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nrp20240930_10q.htm 
 
 Table of Contents 

 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, 2024 or 

 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
 
 Commission file number: 
 001-31465 
 
 NATURAL RESOURCE PARTNERS LP 
 
 (Exact name of registrant as specified in its charter) 
 
 Delaware 
 35-2164875 
 
 (State or other jurisdiction of 
 incorporation or organization) 
 (I.R.S. Employer 
 Identification No.) 
 
 1415 Louisiana Street, Suite 3325 

 Houston , Texas 77002 

 (Address of principal executive offices) 

 (Zip Code) 

 ( 713 ) 751-7507 

 (Registrant ’ s telephone number, including area code) 

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

 Title of each class 
 Trading Symbol(s) 
 Name of each exchange on which registered 
 
 Common Units representing limited partner interests 
 NRP 
 New York Stock Exchange 
 
 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

 Large Accelerated Filer
 ☐ Accelerated Filer 
 ☒ 

 Non-accelerated Filer
 ☐ Smaller Reporting Company
 ☐ 

 Emerging Growth Company
 ☐ 

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

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

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

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

 APPLICABLE ONLY TO CORPORATE ISSUERS

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

 Table of Contents 
 
 NATURAL RESOURCE PARTNERS, L.P. 

 TABLE OF CONTENTS 

 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 
 
 17 
 
 Item 3. 
 
 Quantitative and Qualitative Disclosures About Market Risk 
 
 30 
 
 Item 4. 
 
 Controls and Procedures 
 
 30 
 
 Part II. Other Information 
 
 Item 1. 
 
 Legal Proceedings 
 
 31 
 
 Item 1A. 
 
 Risk Factors 
 
 31 
 
 Item 2. 
 
 Unregistered Sales of Equity Securities and Use of Proceeds 
 
 31 
 
 Item 3. 
 
 Defaults Upon Senior Securities 
 
 31 
 
 Item 4. 
 
 Mine Safety Disclosures 
 
 31 
 
 Item 5. 
 
 Other Information 
 
 31 
 
 Item 6. 
 
 Exhibits 
 
 31 
 
 Signatures 
 
 32 
 
 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, 
 
 2024 2023 

 (In thousands, except unit data) 
 (Unaudited) 
 
 ASSETS
 
 Current assets
 
 Cash and cash equivalents
 $ 30,900 $ 11,989 

 Accounts receivable, net
 36,886 41,086 

 Other current assets, net
 1,483 2,218 

 Total current assets
 $ 69,269 $ 55,293 

 Land
 24,008 24,008 

 Mineral rights, net
 382,274 394,483 

 Intangible assets, net
 13,109 13,682 

 Equity in unconsolidated investment
 267,806 276,549 

 Long-term contract receivable, net
 24,212 26,321 

 Other long-term assets, net
 9,187 7,540 

 Total assets
 $ 789,865 $ 797,876 

 LIABILITIES AND CAPITAL
 
 Current liabilities
 
 Accounts payable
 $ 984 $ 885 

 Accrued liabilities
 7,912 12,987 

 Accrued interest
 775 584 

 Current portion of deferred revenue
 5,823 4,599 

 Current portion of long-term debt, net
 14,226 30,785 

 Total current liabilities
 $ 29,720 $ 49,840 

 Deferred revenue
 53,912 38,356 

 Long-term debt, net
 183,137 124,273 

 Other non-current liabilities
 5,903 7,172 

 Total liabilities
 $ 272,672 $ 219,641 

 Commitments and contingencies (see Note 13)
 
 Class A Convertible Preferred Units ( 71,666 issued and outstanding at December 31, 2023 at $ 1,000 par value per unit) (See Note 3)
 $ — $ 47,181 

 Partners’ capital
 
 Common unitholders’ interest ( 13,049,123 and 12,634,642 units issued and outstanding at September 30, 2024 and December 31, 2023, respectively)
 $ 509,258 $ 503,076 

 General partner’s interest
 8,891 8,005 

 Warrant holders’ interest
 — 23,095 

 Accumulated other comprehensive loss
 ( 956 ) ( 3,122 ) 

 Total partners’ capital
 $ 517,193 $ 531,054 

 Total liabilities and partners' capital
 $ 789,865 $ 797,876 

 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) 
 
 2024 
 
 2023 
 
 2024 
 
 2023 
 
 Revenues and other income
 
 Royalty and other mineral rights
 
 $ 
 50,405 
 
 $ 
 68,533 
 
 $ 
 172,368 
 
 $ 
 205,811 
 
 Transportation and processing services
 
 1,812 
 
 4,579 
 
 7,900 
 
 11,447 
 
 Equity in earnings of Sisecam Wyoming
 
 8,109 
 
 12,401 
 
 17,204 
 
 58,633 
 
 Gain on asset sales and disposals
 
 1 
 
 854 
 
 4,809 
 
 955 
 
 Total revenues and other income
 
 $ 
 60,327 
 
 $ 
 86,367 
 
 $ 
 202,281 
 
 $ 
 276,846 
 
 Operating expenses
 
 Operating and maintenance expenses
 
 $ 
 6,786 
 
 $ 
 8,358 
 
 $ 
 18,391 
 
 $ 
 23,451 
 
 Depreciation, depletion and amortization
 
 4,730 
 
 4,594 
 
 12,708 
 
 12,469 
 
 General and administrative expenses
 
 5,935 
 
 5,669 
 
 18,193 
 
 17,157 
 
 Asset impairments
 
 87 
 
 63 
 
 87 
 
 132 
 
 Total operating expenses
 
 $ 
 17,538 
 
 $ 
 18,684 
 
 $ 
 49,379 
 
 $ 
 53,209 
 
 Income from operations
 
 $ 
 42,789 
 
 $ 
 67,683 
 
 $ 
 152,902 
 
 $ 
 223,637 
 
 Interest expense, net
 
 $ 
 ( 4,194 
 ) 
 
 $ 
 ( 3,837 
 ) 
 
 $ 
 ( 12,030 
 ) 
 
 $ 
 ( 10,182 
 ) 
 
 Net income
 
 $ 
 38,595 
 
 $ 
 63,846 
 
 $ 
 140,872 
 
 $ 
 213,455 
 
 Less: income attributable to preferred unitholders
 
 ( 655 
 ) 
 
 ( 2,936 
 ) 
 
 ( 4,248 
 ) 
 
 ( 14,568 
 ) 
 
 Less: redemption of preferred units
 
 ( 10,819 
 ) 
 
 ( 17,083 
 ) 
 
 ( 24,485 
 ) 
 
 ( 60,929 
 ) 
 
 Net income attributable to common unitholders and the general partner
 
 $ 
 27,121 
 
 $ 
 43,827 
 
 $ 
 112,139 
 
 $ 
 137,958 
 
 Net income attributable to common unitholders
 
 $ 
 26,578 
 
 $ 
 42,951 
 
 $ 
 109,896 
 
 $ 
 135,199 
 
 Net income attributable to the general partner
 
 543 
 
 876 
 
 2,243 
 
 2,759 
 
 Net income per common unit (see Note 5)
 
 Basic
 
 $ 
 2.04 
 
 $ 
 3.40 
 
 $ 
 8.47 
 
 $ 
 10.72 
 
 Diluted
 
 2.00 
 
 2.91 
 
 8.21 
 
 8.88 
 
 Net income
 
 $ 
 38,595 
 
 $ 
 63,846 
 
 $ 
 140,872 
 
 $ 
 213,455 
 
 Comprehensive income (loss) from unconsolidated investment and other
 
 82 
 
 2,200 
 
 2,166 
 
 ( 16,472 
 ) 
 
 Comprehensive income
 
 $ 
 38,677 
 
 $ 
 66,046 
 
 $ 
 143,038 
 
 $ 
 196,983 
 
 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 
 Loss 
 Capital 
 
 Balance at December 31, 2023
 12,635 $ 503,076 $ 8,005 $ 23,095 $ ( 3,122 ) $ 531,054 

 Net income (1) 
 — 55,089 1,124 — — 56,213 

 Distributions to common unitholders and the general partner
 — ( 41,342 ) ( 844 ) — — ( 42,186 ) 

 Distributions to preferred unitholders
 — ( 2,107 ) ( 43 ) — — ( 2,150 ) 

 Issuance of unit-based awards
 126 — — — — — 

 Unit-based awards amortization and vesting, net
 — ( 3,971 ) — — — ( 3,971 ) 

 Capital contribution
 — — 227 — — 227 

 Warrant settlements
 199 ( 36,650 ) ( 748 ) ( 18,291 ) — ( 55,689 ) 

 Comprehensive income from unconsolidated investment and other
 — — — — 845 845 

 Balance at March 31, 2024
 12,960 $ 474,095 $ 7,721 $ 4,804 $ ( 2,277 ) $ 484,343 

 Net income (2) 
 — 45,142 922 — — 46,064 

 Redemption of preferred units
 — ( 13,393 ) ( 273 ) — — ( 13,666 ) 

 Distributions to common unitholders and the general partner
 — ( 9,787 ) ( 200 ) — — ( 9,987 ) 

 Distributions to preferred unitholders
 — ( 2,590 ) ( 53 ) — — ( 2,643 ) 

 Unit-based awards amortization and vesting
 — 2,502 — — — 2,502 

 Capital contribution
 — — 555 — — 555 

 Warrant settlements
 89 ( 5,092 ) ( 104 ) ( 4,804 ) — ( 10,000 ) 

 Comprehensive income from unconsolidated investment and other
 — — — — 1,239 1,239 

 Balance at June 30, 2024
 13,049 $ 490,877 $ 8,568 $ — $ ( 1,038 ) $ 498,407 

 Net income (3) 
 — 37,824 771 — — 38,595 

 Redemption of preferred units
 — ( 10,602 ) ( 217 ) — — ( 10,819 ) 

 Distributions to common unitholders and the general partner
 — ( 9,787 ) ( 199 ) — — ( 9,986 ) 

 Distributions to preferred unitholders
 — ( 1,573 ) ( 32 ) — — ( 1,605 ) 

 Unit-based awards amortization and vesting
 — 2,519 — — — 2,519 

 Comprehensive income from unconsolidated investment and other
 — — — — 82 82 

 Balance at September 30, 2024
 13,049 $ 509,258 $ 8,891 $ — $ ( 956 ) $ 517,193 

 (1) 
 Net income includes $2.15 million of income attributable to preferred unitholders that accumulated during the period, of which $2.11 million is allocated to the common unitholders and $0.04 million is allocated to the general partner.
 
 (2) 
 Net income includes $1.44 million of income attributable to preferred unitholders that accumulated during the period, of which $1.41 million is allocated to the common unitholders and $0.03 million is allocated to the general partner. 
 
 (3) 
 Net income includes $0.66 million of income attributable to preferred unitholders that accumulated during the period, of which $0.64 million is allocated to the common unitholders and $0.01 million is allocated to the general partner. 
 
 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 (Loss) 
 
 Capital 
 
 Balance at December 31, 2022
 
 12,506 
 
 $ 
 404,799 
 
 $ 
 5,977 
 
 $ 
 47,964 
 
 $ 
 18,717 
 
 $ 
 477,457 
 
 Net income (1) 
 
 — 
 
 77,690 
 
 1,585 
 
 — 
 
 — 
 
 79,275 
 
 Redemption of preferred units
 
 — 
 
 ( 15,904 
 ) 
 
 ( 324 
 ) 
 
 — 
 
 — 
 
 ( 16,228 
 ) 
 
 Distributions to common unitholders and the general partner
 
 — 
 
 ( 40,082 
 ) 
 
 ( 818 
 ) 
 
 — 
 
 — 
 
 ( 40,900 
 ) 
 
 Distributions to preferred unitholders
 
 — 
 
 ( 7,924 
 ) 
 
 ( 162 
 ) 
 
 — 
 
 — 
 
 ( 8,086 
 ) 
 
 Issuance of unit-based awards
 
 129 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Unit-based awards amortization and vesting, net
 
 — 
 
 ( 1,178 
 ) 
 
 — 
 
 — 
 
 — 
 
 ( 1,178 
 ) 
 
 Capital contribution
 
 — 
 
 — 
 
 142 
 
 — 
 
 — 
 
 142 
 
 Comprehensive loss from unconsolidated investment and other
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 19,583 
 ) 
 
 ( 19,583 
 ) 
 
 Balance at March 31, 2023
 
 12,635 
 
 $ 
 417,401 
 
 $ 
 6,400 
 
 $ 
 47,964 
 
 $ 
 ( 866 
 ) 
 
 $ 
 470,899 
 
 Net income (2) 
 
 — 
 
 68,927 
 
 1,407 
 
 — 
 
 — 
 
 70,334 
 
 Redemption of preferred units
 
 — 
 
 ( 27,065 
 ) 
 
 ( 553 
 ) 
 
 — 
 
 — 
 
 ( 27,618 
 ) 
 
 Distributions to common unitholders and the general partner
 
 — 
 
 ( 9,476 
 ) 
 
 ( 193 
 ) 
 
 — 
 
 — 
 
 ( 9,669 
 ) 
 
 Distributions to preferred unitholders
 
 — 
 
 ( 7,248 
 ) 
 
 ( 148 
 ) 
 
 — 
 
 — 
 
 ( 7,396 
 ) 
 
 Unit-based awards amortization and vesting
 
 — 
 
 2,299 
 
 — 
 
 — 
 
 — 
 
 2,299 
 
 Comprehensive income from unconsolidated investment and other
 
 — 
 
 — 
 
 — 
 
 — 
 
 911 
 
 911 
 
 Balance at June 30, 2023
 
 12,635 
 
 $ 
 444,838 
 
 $ 
 6,913 
 
 $ 
 47,964 
 
 $ 
 45 
 
 $ 
 499,760 
 
 Net income (3) 
 
 — 
 
 62,569 
 
 1,277 
 
 — 
 
 — 
 
 63,846 
 
 Redemption of preferred units
 
 — 
 
 ( 16,741 
 ) 
 
 ( 342 
 ) 
 
 — 
 
 — 
 
 ( 17,083 
 ) 
 
 Distributions to common unitholders and the general partner
 
 — 
 
 ( 9,475 
 ) 
 
 ( 194 
 ) 
 
 — 
 
 — 
 
 ( 9,669 
 ) 
 
 Distributions to preferred unitholders
 
 — 
 
 ( 4,349 
 ) 
 
 ( 88 
 ) 
 
 — 
 
 — 
 
 ( 4,437 
 ) 
 
 Unit-based awards amortization and vesting
 
 — 
 
 2,318 
 
 — 
 
 — 
 
 — 
 
 2,318 
 
 Warrant settlement
 
 — 
 
 ( 18,117 
 ) 
 
 ( 370 
 ) 
 
 ( 15,121 
 ) 
 
 — 
 
 ( 33,608 
 ) 
 
 Comprehensive income from unconsolidated investment and other
 
 — 
 
 — 
 
 — 
 
 — 
 
 2,200 
 
 2,200 
 
 Balance at September 30, 2023
 
 12,635 
 
 $ 
 461,043 
 
 $ 
 7,196 
 
 $ 
 32,843 
 
 $ 
 2,245 
 
 $ 
 503,327 
 
 (1) 
 
 Net income includes $6.66 million of income attributable to preferred unitholders that accumulated during the period, of which $6.53 million is allocated to the common unitholders and $0.13 million is allocated to the general partner.
 
 (2) 
 Net income includes $4.97 million of income attributable to preferred unitholders that accumulated during the period, of which $4.87 million is allocated to the common unitholders and $0.10 million is allocated to the general partner. 
 
 (3) 
 Net income includes $2.94 million of income attributable to preferred unitholders that accumulated during the period, of which $2.88 million is allocated to the common unitholders and $0.06 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) 
 
 2024 
 
 2023 
 
 Cash flows from operating activities
 
 Net income
 
 $ 
 140,872 
 
 $ 
 213,455 
 
 Adjustments to reconcile net income to net cash provided by operating activities:
 
 Depreciation, depletion and amortization
 
 12,708 
 
 12,469 
 
 Distributions from unconsolidated investment
 
 28,114 
 
 66,140 
 
 Equity earnings from unconsolidated investment
 
 ( 17,204 
 ) 
 
 ( 58,633 
 ) 
 
 Gain on asset sales and disposals
 
 ( 4,809 
 ) 
 
 ( 955 
 ) 
 
 Asset impairments
 
 87 
 
 132 
 
 Bad debt expense
 
 538 
 
 813 
 
 Unit-based compensation expense
 
 8,878 
 
 7,903 
 
 Amortization of debt issuance costs and other
 
 ( 2,603 
 ) 
 
 1,043 
 
 Change in operating assets and liabilities:
 
 Accounts receivable
 
 5,711 
 
 4,090 
 
 Accounts payable
 
 98 
 
 ( 850 
 ) 
 
 Accrued liabilities
 
 ( 5,917 
 ) 
 
 ( 6,288 
 ) 
 
 Accrued interest
 
 192 
 
 235 
 
 Deferred revenue
 
 16,781 
 
 ( 4,963 
 ) 
 
 Other items, net
 
 ( 1,173 
 ) 
 
 ( 1,399 
 ) 
 
 Net cash provided by operating activities
 
 $ 
 182,273 
 
 $ 
 233,192 
 
 Cash flows from investing activities
 
 Proceeds from asset sales and disposals
 
 $ 
 4,809 
 
 $ 
 961 
 
 Return of long-term contract receivable
 
 1,979 
 
 1,830 
 
 Capital expenditures
 
 — 
 
 ( 10 
 ) 
 
 Net cash provided by investing activities
 
 $ 
 6,788 
 
 $ 
 2,781 
 
 Cash flows from financing activities
 
 Debt borrowings
 
 $ 
 152,850 
 
 $ 
 215,034 
 
 Debt repayments
 
 ( 110,696 
 ) 
 
 ( 176,061 
 ) 
 
 Distributions to common unitholders and the general partner
 
 ( 62,159 
 ) 
 
 ( 60,238 
 ) 
 
 Distributions to preferred unitholders
 
 ( 6,398 
 ) 
 
 ( 19,919 
 ) 
 
 Redemption of preferred units
 
 ( 71,666 
 ) 
 
 ( 178,334 
 ) 
 
 Warrant settlements (see Note 3)
 
 ( 65,689 
 ) 
 
 ( 33,608 
 ) 
 
 Other items, net
 
 ( 6,392 
 ) 
 
 ( 3,527 
 ) 
 
 Net cash used in financing activities
 
 $ 
 ( 170,150 
 ) 
 
 $ 
 ( 256,653 
 ) 
 
 Net increase (decrease) in cash and cash equivalents
 
 $ 
 18,911 
 
 $ 
 ( 20,680 
 ) 
 
 Cash and cash equivalents at beginning of period
 
 11,989 
 
 39,091 
 
 Cash and cash equivalents at end of period
 
 $ 
 30,900 
 
 $ 
 18,411 
 
 Supplemental cash flow information:
 
 Cash paid for interest
 
 $ 
 11,466 
 
 $ 
 9,484 
 
 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 6. Segment Information . The Partnership’s operations are conducted through, and its operating assets are owned by, its subsidiaries. The Partnership owns its subsidiaries through one wholly owned operating company, NRP (Operating) LLC ("Opco"). As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context.

 Principles of Consolidation and Reporting 

 The accompanying unaudited Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with Rule 10 - 01 of Regulation S- X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2023 and notes thereto included in the Partnership's Annual Report on Form 10 -K, which was filed with the SEC on March 7, 2024. Reclassifications have been made to prior year amounts in the Consolidated Financial Statements to conform with current year presentation. These reclassifications had no impact on previously reported total assets, total liabilities, partners' capital, net income, or cash flows from operating, investing or financing activities.

 Recently Issued Accounting Standard 

 In November 2023, the FASB issued ASU No. 2023 - 07—Segment Reporting (Topic 280 )—Improvements to Reportable Segment Disclosures ("ASU 2023 - 07" ). The amendments in ASU 2023 - 07 improve reportable segment disclosure requirements, primarily through enhanced disclosures about segment expenses. The guidance is effective for annual periods beginning after December 15, 2023 and quarterly periods beginning after December 15, 2024 and will be adopted retrospectively to all prior periods presented in the financial statements. NRP does not expect the adoption of ASU 2023 - 07 to have a material effect on its Consolidated Financial Statements.

 6 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 2. Revenues from Contracts with Customers 

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

 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 (In thousands) 
 
 2024 
 
 2023 
 
 2024 
 
 2023 
 
 Coal royalty revenues
 
 $ 
 37,605 
 
 $ 
 55,544 
 
 $ 
 124,108 
 
 $ 
 161,527 
 
 Production lease minimum revenues
 
 437 
 
 850 
 
 1,773 
 
 2,025 
 
 Minimum lease straight-line revenues
 
 4,117 
 
 4,464 
 
 12,414 
 
 13,414 
 
 Carbon neutral initiative revenues
 
 ( 39 
 ) 
 
 681 
 
 4,322 
 
 2,914 
 
 Property tax revenues
 
 1,809 
 
 1,770 
 
 5,246 
 
 4,710 
 
 Wheelage revenues
 
 2,072 
 
 2,385 
 
 7,082 
 
 9,538 
 
 Coal overriding royalty revenues
 
 227 
 
 827 
 
 2,064 
 
 1,165 
 
 Lease amendment revenues
 
 1,071 
 
 623 
 
 2,485 
 
 2,322 
 
 Aggregates royalty revenues
 
 662 
 
 736 
 
 2,164 
 
 2,175 
 
 Oil and gas royalty revenues
 
 1,317 
 
 324 
 
 6,956 
 
 5,126 
 
 Other revenues
 
 1,127 
 
 329 
 
 1,956 
 
 895 
 
 Royalty and other mineral rights revenues
 
 $ 
 50,405 
 
 $ 
 68,533 
 
 $ 
 170,570 
 
 $ 
 205,811 
 
 Transportation and processing services revenues
 
 1,248 
 
 3,964 
 
 6,169 
 
 9,538 
 
 Total Mineral Rights segment revenues from contracts with customers
 
 $ 
 51,653 
 
 $ 
 72,497 
 
 $ 
 176,739 
 
 $ 
 215,349 
 
 The following table details the Partnership's Mineral Rights segment receivables and liabilities resulting from contracts with customers: 

 September 30, 
 
 December 31, 
 
 (In thousands) 
 
 2024 
 
 2023 
 
 Contract Assets
 
 Accounts receivable, net
 
 $ 
 32,878 
 
 $ 
 37,206 
 
 Other current assets, net (1) 
 
 1,047 
 
 429 
 
 Other long-term assets, net (2) 
 
 1,725 
 
 — 
 
 Contract liabilities
 
 Accounts payable (3) 
 
 $ 
 114 
 
 $ 
 — 
 
 Current portion of deferred revenue
 
 5,823 
 
 4,599 
 
 Deferred revenue
 
 53,912 
 
 38,356 
 
 ( 1 ) 
 Other current assets, net includes short-term notes receivables from contracts with customers.
 
 ( 2 ) 
 Other long-term assets, net includes amounts prepaid by NRP related to override agreements from contracts with customers as well as long-term lease amendment fee receivables from contracts with customers. 
 
 ( 3 ) 
 Accounts payable include override payments owed by NRP from contracts with customers. 
 
 The following table shows the activity related to the Partnership's Mineral Rights segment deferred revenue resulting from contracts with customers: 

 For the Nine Months Ended September 30, 
 
 (In thousands) 
 
 2024 
 
 2023 
 
 Balance at beginning of period (current and non-current)
 
 $ 
 42,955 
 
 $ 
 46,437 
 
 Increase due to minimums and lease amendment fees
 
 28,319 
 
 11,525 
 
 Recognition of previously deferred revenue
 
 ( 11,539 
 ) 
 
 ( 16,487 
 ) 
 
 Balance at end of period (current and non-current)
 
 $ 
 59,735 
 
 $ 
 41,475 
 
 The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty contracts with customers are as follows as of September 30, 2024 (in thousands): 

 Lease Term (1) 
 
 Weighted Average Remaining Years 
 
 Annual Minimum Payments 
 
 0 - 5 years
 
 1.9 
 
 $ 
 14,949 
 
 5 - 10 years
 
 5.5 
 
 18,222 
 
 10+ years
 
 11.3 
 
 25,779 
 
 Total
 
 7.1 
 
 $ 
 58,950 
 
 ( 1 ) 
 Lease term does not include renewal periods.
 
 7 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 3. Class A Convertible Preferred Units and Warrants 

 On March 2, 2017, NRP issued $ 250 million of Class A Convertible Preferred Units representing limited partner interests in NRP (the "preferred units") to certain entities controlled by funds affiliated with The Blackstone Group Inc. (collectively referred to as "Blackstone") and certain affiliates of GoldenTree Asset Management LP (collectively referred to as "GoldenTree") (together the "preferred purchasers") pursuant to a Preferred Unit and Warrant Purchase Agreement. NRP issued 250,000 preferred units to the preferred purchasers at a price of $ 1,000 per preferred unit (the "per unit purchase price"), less a 2.5 % structuring and origination fee. The preferred units entitle the preferred purchasers to receive cumulative distributions at a rate of 12 % of the purchase price per year, up to one half of which NRP may pay in additional preferred units (such additional preferred units, the "PIK units"). The preferred units have a perpetual term, unless converted or redeemed as described below. However, in 2024 all remaining preferred units were redeemed and none of the Partnership's preferred units remain outstanding.

 NRP also issued two tranches of warrants (the "warrants") to purchase common units to the preferred purchasers (warrants to purchase 1.75 million common units with a strike price of $ 22.81 and warrants to purchase 2.25 million common units with a strike price of $ 34.00 ). The warrants may be exercised by the holders thereof at any time before the eighth anniversary of the closing date. Upon exercise of the warrants, NRP may, at its option, elect to settle the warrants in common units or cash, each on a net basis. However, in 2024 all remaining warrants were settled and none of the Partnership's warrants remain outstanding.

 Accounting for the Preferred Units and Warrants 

 Classification 

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

 Initial Measurement 

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

 Subsequent Measurement 

 Preferred Units 

 During the three months ended September 30, 2024, the Partnership redeemed the remaining 31,666 preferred units for $ 31.7 million in cash. During the nine months ended September 30, 2024, the Partnership redeemed a total of 71,666 preferred units for $ 71.7 million in cash. During the nine months ended September 30, 2023, the Partnership redeemed a total of 178,334 preferred units for $ 178.3 million in cash. Of the originally issued 250,000 preferred units, no preferred units remain outstanding as of September 30, 2024 and 71,666 preferred units remained outstanding as of December 31, 2023. The preferred units had a $ 47.2 million carrying value included in class A convertible preferred units on the Partnership's Consolidated Balance Sheets at December 31, 2023 .

 Warrants 

 During the nine months ended September 30, 2024, the Partnership settled a total of 1,540,000 warrants to purchase common units with a strike price of $ 34.00 . On January 29, 2024 ( the "January 2024 exercise date"), holders of the Partnership's warrants exercised 462,165 warrants at a strike price of $ 34.00 . The Partnership settled the warrants on a net basis with $ 10.0 million in cash and 198,767 common units. The 15 -day VWAP ending on the business day prior to the January 2024 exercise date was $ 97.62 . On February 7, 2024 (the "February 7, 2024 exercise date"), holders of the Partnership's warrants exercised 128,750 warrants at a strike price of $ 34.00 . The Partnership settled the warrants on a net basis with $ 8.0 million in cash. The 15 -day VWAP ending on the business day prior to the February 7, 2024 exercise date was $ 96.29 . On February 8, 2024 ( the "February 8, 2024 exercise date"), holders of the Partnership's warrants exercised 128,750 warrants at a strike price of $ 34.00 . The 15 -day VWAP ending on the business day prior to the February 8, 2024 exercise date was $ 95.63 . The Partnership settled these warrants on a net basis with $ 7.9 million in cash. On February 14, 2024 (the "February 14, 2024 exercise date"), holders of the Partnership's warrants exercised 500,000 warrants at a strike price of $ 34.00 . The 15 -day VWAP ending on the business day prior to the February 14, 2024 exercise date was $ 93.47 . The Partnership settled these warrants on a net basis with $ 29.7 million in cash. In April 2024 ( the "April 2024 exercise date"), holders of the Partnership's warrants exercised 320,335 warrants at a strike price of $ 34.00 . The Partnership settled the warrants on a net basis with $ 10.0 million in cash and 89,059 common units. The 15 -day VWAP ending on the business day prior to the April 2024 exercise date was $ 90.33 .

 On September 18, 2023, the Partnership negotiated a transaction with holders of the Partnership's warrants pursuant to which the Partnership repurchased and retired an aggregate of 752,500 warrants with an exercise price of $ 22.81 and 60,000 warrants with an exercise price of $ 34.00 for approximately $ 33.6 million in cash.

 Of the originally issued 4,000,000 warrants, no warrants remain outstanding as of September 30, 2024 and 1,540,000 warrants to purchase common units with a strike price of $ 34.00 were outstanding as of December 31, 2023 . These warrants had a carrying value of $ 23.1 million included in warrant holders' interest within partners' capital on the Partnership's Consolidated Balance Sheets at December 31, 2023 . 

 Embedded Features 

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

 8 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 4. Common and Preferred Unit Distributions 

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

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

 Income available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income available to common unitholders and the general partner by $ 0.7 million and $ 2.9 million during the three months ended September 30, 2024 and 2023, respectively, and $ 4.2 million and $ 14.6 million during the nine months ended September 30, 2024 and 2023 , respectively, as a result of accumulated preferred unit distributions earned during the period. Income available to common unitholders and the general partner is also reduced by the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred units. As such, NRP reduced net income available to common unitholders and the general partner by $ 10.8 million and $ 24.5 million during the three and nine months ended September 30, 2024, and $ 17.1 million and $ 60.9 million during the three and nine months ended September 30, 2023 , respectively.

 The following table shows the cash distributions declared and paid to common and preferred unitholders during the nine months ended September 30, 2024 and 2023 , respectively:

 Common Units 
 
 Preferred Units 
 
 Month Paid 
 
 Period Covered by Distribution 
 
 Distribution per Unit 
 
 Total Distribution (1) (In thousands) 
 
 Distribution per Unit 
 
 Total Distribution (In thousands) 
 
 2024
 
 February
 
 October 1 - December 31, 2023 
 
 $ 
 0.75 
 
 $ 
 9,918 
 
 $ 
 30.00 
 
 $ 
 2,150 
 
 March (2) 
 
 Special Distribution 
 
 2.44 
 
 32,268 
 
 — 
 
 — 
 
 May
 
 January 1 - March 31, 2024 
 
 0.75 
 
 9,987 
 
 30.00 
 
 2,150 
 
 May (3) 
 
 April 1 - May 8, 2024 
 
 — 
 
 — 
 
 12.33 
 
 493 
 
 August
 
 April 1 - June 30, 2024 
 
 0.75 
 
 9,986 
 
 30.00 
 
 950 
 
 September (4) 
 
 July 1 - September 3, 2024 
 
 — 
 
 — 
 
 20.68 
 
 655 
 
 2023
 
 February
 
 October 1 - December 31, 2022 
 
 $ 
 0.75 
 
 $ 
 9,571 
 
 $ 
 30.00 
 
 $ 
 7,500 
 
 February (5) 
 
 January 1 - February 8, 2023 
 
 — 
 
 — 
 
 12.33 
 
 586 
 
 March (6) 
 
 Special Distribution 
 
 2.43 
 
 31,329 
 
 — 
 
 — 
 
 May
 
 January 1 - March 31, 2023 
 
 0.75 
 
 9,669 
 
 30.00 
 
 6,075 
 
 May (7) 
 
 April 1 - May 5, 2023 
 
 — 
 
 — 
 
 11.33 
 
 406 
 
 June (8) 
 
 April 1 - June 2, 2023 
 
 — 
 
 — 
 
 20.33 
 
 915 
 
 August
 
 April 1 - June 30, 2023 
 
 0.75 
 
 9,669 
 
 30.00 
 
 3,650 
 
 August (9) 
 
 July 1 - August 8, 2023 
 
 — 
 
 — 
 
 12.33 
 
 432 
 
 September (10) 
 
 July 1 - September 12, 2023 
 
 — 
 
 — 
 
 23.67 
 
 355 
 
 ( 1 ) 
 Totals include the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.
 
 ( 2 ) 
 Special distribution was made to help cover unitholder tax liabilities associated with owning NRP's common units during 2023. 
 
 ( 3 ) 
 Relates to accrued distribution paid upon the redemption of 40,000 preferred units in May 2024. 
 
 ( 4 ) 
 Related to accrued distribution paid upon the redemption of 31,666 preferred units in September 2024. 
 
 ( 5 ) 
 Relates to accrued distribution paid upon the redemption of 47,499 preferred units in February 2023. 
 
 ( 6 ) 
 Special distribution was made to help cover unitholder tax liabilities associated with owning NRP's common units during 2022. 
 
 ( 7 ) 
 Relates to accrued distribution paid upon the redemption of 35,834 preferred units in May 2023. 
 
 ( 8 ) 
 Relates to accrued distribution paid upon redemption of 45,000 preferred units in June 2023. 
 
 ( 9 ) 
 Related to accrued distribution paid upon redemption of 35,000 preferred units in August 2023. 
 
 ( 10 ) 
 Related to accrued distribution paid upon the redemption of 15,001 preferred units in September 2023. 
 
 9 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 5. Net Income Per Common Unit 

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

 The dilutive effect of the preferred units is calculated using the if-converted method. Under the if-converted method, the preferred units are assumed to be converted at the beginning of the period, and the resulting common units are included in the denominator of the diluted net income per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the preferred units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation. The calculation of diluted net income per common unit for the nine months ended September 30, 2024 and the three and nine months ended September 30, 2023 includes the assumed conversion of the remaining preferred units during the period. The calculation of diluted net income per common unit for the three months ended September 30, 2024 does not include the assumed conversion of any remaining preferred units as all preferred units were redeemed as of September 30, 2024. The calculation of diluted net income per common units for the three and nine months ended September 30, 2024 and 2023 does not include the assumed conversion of the preferred units that were redeemed during the periods as the inclusion of these units would be anti-dilutive.

 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 nine months ended September 30, 2024 includes the net settlement of the warrants for the period during which they were outstanding. The dilutive effect of the warrants was not factored into the calculation of diluted net income per common unit for the three months ended September 30, 2024 as these were fully settled as of June 30, 2024. The calculation of diluted net income per common unit for the three and nine months ended September 30, 2023 includes the net settlement of the warrants for the period during which they were outstanding.

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

 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 (In thousands, except per unit data) 
 
 2024 
 
 2023 
 
 2024 
 
 2023 
 
 Basic net income per common unit 
 
 Net income attributable to common unitholders
 
 $ 
 26,578 
 
 $ 
 42,951 
 
 $ 
 109,896 
 
 $ 
 135,199 
 
 Weighted average common units—basic
 
 13,049 
 
 12,635 
 
 12,971 
 
 12,613 
 
 Basic net income per common unit
 
 $ 
 2.04 
 
 $ 
 3.40 
 
 $ 
 8.47 
 
 $ 
 10.72 
 
 Diluted net income per common unit 
 
 Weighted average common units—basic
 
 13,049 
 
 12,635 
 
 12,971 
 
 12,613 
 
 Plus: dilutive effect of preferred units
 
 — 
 
 1,104 
 
 375 
 
 2,434 
 
 Plus: dilutive effect of warrants
 
 — 
 
 1,492 
 
 186 
 
 1,296 
 
 Plus: dilutive effect of unvested unit-based awards
 
 222 
 
 240 
 
 229 
 
 190 
 
 Weighted average common units—diluted
 
 13,271 
 
 15,471 
 
 13,761 
 
 16,533 
 
 Net income
 
 $ 
 38,595 
 
 $ 
 63,846 
 
 $ 
 140,872 
 
 $ 
 213,455 
 
 Less: income attributable to preferred unitholders
 
 ( 655 
 ) 
 
 ( 786 
 ) 
 
 ( 1,148 
 ) 
 
 ( 2,693 
 ) 
 
 Less: redemption of preferred units
 
 ( 10,819 
 ) 
 
 ( 17,083 
 ) 
 
 ( 24,485 
 ) 
 
 ( 60,929 
 ) 
 
 Diluted net income attributable to common unitholders and the general partner
 
 $ 
 27,121 
 
 $ 
 45,977 
 
 $ 
 115,239 
 
 $ 
 149,833 
 
 Less: diluted net income attributable to the general partner
 
 ( 543 
 ) 
 
 ( 920 
 ) 
 
 ( 2,305 
 ) 
 
 ( 2,997 
 ) 
 
 Diluted net income attributable to common unitholders
 
 $ 
 26,578 
 
 $ 
 45,057 
 
 $ 
 112,934 
 
 $ 
 146,836 
 
 Diluted net income per common unit
 
 $ 
 2.00 
 
 $ 
 2.91 
 
 $ 
 8.21 
 
 $ 
 8.88 
 
 10 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 6. Segment Information 

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

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

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

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

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

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

 Operating Segments 
 
 (In thousands) 
 
 Mineral Rights 
 
 Soda Ash 
 
 Corporate and Financing 
 
 Total 
 
 For the Three Months Ended September 30, 2024 
 
 Revenues
 
 $ 
 52,217 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 52,217 
 
 Equity in earnings of Sisecam Wyoming
 
 — 
 
 8,109 
 
 — 
 
 8,109 
 
 Gain on asset sales and disposals
 
 1 
 
 — 
 
 — 
 
 1 
 
 Operating and maintenance expenses
 
 6,762 
 
 24 
 
 — 
 
 6,786 
 
 Depreciation, depletion and amortization
 
 4,725 
 
 — 
 
 5 
 
 4,730 
 
 General and administrative expenses
 
 — 
 
 — 
 
 5,935 
 
 5,935 
 
 Asset impairments
 
 87 
 
 — 
 
 — 
 
 87 
 
 Interest expense, net
 
 — 
 
 — 
 
 4,194 
 
 4,194 
 
 Net income (loss)
 
 40,644 
 
 8,085 
 
 ( 10,134 
 ) 
 
 38,595 
 
 For the Three Months Ended September 30, 2023 
 
 Revenues
 
 $ 
 73,112 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 73,112 
 
 Equity in earnings of Sisecam Wyoming
 
 — 
 
 12,401 
 
 — 
 
 12,401 
 
 Gain on asset sales and disposals
 
 854 
 
 — 
 
 — 
 
 854 
 
 Operating and maintenance expenses
 
 8,305 
 
 53 
 
 — 
 
 8,358 
 
 Depreciation, depletion and amortization
 
 4,589 
 
 — 
 
 5 
 
 4,594 
 
 General and administrative expenses
 
 — 
 
 — 
 
 5,669 
 
 5,669 
 
 Asset impairments
 
 63 
 
 — 
 
 — 
 
 63 
 
 Interest expense, net
 
 — 
 
 — 
 
 3,837 
 
 3,837 
 
 Net income (loss)
 
 61,009 
 
 12,348 
 
 ( 9,511 
 ) 
 
 63,846 
 
 For the Nine Months Ended September 30, 2024 
 
 Revenues
 
 $ 
 180,268 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 180,268 
 
 Equity in earnings of Sisecam Wyoming
 
 — 
 
 17,204 
 
 — 
 
 17,204 
 
 Gain on asset sales and disposals
 
 4,809 
 
 — 
 
 — 
 
 4,809 
 
 Operating and maintenance expenses
 
 18,279 
 
 112 
 
 — 
 
 18,391 
 
 Depreciation, depletion and amortization
 
 12,694 
 
 — 
 
 14 
 
 12,708 
 
 General and administrative expenses
 
 — 
 
 — 
 
 18,193 
 
 18,193 
 
 Asset impairments
 
 87 
 
 — 
 
 — 
 
 87 
 
 Interest expense, net
 
 — 
 
 — 
 
 12,030 
 
 12,030 
 
 Net income (loss)
 
 154,017 
 
 17,092 
 
 ( 30,237 
 ) 
 
 140,872 
 
 For the Nine Months Ended September 30, 2023 
 
 Revenues
 
 $ 
 217,258 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 217,258 
 
 Equity in earnings of Sisecam Wyoming
 
 — 
 
 58,633 
 
 — 
 
 58,633 
 
 Gain on asset sales and disposals
 
 955 
 
 — 
 
 — 
 
 955 
 
 Operating and maintenance expenses
 
 23,226 
 
 225 
 
 — 
 
 23,451 
 
 Depreciation, depletion and amortization
 
 12,455 
 
 — 
 
 14 
 
 12,469 
 
 General and administrative expenses
 
 — 
 
 — 
 
 17,157 
 
 17,157 
 
 Asset impairments
 
 132 
 
 — 
 
 — 
 
 132 
 
 Interest expense, net
 
 — 
 
 — 
 
 10,182 
 
 10,182 
 
 Net income (loss)
 
 182,400 
 
 58,408 
 
 ( 27,353 
 ) 
 
 213,455 
 
 11 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 7. Equity Investment 

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

 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 (In thousands) 
 
 2024 
 
 2023 
 
 2024 
 
 2023 
 
 Balance at beginning of period
 
 $ 
 265,935 
 
 $ 
 290,900 
 
 $ 
 276,549 
 
 $ 
 306,470 
 
 Income allocation to NRP’s equity interests (1) 
 
 9,315 
 
 13,608 
 
 20,718 
 
 62,184 
 
 Amortization of basis difference
 
 ( 1,206 
 ) 
 
 ( 1,207 
 ) 
 
 ( 3,513 
 ) 
 
 ( 3,551 
 ) 
 
 Other comprehensive income (loss)
 
 82 
 
 2,200 
 
 2,166 
 
 ( 16,472 
 ) 
 
 Distributions
 
 ( 6,320 
 ) 
 
 ( 23,010 
 ) 
 
 ( 28,114 
 ) 
 
 ( 66,140 
 ) 
 
 Balance at end of period
 
 $ 
 267,806 
 
 $ 
 282,491 
 
 $ 
 267,806 
 
 $ 
 282,491 
 
 ( 1 ) 
 Amounts reclassified into income out of accumulated other comprehensive loss were $ 1.5 million and $ 0.9 million for the three months ended September 30, 2024 and 2023, respectively and $ 4.5 million and $( 17.4 ) million for the nine months ended September 30, 2024 and 2023, respectively. 
 
 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, 2024 and 2023 :

 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 (In thousands) 
 
 2024 
 
 2023 
 
 2024 
 
 2023 
 
 Net sales
 
 $ 
 160,975 
 
 $ 
 180,232 
 
 $ 
 438,385 
 
 $ 
 588,725 
 
 Gross profit
 
 25,976 
 
 34,454 
 
 64,584 
 
 148,063 
 
 Net income
 
 19,009 
 
 27,772 
 
 42,281 
 
 126,906 
 
 8. Mineral Rights, Net 

 The Partnership’s mineral rights consist of the following:

 September 30, 2024 
 
 December 31, 2023 
 
 (In thousands) 
 
 Carrying Value 
 
 Accumulated Depletion 
 
 Net Book Value 
 
 Carrying Value 
 
 Accumulated Depletion 
 
 Net Book Value 
 
 Coal properties
 
 $ 
 660,961 
 
 $ 
 ( 296,781 
 ) 
 
 $ 
 364,180 
 
 $ 
 661,256 
 
 $ 
 ( 285,470 
 ) 
 
 $ 
 375,786 
 
 Aggregates properties
 
 8,655 
 
 ( 4,003 
 ) 
 
 4,652 
 
 8,655 
 
 ( 3,761 
 ) 
 
 4,894 
 
 Oil and gas royalty properties
 
 12,354 
 
 ( 10,443 
 ) 
 
 1,911 
 
 12,354 
 
 ( 10,082 
 ) 
 
 2,272 
 
 Other
 
 13,143 
 
 ( 1,612 
 ) 
 
 11,531 
 
 13,143 
 
 ( 1,612 
 ) 
 
 11,531 
 
 Total mineral rights, net
 
 $ 
 695,113 
 
 $ 
 ( 312,839 
 ) 
 
 $ 
 382,274 
 
 $ 
 695,408 
 
 $ 
 ( 300,925 
 ) 
 
 $ 
 394,483 
 
 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 $ 4.7 million and $ 4.1 million for the three months ended September 30, 2024 and 2023 , respectively and $ 12.1 million and $ 11.6 million for the nine months ended September 30, 2024 and 2023, respectively.

 During the nine months ended September 30, 2024, the Partnership recorded a gain $ 4.8 million, included in gain on asset sales and disposals on the Consolidated Statements of Comprehensive Income primarily related to a coal property condemnation in the second quarter of 2024. During the three and nine months ended September 30, 2023, the Partnership had $ 0.9 million and $ 1.0 million, respectively, included in gains on asset sales and disposals on the Consolidated Statements of Comprehensive Income.

 The Partnership has developed procedures to evaluate its long-lived assets for possible impairment periodically or whenever events or changes in circumstances indicate an asset's net book value may not be recoverable. Potential events or circumstances include, but are not limited to, specific events such as a reduction in economically recoverable reserves or production ceasing on a property for an extended period. This analysis is based on historic, current and future performance and considers both quantitative and qualitative information. As a result of the Partnership's analyses, NRP recorded immaterial impairment expense during the three and nine months ended September 30, 2024 and 2023. 

 12 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 9. Debt, Net 

 The Partnership's debt consists of the following:

 September 30, 
 December 31, 
 
 (In thousands) 
 2024 
 2023 
 
 Opco Credit Facility
 $ 154,684 $ 95,834 

 Opco Senior Notes
 
 5.82 % with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024
 $ — $ 12,685 

 8.92 % with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024
 — 4,012 

 5.03 % with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026
 34,262 34,262 

 5.18 % with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026
 8,732 8,732 

 Total Opco Senior Notes
 $ 42,994 $ 59,691 

 Total debt at face value
 $ 197,678 $ 155,525 

 Net unamortized debt issuance costs
 ( 315 ) ( 467 ) 

 Total debt, net
 $ 197,363 $ 155,058 

 Less: current portion of long-term debt
 ( 14,226 ) ( 30,785 ) 

 Total long-term debt, net
 $ 183,137 $ 124,273 

 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, 2024 and December 31, 2023 , Opco was in compliance with the terms of the financial covenants contained in its debt agreements.

 Opco Credit Facility 

 In May 2023, the Partnership entered into the Sixth Amendment (the "Sixth Amendment) to the Opco Credit Facility (the "Opco Credit Facility"). The Sixth Amendment maintained the term of the Opco Credit Facility until August 2027. Lender commitments under the Opco Credit Facility increased from $ 130.0 million to $ 155.0 million, with the ability to expand such commitments to $ 200.0 million with the addition of future commitments. In February 2024, the Partnership exercised its option under the Opco Credit Facility to increase the total aggregate commitment under the Opco Credit Facility twice, initially by $ 30.0 million from $ 155.0 million to $ 185.0 million and subsequently by $ 15.0 million from $ 185.0 million to $ 200.0 million. These increases in the total aggregate commitment were made pursuant to an accordion feature of the Opco Credit Facility. In connection with the initial increase, a new lender joined the lending group with a commitment of $ 30.0 million. The Sixth Amendment also included modifications to Opco’s ability to declare and make certain restricted payments. The Opco Credit Facility contains financial covenants requiring Opco to maintain:

 •
 
 A leverage ratio of consolidated indebtedness to EBITDDA (in each case as defined in the Opco Credit Facility) not to exceed 3.0x As of September 30, 2024, this ratio was 0.8x; and
 
 •
 
 an interest coverage ratio of consolidated EBITDDA to the sum of consolidated interest expense and consolidated lease expense (in each case as defined in the Opco Credit Facility) of not less than 3.5 to 1.0. As of September 30, 2024, this ratio was 14.2x. 
 
 As of December 31, 2023, the Partnership had $ 95.8 million in borrowings outstanding under the Opco Credit Facility and $ 59.2 million of available borrowing capacity. During the nine months ended September 30, 2024 , the Partnership borrowed $ 152.9 million and repaid $ 94.0 million, resulting in $ 154.7 million in borrowings outstanding under the Opco Credit Facility and $ 45.3 million of available borrowing capacity as of September 30, 2024 . During the nine months ended September 30, 2023 , the Partnership borrowed $ 215.0 million and repaid $ 157.0 million on the Opco Credit Facility. The weighted average interest rate for the borrowings outstanding under the Opco Credit Facility for the three and nine months ended September 30, 2024 was 8.91 % and 8.92 %, respectively. The weighted average interest rate for the borrowings outstanding under the Opco Credit Facility for the three and nine months ended September 30, 2023 was 8.85 % and 8.61 %, respectively. 

 The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of $ 305.3 million and $ 316.3 million classified as mineral rights, net and other long-term assets, net and $ 24.2 million and $ 26.3 million classified as long-term contract receivable, net on the Partnership’s Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 , respectively.

 Opco Senior Notes 

 Opco issued several series of private placement senior notes (the "Opco Senior Notes") with various interest rates and principal due dates. As of September 30, 2024, only the 5.03% and 5.18% Opco Senior Notes, both due December 2026, remain outstanding. These Opco Senior Notes have principal due annually in December and interest due semi-annually in June and December. As of September 30, 2024 and December 31, 2023 , the Opco Senior Notes had cumulative principal balances of $ 43.0 million and $ 59.7 million, respectively. Opco made mandatory principal payments of $ 16.7 and $ 19.1 million during the nine months ended September 30, 2024 and 2023, respectively. 

 13 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 10. Fair Value Measurements 

 Fair Value of Financial Assets and Liabilities 

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

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

 September 30, 2024 
 December 31, 2023 
 
 Fair Value 
 Carrying 
 Estimated 
 Carrying 
 Estimated 
 
 (In thousands) 
 Hierarchy Level 
 Value 
 Fair Value 
 Value 
 Fair Value 
 
 Debt:
 
 Opco Senior Notes (1) 
 3 $ 42,679 $ 40,992 $ 59,224 $ 56,533 

 Opco Credit Facility (2) 
 3 154,684 154,684 95,834 95,384 

 Assets:
 
 Contract receivable, net (current and long-term) (3) 
 3 $ 26,997 $ 23,223 $ 28,946 $ 24,492 

 ( 1 ) The fair value of the Opco Senior Notes was estimated by management utilizing the present value replacement method incorporating the interest rate of the Opco Credit Facility. 

 ( 2 ) The fair value of the Opco Credit Facility approximates the outstanding borrowing amount because the interest rates are variable and reflective of market rates and the terms of the credit facility allow the Partnership to repay the debt at any time without penalty. 

 ( 3 ) The fair value of the Partnership's contract receivable is determined based on the present value of future cash flow projections related to the underlying asset at a discount rate of 15 % at September 30, 2024 and December 31, 2023 . 

 NRP had embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that were 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 were based on numerous factors including the likelihood of the event occurring. The embedded derivatives were 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 December 31, 2023 . As a result of the redemption of all of the Partnership's remaining preferred units in September 2024, NRP no longer has embedded derivatives associated with preferred units as of September 30, 2024. 

 11. Related Party Transactions 

 Affiliates of our General Partner 

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

 Related party general and administrative expenses included on the Partnership's Consolidated Statement of Comprehensive Income are as follows:

 For the Three Months Ended September 30, 
 For the Nine Months Ended September 30, 
 
 (In thousands) 
 2024 
 2023 
 2024 
 2023 
 
 Operating and maintenance expenses
 $ 2,014 $ 1,663 $ 5,483 $ 5,094 

 General and administrative expenses
 1,296 1,287 4,117 3,860 

 The Partnership had accounts payable to related parties of $ 0.6 million on its Consolidated Balance Sheets at both September 30, 2024 and December 31, 2023 . The Partnership had other current assets of $ 0.1 million on its Consolidated Balance Sheets related to a related party prepaid expense at both September 30, 2024 and December 31, 2023. 

 As a result of its office lease with WPPLP, the Partnership has a right-of-use asset and lease liability of $ 3.4 million and $ 3.5 million included in other long-term assets , net and other non-current liabilities , respectively on its Consolidated Balance Sheets at September 30, 2024 and December 31, 2023 , respectively.

 During the three months ended September 30, 2024 and 2023 , the Partnership reco gnized $ 0.01 million and $ 1.1 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 $ 0.05 million and $ 5.1 million during the nine months ended September 30, 2024 and 2023, respectively. At September 30, 2024 and December 31, 2023 the Partnership had $ 0.5 million and $ 0.0 million, respectively, of other long-term assets, net on its Consolidated Balance Sheets related to a prepaid royalty for this agreement.

 14 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 12. Major Customers 

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

 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 2024 
 
 2023 
 
 2024 
 
 2023 
 
 (In thousands) 
 
 Revenues 
 
 Percent 
 
 Revenues 
 
 Percent 
 
 Revenues 
 
 Percent 
 
 Revenues 
 
 Percent 
 
 Alpha Metallurgical Resources, Inc. (1) 
 
 $ 
 14,556 
 
 28 
 % 
 
 $ 
 17,219 
 
 20 
 % 
 
 $ 
 53,345 
 
 30 
 % 
 
 $ 
 61,122 
 
 22 
 % 
 
 Foresight Energy Resources LLC ("Foresight") (1) 
 
 $ 
 7,421 
 
 14 
 % 
 
 $ 
 18,600 
 
 22 
 % 
 
 $ 
 30,003 
 
 17 
 % 
 
 $ 
 43,453 
 
 16 
 % 
 
 Alabama Kanu Holdings, LLC (1) (2) 
 
 $ 
 7,143 
 
 14 
 % 
 
 $ 
 8,892 
 
 10 
 % 
 
 $ 
 21,344 
 
 12 
 % 
 
 $ 
 24,962 
 
 9 
 % 
 
 ( 1 ) 
 
 Revenues from Alpha Metallurgical Resources, Inc., Foresight and Alabama Kanu Holdings, LLC are included within the Partnership's Mineral Rights segment.
 
 ( 2 ) 
 Alabama Kanu Holdings, LLC purchased Hatfield Metallurgical Holdings, LLC in August 2024. 
 
 13. Commitments and Contingencies 

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

 14. Unit-Based Compensation 

 During the nine months ended September 30, 2024 and 2023 , the Partnership granted service, performance and market-based awards under its 2017 Long-Term Incentive Plan. The Partnership's service and performance-based awards are valued using the closing price of NRP's common units as of the grant date while the Partnership's market-based awards are valued using a Monte Carlo simulation. The grant date fair value of the awards granted during nine months ended September 30, 2024 and 2023 was $ 6.7 million and $ 16.0 million, respectively, which included a grant date fair value of $ 2.5 and $ 2.8 million for the market-based awards valued using a Monte Carlo simulation during the nine months ended September 30, 2024 and 2023 , respectively. Total unit-based compensation expense associated with these awards was $ 3.0 million and $ 2.7 million for the three months ended September 30, 2024 and 2023 , respectively, and $ 8.9 million and $ 7.9 million for the nine months ended September 30, 2024 and 2023, respectfully, 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, 2024 was $ 12.4 million, which will be recognized over a weighted average period of 1.6 years. The unamortized cost associated with unvested outstanding awards as of December 31, 2023 was $ 13.3 million.

 A summary of the unit activity in the outstanding grants during 2024 is as follows:

 (In thousands) 
 
 Common Units 
 
 Weighted Average Grant Date Fair Value per Common Unit 
 
 Outstanding at January 1, 2024
 
 483 
 
 $ 
 46.21 
 
 Granted
 
 65 
 
 $ 
 103.50 
 
 Fully vested and issued
 
 ( 197 
 ) 
 
 $ 
 38.76 
 
 Forfeitures
 
 ( 1 
 ) 
 
 $ 
 90.70 
 
 Outstanding at September 30, 2024
 
 350 
 
 $ 
 60.81 
 
 15 
 
 Table of Contents 
 
 NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
 
 (Unaudited)
 
 15. Financing Transaction 

 The Partnership owns rail loadout and associated infrastructure at the Sugar Camp mine in the Illinois Basin operated by a subsidiary of Foresight. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight and is accounted for as a financing transaction (the "Sugar Camp lease"). The Sugar Camp lease expires in 2032 with renewal options for up to 80 additional years. Minimum payments are $5.0 million per year through the end of the current lease term. The Partnership is also entitled to variable payments in the form of throughput fees 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 ten thousand dollars per year for the remainder of the renewed term.

 16. Credit Losses 

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

 As of September 30, 2024 and December 31, 2023 , NRP had the following current expected credit loss (“CECL”) allowance related to its receivables and long-term contract receivable:

 September 30, 2024 
 
 December 31, 2023 
 
 (In thousands) 
 
 Gross 
 
 CECL Allowance 
 
 Net 
 
 Gross 
 
 CECL Allowance 
 
 Net 
 
 Receivables
 
 $ 
 44,356 
 
 $ 
 ( 5,583 
 ) 
 
 $ 
 38,773 
 
 $ 
 47,170 
 
 $ 
 ( 5,655 
 ) 
 
 $ 
 41,515 
 
 Long-term contract receivable
 
 25,081 
 
 ( 869 
 ) 
 
 24,212 
 
 27,265 
 
 ( 944 
 ) 
 
 26,321 
 
 Total
 
 $ 
 69,437 
 
 $ 
 ( 6,452 
 ) 
 
 $ 
 62,985 
 
 $ 
 74,435 
 
 $ 
 ( 6,599 
 ) 
 
 $ 
 67,836 
 
 NRP recorded $ 0.7 million and $ 1.6 million of 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 30, 2024 and 2023 , respectively, and a reversal of $ 0.1 million and $ 0.8 million of operating and maintenance expenses during the nine months ended September 30, 2024 and 2023, respectively. The Partnership charged an additional $ 0.4 million and $ 0.7 million in bad debt expense towards the allowance for doubtful accounts during the three and nine months ended September 30, 2024, respectively. 

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

 17. Subsequent Events 

 The following represents material events that have occurred subsequent to September 30, 2024 through the time of the Partnership’s filing of its Quarterly Report on Form 10 -Q with the SEC:

 Opco Credit Facility Amendment 

 In October 2024, NRP entered into the Seventh Amendment to the Opco Credit Facility which extended the maturity from August 2027 to October 2029. The Seventh Amendment also removed reference to the preferred units and warrants, which are no longer outstanding, and includes modifications to Opco's ability to declare and make certain restricted payments.

 Common Unit and Preferred Unit Distributions 

 In November 2024, the Board of Directors declared a distribution of $ 0.75 per common unit with respect to the third quarter of 2024 . 

 16 
 
 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, 2024 and 2023 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, 2023.

 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.

 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: future distributions on our common and preferred units; our business strategy; our liquidity and access to capital and financing sources; our financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by our lessees; Sisecam Wyoming LLC’s ("Sisecam Wyoming's") trona mining and soda ash refinery operations; distributions from our soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us, and of scheduled or potential regulatory or legal changes; and global and U.S. economic conditions.

 These forward-looking statements speak only as of the date hereof and are made based upon our current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. You should not put undue reliance on any forward-looking statements. See " Item 1A. Risk Factors " included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023 for important factors that could cause our actual results of operations or our actual financial condition to differ.

 NON-GAAP FINANCIAL MEASURES 

 Adjusted EBITDA 

 Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. For a description of Opco's debt agreements, see Note 9. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note 11. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, 2023. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

 Distributable Cash Flow 

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

 Free Cash Flow 

 Free cash flow ("FCF") represents net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. FCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. FCF may not be calculated the same for us as for other companies. FCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

 Leverage Ratio 

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

 17
 
 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, 2024 are as follows:

 Operating Segments 
 
 (In thousands) 
 
 Mineral Rights 
 
 Soda Ash 
 
 Corporate and Financing 
 
 Total 
 
 Revenues and other income
 
 $ 
 185,077 
 
 $ 
 17,204 
 
 $ 
 — 
 
 $ 
 202,281 
 
 Net income (loss)
 
 $ 
 154,017 
 
 $ 
 17,092 
 
 $ 
 (30,237 
 ) 
 
 $ 
 140,872 
 
 Adjusted EBITDA (1) 
 
 $ 
 166,798 
 
 $ 
 28,002 
 
 $ 
 (18,193 
 ) 
 
 $ 
 176,607 
 
 Cash flow provided by (used in) continuing operations
 
 Operating activities
 
 $ 
 179,593 
 
 $ 
 28,002 
 
 $ 
 (25,322 
 ) 
 
 $ 
 182,273 
 
 Investing activities
 
 $ 
 6,788 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 6,788 
 
 Financing activities
 
 $ 
 (1,086 
 ) 
 
 $ 
 — 
 
 $ 
 (169,064 
 ) 
 
 $ 
 (170,150 
 ) 
 
 Distributable cash flow (1) 
 
 $ 
 186,381 
 
 $ 
 28,002 
 
 $ 
 (25,322 
 ) 
 
 $ 
 189,061 
 
 Free cash flow (1) 
 
 $ 
 181,572 
 
 $ 
 28,002 
 
 $ 
 (25,322 
 ) 
 
 $ 
 184,252 
 
 (1) 
 
 See "Results of Operations" below for reconciliations to the most comparable GAAP financial measures.
 
 18
 
 Table of Contents 
 
 Current Results/Market Commentary 

 Financial Results and Quarterly Distributions 

 We generated $182.3 million of operating cash flow and $184.3 million of free cash flow during the nine months ended September 30, 2024, and ended the quarter with $76.2 million of liquidity consisting of $30.9 million of cash and cash equivalents and $45.3 million of available borrowing capacity under our Opco Credit Facility. As of September 30, 2024 our leverage ratio was 0.8 x.

 In the first quarter of 2024, holders of our warrants to purchase common units (the "warrants") exercised a total of 1,219,665 warrants with a strike price of $34.00. We settled these warrants on a net basis with a total of $55.7 million in cash and 198,767 common units. In the second quarter of 2024, holders of our warrants exercised the remaining 320,335 warrants with a strike price of $34.00. We settled these warrants on a net basis with $10.0 million in cash and 89,059 common units. Following these transactions, of the originally issued 4.0 million warrants, after giving effect to these settlements and all prior settlements, no warrants remain outstanding.

 In May 2024, we executed a negotiated transaction with holders of our Class A Preferred Units ("preferred units") pursuant to which we repurchased an aggregate of 40,000 preferred units for $40.0 million in cash. In September 2024, we redeemed the remaining 31,666 preferred units for $31.7 million in cash. Of the originally issued 250,000 preferred units, after giving effect to these redemptions and all prior redemptions, no preferred units remain outstanding.

 In 2024, we exercised our option under the Opco Credit Facility to increase the total aggregate commitment under the Opco Credit Facility twice, initially by $30.0 million from $155.0 million to $185.0 million and subsequently by $15.0 million from $185.0 million to $200.0 million. These increases in the total aggregate commitment were made pursuant to an accordion feature of the Opco Credit Facility. In October 2024, we entered into the Seventh Amendment to the Opco Credit Facility which extended the maturity from August 2027 to October 2029. The Seventh Amendment also removed reference to the preferred units and warrants, which are no longer outstanding, and includes modifications to Opco's ability to declare and make certain restricted payments.

 In February 2024, we paid a cash distribution of $0.75 per common unit of NRP with respect to the fourth quarter of 2023 as well as a $2.15 million cash distribution on the preferred units with respect to the fourth quarter of 2023. We paid a special cash distribution of $2.44 per common unit of NRP in March 2024 to help cover unitholder tax liabilities associated with owning NRP's common units in 2023. In May 2024, we paid a cash distribution of $0.75 per common unit of NRP with respect to the first quarter of 2024 as well as a $2.15 million cash distribution on the preferred units with respect to the first quarter of 2024. In August 2024, we paid a cash distribution of $0.75 per common unit of NRP with respect to the second quarter of 2024 as well as a $0.95 million cash distribution on the preferred units with respect to the second quarter of 2024. Future distributions on our common 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 of Directors determines is necessary for future operating and capital needs. 

 Mineral Rights Business Segment 

 Revenues and other income during the nine months ended September 30, 2024 decreased $33.1 million, or 15% , as compared to the prior year period. Cash provided by operating activities and free cash flow during the nine months ended September 30, 2024 decreased by $10.2 million and $10.1 million, respectively, as compared to the prior year period. These decreases were primarily due to lower metallurgical coal sales prices as well as lower thermal coal sales prices and volumes as compared to the prior year period. 

 Metallurgical coal prices continued to decline during the third quarter of 2024 primarily driven by muted steel demand resulting from sluggish construction activity in China as well as weak manufacturing demand globally. We expect pricing to remain relatively soft for both metallurgical and thermal coal as muted global steel demand impacts metallurgical coal, and mild weather, low natural gas prices, and high inventory levels impact thermal coal. However, continued price support above historical norms is expected due to limited access to capital for operators, qualified labor shortages, and input cost inflation.

 We continue to explore carbon neutral revenue opportunities across our ownership footprint. While the timing and likelihood of additional cash flows from these activities is uncertain, we believe our large ownership throughout the United States provides additional opportunities to create value in this regard with minimal capital investment by us. Our carbon neutral revenue opportunities include the sequestration of carbon dioxide underground and in standing forests, lithium production, and the generation of electricity using geothermal, solar, and wind energy. 

 Soda Ash Business Segment 

 Revenues and other income during the nine months ended September 30, 2024 decreased $41.4 million, or 71%, as compared to the prior year period primarily due to significantly lower sales prices driven by increased global production capacity, primarily from China, and weaker demand for flat glass due to a slowdown in global construction activity and weakness in demand for automobiles. Cash provided by operating activities and free cash flow during the nine months ended September 30, 2024 decreased $37.9 million as compared to the prior year period as the decline in revenues and other income resulted in lower cash distributions received from Sisecam Wyoming in the nine months ended September 30, 2024.

 We believe it will take several years for the world to absorb the additional soda ash supply recently introduced into the market and allow prices to rise back to historically normal equilibrium levels. The timing of this absorption will be highly dependent on China, which currently produces and consumes approximately 50% of global soda ash.

 19
 
 Table of Contents 
 
 Results of Operations 

 Third Quarter of 2024 and 2023 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) 
 
 2024 
 
 2023 
 
 Decrease 
 
 Change 
 
 Mineral Rights
 
 $ 
 52,218 
 
 $ 
 73,966 
 
 $ 
 (21,748 
 ) 
 
 (29 
 )% 
 
 Soda Ash
 
 8,109 
 
 12,401 
 
 (4,292 
 ) 
 
 (35 
 )% 
 
 Total
 
 $ 
 60,327 
 
 $ 
 86,367 
 
 $ 
 (26,040 
 ) 
 
 (30 
 )% 
 
 The changes in revenues and other income are discussed for each of the operating segments below:

 20
 
 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) 
 
 2024 
 
 2023 
 
 (Decrease) 
 
 Change 
 
 Coal sales volumes (tons)
 
 Appalachia
 
 Northern
 
 470 
 
 284 
 
 186 
 
 65 
 % 
 
 Central
 
 3,507 
 
 3,429 
 
 78 
 
 2 
 % 
 
 Southern
 
 705 
 
 741 
 
 (36 
 ) 
 
 (5 
 )% 
 
 Total Appalachia
 
 4,682 
 
 4,454 
 
 228 
 
 5 
 % 
 
 Illinois Basin
 
 1,128 
 
 2,541 
 
 (1,413 
 ) 
 
 (56 
 )% 
 
 Northern Powder River Basin
 
 944 
 
 1,364 
 
 (420 
 ) 
 
 (31 
 )% 
 
 Gulf Coast
 
 436 
 
 479 
 
 (43 
 ) 
 
 (9 
 )% 
 
 Total coal sales volumes
 
 7,190 
 
 8,838 
 
 (1,648 
 ) 
 
 (19 
 )% 
 
 Coal royalty revenue per ton
 
 Appalachia
 
 Northern
 
 $ 
 2.34 
 
 $ 
 5.54 
 
 $ 
 (3.20 
 ) 
 
 (58 
 )% 
 
 Central
 
 6.55 
 
 8.20 
 
 (1.65 
 ) 
 
 (20 
 )% 
 
 Southern
 
 9.56 
 
 11.88 
 
 (2.32 
 ) 
 
 (20 
 )% 
 
 Illinois Basin
 
 1.76 
 
 3.98 
 
 (2.22 
 ) 
 
 (56 
 )% 
 
 Northern Powder River Basin
 
 4.82 
 
 4.86 
 
 (0.04 
 ) 
 
 (1 
 )% 
 
 Gulf Coast
 
 0.84 
 
 0.69 
 
 0.15 
 
 22 
 % 
 
 Combined average coal royalty revenue per ton
 
 5.24 
 
 6.29 
 
 (1.05 
 ) 
 
 (17 
 )% 
 
 Coal royalty revenues
 
 Appalachia
 
 Northern
 
 $ 
 1,100 
 
 $ 
 1,573 
 
 $ 
 (473 
 ) 
 
 (30 
 )% 
 
 Central
 
 22,958 
 
 28,111 
 
 (5,153 
 ) 
 
 (18 
 )% 
 
 Southern
 
 6,743 
 
 8,806 
 
 (2,063 
 ) 
 
 (23 
 )% 
 
 Total Appalachia
 
 30,801 
 
 38,490 
 
 (7,689 
 ) 
 
 (20 
 )% 
 
 Illinois Basin
 
 1,987 
 
 10,108 
 
 (8,121 
 ) 
 
 (80 
 )% 
 
 Northern Powder River Basin
 
 4,546 
 
 6,627 
 
 (2,081 
 ) 
 
 (31 
 )% 
 
 Gulf Coast
 
 366 
 
 330 
 
 36 
 
 11 
 % 
 
 Unadjusted coal royalty revenues
 
 37,700 
 
 55,555 
 
 (17,855 
 ) 
 
 (32 
 )% 
 
 Coal royalty adjustment for minimum leases
 
 (95 
 ) 
 
 (11 
 ) 
 
 (84 
 ) 
 
 (764 
 )% 
 
 Total coal royalty revenues
 
 $ 
 37,605 
 
 $ 
 55,544 
 
 $ 
 (17,939 
 ) 
 
 (32 
 )% 
 
 Other revenues
 
 Production lease minimum revenues
 
 $ 
 437 
 
 $ 
 850 
 
 $ 
 (413 
 ) 
 
 (49 
 )% 
 
 Minimum lease straight-line revenues
 
 4,117 
 
 4,464 
 
 (347 
 ) 
 
 (8 
 )% 
 
 Carbon neutral initiative revenues
 
 (39 
 ) 
 
 681 
 
 (720 
 ) 
 
 (106 
 )% 
 
 Wheelage revenues
 
 2,072 
 
 2,385 
 
 (313 
 ) 
 
 (13 
 )% 
 
 Property tax revenues
 
 1,809 
 
 1,770 
 
 39 
 
 2 
 % 
 
 Coal overriding royalty revenues
 
 227 
 
 827 
 
 (600 
 ) 
 
 (73 
 )% 
 
 Lease amendment revenues
 
 1,071 
 
 623 
 
 448 
 
 72 
 % 
 
 Aggregates royalty revenues
 
 662 
 
 736 
 
 (74 
 ) 
 
 (10 
 )% 
 
 Oil and gas royalty revenues
 
 1,317 
 
 324 
 
 993 
 
 306 
 % 
 
 Other revenues
 
 1,127 
 
 329 
 
 798 
 
 243 
 % 
 
 Total other revenues
 
 $ 
 12,800 
 
 $ 
 12,989 
 
 $ 
 (189 
 ) 
 
 (1 
 )% 
 
 Royalty and other mineral rights
 
 $ 
 50,405 
 
 $ 
 68,533 
 
 $ 
 (18,128 
 ) 
 
 (26 
 )% 
 
 Transportation and processing services revenues
 
 1,812 
 
 4,579 
 
 (2,767 
 ) 
 
 (60 
 )% 
 
 Gain on asset sales and disposals
 
 1 
 
 854 
 
 (853 
 ) 
 
 (100 
 )% 
 
 Total Mineral Rights segment revenues and other income
 
 $ 
 52,218 
 
 $ 
 73,966 
 
 $ 
 (21,748 
 ) 
 
 (29 
 )% 
 
 21
 
 Table of Contents 
 
 Coal Royalty Revenues 

 Approximately 75% of coal royalty revenues and approximately 55% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, 2024. Total coal royalty revenues decreased $17.9 million as compared to the prior year quarter primarily due to lower metallurgical coal sales prices as well as lower thermal coal sales prices and volumes during the three months ended September 30, 2024, as compared to the prior year quarter.

 Transportation and Processing Services Revenues 

 Transportation and processing services revenues decreased $2.8 million primarily due to a temporary relocation of certain production off of NRP's coal reserves. The fee per ton associated with the transportation and processing of the non-NRP coal is less than the fee per ton associated with the transportation and processing of NRP coal. 

 Soda Ash 

 Revenues and other income related to our Soda Ash segment decreased $4.3 million as compared to the prior year quarter primarily due to significantly lower sales prices driven by increased global production capacity, primarily from China, and weaker demand for flat glass due to a slowdown in global construction activity and weakness in demand for automobiles.

 Operating Expenses 

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

 For the Three Months Ended September 30, 
 
 Increase 
 
 Percentage 
 
 (In thousands) 
 
 2024 
 
 2023 
 
 (Decrease) 
 
 Change 
 
 Operating expenses
 
 Operating and maintenance expenses
 
 $ 
 6,786 
 
 $ 
 8,358 
 
 $ 
 (1,572 
 ) 
 
 (19 
 )% 
 
 Depreciation, depletion and amortization
 
 4,730 
 
 4,594 
 
 136 
 
 3 
 % 
 
 General and administrative expenses
 
 5,935 
 
 5,669 
 
 266 
 
 5 
 % 
 
 Asset impairments
 
 87 
 
 63 
 
 24 
 
 38 
 % 
 
 Total operating expenses
 
 $ 
 17,538 
 
 $ 
 18,684 
 
 $ 
 (1,146 
 ) 
 
 (6 
 )% 
 
 Total operating expenses decreased $1.1 million as compared to the prior year quarter primarily due to a decrease in operating and maintenance expenses during the three months ended September 30, 2024 as compared to the prior year quarter. The decrease in operating and maintenance expenses was primarily due to lower overriding royalty expense from an agreement with Western Pocahontas Properties Limited Partnership ("WPPLP") in the third quarter of 2024 as compared to the third quarter of 2023. This overriding royalty expense is fully offset by coal royalty revenue we receive from this property.

 Interest Expense, Net 

 Interest expense, net increased $0.4 million primarily due to higher borrowings outstanding on the Opco Credit Facility during the three months ended September 30, 2024 as compared to the prior year period.

 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, 2024
 
 Net income (loss)
 
 $ 
 40,644 
 
 $ 
 8,085 
 
 $ 
 (10,134 
 ) 
 
 $ 
 38,595 
 
 Less: equity earnings from unconsolidated investment
 
 — 
 
 (8,109 
 ) 
 
 — 
 
 (8,109 
 ) 
 
 Add: total distributions from unconsolidated investment
 
 — 
 
 6,320 
 
 — 
 
 6,320 
 
 Add: interest expense, net
 
 — 
 
 — 
 
 4,194 
 
 4,194 
 
 Add: depreciation, depletion and amortization
 
 4,725 
 
 — 
 
 5 
 
 4,730 
 
 Add: asset impairments
 
 87 
 
 — 
 
 — 
 
 87 
 
 Adjusted EBITDA
 
 $ 
 45,456 
 
 $ 
 6,296 
 
 $ 
 (5,935 
 ) 
 
 $ 
 45,817 
 
 September 30, 2023
 
 Net income (loss)
 
 $ 
 61,009 
 
 $ 
 12,348 
 
 $ 
 (9,511 
 ) 
 
 $ 
 63,846 
 
 Less: equity earnings from unconsolidated investment
 
 — 
 
 (12,401 
 ) 
 
 — 
 
 (12,401 
 ) 
 
 Add: total distributions from unconsolidated investment
 
 — 
 
 23,010 
 
 — 
 
 23,010 
 
 Add: interest expense, net
 
 — 
 
 — 
 
 3,837 
 
 3,837 
 
 Add: depreciation, depletion and amortization
 
 4,589 
 
 — 
 
 5 
 
 4,594 
 
 Add: asset impairments
 
 63 
 
 — 
 
 — 
 
 63 
 
 Adjusted EBITDA
 
 $ 
 65,661 
 
 $ 
 22,957 
 
 $ 
 (5,669 
 ) 
 
 $ 
 82,949 
 
 Net income decreased $25.3 million as compared to the prior year quarter primarily due to the decrease in revenues and other income as discussed above. Adjusted EBITDA decreased $37.1 million as compared to the prior year quarter primarily due to a $20.2 million decrease in Adjusted EBITDA within our Mineral Rights segment driven by the lower revenues and other income as discussed above in addition to a $16.7 million decrease in Adjusted EBITDA within our Soda Ash segment driven by a lower distribution received from Sisecam Wyoming in the third quarter of 2024.

 22
 
 Table of Contents 
 
 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, 2024
 
 Cash flow provided by (used in)
 
 Operating activities
 
 $ 
 53,610 
 
 $ 
 6,297 
 
 $ 
 (5,762 
 ) 
 
 $ 
 54,145 
 
 Investing activities
 
 674 
 
 — 
 
 — 
 
 674 
 
 Financing activities
 
 — 
 
 — 
 
 (56,259 
 ) 
 
 (56,259 
 ) 
 
 September 30, 2023
 
 Cash flow provided by (used in)
 
 Operating activities
 
 $ 
 60,938 
 
 $ 
 22,958 
 
 $ 
 (4,954 
 ) 
 
 $ 
 78,942 
 
 Investing activities
 
 1,477 
 
 — 
 
 — 
 
 1,477 
 
 Financing activities
 
 — 
 
 — 
 
 (72,738 
 ) 
 
 (72,738 
 ) 
 
 The following table reconciles net cash provided by (used in) operating activities (the most comparable GAAP financial measure) by business segment to DCF and FCF:

 Operating Segments 
 
 For the Three Months Ended (In thousands) 
 
 Mineral Rights 
 
 Soda Ash 
 
 Corporate and Financing 
 
 Total 
 
 September 30, 2024
 
 Net cash provided by (used in) operating activities
 
 $ 
 53,610 
 
 $ 
 6,297 
 
 $ 
 (5,762 
 ) 
 
 $ 
 54,145 
 
 Add: proceeds from asset sales and disposals
 
 1 
 
 — 
 
 — 
 
 1 
 
 Add: return of long-term contract receivable
 
 673 
 
 — 
 
 — 
 
 673 
 
 Distributable cash flow
 
 $ 
 54,284 
 
 $ 
 6,297 
 
 $ 
 (5,762 
 ) 
 
 $ 
 54,819 
 
 Less: proceeds from asset sales and disposals
 
 (1 
 ) 
 
 — 
 
 — 
 
 (1 
 ) 
 
 Free cash flow
 
 $ 
 54,283 
 
 $ 
 6,297 
 
 $ 
 (5,762 
 ) 
 
 $ 
 54,818 
 
 September 30, 2023
 
 Net cash provided by (used in) operating activities
 
 $ 
 60,938 
 
 $ 
 22,958 
 
 $ 
 (4,954 
 ) 
 
 $ 
 78,942 
 
 Add: proceeds from asset sales and disposals
 
 855 
 
 — 
 
 — 
 
 855 
 
 Add: return of long-term contract receivable
 
 622 
 
 — 
 
 — 
 
 622 
 
 Less: maintenance capital expenditures
 
 — 
 
 — 
 
 — 
 
 — 
 
 Distributable cash flow
 
 $ 
 62,415 
 
 $ 
 22,958 
 
 $ 
 (4,954 
 ) 
 
 $ 
 80,419 
 
 Less: proceeds from asset sales and disposals
 
 (855 
 ) 
 
 — 
 
 — 
 
 (855 
 ) 
 
 Free cash flow
 
 $ 
 61,560 
 
 $ 
 22,958 
 
 $ 
 (4,954 
 ) 
 
 $ 
 79,564 
 
 Operating cash flow, DCF and FCF decreased $24.8 million, $25.6 million and $24.7 million, respectively, as compared to the prior year quarter. The discussion by segment is as follows:

 •
 
 Mineral Rights Segment
 
 ◦
 
 Operating cash flow, DCF and FCF decreased $7.3 million, $8.1 million and $7.3 million, respectively, primarily due to lower metallurgical coal sales prices as well as lower thermal coal sales prices and volumes as compared to the prior year quarter. 
 
 •
 
 Soda Ash Segment
 
 ◦
 
 Operating cash flow, DCF and FCF decreased $16.7 million as compared to the prior year quarter primarily due to a lower distribution received from Sisecam Wyoming in the third quarter of 2024.
 
 •
 
 Corporate and Financing
 
 ◦
 
 Operating cash flow, DCF and FCF decreased $0.8 million as compared to the prior year quarter primarily due to higher cash paid for interest resulting from higher borrowings outstanding on the Opco Credit Facility during the three months ended September 30, 2024.
 
 23
 
 Table of Contents 
 
 First Nine Months of 2024 and 2023 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) 
 
 2024 
 
 2023 
 
 Decrease 
 
 Change 
 
 Mineral Rights
 
 $ 
 185,077 
 
 $ 
 218,213 
 
 $ 
 (33,136 
 ) 
 
 (15 
 )% 
 
 Soda Ash
 
 17,204 
 
 58,633 
 
 (41,429 
 ) 
 
 (71 
 )% 
 
 Total
 
 $ 
 202,281 
 
 $ 
 276,846 
 
 $ 
 (74,565 
 ) 
 
 (27 
 )% 
 
 The changes in revenues and other income are discussed for each of the operating segments below:

 24
 
 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) 
 
 2024 
 
 2023 
 
 (Decrease) 
 
 Change 
 
 Coal sales volumes (tons)
 
 Appalachia
 
 Northern
 
 716 
 
 1,053 
 
 (337 
 ) 
 
 (32 
 )% 
 
 Central
 
 10,677 
 
 10,390 
 
 287 
 
 3 
 % 
 
 Southern
 
 1,984 
 
 2,016 
 
 (32 
 ) 
 
 (2 
 )% 
 
 Total Appalachia
 
 13,377 
 
 13,459 
 
 (82 
 ) 
 
 (1 
 )% 
 
 Illinois Basin
 
 4,503 
 
 5,482 
 
 (979 
 ) 
 
 (18 
 )% 
 
 Northern Powder River Basin
 
 2,460 
 
 3,330 
 
 (870 
 ) 
 
 (26 
 )% 
 
 Gulf Coast
 
 1,136 
 
 676 
 
 460 
 
 68 
 % 
 
 Total coal sales volumes
 
 21,476 
 
 22,947 
 
 (1,471 
 ) 
 
 (6 
 )% 
 
 Coal royalty revenue per ton
 
 Appalachia
 
 Northern
 
 $ 
 2.70 
 
 $ 
 7.59 
 
 $ 
 (4.89 
 ) 
 
 (64 
 )% 
 
 Central
 
 7.34 
 
 8.89 
 
 (1.55 
 ) 
 
 (17 
 )% 
 
 Southern
 
 10.37 
 
 12.41 
 
 (2.04 
 ) 
 
 (16 
 )% 
 
 Illinois Basin
 
 2.33 
 
 3.63 
 
 (1.30 
 ) 
 
 (36 
 )% 
 
 Northern Powder River Basin
 
 4.87 
 
 4.74 
 
 0.13 
 
 3 
 % 
 
 Gulf Coast
 
 0.79 
 
 0.68 
 
 0.11 
 
 16 
 % 
 
 Combined average coal royalty revenue per ton
 
 5.78 
 
 7.04 
 
 (1.26 
 ) 
 
 (18 
 )% 
 
 Coal royalty revenues
 
 Appalachia
 
 Northern
 
 $ 
 1,930 
 
 $ 
 7,991 
 
 $ 
 (6,061 
 ) 
 
 (76 
 )% 
 
 Central
 
 78,328 
 
 92,362 
 
 (14,034 
 ) 
 
 (15 
 )% 
 
 Southern
 
 20,571 
 
 25,024 
 
 (4,453 
 ) 
 
 (18 
 )% 
 
 Total Appalachia
 
 100,829 
 
 125,377 
 
 (24,548 
 ) 
 
 (20 
 )% 
 
 Illinois Basin
 
 10,510 
 
 19,924 
 
 (9,414 
 ) 
 
 (47 
 )% 
 
 Northern Powder River Basin
 
 11,976 
 
 15,768 
 
 (3,792 
 ) 
 
 (24 
 )% 
 
 Gulf Coast
 
 902 
 
 461 
 
 441 
 
 96 
 % 
 
 Unadjusted coal royalty revenues
 
 124,217 
 
 161,530 
 
 (37,313 
 ) 
 
 (23 
 )% 
 
 Coal royalty adjustment for minimum leases
 
 (109 
 ) 
 
 (3 
 ) 
 
 (106 
 ) 
 
 (3,533 
 )% 
 
 Total coal royalty revenues
 
 $ 
 124,108 
 
 $ 
 161,527 
 
 $ 
 (37,419 
 ) 
 
 (23 
 )% 
 
 Other revenues
 
 Production lease minimum revenues
 
 $ 
 1,773 
 
 $ 
 2,025 
 
 $ 
 (252 
 ) 
 
 (12 
 )% 
 
 Minimum lease straight-line revenues
 
 12,414 
 
 13,414 
 
 (1,000 
 ) 
 
 (7 
 )% 
 
 Carbon neutral initiative revenues
 
 4,322 
 
 2,914 
 
 1,408 
 
 48 
 % 
 
 Wheelage revenues
 
 7,082 
 
 9,538 
 
 (2,456 
 ) 
 
 (26 
 )% 
 
 Property tax revenues
 
 5,246 
 
 4,710 
 
 536 
 
 11 
 % 
 
 Coal overriding royalty revenues
 
 2,064 
 
 1,165 
 
 899 
 
 77 
 % 
 
 Lease amendment revenues
 
 2,485 
 
 2,322 
 
 163 
 
 7 
 % 
 
 Aggregates royalty revenues
 
 2,164 
 
 2,175 
 
 (11 
 ) 
 
 (1 
 )% 
 
 Oil and gas royalty revenues
 
 6,956 
 
 5,126 
 
 1,830 
 
 36 
 % 
 
 Other revenues
 
 3,754 
 
 895 
 
 2,859 
 
 319 
 % 
 
 Total other revenues
 
 $ 
 48,260 
 
 $ 
 44,284 
 
 $ 
 3,976 
 
 9 
 % 
 
 Royalty and other mineral rights
 
 $ 
 172,368 
 
 $ 
 205,811 
 
 $ 
 (33,443 
 ) 
 
 (16 
 )% 
 
 Transportation and processing services revenues
 
 7,900 
 
 11,447 
 
 (3,547 
 ) 
 
 (31 
 )% 
 
 Gain on asset sales and disposals
 
 4,809 
 
 955 
 
 3,854 
 
 404 
 % 
 
 Total Mineral Rights segment revenues and other income
 
 $ 
 185,077 
 
 $ 
 218,213 
 
 $ 
 (33,136 
 ) 
 
 (15 
 )% 
 
 25
 
 Table of Contents 
 
 Coal Royalty Revenues 

 Approximately 75% of coal royalty revenues and approximately 55% of coal royalty sales volumes were derived from metallurgical coal during the nine months ended September 30, 2024. Total coal royalty revenues decreased $37.4 million as compared to the prior year period primarily due to lower metallurgical coal sales prices as well as lower thermal coal sales prices and volumes during the nine months ended September 30, 2024, as compared to the prior year period.

 Other Revenues 

 Other revenues increased $4.0 million primarily driven by higher oil and gas royalty and other revenues as compared to the prior year period.

 Gain on Asset Sales and Disposals 

 Gain on asset sales and disposals increased $3.9 million during the nine months ended September 30, 2024 as compared to the prior year period as a result of a coal property condemnation in the second quarter of 2024. 

 Soda Ash 

 Revenues and other income related to our Soda Ash segment decreased $41.4 million as compared to the prior year period primarily due to significantly lower sales prices driven by increased global production capacity, primarily from China, and weaker demand for flat glass due to a slowdown in global construction activity and weakness in demand for automobiles.

 Operating Expenses 

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

 For the Nine Months Ended September 30, 
 
 Increase 
 
 Percentage 
 
 (In thousands) 
 
 2024 
 
 2023 
 
 (Decrease) 
 
 Change 
 
 Operating expenses
 
 Operating and maintenance expenses
 
 $ 
 18,391 
 
 $ 
 23,451 
 
 $ 
 (5,060 
 ) 
 
 (22 
 )% 
 
 Depreciation, depletion and amortization
 
 12,708 
 
 12,469 
 
 239 
 
 2 
 % 
 
 General and administrative expenses
 
 18,193 
 
 17,157 
 
 1,036 
 
 6 
 % 
 
 Asset impairments
 
 87 
 
 132 
 
 (45 
 ) 
 
 (34 
 )% 
 
 Total operating expenses
 
 $ 
 49,379 
 
 $ 
 53,209 
 
 $ 
 (3,830 
 ) 
 
 (7 
 )% 
 
 Total operating expenses decreased $3.8 million as compared to the prior year period primarily due to a decrease in operating and maintenance expenses during the nine months ended September 30, 2024 as compared to the prior year period. The decrease in operating and maintenance expenses was primarily due to lower overriding royalty expense from an agreement with WPPLP in the first nine months of 2024 as compared to the first nine months of 2023. This overriding royalty expense is fully offset by coal royalty revenue we receive from this property.

 Interest Expense, Net 

 Interest expense, net increased $1.8 million primarily due to higher borrowings outstanding on the Opco Credit Facility during the nine months ended September 30, 2024 as compared to the prior year period.

 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, 2024
 
 Net income (loss)
 
 $ 
 154,017 
 
 $ 
 17,092 
 
 $ 
 (30,237 
 ) 
 
 $ 
 140,872 
 
 Less: equity earnings from unconsolidated investment
 
 — 
 
 (17,204 
 ) 
 
 — 
 
 (17,204 
 ) 
 
 Add: total distributions from unconsolidated investment
 
 — 
 
 28,114 
 
 — 
 
 28,114 
 
 Add: interest expense, net
 
 — 
 
 — 
 
 12,030 
 
 12,030 
 
 Add: depreciation, depletion and amortization
 
 12,694 
 
 — 
 
 14 
 
 12,708 
 
 Add: asset impairments
 
 87 
 
 — 
 
 — 
 
 87 
 
 Adjusted EBITDA
 
 $ 
 166,798 
 
 $ 
 28,002 
 
 $ 
 (18,193 
 ) 
 
 $ 
 176,607 
 
 September 30, 2023
 
 Net income (loss)
 
 $ 
 182,400 
 
 $ 
 58,408 
 
 $ 
 (27,353 
 ) 
 
 $ 
 213,455 
 
 Less: equity earnings from unconsolidated investment
 
 — 
 
 (58,633 
 ) 
 
 — 
 
 (58,633 
 ) 
 
 Add: total distributions from unconsolidated investment
 
 — 
 
 66,140 
 
 — 
 
 66,140 
 
 Add: interest expense, net
 
 — 
 
 — 
 
 10,182 
 
 10,182 
 
 Add: depreciation, depletion and amortization
 
 12,455 
 
 — 
 
 14 
 
 12,469 
 
 Add: asset impairments
 
 132 
 
 — 
 
 — 
 
 132 
 
 Adjusted EBITDA
 
 $ 
 194,987 
 
 $ 
 65,915 
 
 $ 
 (17,157 
 ) 
 
 $ 
 243,745 
 
 Net income decreased $72.6 million as compared to the prior year period primarily due to the decrease in revenues and other income as discussed above. Adjusted EBITDA decreased $67.1 million as compared to the prior year period primarily due to an $28.2 million decrease in Adjusted EBITDA within our Mineral Rights segment primarily as a result of lower revenues and other income and a $37.9 million decrease in Adjusted EBITDA within our Soda Ash segment primarily due to lower distributions received from Sisecam Wyoming in the first nine months of 2024.

 26
 
 Table of Contents 
 
 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, 2024
 
 Cash flow provided by (used in)
 
 Operating activities
 
 $ 
 179,593 
 
 $ 
 28,002 
 
 $ 
 (25,322 
 ) 
 
 $ 
 182,273 
 
 Investing activities
 
 6,788 
 
 — 
 
 — 
 
 6,788 
 
 Financing activities
 
 (1,086 
 ) 
 
 — 
 
 (169,064 
 ) 
 
 (170,150 
 ) 
 
 September 30, 2023
 
 Cash flow provided by (used in)
 
 Operating activities
 
 $ 
 189,836 
 
 $ 
 65,901 
 
 $ 
 (22,545 
 ) 
 
 $ 
 233,192 
 
 Investing activities
 
 2,791 
 
 — 
 
 (10 
 ) 
 
 2,781 
 
 Financing activities
 
 (583 
 ) 
 
 — 
 
 (256,070 
 ) 
 
 (256,653 
 ) 
 
 The following table reconciles net cash provided by (used in) operating activities (the most comparable GAAP financial measure) by business segment to DCF and FCF:

 Operating Segments 
 
 For the Nine Months Ended (In thousands) 
 
 Mineral Rights 
 
 Soda Ash 
 
 Corporate and Financing 
 
 Total 
 
 September 30, 2024
 
 Net cash provided by (used in) operating activities
 
 $ 
 179,593 
 
 $ 
 28,002 
 
 $ 
 (25,322 
 ) 
 
 $ 
 182,273 
 
 Add: proceeds from asset sales and disposals
 
 4,809 
 
 — 
 
 — 
 
 4,809 
 
 Add: return of long-term contract receivable
 
 1,979 
 
 — 
 
 — 
 
 1,979 
 
 Less: maintenance capital expenditures
 
 — 
 
 — 
 
 — 
 
 — 
 
 Distributable cash flow
 
 $ 
 186,381 
 
 $ 
 28,002 
 
 $ 
 (25,322 
 ) 
 
 $ 
 189,061 
 
 Less: proceeds from asset sales and disposals
 
 (4,809 
 ) 
 
 — 
 
 — 
 
 (4,809 
 ) 
 
 Free cash flow
 
 $ 
 181,572 
 
 $ 
 28,002 
 
 $ 
 (25,322 
 ) 
 
 $ 
 184,252 
 
 September 30, 2023
 
 Net cash provided by (used in) operating activities
 
 $ 
 189,836 
 
 $ 
 65,901 
 
 $ 
 (22,545 
 ) 
 
 $ 
 233,192 
 
 Add: proceeds from asset sales and disposals
 
 961 
 
 — 
 
 — 
 
 961 
 
 Add: return of long-term contract receivable
 
 1,830 
 
 — 
 
 — 
 
 1,830 
 
 Less: maintenance capital expenditures
 
 — 
 
 — 
 
 (10 
 ) 
 
 (10 
 ) 
 
 Distributable cash flow
 
 $ 
 192,627 
 
 $ 
 65,901 
 
 $ 
 (22,555 
 ) 
 
 $ 
 235,973 
 
 Less: proceeds from asset sales and disposals
 
 (961 
 ) 
 
 — 
 
 — 
 
 (961 
 ) 
 
 Free cash flow
 
 $ 
 191,666 
 
 $ 
 65,901 
 
 $ 
 (22,555 
 ) 
 
 $ 
 235,012 
 
 Operating cash flow, DCF and FCF decreased $50.9 million, $46.9 million and $50.8 million, respectively. The discussion by segment is as follows:

 •
 
 Mineral Rights Segment
 
 ◦
 
 Operating cash flow, DCF and FCF decreased $10.2 million, $6.2 million and $10.1 million, respectively, primarily due to lower metallurgical coal sales prices as well as lower thermal coal sales prices and volumes during the first nine months of 2024 as compared to the prior year period. The decrease in DCF was partially offset by cash received related to a coal property condemnation in the second quarter of 2024.
 
 •
 
 Soda Ash Segment
 
 ◦
 
 Operating cash flow, DCF and FCF decreased $37.9 million as compared to the prior year period primarily due to lower distributions received from Sisecam Wyoming in the first nine months of 2024.
 
 •
 
 Corporate and Financing Segment
 
 ◦
 
 Operating cash flow, DCF and FCF decreased $2.8 million as compared to the prior year quarter primarily due to higher cash paid for interest resulting from higher borrowings outstanding on the Opco Credit Facility during the nine months ended September 30, 2024.
 
 27
 
 Table of Contents 
 
 Liquidity and Capital Resources 

 Current Liquidity 

 As of September 30, 2024, we had total liquidity of $76.2 million, consisting of $30.9 million of cash and cash equivalents and $45.3 million of borrowing capacity under our Opco Credit Facility. We have debt service obligations, including approximately $14 million of principal repayments on Opco’s senior notes, throughout the remainder of 2024. The following table calculates our leverage ratio as of September 30, 2024: 

 For the Three Months Ended 
 
 (In thousands) 
 
 December 31, 2023 
 
 March 31, 2024 
 
 June 30, 2024 
 
 September 30, 2024 
 
 Last 12 Months 
 
 Net income
 
 $ 
 64,980 
 
 $ 
 56,213 
 
 $ 
 46,064 
 
 $ 
 38,595 
 
 $ 
 205,852 
 
 Less: equity earnings from unconsolidated investment
 
 (14,764 
 ) 
 
 (5,450 
 ) 
 
 (3,645 
 ) 
 
 (8,109 
 ) 
 
 (31,968 
 ) 
 
 Add: total distributions from unconsolidated investment
 
 15,338 
 
 14,210 
 
 7,584 
 
 6,320 
 
 43,452 
 
 Add: interest expense, net
 
 3,921 
 
 3,487 
 
 4,349 
 
 4,194 
 
 15,951 
 
 Add: depreciation, depletion and amortization
 
 6,020 
 
 4,654 
 
 3,324 
 
 4,730 
 
 18,728 
 
 Add: asset impairments
 
 424 
 
 — 
 
 — 
 
 87 
 
 511 
 
 Adjusted EBITDA
 
 $ 
 75,919 
 
 $ 
 73,114 
 
 $ 
 57,676 
 
 $ 
 45,817 
 
 $ 
 252,526 
 
 Debt—at September 30, 2024
 
 $ 
 197,678 
 
 Leverage Ratio
 
 0.8 x
 
 Cash Flows 

 Cash flows provided by operating activities decreased $50.9 million, from $233.2 million in the nine months ended September 30, 2023 to $182.3 million in the nine months ended September 30, 2024 , primarily due to decreased cash flow within our Mineral Rights and Soda Ash segments, all discussed above.

 Cash flows provided by investing activities increased $4.0, million from $2.8 million in the nine months ended September 30, 2023 to $6.8 million in the nine months ended September 30, 2024, primarily due to a coal condemnation payment received in the second quarter of 2024.

 Cash used in financing activities decreased $86.5 million, from $256.7 million used in the nine months ended September 30, 2023 to $170.2 million used in the nine months ended September 30, 2024 due to the following:

 • 
 $106.7 million of decreased cash used for the redemption of preferred units in 2024 as compared to 2023; 
 
 •
 
 $65.4 million of decreased debt repayments in 2024 as compared to 2023; and
 
 • 
 $13.5 million decreased distributions to preferred unitholders in 2024 as compared to 2023.
 
 These decreases in cash flow used were partially offset by the following:

 • 
 $62.2 million of decreased borrowings on the Opco Credit Facility in 2024 as compared to 2023; 
 
 • 
 $32.1 million of increased cash used for the warrant settlements in 2024 as compared to 2023; 
 
 • 
 $2.9 million of increased cash used for other items, net in 2024 as compared to 2023; and 
 
 • 
 $1.9 million of increased distributions to common unitholders and the general partner in 2024 as compared to 2023. 
 
 28
 
 Table of Contents 
 
 Capital Resources and Obligations 

 Debt, Net 

 We had the following debt outstanding as of September 30, 2024 and December 31, 2023:

 September 30, 
 
 December 31, 
 
 (In thousands) 
 
 2024 
 
 2023 
 
 Current portion of long-term debt, net
 
 $ 
 14,226 
 
 $ 
 30,785 
 
 Long-term debt, net
 
 183,137 
 
 124,273 
 
 Total debt, net
 
 $ 
 197,363 
 
 $ 
 155,058 
 
 We have been and continue to be in compliance with the terms of the financial covenants contained in our debt agreements. For additional information regarding our debt and the agreements governing our debt, including the covenants contained therein, see Note 9. Debt, Net to the Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

 Off-Balance Sheet Transactions 

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

 Related Party Transactions 

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

 Summary of Critical Accounting Estimates 

 The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

 Recent Accounting Standards 

 In November 2023, the FASB issued ASU No. 2023-07—Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The amendments in ASU 2023-07 improve reportable segment disclosure requirements, primarily through enhanced disclosures about segment expenses. The guidance is effective for annual periods beginning after December 15, 2023 and quarterly periods beginning after December 15, 2024 and will be adopted retrospectively to all prior periods presented in the financial statements. We do not expect the adoption of ASU 2023-07 to have a material effect on our Consolidated Financial Statements.

 29
 
 Table of Contents 
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

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

 Commodity Price Risk 

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

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

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

 Interest Rate Risk 

 Our exposure to changes in interest rates results from our borrowings under the Opco Credit Facility, which is subject to variably interest rates based upon SOFR. At September 30, 2024, we had $154.7 million in borrowings outstanding under the Opco Credit Facility. If interest rates were to increase by 1%, annual interest expense would increase approximately $1.5 million, assuming the same principal amount remained outstanding during the year.

 ITEM 4. CONTROLS AND PROCEDURES 

 Evaluation of Disclosure Controls and Procedures 

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

 Changes in the Partnership ’ s Internal Control Over Financial Reporting 

 There were no material changes in the Partnership’s internal control over financial reporting during the first nine months of 2024 that materially affected, or were reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

 30
 
 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, 2023.

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

 None.

 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 

 None. 

 ITEM 4. MINE SAFETY DISCLOSURES 

 None.

 ITEM 5. OTHER INFORMATION 

 None . 

 ITEM 6. EXHIBITS 

 Exhibit 
 Number 
 
 Description 
 
 3.1 
 
 Fifth Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated as of March 2, 2017 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on March 6, 2017).
 
 3.2 
 
 Fifth Amended and Restated Agreement of Limited Partnership of NRP (GP) LP, dated as of December 16, 2011 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 16, 2011).
 
 3.3 
 
 Fifth Amended and Restated Limited Liability Company Agreement of GP Natural Resource Partners LLC, dated as of October 31, 2013 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on October 31, 2013).
 
 3.4 
 
 Certificate of Limited Partnership of Natural Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed April 19, 2002, File No. 333-86582).
 
 10.1 
 
 New Lender Agreement, dated as of February 1, 2024, by and among NRP (Operating) LLC, Zions Bancorporation, N.A. dba Amegy Bank, and Summit Community Bank (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on February 6, 2024). 
 
 10.2 
 
 Commitment Increase Agreement dated as of February 14, 2024, by and among NRP (Operating) LLC, Zions Bancorporation, N.A. dba Amegy Bank, and Frost Bank (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on February 20, 2024). 
 
 10.3 
 
 Seventh Amendment to the Third Amended and Restated Credit Agreement, dated as of October 15, 2024, by and among NRP (Operating) LLC, the lenders party thereto and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on October 18, 2024). 
 
 31.1* 
 
 Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley. 
 
 31.2* 
 
 Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley. 
 
 32.1** 
 
 Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350. 
 
 32.2** 
 
 Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350. 
 
 101.INS*
 
 Inline XBRL Instance Document
 
 101.SCH*
 
 Inline XBRL Taxonomy Extension Schema Document
 
 101.CAL*
 
 Inline XBRL Taxonomy Extension Calculation Linkbase Document
 
 101.DEF*
 
 Inline XBRL Taxonomy Extension Definition Linkbase Document
 
 101.LAB*
 
 Inline XBRL Taxonomy Extension Labels Linkbase Document
 
 101.PRE*
 
 Inline XBRL Taxonomy Extension Presentation Linkbase Document
 
 104*
 
 Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
 
 *
 
 Filed herewith
 
 **
 
 Furnished herewith
 
 31
 
 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 5, 2024 
 
 By:
 
 /s/ Corbin J. Robertson, Jr. 
 
 Corbin J. Robertson, Jr.
 
 Chairman of the Board and
 
 Chief Executive Officer
 
 (Principal Executive Officer)
 
 Date: November 5, 2024
 
 By:
 
 /s/ Christopher J. Zolas
 
 Christopher J. Zolas
 
 Chief Financial Officer
 
 (Principal Financial and Accounting Officer)
 
 32
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
NATURAL RESOURCE PARTNERS LP 10-Q
