471   Net cash provided by operating activities   $ 197,950     $ 66,643                     Cash flows from investing activities                 Proceeds from asset sales and disposals   $ 699     $ 249   Return of long-term contract receivable     1,138       1,622   Capital expenditures     ( 59 )     —   Net cash provided by investing activities   $ 1,778     $ 1,871                     Cash flows from financing activities                 Debt repayments   $ ( 197,665 )   $ ( 19,061 ) Distributions to common unitholders and the general partner     ( 24,813 )     ( 16,973 ) Distributions to preferred unitholders     ( 22,500 )     ( 11,591 ) Acquisition of non-controlling interest in BRP     —       ( 1,000 ) Redemption of preferred units paid-in-kind     ( 19,579 )     —   Other items, net     ( 9,754 )     ( 690 ) Net cash used in financing activities   $ ( 274,311 )   $ ( 49,315 )                   Net increase (decrease) in cash and cash equivalents   $ ( 74,583 )   $ 19,199   Cash and cash equivalents at beginning of period     135,520       99,790   Cash and cash equivalents at end of period   $ 60,937     $ 118,989                     Supplemental cash flow information:                 Cash paid for interest   $ 18,501     $ 20,829   Non-cash investing and financing activities:                 Preferred unit distributions paid-in-kind     —       11,591       The accompanying notes are an integral part of these consolidated financial statements.     5 Table of Contents     NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)   1.      Basis of Presentation   Nature of Business   Natural Resource Partners L.P. (the "Partnership") engages principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and owns a non-controlling 49 % interest in Sisecam Wyoming LLC ("Sisecam Wyoming"), a trona ore mining and soda ash production business. The Partnership is organized into two operating segments further described in Note 5. Segment Information . As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context.   Principles of Consolidation and Reporting   The accompanying unaudited Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with Rule 10 - 01 of Regulation S- X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2021 and notes thereto included in the Partnership's Annual Report on Form 10 -K, which was filed with the SEC on March 15, 2022.      2.      Revenues from Contracts with Customers   The following table presents the Partnership's Mineral Rights segment revenues by major source:       For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (In thousands)   2022     2021     2022     2021   Coal royalty revenues   $ 52,381     $ 32,432     $ 170,775     $ 66,095   Production lease minimum revenues     1,885       3,235       3,542       10,241   Minimum lease straight-line revenues     4,778       4,808       14,235       15,773   Carbon neutral initiative revenues (1)     8,600       —       8,600       —   Property tax revenues     1,360       1,466       4,527       4,522   Wheelage revenues     2,977       1,964       11,073       5,589   Coal overriding royalty revenues     1,367       757       2,307       3,592   Lease amendment revenues     759       1,519       2,450       3,159   Aggregates royalty revenues     884       429       2,691       1,339   Oil and gas royalty revenues     6,170       1,154       10,890       3,420   Other revenues     218       120       705       692   Royalty and other mineral rights revenues   $ 81,379     $ 47,884     $ 231,795     $ 114,422   Transportation and processing services revenues (2)     5,969       2,171       15,377       6,545   Total Mineral Rights segment revenues   $ 87,348     $ 50,055     $ 247,172     $ 120,967             ( 1 ) Included within carbon neutral initiative revenues are payments that are recognized at a point in time upon satisfaction of NRP's performance obligation. ( 2 ) Transportation and processing services revenues from contracts with customers as defined under ASC 606 was $ 4.9  million and $ 1.2  million for the three months ended September 30, 2022 and 2021 , respectively, and $ 12.9  million and $ 3.7  million for the nine months ended September 30, 2022 and 2021, respectively. The remaining transportation and processing services revenues of $ 1.1  million and $ 0.9  million for the three months ended September 30, 2022 and 2021 , respectively, and $ 2.5  million and $ 2.8  million for the nine months ended September 30, 2022 and 2021 , respectively, related to other NRP-owned infrastructure leased to and operated by third -party operators accounted for under other guidance. See Note 14. Financing Transaction  for more information.   The following table details the Partnership's Mineral Rights segment receivables and liabilities resulting from contracts with customers:       September 30,     December 31,   (In thousands)   2022     2021   Receivables                 Accounts receivable, net   $ 30,991     $ 22,277   Other current assets, net (1)     874       769   Other long-term assets, net (2)     75       250                     Contract liabilities                 Current portion of deferred revenue   $ 8,886     $ 11,817   Deferred revenue     35,882       50,045             ( 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.     6 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   The following table shows the activity related to the Partnership's Mineral Rights segment deferred revenue:        For the Nine Months Ended       September 30,   (In thousands)   2022     2021   Balance at beginning of period (current and non-current)   $ 61,862     $ 61,554   Increase due to minimums and lease amendment fees     11,309       6,411   Recognition of previously deferred revenue     ( 28,403 )     ( 8,532 ) Balance at end of period (current and non-current)   $ 44,768     $ 59,433     The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty leases are as follows as of  September 30, 2022 (in thousands):    Lease Term (1)   Weighted Average Remaining Years     Annual Minimum Payments   0 - 5 years   2.4     $ 22,229   5 - 10 years   3.8       7,517   10+ years   12.8       27,221   Total   7.5     $ 56,967             ( 1 ) Lease term does not include renewal periods.     3.      Common and Preferred Unit Distributions   The Partnership makes cash distributions to common and preferred unitholders on a quarterly basis, subject to approval by the Board of Directors of GP Natural Resource Partners LLC (the "Board of Directors"). NRP recognizes both common unit and preferred unit distributions on the date the distribution is declared.   Distributions made on the common units and the general partner's general partner ("GP") interest are made on a pro-rata basis in accordance with their relative percentage interests in the Partnership. The general partner is entitled to receive 2 % of such distributions.   Income available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income available to common unitholders and the general partner by $ 7.5  million and $ 8.0  million during the three months ended September 30, 2022 and 2021 , respectively, and $ 22.5  million and $ 23.5  million during the nine months ended  September 30, 2022 and 2021, respectively, as a result of accumulated preferred unit distributions earned during the period.   The following table shows the cash distributions declared and paid to common and preferred unitholders during the nine months ended September 30, 2022 and 2021 , respectively:           Cash Distributions   Paid-in-kind Distributions         Common Units   Preferred Units             Total Distribution (1)       Total Distribution   Total Distribution Month Paid   Period Covered by Distribution   Distribution per Unit   (In thousands)   Distribution per Unit   (In thousands)   (In units) 2022                                 February 2022   October 1 - December 31, 2021   $ 0.45   $ 5,672   $ 30.00   $ 7,500   — May 2022   January 1 - March 31, 2022     0.75     9,570     30.00     7,500   — August 2022   April 1 - June 30, 2022     0.75     9,571     30.00     7,500   —                                   2021                                 February 2021   October 1 - December 31, 2020   $ 0.45   $ 5,630   $ 15.00   $ 3,806   3,806 May 2021   January 1 - March 31, 2021     0.45     5,672     15.00     3,864   3,864 August 2021   April 1 - June 30, 2021     0.45     5,671     15.00     3,921   3,921           ( 1 ) Totals include the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.     7 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   4.      Net Income Per Common Unit   Basic net income per common unit is computed by dividing net income, after considering income attributable to preferred unitholders and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income 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 nine months ended September 30, 2022  and 2021 includes the assumed conversion of the preferred units.    The dilutive effect of the warrants is calculated using the treasury stock method, which assumes that the proceeds from the exercise of these instruments are used to purchase common units at the average market price for the period. The calculation of diluted net income per common unit for the three and nine months ended September 30, 2022 includes the net settlement of warrants to purchase 0.75  million common units at a strike price of $ 22.81 and the net settlement of warrants to purchase 2.25  million common units with a strike price of $ 34.00 whereas the calculation of diluted net income per common unit for the three and nine months ended  September 30, 2021 does not include the net settlement of warrants to purchase 1.75 million common units at a strike price of $ 22.81 or the net settlement of warrants to purchase 2.25 million common units with a strike price of $ 34.00 because the impact would have been anti-dilutive.   The following tables reconcile the numerator and denominator of the basic and diluted net income per common unit computations and calculates basic and diluted net income per common unit:       For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (In thousands, except per unit data)   2022     2021     2022     2021   Allocation of net income                                 Net income   $ 74,555     $ 29,498     $ 205,274     $ 53,261   Less: income attributable to preferred unitholders     ( 7,500 )     ( 7,961 )     ( 22,500 )     ( 23,530 ) Net income attributable to common unitholders and the general partner   $ 67,055     $ 21,537     $ 182,774     $ 29,731   Less: net income attributable to the general partner     ( 1,341 )     ( 431 )     ( 3,655 )     ( 595 ) Net income attributable to common unitholders   $ 65,714     $ 21,106     $ 179,119     $ 29,136                                     Basic net income per common unit                                 Weighted average common units—basic     12,506       12,351       12,476       12,332   Basic net income per common unit   $ 5.25     $ 1.71     $ 14.36     $ 2.36                                     Diluted net income per common unit                                 Weighted average common units—basic     12,506       12,351       12,476       12,332   Plus: dilutive effect of preferred units     6,210       13,835       6,210       13,835   Plus: dilutive effect of warrants     807       —       759       —   Plus: dilutive effect of unvested unit-based awards     195       188       204       144   Weighted average common units—diluted     19,718       26,374       19,649       26,311                                     Net income   $ 74,555     $ 29,498     $ 205,274     $ 53,261   Less: income attributable to preferred unitholders     —       —       —       —   Diluted net income attributable to common unitholders and the general partner   $ 74,555     $ 29,498     $ 205,274     $ 53,261   Less: diluted net income attributable to the general partner     ( 1,491 )     ( 589 )     ( 4,105 )     ( 1,065 ) Diluted net income attributable to common unitholders   $ 73,064     $ 28,909     $ 201,169     $ 52,196                                     Diluted net income per common unit   $ 3.71     $ 1.10     $ 10.24     $ 1.98       8 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   5.      Segment Information   The Partnership's segments are strategic business units that offer distinct products and services to different customers in different geographies within the U.S. and that are managed accordingly. NRP has the following 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 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 Three Months Ended September 30, 2021                                 Revenues   $ 50,055     $ 6,672     $ —     $ 56,727   Gain on asset sales and disposals     68       —       —       68   Operating and maintenance expenses     8,278       76       —       8,354   Depreciation, depletion and amortization     5,182       —       —       5,182   General and administrative expenses     —       —       4,052       4,052   Asset impairments     57       —       —       57   Other expenses, net     —       —       9,652       9,652   Net income (loss)     36,606       6,596       ( 13,704 )     29,498                                     For the Nine Months Ended September 30, 2022                                 Revenues   $ 247,172     $ 44,036     $ —     $ 291,208   Gain on asset sales and disposals     699       —       —       699   Operating and maintenance expenses     25,884       105       —       25,989   Depreciation, depletion and amortization     16,565       —       —       16,565   General and administrative expenses     —       —       14,037       14,037   Asset impairments     874       —       —       874   Other expenses, net     —       —       29,168       29,168   Net income (loss)     204,548       43,931       ( 43,205 )     205,274                                     For the Nine Months Ended September 30, 2021                                 Revenues   $ 120,967     $ 11,246     $ —     $ 132,213   Gain on asset sales and disposals     243       —       —       243   Operating and maintenance expenses     18,945       131       —       19,076   Depreciation, depletion and amortization     15,145       —       —       15,145   General and administrative expenses     —       —       11,550       11,550   Asset impairments     4,116       —       —       4,116   Other expenses, net     24       —       29,284       29,308   Net income (loss)     82,980       11,115       ( 40,834 )     53,261       9 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   6.      Equity Investment     The Partnership accounts for its 49 % investment in Sisecam Wyoming using the equity method of accounting. Activity related to this investment is as follows:        For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (In thousands)   2022     2021     2022     2021   Balance at beginning of period   $ 280,300     $ 266,433     $ 276,004     $ 262,514   Income allocation to NRP’s equity interests     15,732       7,989       47,601       15,060   Amortization of basis difference     ( 1,176 )     ( 1,317 )     ( 3,565 )     ( 3,814 ) Other comprehensive income (loss)     289       4,204       ( 1,179 )     7,469   Distribution     ( 10,339 )     —       ( 34,055 )     ( 3,920 ) Balance at end of period   $ 284,806     $ 277,309     $ 284,806     $ 277,309     The following table represents summarized financial information for Sisecam Wyoming as derived from their respective unaudited financial statements for the three and nine months ended September 30, 2022 and 2021 :       For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (In thousands)   2022     2021     2022     2021   Net sales   $ 190,450     $ 135,648     $ 542,955     $ 384,129   Gross profit   $ 39,679       23,530       119,723       50,317   Net income   $ 32,105       16,304       97,144       30,734       7.      Mineral Rights, Net   The Partnership’s mineral rights consist of the following:       September 30, 2022     December 31, 2021   (In thousands)   Carrying Value     Accumulated Depletion     Net Book Value     Carrying Value     Accumulated Depletion     Net Book Value   Coal properties   $ 666,604     $ ( 265,031 )   $ 401,573     $ 670,650     $ ( 253,503 )   $ 417,147   Aggregates properties     8,674       ( 3,310 )     5,364       8,747       ( 2,975 )     5,772   Oil and gas royalty properties     12,354       ( 9,479 )     2,875       12,354       ( 9,115 )     3,239   Other     13,151       ( 1,612 )     11,539       13,151       ( 1,612 )     11,539   Total mineral rights, net   $ 700,783     $ ( 279,432 )   $ 421,351     $ 704,902     $ ( 267,205 )   $ 437,697     Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income and totaled $ 6.4  million and $ 4.6  million for the three months ended September 30, 2022 and 2021, respectively, and $ 15.5  million and $ 13.8  million for the nine months ended September 30, 2022 and 2021 , respectively.   During the three and nine months ended September 30, 2022  the Partnership recorded $ 0.8 million and $0.9 million of asset impairments, respectively. During the three months ended September 30, 2021, the Partnership did not have any material asset impairments and during the nine months ended September 30, 2021, the Partnership recorded $ 4.1  million of expense primarily due to a lease termination that resulted in the full impairment of a coal property. The Partnership has developed procedures to evaluate its long-lived assets for possible impairment periodically or whenever events or changes in circumstances indicate an asset's net book value may not be recoverable. Potential events or circumstances include, but are not limited to, specific events such as a reduction in economically recoverable reserves or production ceasing on a property for an extended period. This analysis is based on historic, current and future performance and considers both quantitative and qualitative information. While the Partnership's impairment evaluation as of September 30, 2022 incorporated an estimated impact of the global COVID- 19 pandemic, there is significant uncertainty as to the severity and duration of this disruption. If the impact is worse than current estimates, an additional impairment charge may be recognized in future periods.     10 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   8.      Debt, Net   The Partnership's debt consists of the following:       September 30,     December 31,   (In thousands)   2022     2021   NRP LP debt:                 9.125 % senior notes, with semi-annual interest payments in June and December, due June 2025, issued at par ("2025 Senior Notes")   $ 121,396     $ 300,000   Opco debt:                 Revolving credit facility   $ —     $ —   Senior Notes                 5.55 % with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023   $ 2,366     $ 4,730   4.73 % with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023     12,008       12,008   5.82 % with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024     25,368       38,053   8.92 % with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024     8,023       12,035   5.03 % with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026     57,104       57,104   5.18 % with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026     14,554       14,554   Total Opco Senior Notes   $ 119,423     $ 138,484   Total debt at face value   $ 240,819     $ 438,484   Net unamortized debt issuance costs     ( 2,096 )     ( 4,939 ) Total debt, net   $ 238,723     $ 433,545   Less: current portion of long-term debt     ( 89,989 )     ( 39,102 ) Total long-term debt, net   $ 148,734     $ 394,443     NRP LP Debt   2025 Senior Notes   In October 2022, NRP redeemed the outstanding $ 121.4 million 2025 Senior Notes at a redemption price of 102.281 % of the principal amount plus accrued and unpaid interest, utilizing cash on hand and $ 70  million in borrowings under its recently extended credit facility. The $ 51.4  million of 2025 Senior Notes redeemed using cash on hand is classified as current portion of long-term debt, net on the Consolidated Balance Sheets at September 30, 2022. As of the date of this report, there are no 2025 Senior Notes outstanding. The following describes the terms of the 2025 Senior Notes prior to their redemption.   The 2025 Senior Notes were issued under an Indenture dated as of April 29, 2019 ( the "2025 Indenture"), bear interest at  9.125 % per year and mature on June 30, 2025. Interest is payable semi-annually on June 30 and December 30. NRP has the option to redeem the 2025 Senior Notes, in whole or in part, at any time on or after October 30, 2021, at the redemption prices (expressed as percentages of principal amount) of  104.563 % for the 12 -month period beginning October 30, 2021,  102.281 % for the 12 -month period beginning October 30, 2022, and thereafter at  100.000 %, together, in each case, with any accrued and unpaid interest to the date of redemption. Furthermore, before October 30, 2021, NRP may on any one or more occasions redeem up to  35 % of the aggregate principal amount of the 2025 Senior Notes with the net proceeds of certain public or private equity offerings at a redemption price of  109.125 % of the principal amount of 2025 Senior Notes, plus any accrued and unpaid interest, if any, to the date of redemption, if at least  65 % of the aggregate principal amount of the 2025 Senior Notes issued under the 2025 Indenture remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering. In the event of a change of control, as defined in the 2025 Indenture, the holders of the 2025 Senior Notes may require us to purchase their 2025 Senior Notes at a purchase price equal to  101 % of the principal amount of the 2025 Senior Notes, plus accrued and unpaid interest, if any. The 2025 Senior Notes were issued at par. During the three and nine months ended September 30, 2022,  NRP retired $ 60.5 million and $ 178.6 million, respectively of its 2025 Senior Notes. These notes were purchased on the open market at a weighted average price of 102.750 % and 102.436 % for the three and nine months ended September 30, 2022, a discount to the redemption price at the time of 104.563 %. Included in loss on extinguishment of debt on the Partnership's Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 are $ 1.7  million and $ 4.4 million, respectively, of call premium and fees and the write off of $ 0.6  million and $ 2.0  million, respectively, of debt issuance costs.   The 2025 Senior Notes are the senior unsecured obligations of NRP. The 2025 Senior Notes rank equal in right of payment to all existing and future senior unsecured debt of NRP and senior in right of payment to any of NRP's subordinated debt. The 2025 Senior Notes are effectively subordinated in right of payment to all future secured debt of NRP to the extent of the value of the collateral securing such indebtedness and are structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries, including the Opco Credit Facility and each series of Opco’s existing senior notes. "Opco" refers to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. None of NRP's subsidiaries guarantee the 2025 Senior Notes. As of September 30, 2022 and December 31, 2021 , NRP was in compliance with the terms of the Indenture relating to their 2025 Senior Notes.     11 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   Opco Debt   All of Opco’s debt is guaranteed by its wholly owned subsidiaries and is secured by certain of the assets of Opco and its wholly owned subsidiaries, other than BRP LLC and NRP Trona LLC. As of September 30, 2022 and December 31, 2021 , Opco was in compliance with the terms of the financial covenants contained in its debt agreements.   Opco Credit Facility   In August 2022, the Partnership entered into the Fifth Amendment (the "Fifth Amendment) to the Opco Credit Facility (the "Opco Credit Facility"). The Fifth Amendment extended the term of the Opco Credit Facility until August 2027. Lender commitments under the Opco Credit Facility increased to $ 130.0 million. The Opco Credit Facility contains financial covenants requiring Opco to maintain:   • A leverage ratio of consolidated indebtedness to EBITDDA (in each case as defined in the Opco Credit Facility) not to exceed 3.0 x; 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.   During the three and nine months ended September 30, 2022 and 2021 , the Partnership did not have any borrowings outstanding under the Opco Credit Facility and had $ 130.0 million and $ 100.0 million in available borrowing capacity at September 30, 2022 and December 31, 2021 , As mentioned above, in October 2022, NRP borrowed $ 70 million under the credit facility to redeem the outstanding 2025 Senior Notes.   The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of $ 331.2  million and $ 345.0 million classified as mineral rights, net and other long-term assets, net on the Partnership’s Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 , respectively.   Opco Senior Notes       Opco has issued several series of private placement senior notes (the "Opco Senior Notes") with various interest rates and principal due dates. As of September 30, 2022 and December 31, 2021 , the Opco Senior Notes had cumulative principal balances of $ 119.4  million and $ 138.5 million, respectively. Opco made mandatory principal payments of $19.1  million during the nine months ended September 30, 2022 and 2021 .   The 8.92 % Opco Senior Notes also provides that in the event that Opco’s leverage ratio of consolidated indebtedness to consolidated EBITDDA (as defined in the Note Purchase Agreements) exceeds 3.75 to 1.00 at the end of any fiscal quarter, then in addition to all other interest accruing on these notes, additional interest in the amount of 2.00 % per annum shall accrue on the notes for the two succeeding quarters and for as long thereafter as the leverage ratio remains above 3.75 to 1.00. Opco has not exceeded the 3.75 to 1.00 ratio at the end of any fiscal quarter through September 30, 2022 .     9.      Fair Value Measurements   Fair Value of Financial Assets and Liabilities   The Partnership’s financial assets and liabilities consist of cash and cash equivalents, a contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents approximate fair value due to their short-term nature. The Partnership uses available market data and valuation methodologies to estimate the fair value of its debt and contract receivable.   The following table shows the carrying value and estimated fair value of the Partnership's debt and contract receivable:           September 30, 2022     December 31, 2021       Fair Value   Carrying     Estimated     Carrying     Estimated   (In thousands)   Hierarchy Level   Value     Fair Value     Value     Fair Value   Debt:                                     NRP 2025 Senior Notes   1   $ 120,199     $ 124,165     $ 296,236     $ 300,000   Opco Senior Notes (1)   3     118,524       122,146       137,309       138,484   Opco Credit Facility   3     —       —       —       —                                         Assets:                                     Contract receivable, net (current and long-term) (2)   3   $ 31,948     $ 25,144     $ 33,612     $ 26,010             ( 1 ) The fair value of the Opco Senior Notes are estimated by management using quotations obtained for the NRP 2025 Senior Notes on the closing trading prices near period end, which were at 102 % and 100 % of par value at September 30, 2022 and December 31, 2021 , respectively. All 2025 Senior Notes were redeemed in October 2022.  ( 2 ) The fair value of the Partnership's contract receivable is determined based on the present value of future cash flow projections related to the underlying asset at a discount rate of 15 % at September 30, 2022 and December 31, 2021 .   NRP has embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that are accounted for separately from the preferred units as assets and liabilities at fair value on the Partnership's Consolidated Balance Sheets. Level 3 valuation of the embedded derivatives are based on numerous factors including the likelihood of the event occurring. The embedded derivatives are revalued quarterly and changes in their fair value would be recorded in other expenses, net on the Partnership's Consolidated Statements of Comprehensive Income. The embedded derivatives had zero value as of September 30, 2022 and December 31, 2021 .     12 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   10.      Related Party Transactions   Affiliates of our General Partner   The Partnership’s general partner does not receive any management fee or other compensation for its management of NRP. However, in accordance with the partnership agreement, the general partner and its affiliates are reimbursed for services provided to the Partnership and for expenses incurred on the Partnership’s behalf. Employees of Quintana Minerals Corporation ("QMC") and Western Pocahontas Properties Limited Partnership ("WPPLP"), affiliates of the Partnership, provide their services to manage the Partnership's business. QMC and WPPLP charge the Partnership the portion of their employee salary and benefits costs related to their employee services provided to NRP. These QMC and WPPLP employee management service costs are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income. NRP also reimburses overhead costs incurred by its affiliates, including Quintana Infrastructure Development ("QID"), to manage the Partnership's business. These overhead costs include certain rent, information technology, administration of employee benefits and other corporate services incurred by or on behalf of the Partnership’s general partner and its affiliates and are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income.   Direct general and administrative expenses charged to the Partnership by QMC, WPPLP and QID are included on the Partnership's Consolidated Statement of Comprehensive Income as follows:       For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (In thousands)   2022     2021     2022     2021   Operating and maintenance expenses   $ 1,687     $ 1,661     $ 5,044     $ 4,913   General and administrative expenses     1,195       1,185       3,660       3,486     The Partnership had accounts payable on its Consolidated Balance Sheets of $ 0.4  million to QMC at both September 30, 2022 and December 31, 2021 and $ 1.0  million and $ 0.9  million to WPPLP at September 30, 2022 and December 31, 2021 , respectively.   During the three months ended September 30, 2022 and 2021 , the Partnership recognized $ 2.2  million and $ 0.9  million, respectively, in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to an overriding royalty agreement with WPPLP. These amounts were $ 6.5  million and $ 2.1  million during the  nine months ended September 30, 2022 and 2021 , respectively.    Corbin J. Robertson, Jr. owns 85 % of the general partner of Great Northern Properties Limited Partnership ("GNP"), a privately held company primarily engaged in owning and managing mineral properties and surface leases. As of September 30, 2022 and December 31, 2021 the Partnership had $ 0.0  million and $ 0.1  million, respectively, of accounts receivable from GNP included in accounts receivable, net on its Consolidated Balance Sheets related to amounts collected for surface leases that belong to NRP.     11.      Major Customers   Revenues from customers that exceeded 10 percent of total revenues for any of the periods presented below are as follows:       For the Three Months Ended September 30,     For the Nine Months Ended September 30,       2022     2021     2022     2021   (In thousands)   Revenues     Percent     Revenues     Percent     Revenues     Percent     Revenues     Percent   Foresight Energy Resources LLC ("Foresight") (1) (2)   $ 19,334       19 %   $ 8,552       15 %   $ 47,081       16 %   $ 25,686       19 % Alpha Metallurgical Resources, Inc. (1)   $ 21,000       21 %   $ 12,854       23 %   $ 81,638       28 %   $ 29,748       23 %           ( 1 ) Revenues from Foresight and Alpha Metallurgical Resources, Inc. are included within the Partnership's Mineral Rights segment. ( 2 ) Revenues from Foresight in 2021 were fixed as a result of the lease amendment the Partnership entered into with Foresight pursuant to which Foresight agreed to pay NRP fixed cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between the Partnership and Foresight. Revenues from Foresight in 2022 represent traditional royalty and minimum payments.     12.      Commitments and Contingencies   NRP is involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, Partnership management believes these ordinary course matters will not have a material effect on the Partnership’s financial position, liquidity or operations.     13 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   13.      Unit-Based Compensation   The Partnership's unit-based awards granted in 2022 and  2021 were valued using the closing price of NRP's common units as of the grant date. The grant date fair value of these awards granted during the  nine months ended September 30, 2022 and 2021 were $ 7.9 million and $ 3.8 million, respectively. Total unit-based compensation expense associated with these awards was $ 1.4  million and $ 1.1 million for the three months ended September 30, 2022 and 2021, respectively, and $ 4.2  million and $ 2.8  million for the nine months ended September 30, 2022 and 2021 , respectively, and is included in general and administrative expenses and operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income. The unamortized cost associated with unvested outstanding awards as of September 30, 2022 is $ 7.6  million, which is to be recognized over a weighted average period of 2.0  years. The unamortized cost associated with unvested outstanding awards as of  December 31, 2021 was $ 3.3 million.   A summary of the unit activity in the outstanding grants during  2022 is as follows:   (In thousands)   Common Units     Weighted Average Grant Date Fair Value per Common Unit   Outstanding at January 1, 2022   411     $ 23.00   Granted   208     $ 38.29   Fully vested and issued   ( 233 )   $ 26.74   Outstanding at September 30, 2022   386     $ 28.96       14.      Financing Transaction   The Partnership owns rail loadout and associated infrastructure at the Sugar Camp mine in the Illinois Basin operated by a subsidiary of Foresight. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight and is accounted for as a financing transaction (the "Sugar Camp lease"). The Sugar Camp lease expires in 2032 with renewal options for up to 80 additional years. Minimum payments are $ 5.0 million per year through the end of the lease term. The Partnership is also entitled to variable payments in the form of throughput fees determined based on the amount of coal transported and processed utilizing the Partnership's assets. In the event the Sugar Camp lease is renewed beyond 2032, payments become a fixed $ 10 thousand per year for the remainder of the renewed term.     15.      Credit Losses   The Partnership is exposed to credit losses through collection of its short-term trade receivables resulting from contracts with customers and a long-term receivable resulting from a financing transaction with a customer. The Partnership records an allowance for current expected credit losses on these receivables based on the loss-rate method. NRP assessed the likelihood of collection of its receivables utilizing historical loss rates, current market conditions that included the estimated impact of the global COVID- 19 pandemic, industry and macroeconomic factors, reasonable and supportable forecasts and facts or circumstances of individual customers and properties. Examples of these facts or circumstances include, but are not limited to, contract disputes or renegotiations with the customer and evaluation of short and long-term economic viability of the contracted property. For its long-term contract receivable, management reverts to the historical loss experience immediately after the reasonable and supportable forecast period ends.   As of September 30, 2022 and December 31, 2021 , NRP had the following current expected credit loss (“CECL”) allowance related to its receivables and long-term contract receivable:       September 30, 2022     December 31, 2021   (In thousands)   Gross     CECL Allowance     Net     Gross     CECL Allowance     Net   Receivables   $ 39,692     $ ( 4,018 )   $ 35,674     $ 28,869     $ ( 3,312 )   $ 25,557   Long-term contract receivable     30,631       ( 1,061 )     29,570       32,497       ( 1,126 )     31,371   Total   $ 70,323     $ ( 5,079 )   $ 65,244     $ 61,366     $ ( 4,438 )   $ 56,928     NRP recorded $ 0.0  million and $ 0.5 million in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to the change in the CECL allowance during the three months ended September 2022 and 2021, respectively, and $ 0.6  million and $( 0.2 ) million during the  nine months ended September 30, 2022 and 2021 , respectively.   NRP has procedures in place to monitor its ongoing credit exposure through timely review of counterparty balances against contract terms and due dates, account and financing receivable reconciliation, bankruptcy monitoring, lessee audits and dispute resolution. The Partnership may employ legal counsel or collection specialists to pursue recovery of defaulted receivables.     14 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited)   16.      Subsequent Events   The following represents material events that have occurred subsequent to September 30, 2022 through the time of the Partnership’s filing of its Quarterly Report on Form 10 -Q with the SEC:   Common Unit and Preferred Unit Distributions   In November 2022, the Board of Directors declared a distribution of $ 0.75 per common unit with respect to the  third quarter of 2022 . The Board of Directors also declared a distribution on NRP's preferred units with respect to the third quarter of 2022 totaling $ 7.5  million in cash.   Redemption of 2025 Senior Notes    In October 2022, NRP redeemed the outstanding $ 121.4  million 2025 Senior Notes at a redemption price of 102.281 % of the principal amount plus accrued and unpaid interest, utilizing cash on hand and $ 70  million in borrowings under its recently extended credit facility. The fourth quarter 2022 Consolidated Statement of Comprehensive Income will include a $ 3.9 million loss on extinguishment of debt associated with the redemption.       15 Table of Contents     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   The following review of operations for the three and nine month periods ended September 30, 2022 and 2021 should be read in conjunction with our Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in this Form 10-Q and with the Consolidated Financial Statements, Notes to Consolidated Financial Statements and Management’s Discussion and Analysis included in the Natural Resource Partners L.P. Annual Report on Form 10-K for the year ended December 31, 2021.   As used herein, unless the context otherwise requires: "we," "our," "us" and the "Partnership" refer to Natural Resource Partners L.P. and, where the context requires, our subsidiaries. References to "NRP" and "Natural Resource Partners" refer to Natural Resource Partners L.P. only, and not to NRP (Operating) LLC or any of Natural Resource Partners L.P.’s subsidiaries. References to "Opco" refer to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. NRP Finance Corporation ("NRP Finance") is a wholly owned subsidiary of NRP and a co-issuer with NRP on the 9.125% senior notes due 2025 (the "2025 Senior Notes").   INFORMATION REGARDING FORWARD-LOOKING STATEMENTS   Statements included in this 10-Q may constitute forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are also forward-looking statements. Such forward-looking statements include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on our common and preferred units; our business strategy; our liquidity and access to capital and financing sources; our financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected production levels by our lessees; Sisecam Wyoming LLC’s ("Sisecam Wyoming's") trona mining and soda ash refinery operations; distributions from our soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us, and of scheduled or potential regulatory or legal changes; and global and U.S. economic conditions.   These forward-looking statements speak only as of the date hereof and are made based upon our current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. You should not put undue reliance on any forward-looking statements. See " Item 1A. Risk Factors " included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2021 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, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. For a description of Opco's debt agreements, see Note 8. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note 11. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, 2021. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.   Distributable Cash Flow   Distributable cash flow ("DCF") represents net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivables; less maintenance capital expenditures. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, DCF presented below is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. DCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to asses our ability to make cash distributions and repay debt.   Free Cash Flow   Free cash flow ("FCF") represents net cash provided by (used in) operating activities of continuing operations plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivables; less maintenance and expansion capital expenditures 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.     16 Table of Contents   Introduction   The following discussion and analysis presents management's view of our business, financial condition and overall performance. Our discussion and analysis consists of the following subjects:   •    Executive Overview   •    Results of Operations   •    Liquidity and Capital Resources   •    Off-Balance Sheet Transactions   •    Related Party Transactions   •    Summary of Critical Accounting Estimates   •    Recent Accounting Standards   Executive Overview   We are a diversified natural resource company engaged principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and own a non-controlling 49% interest in Sisecam Wyoming, a trona ore mining and soda ash production business. Our common units trade on the New York Stock Exchange under the symbol "NRP." Our business is organized into two operating segments:   Mineral Rights —consists of approximately 13 million acres of mineral interests and other subsurface rights across the United States. If combined in a single tract, our ownership would cover roughly 20,000 square miles. Our ownership provides critical inputs for the manufacturing of steel, electricity and basic building materials, as well as opportunities for carbon sequestration and renewable energy. We are working to strategically redefine our business as a key player in the transitional energy economy in the years to come.   Soda Ash —consists of our 49% non-controlling equity interest in Sisecam Wyoming, a trona ore mining and soda ash production business located in the Green River Basin of Wyoming. Sisecam Wyoming mines the trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries.   Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment.   Our financial results by segment for the nine months ended September 30, 2022 are as follows:       Operating Segments                   (In thousands)   Mineral Rights     Soda Ash     Corporate and Financing     Total   Revenues and other income   $ 247,871     $ 44,036     $ —     $ 291,907   Net income (loss)   $ 204,548     $ 43,931     $ (43,205 )   $ 205,274   Adjusted EBITDA (1)   $ 221,987     $ 33,950     $ (14,037 )   $ 241,900                                     Cash flow provided by (used in) continuing operations                                 Operating activities   $ 194,475     $ 33,934     $ (30,459 )   $ 197,950   Investing activities   $ 1,837     $ —     $ (59 )   $ 1,778   Financing activities   $ (614 )   $ —     $ (273,697 )   $ (274,311 ) Distributable cash flow (1)   $ 196,312     $ 33,934     $ (30,518 )   $ 199,728   Free cash flow (1)   $ 195,613     $ 33,934     $ (30,518 )   $ 199,029             (1) See "—Results of Operations" below for reconciliations to the most comparable GAAP financial measures.   Current Results/Market Commentary   Business Outlook and Quarterly Distributions   We generated $199.0 million of free cash flow during the nine months ended September 30, 2022 and ended the quarter with $190.9 million of liquidity consisting of $60.9 million of cash and cash equivalents and $130.0 million of borrowing capacity under our Opco Credit Facility. During the third quarter of 2022 we refinanced, upsized, and extended our Opco Credit Facility to $130 million due 2027. Also during the third quarter, we permanently retired an additional $60.5 million of 2025 Senior Notes, bringing our total 2025 Senior Note repurchases through the third quarter of 2022 to $178.6 million. These notes were purchased on the open market at a weighted average price of 102.436%, a discount to the redemption price at the time of 104.563%. In October 2022, we redeemed the outstanding $121.4 million 2025 Senior Notes at a redemption price of 102.281% using cash on hand and $70 million in borrowings under our Opco Credit Facility. These debt repurchases and the redemption of our outstanding 2025 Senior Notes will save approximately $27.4 million annually in interest costs. As of September 30, 2022 our leverage ratio was 0.8x.   In November 2022, the Board of Directors declared a cash distribution of $0.75 per common unit of NRP with respect to the third quarter of 2022. The Board of Directors also declared a $7.5 million cash distribution on the preferred units with respect to the third quarter. 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.     17 Table of Contents   Mineral Rights Business Segment   Metallurgical and thermal coal prices remain supported by ongoing tightness in the supply-demand balance for coal. Many operators are limited in their ability to increase production due to ongoing labor shortages, global supply chain interruptions, and access to capital. Thermal coal prices are further supported by the European Union's ban on Russian coal due to the war in Ukraine, as well as increased natural gas prices and demand for electricity. While metallurgical markets are seeing weakened demand for steel, and thermal markets continue to face ongoing environmental and political pressures, supply constraints should provide continued support for metallurgical and thermal coal prices for the foreseeable future. Our lessees sold 24.2 million tons of coal from our properties in the first nine months of 2022, and we derived approximately 75% of our coal royalty revenues and approximately 45% of our coal royalty sales volumes from metallurgical coal during the same period.   We continue to identify alternative revenue sources across our large portfolio of land and mineral assets. We own the rights to sequester carbon dioxide ("CO 2 ") on approximately 3.5 million acres of pore space in the southern United States. As announced previously, in the first quarter of 2022 we executed our first subsurface CO 2  sequestration lease on 75,000 acres of underground pore space we own in southwest Alabama with the potential to store over 300 million metric tons of CO 2 . In October of 2022, we announced our second subsurface CO 2 transaction with the execution of a lease for approximately 65,000 acres of pore space we control near southeast Texas with estimated storage capacity of at least 500 million metric tons of CO 2 . In total, we have approximately 140,000 acres of pore space under lease for carbon sequestration with estimated CO 2  storage capacity of 800 million metric tons. While the timing and likelihood of additional cash flows being realized from these activities is uncertain, we believe our large ownership footprint throughout the United States will provide additional opportunities to create value in this regard and position us as a key beneficiary of the transitional energy economy with minimal capital investment.    Soda Ash Business Segment   Revenues and other income in the first nine months of 2022 were higher by $32.8 million compared to the prior year period primarily as a result of increased international sales prices. Free cash flow in the first nine months of 2022 increased $30.1 million as compared to the prior year period due to Sisecam Wyoming reinstating its regular quarterly cash distributions beginning in the fourth quarter of 2021.   Supply interruptions in China and input cost inflation which significantly increased the global marginal cost of soda ash production led to historically high soda ash prices in the third quarter of 2022. Though soda ash demand weakened in many parts of the world during the third quarter due to slowing global economic growth and lower construction activity in China, Sisecam Wyoming remained sold-out as it took advantage of its low-cost position to profitably export soda ash. Consequently, Sisecam Wyoming delivered strong financial results in the third quarter of 2022.   Results of Operations   Third Quarter of 2022 and 2021 Compared   Revenues and Other Income   The following table includes our revenues and other income by operating segment:       For the Three Months Ended September 30,             Percentage   Operating Segment (In thousands)   2022     2021     Increase     Change   Mineral Rights   $ 87,702     $ 50,123     $ 37,579       75 % Soda Ash     14,556       6,672       7,884       118 % Total   $ 102,258     $ 56,795     $ 45,463       80 %   The changes in revenues and other income are discussed for each of the operating segments below:     18 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 September 30,     Increase     Percentage   (In thousands, except per ton data)   2022     2021     (Decrease)     Change   Coal sales volumes (tons)                                 Appalachia                                 Northern     440       422       18       4 % Central     3,503       3,199       304       10 % Southern     498       642       (144 )     (22 )% Total Appalachia     4,441       4,263       178       4 % Illinois Basin     3,490       2,689       801       30 % Northern Powder River Basin     835       1,047       (212 )     (20 )% Gulf Coast     188       13       175       1346 % Total coal sales volumes     8,954       8,012       942       12 %                                   Coal royalty revenue per ton                                 Appalachia                                 Northern   $ 6.74     $ 7.18     $ (0.44 )     (6 )% Central     9.04       5.74       3.30       57 % Southern     9.78       11.61       (1.83 )     (16 )% Illinois Basin     2.57       2.33       0.24       10 % Northern Powder River Basin     4.56       3.71       0.85       23 % Gulf Coast     0.59       0.54       0.05       9 % Combined average coal royalty revenue per ton     5.85       4.87       0.98       20 %                                   Coal royalty revenues                                 Appalachia                                 Northern   $ 2,965     $ 3,031     $ (66 )     (2 )% Central     31,680       18,357       13,323       73 % Southern     4,872       7,452       (2,580 )     (35 )% Total Appalachia     39,517       28,840       10,677       37 % Illinois Basin     8,967       6,261       2,706       43 % Northern Powder River Basin     3,805       3,881       (76 )     (2 )% Gulf Coast     111       7       104       1486 % Unadjusted coal royalty revenues     52,400       38,989       13,411       34 % Coal royalty adjustment for minimum leases     (19 )     (6,557 )     6,538       100 % Total coal royalty revenues   $ 52,381     $ 32,432     $ 19,949       62 %                                   Other revenues                                 Production lease minimum revenues   $ 1,885     $ 3,235     $ (1,350 )     (42 )% Minimum lease straight-line revenues     4,778       4,808       (30 )     (1 )% Carbon neutral initiative revenues     8,600       —       8,600       100 % Wheelage revenues     2,977       1,964       1,013       52 % Property tax revenues     1,360       1,466       (106 )     (7 )% Coal overriding royalty revenues     1,367       757       610       81 % Lease amendment revenues     759       1,519       (760 )     (50 )% Aggregates royalty revenues     884       429       455       106 % Oil and gas royalty revenues     6,170       1,154       5,016       435 % Other revenues     218       120       98       82 % Total other revenues   $ 28,998     $ 15,452     $ 13,546       88 % Royalty and other mineral rights   $ 81,379     $ 47,884     $ 33,495       70 % Transportation and processing services revenues     5,969       2,171       3,798       175 % Gain on asset sales and disposals     354       68       286       421 % Total Mineral Rights segment revenues and other income   $ 87,702     $ 50,123     $ 37,579       75 %     19 Table of Contents   Coal Royalty Revenues   Approximately 65% of coal royalty revenues and approximately 40% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, 2022. Total coal royalty revenues increased $19.9 million as compared to the prior year quarter. The discussion by region is as follows:   • Appalachia:  Coal royalty revenues increased $10.7 million primarily due to increased coal sales prices and volumes in Central Appalachia during the three months ended September 30, 2022, as compared to the prior year quarter.   • Illinois Basin:  Coal royalty revenues increased $2.7 million primarily due to increased sales volumes and prices during the three months ended September 30, 2022 as compared to the prior year quarter. Revenues recognized from Foresight in 2021 were fixed as a result of the lease amendment the Partnership entered into with Foresight pursuant to which Foresight agreed to pay NRP fixed cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between the Partnership and Foresight. Revenues from Foresight in 2022 represent traditional royalty and minimum payments.   • Northern Powder River Basin:  Coal royalty revenues decreased $0.1 million primarily due to decreased sales volumes as our lessee mined less on our property during the third quarter of 2022 as compared to the prior year quarter in accordance with its mine plan.   Other Revenues   Total other revenues increased $13.5 million during the three months September 30, 2022 as compared to the prior year quarter primarily due to an $8.6 million increase in carbon neutral initiatives and a $5.0 million increase in oil and gas royalty revenues. The increase in carbon neutral initiatives is due to the recognition of revenue related to carbon neutral transactions including subsurface CO 2 storage and geothermal. The increase in oil and gas royalty revenues is primarily related to new wells and increased natural gas prices as compared to the prior year period.   Transportation and Processing Services Revenues   Transportation and processing services revenues increased $3.8 million during the three months ended September 30, 2022 as compared to the prior year period primarily due to the lease amendment with Foresight whereas transportation and processing revenues were based on the recognition of a fixed amount in 2021. Revenues from Foresight in 2022 represent traditional royalty and minimum payments and were greater than the fixed revenue from 2021.   Soda Ash   Revenues and other income related to our Soda Ash segment increased $7.9 million compared to the prior year quarter primarily as a result of increased international sales prices.   Operating and Other Expenses   The following table presents the significant categories of our consolidated operating and other expenses:       For the Three Months Ended September 30,     Increase     Percentage   (In thousands)   2022     2021     (Decrease)     Change   Operating expenses                                 Operating and maintenance expenses   $ 7,898     $ 8,354     $ (456 )     (5 )% Depreciation, depletion and amortization     6,850       5,182       1,668       32 % General and administrative expenses     4,518       4,052       466       12 % Asset impairments     812       57       755       1325 % Total operating expenses   $ 20,078     $ 17,645     $ 2,433       14 %                                   Other expenses, net                                 Interest expense, net   $ 5,141     $ 9,652     $ (4,511 )     (47 )% Loss on extinguishment of debt     2,484       —       2,484       100 % Total other expenses, net   $ 7,625     $ 9,652     $ (2,027 )     (21 )%   Total operating expenses increased $2.4 million primarily due to increased depreciation, depletion and amortization expense as a result of higher Illinois Basin coal royalty sales volumes during the three months ended September 30, 2022, as compared to the prior year period.   Total other expenses, net decreased $2.0 million primarily due to a $4.5 million decrease in interest expense, net as a result of less debt outstanding as compared to the prior year period, partially offset by a $2.5 million loss on early extinguishment of debt related to the premiums and fees incurred and write-off of debt issuance costs associated with the retirement of the 2025 Senior Notes during the three months ended September 30, 2022.     20 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 Three Months Ended (In thousands)   Mineral Rights     Soda Ash     Corporate and Financing     Total   September 30, 2022                                 Net income (loss)   $ 72,173     $ 14,525     $ (12,143 )   $ 74,555   Less: equity earnings from unconsolidated investment     —       (14,556 )     —       (14,556 ) Add: total distributions from unconsolidated investment     —       10,339       —       10,339   Add: interest expense, net     —       —       5,141       5,141   Add: loss on extinguishment of debt     —       —       2,484       2,484   Add: depreciation, depletion and amortization     6,850       —       —       6,850   Add: asset impairments     812       —       —       812   Adjusted EBITDA   $ 79,835     $ 10,308     $ (4,518 )   $ 85,625                                     September 30, 2021                                 Net income (loss)   $ 36,606     $ 6,596     $ (13,704 )   $ 29,498   Less: equity earnings from unconsolidated investment     —       (6,672 )     —       (6,672 ) Add: total distributions from unconsolidated investment     —       —       —       —   Add: interest expense, net     —       —       9,652       9,652   Add: loss on extinguishment of debt     —       —       —       —   Add: depreciation, depletion and amortization     5,182       —       —       5,182   Add: asset impairments     57       —       —       57   Adjusted EBITDA   $ 41,845     $ (76 )   $ (4,052 )   $ 37,717     Adjusted EBITDA increased $47.9 million primarily due to a $38.0 million increase in Adjusted EBITDA within our Mineral Rights segment as a result of higher revenues and other income as discussed above, in addition to a $10.4 million increase in Adjusted EBITDA within our Soda Ash segment due to Sisecam Wyoming reinstating its regular quarterly cash distributions beginning in the fourth quarter of 2021 as discussed above.   Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)   The following table presents the three major categories of the statement of cash flows by business segment:       Operating Segments                   For the Three Months Ended (In thousands)   Mineral Rights     Soda Ash     Corporate and Financing     Total   September 30, 2022                                 Cash flow provided by (used in) continuing operations                                 Operating activities   $ 75,948     $ 10,309     $ (3,761 )   $ 82,496   Investing activities     928       —       (59 )     869   Financing activities     —       —       (81,784 )     (81,784 )                                   September 30, 2021                                 Cash flow provided by (used in) continuing operations                                 Operating activities   $ 33,968     $ (36 )   $ (3,873 )   $ 30,059   Investing activities     614       —       —       614   Financing activities     —       —       (9,592 )     (9,592 )     21 Table of Contents   The following table reconciles net cash provided by (used in) operating activities of continuing operations (the most comparable GAAP financial measure) by business segment to DCF and FCF:       Operating Segments                   For the Three Months Ended (In thousands)   Mineral Rights     Soda Ash     Corporate and Financing     Total   September 30, 2022                                 Net cash provided by (used in) operating activities of continuing operations   $ 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   $ 76,876     $ 10,309     $ (3,820 )   $ 83,365   Less: proceeds from asset sales and disposals     (353 )     —       —       (353 ) Free cash flow   $ 76,523     $ 10,309     $ (3,820 )   $ 83,012                                     September 30, 2021                                 Net cash provided by (used in) operating activities of continuing operations   $ 33,968     $ (36 )   $ (3,873 )   $ 30,059   Add: proceeds from asset sales and disposals     74       —       —       74   Add: return of long-term contract receivable     540       —       —       540   Distributable cash flow   $ 34,582     $ (36 )   $ (3,873 )   $ 30,673   Less: proceeds from asset sales and disposals     (74 )     —       —       (74 ) Free cash flow   $ 34,508     $ (36 )   $ (3,873 )   $ 30,599     DCF and FCF increased $52.7 million and $52.4 million, respectively, primarily due to the following:   • Mineral Rights Segment   ◦ DCF and FCF increased $42.3 million and $42.0 million, respectively, primarily due to the segment's increase in revenues and other income as discussed above.   • Soda Ash Segment   ◦ DCF and FCF increased $10.3 million as a result of Sisecam Wyoming reinstating its regular quarterly cash distributions beginning in the fourth quarter of 2021 as discussed above.   Results of Operations   First Nine Months of 2022 and 2021 Compared   Revenues and Other Income   The following table includes our revenues and other income by operating segment:       For the Nine Months Ended September 30,             Percentage   Operating Segment (In thousands)   2022     2021     Increase     Change   Mineral Rights   $ 247,871     $ 121,210     $ 126,661       104 % Soda Ash     44,036       11,246       32,790       292 % Total   $ 291,907     $ 132,456     $ 159,451       120 %   The changes in revenues and other income are discussed for each of the operating segments below:     22 Table of Contents   Mineral Rights   The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:       For the Nine Months Ended September 30,     Increase     Percentage   (In thousands, except per ton data)   2022     2021     (Decrease)     Change   Coal sales volumes (tons)                                 Appalachia                                 Northern     1,260       947       313       33 % Central     10,238       8,824       1,414       16 % Southern     1,171       1,058       113       11 % Total Appalachia     12,669       10,829       1,840       17 % Illinois Basin     8,395       7,987       408       5 % Northern Powder River Basin     2,772       2,291       481       21 % Gulf Coast     324       13       311       2392 % Total coal sales volumes     24,160       21,120       3,040       14 %                                   Coal royalty revenue per ton                                 Appalachia                                 Northern   $ 9.48     $ 5.57     $ 3.91       70 % Central     10.85       4.91       5.94       121 % Southern     14.28       9.82       4.46       45 % Illinois Basin     2.30       2.13       0.17       8 % Northern Powder River Basin     4.24       3.59       0.65       18 % Gulf Coast     0.58       0.54       0.04       7 % Combined average coal royalty revenue per ton     7.08       3.99       3.09       77 %                                   Coal royalty revenues                                 Appalachia                                 Northern   $ 11,946     $ 5,272     $ 6,674       127 % Central     111,121       43,308       67,813       157 % Southern     16,725       10,390       6,335       61 % Total Appalachia     139,792       58,970       80,822       137 % Illinois Basin     19,331       17,044       2,287       13 % Northern Powder River Basin     11,751       8,222       3,529       43 % Gulf Coast     187       7       180       2571 % Unadjusted coal royalty revenues     171,061       84,243       86,818       103 % Coal royalty adjustment for minimum leases     (286 )     (18,148 )     17,862       98 % Total coal royalty revenues   $ 170,775     $ 66,095     $ 104,680       158 %                                   Other revenues                                 Production lease minimum revenues   $ 3,542     $ 10,241     $ (6,699 )     (65 )% Minimum lease straight-line revenues     14,235       15,773       (1,538 )     (10 )% Carbon neutral initiative revenues     8,600       —       8,600       100 % Wheelage revenues     11,073       5,589       5,484       98 % Property tax revenues     4,527       4,522       5       0 % Coal overriding royalty revenues     2,307       3,592       (1,285 )     (36 )% Lease amendment revenues     2,450       3,159       (709 )     (22 )% Aggregates royalty revenues     2,691       1,339       1,352       101 % Oil and gas royalty revenues     10,890       3,420       7,470       218 % Other revenues     705       692       13       2 % Total other revenues   $ 61,020     $ 48,327     $ 12,693       26 % Royalty and other mineral rights   $ 231,795     $ 114,422     $ 117,373       103 % Transportation and processing services revenues     15,377       6,545       8,832       135 % Gain on asset sales and disposals     699       243       456       188 % Total Mineral Rights segment revenues and other income   $ 247,871     $ 121,210     $ 126,661       104 %     23 Table of Contents   Coal Royalty Revenues   Total coal royalty revenues increased $104.7 million during the nine months ended September 30, 2022, as compared to the prior year period. The discussion by region is as follows:   • Appalachia:  Coal royalty revenues increased $80.8 million primarily due to increased coal sales prices and volumes during the nine months ended September 30, 2022, as compared to the prior year period.   • Illinois Basin:  Coal royalty revenues increased $2.3 million primarily due to higher sales volumes and increased sales prices during the nine months ended September 30, 2022, as compared to the prior year period. Revenues recognized from Foresight in 2021 were fixed as a result of the lease amendment the Partnership entered into with Foresight pursuant to which Foresight agreed to pay NRP fixed cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between the Partnership and Foresight. Revenues from Foresight in 2022 represent traditional royalty and minimum payments.   • Northern Powder River Basin:  Coal royalty revenues increased $3.5 million primarily due to increased sales volumes as our lessee mined more on our property during the nine months ended September 30, 2022 as compared to the prior year period in accordance with its mine plan.   Other Revenues   Other revenues increased $12.7 million during the nine months ended September 30, 2022 as compared to the prior year period primarily due to the following:   • An $8.6 million increase in carbon neutral initiatives due to the recognition of revenue related to carbon neutral transactions including subsurface CO 2 storage and geothermal.   • A $7.5 million increase in oil and gas royalty revenues primarily due to new wells and increased natural gas prices.   • A $5.5 million increase in wheelage revenues as a result of higher production in 2022 from the properties that pay us a wheelage fee as compared to the prior year period.   These increases were partially offset by a $6.7 million decrease in production lease minimum revenues primarily as a result of breakage revenues recognized in the first nine months of 2021.    Transportation and Processing Services Revenues   Transportation and processing services revenues increased $8.8 million during the nine months ended September 30, 2022 as compared to the prior year period primarily due to the lease amendment with Foresight whereas transportation and processing revenues were based on the recognition of a fixed amount in 2021. Revenues from Foresight in 2022 represent traditional royalty and minimum payments and were greater than the fixed revenue from 2021.   Soda Ash   Revenues and other income related to our Soda Ash segment increased $32.8 million primarily as a result of increased international sales prices.   Operating and Other Expenses   The following table presents the significant categories of our consolidated operating and other expenses:       For the Nine Months Ended September 30,     Increase     Percentage   (In thousands)   2022     2021     (Decrease)     Change   Operating expenses                                 Operating and maintenance expenses   $ 25,989     $ 19,076     $ 6,913       36 % Depreciation, depletion and amortization     16,565       15,145       1,420       9 % General and administrative expenses     14,037       11,550       2,487       22 % Asset impairments     874       4,116       (3,242 )     (79 )% Total operating expenses   $ 57,465     $ 49,887     $ 7,578       15 %                                   Other expenses, net                                 Interest expense, net   $ 22,636     $ 29,308     $ (6,672 )     (23 )% Loss on extinguishment of debt     6,532       —       6,532       100 % Total other expenses, net   $ 29,168     $ 29,308     $ (140 )     (0 )%   Total operating expenses increased $7.6 million primarily due to a $6.9 million increase in operating and maintenance expenses as compared to the prior year period primarily as a result of higher costs related to an overriding royalty agreement with WPPLP, partially offset by a decrease in bad debt expense. The coal royalty expense we pay to WPPLP is fully offset by the coal royalty revenue we receive from this property. Total operating expenses also increased as a result of a $2.5 million increase in general and administrative expenses primarily due to increased long-term incentive expense incurred during the nine months ended September 30, 2022. These increases were partially offset by a $3.2 million decrease in asset impairments as compared to the prior year period. Asset impairments in 2021 primarily related to a lease termination that resulted in the full impairment of a coal property.   Total other expenses, net was essentially flat year-over-year. The $6.7 million decrease in interest expense, net resulting from less debt outstanding was partially offset by a $6.5 million loss on early extinguishment of debt related to the premiums and fees incurred and write-off of debt issuance costs associated with the retirement of the 2025 Senior Notes during the nine months ended September 30, 2022.      24 Table of Contents   Adjusted EBITDA (Non-GAAP Financial Measure)   The following table reconciles net income (loss) (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:       Operating Segments                   For the Nine Months Ended (In thousands)   Mineral Rights     Soda Ash     Corporate and Financing     Total   September 30, 2022                                 Net income (loss)   $ 204,548     $ 43,931     $ (43,205 )   $ 205,274   Less: equity earnings from unconsolidated investment     —       (44,036 )     —       (44,036 ) Add: total distributions from unconsolidated investment     —       34,055       —       34,055   Add: interest expense, net     —       —       22,636       22,636   Add: loss on extinguishment of debt     —       —       6,532       6,532   Add: depreciation, depletion and amortization     16,565       —       —       16,565   Add: asset impairments     874       —       —       874   Adjusted EBITDA   $ 221,987     $ 33,950     $ (14,037 )   $ 241,900                                     September 30, 2021                                 Net income (loss)   $ 82,980     $ 11,115     $ (40,834 )   $ 53,261   Less: equity earnings from unconsolidated investment     —       (11,246 )     —       (11,246 ) Add: total distributions from unconsolidated investment     —       3,920       —       3,920   Add: interest expense, net     24       —       29,284       29,308   Add: depreciation, depletion and amortization     15,145       —       —       15,145   Add: asset impairments     4,116       —       —       4,116   Adjusted EBITDA   $ 102,265     $ 3,789     $ (11,550 )   $ 94,504     Adjusted EBITDA increased $147.4 million primarily due to a $119.7 million increase in Adjusted EBITDA within our Mineral Rights segment as a result of higher revenues and other income as discussed above, in addition to a $30.2 million increase in Adjusted EBITDA within our Soda Ash segment as a result of higher distributions received from Sisecam Wyoming in the first nine months of 2022 as compared to the prior year period as discussed above.   Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)   The following table presents the three major categories of the statement of cash flows by business segment:       Operating Segments                   For the Nine Months Ended (In thousands)   Mineral Rights     Soda Ash     Corporate and Financing     Total   September 30, 2022                                 Cash flow provided by (used in) continuing operations                                 Operating activities   $ 194,475     $ 33,934     $ (30,459 )   $ 197,950   Investing activities     1,837       —       (59 )     1,778   Financing activities     (614 )     —       (273,697 )     (274,311 )                                   September 30, 2021                                 Cash flow provided by (used in) continuing operations                                 Operating activities   $ 91,958     $ 3,817     $ (29,132 )   $ 66,643   Investing activities     1,871       —       —       1,871   Financing activities     (1,132 )     —       (48,183 )     (49,315 )     25 Table of Contents   The following table reconciles net cash provided by (used in) operating activities of continuing operations (the most comparable GAAP financial measure) by business segment to DCF and FCF:       Operating Segments                   For the Nine Months Ended (In thousands)   Mineral Rights     Soda Ash     Corporate and Financing     Total   September 30, 2022                                 Net cash provided by (used in) operating activities of continuing operations   $ 194,475     $ 33,934     $ (30,459 )   $ 197,950   Add: proceeds from asset sales and disposals     699       —       —       699   Add: return of long-term contract receivable     1,138       —       —       1,138   Less: maintenance capital expenditures     —       —       (59 )     (59 ) Distributable cash flow   $ 196,312     $ 33,934     $ (30,518 )   $ 199,728   Less: proceeds from asset sales and disposals     (699 )     —       —       (699 ) Free cash flow   $ 195,613     $ 33,934     $ (30,518 )   $ 199,029                                     September 30, 2021                                 Net cash provided by (used in) operating activities of continuing operations   $ 91,958     $ 3,817     $ (29,132 )   $ 66,643   Add: proceeds from asset sales and disposals     249       —       —       249   Add: return of long-term contract receivable     1,622       —       —       1,622   Distributable cash flow   $ 93,829     $ 3,817     $ (29,132 )   $ 68,514   Less: proceeds from asset sales and disposals     (249 )     —       —       (249 ) Less: acquisition costs     (1,000 )     —       —       (1,000 ) Free cash flow   $ 92,580     $ 3,817     $ (29,132 )   $ 67,265     DCF and FCF increased $131.2 million and $131.8 million, respectively, primarily due to the following:   • Mineral Rights Segment   ◦ DCF and FCF increased $102.5 million and $103.0 million, respectively, primarily due to the segment's increase in revenues and other income as discussed above.   • Soda Ash Segment   ◦ DCF and FCF increased $30.1 million as a result of higher cash distributions received from Sisecam Wyoming in the first nine months of 2022 as compared to the prior year period as discussed above.   Liquidity and Capital Resources   Current Liquidity   As of September 30, 2022, we had total liquidity of $190.9 million, consisting of $60.9 million of cash and cash equivalents and $130.0 million of borrowing capacity under our Opco Credit Facility. We have debt service obligations, including approximately $20 million of principal repayments on Opco’s senior notes throughout the remainder of 2022. As discussed previously, through the date of this report, we have permanently retired all of our 9.125% Senior Notes due 2025 and have $70 million drawn on our Opco Credit Facility. We believe our liquidity position provides us with the flexibility to continue paying down debt and manage our business.   Cash Flows   Cash flows provided by operating activities increased $131.3 million, from $66.6 million in the nine months ended September 30, 2021 to $198.0 million in the nine months ended September 30, 2022, primarily related to increased revenues and other income within our Mineral Rights segment and $30.1 million of higher cash distributions received from Sisecam Wyoming in the first nine months of 2022 as compared to the prior year period.   Cash flows used in financing activities increased $225.0 million, from $49.3 million used in the nine months ended September 30, 2021 to $274.3 million used in the nine months ended September 30, 2022, primarily due to the following:   • $178.6 million of cash used to retire a portion of our 2025 Senior Notes during the nine months ended September 30, 2022;   • $19.6 million of cash used to redeem the preferred units paid-in-kind during the first quarter of 2022;   • $10.9 million of increased cash used for preferred unit distributions as a result of paying all of our preferred unit distributions in cash in 2022 as compared to half in kind during the nine months ended September 30, 2021;   • $9.1 million of increased cash used for other items, net which primarily related to the premiums paid related to the repayment of the 2025 Senior Notes during the nine months ended September 30, 2022; and   • $7.8 million of increased cash used for distributions to common unitholders and the general partner as a result of increasing our common unit distribution to $0.75/unit beginning in the second quarter of 2022.     26 Table of Contents   Capital Resources and Obligations   Debt, Net   We had the following debt outstanding as of September 30, 2022 and December 31, 2021:       September 30,     December 31,   (In thousands)   2022     2021   Current portion of long-term debt, net   $ 89,989     $ 39,102   Long-term debt, net     148,734       394,443   Total debt, net   $ 238,723     $ 433,545     We have been and continue to be in compliance with the terms of the financial covenants contained in our debt agreements. For additional information regarding our debt and the agreements governing our debt, including the covenants contained therein, see  Note 8. Debt, Net to the Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.   Off-Balance Sheet Transactions   We do not have any off-balance sheet arrangements with unconsolidated entities or related parties and accordingly, there are no off-balance sheet risks to our liquidity and capital resources from unconsolidated entities.   Related Party Transactions   The information required set forth under Note 10. Related Party Transactions to the Consolidated Financial Statements is incorporated herein by reference.   Summary of Critical Accounting Estimates   The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.   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.   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   As a smaller reporting company, we are not required to include this disclosure in our Form 10-Q for the quarterly period ended September 30, 2022.   ITEM 4. CONTROLS AND PROCEDURES   Evaluation of Disclosure Controls and Procedures   NRP carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of NRP management, including the Chief Executive Officer and Chief Financial Officer of the general partner of the general partner of NRP. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective in providing reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (b) such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.   Changes in the Partnership ’ s Internal Control Over Financial Reporting   There were no material changes in the Partnership’s internal control over financial reporting during the first nine months of 2022 that materially affected, or were reasonably likely to materially affect, the Partnership’s internal control over financial reporting.     27 Table of Contents   PART II ITEM 1. LEGAL PROCEEDINGS   From time to time, we are involved in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, we believe these ordinary course matters will not have a material effect on our financial position, liquidity or operations.   ITEM 1A. RISK FACTORS   During the period covered by this report, there were no material changes from the risk factors previously disclosed in Natural Resource Partners L.P.’s Annual Report on Form 10-K for the year ended December 31, 2021.   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS   None.   ITEM 3. DEFAULTS UPON SENIOR SECURITIES   None.    ITEM 4. MINE SAFETY DISCLOSURES   None.   ITEM 5. OTHER INFORMATION   None.   ITEM 6. EXHIBITS   Exhibit Number   Description 3.1   Fifth Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated as of March 2, 2017 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on March 6, 2017). 3.2   Fifth Amended and Restated Agreement of Limited Partnership of NRP (GP) LP, dated as of December 16, 2011 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 16, 2011). 3.3   Fifth Amended and Restated Limited Liability Company Agreement of GP Natural Resource Partners LLC, dated as of October 31, 2013 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on October 31, 2013). 3.4   Certificate of Limited Partnership of Natural Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed April 19, 2002, File No. 333-86582). 31.1*   Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley. 31.2*   Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley. 32.1**   Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350. 32.2**   Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350. 10.1   Master Assignment Agreement and Fifth Amendment to Third Amended Credit Agreement, dated as of August 9, 2022 by and among NRP (Operating) LLC, the Lenders party thereto, the Exiting Lenders, and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent for the Lenders, as Swingline Lender, and as an Issuing Bank (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 11, 2022).  10.2   New Lender Agreement, dated as of September 1, 2022 by and among NRP (Operating) LLC, the Borrower, Zions Bancorporation, N.A. dba Amegy Bank, in its capacity as administrative agent under the Fifth Amendment to Third Amended Credit Agreement and Prosperity Bank, the New Lender (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on September 8, 2022).  101.INS*   Inline XBRL Instance Document 101.SCH*   Inline XBRL Taxonomy Extension Schema Document 101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB*   Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document 104*   Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)       *   Filed herewith **   Furnished herewith     28 Table of Contents   SIGNATURES   Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned and thereunto duly authorized.     NATURAL RESOURCE PARTNERS L.P.   By: NRP (GP) LP, its general partner   By: GP NATURAL RESOURCE     PARTNERS LLC, its general partner       Date: November 3, 2022 By: /s/ Corbin J. Robertson, Jr.     Corbin J. Robertson, Jr.     Chairman of the Board and     Chief Executive Officer     (Principal Executive Officer)         Date: November 3, 2022 By: /s/ Christopher J. Zolas     Christopher J. Zolas     Chief Financial Officer and Treasurer     (Principal Financial and Accounting Officer)         29