NRP Natural Resource Partners Ltd New

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Delaware	001-31465	35-2164875
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
	1415 Louisiana Street, Suite 3325
	Houston, Texas 77002
	(Address of principal executive office) (Zip Code)
	(713) 751-7507
	(Registrant's telephone number, including area code)

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Emerging Growth Company

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Item 2.02.

Results of Operations and Financial Condition

Item 9.01.

Financial Statements and Exhibits

(d)	Exhibits.
99.1	Natural Resource Partners L.P. press release dated as of August 4, 2023
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

	NATURAL RESOURCE PARTNERS L.P.
	(Registrant)
	By:	NRP (GP) LP
		its General Partner
	By:	GP Natural Resource Partners LLC
		its General Partner
Date: August 4, 2023		/s/ Philip T. Warman
		Philip T. Warman
		General Counsel

Natural Resource Partners L.P.

1415 Louisiana St., Suite 3325, Houston, TX 77002

NEWS RELEASE

Natural Resource Partners L.P. Reports Second Quarter 2023 Results and Declares Second Quarter 2023 Distribution of $0.75 per Common Unit

 

HOUSTON, August 4, 2023 - Natural Resource Partners L.P. (NYSE:NRP) today reported second quarter 2023 results as follows:

 

		For the Three Months Ended				Last Twelve Months Ended
(In thousands) (Unaudited)		June 30, 2023
Operating cash flow		$	81,350			$	305,634
Free cash flow (1)			81,952				307,874
Cash flow cushion (last twelve months) (1)							39,953
Net income		$	70,334			$	287,382
Adjusted EBITDA (1)			83,059				321,768

(1)

See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

 

 

Highlights:

 

• Generated $82 million of free cash flow

• Paid first quarter 2023 common unit distribution of $0.75 per unit

• Redeemed $81 million of preferred units at par with cash

• Leverage ratio of 0.6x as of June 30, 2023

• Declares second quarter 2023 common unit distribution of $0.75 

"NRP generated $82 million of free cash flow in the second quarter driven by a solid performance from our mineral rights assets along with strong sales prices and distributions from our soda ash investment," said Craig Nunez, NRP's president and chief operating officer. "I am also pleased to report that during the second quarter we redeemed $81 million of preferred units at par with cash, lowering the outstanding par value of preferred equity to $122 million. We remain steadfast in our strategy to pay off our debt and redeem our preferred equity while maintaining distributions to our common unitholders. We believe this is the right strategy to maximize unitholder value and advantageously position the business for the long term.”

 

NRP announced today that the board of directors of its general partner declared a second quarter 2023 cash distribution of $0.75 per common unit to be paid on August 23, 2023, to unitholders of record on August 16, 2023. In addition, the board declared a $3.65 million cash distribution on NRP's outstanding preferred units. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the board of directors. The board of directors considers numerous factors each quarter in determining cash distributions including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability, and the level of cash reserves that the board determines is necessary for future operating and capital needs.

 

NRP's liquidity was $62.7 million at June 30, 2023, consisting of $10.7 million of cash and $52.0 million of borrowing capacity available under its revolving credit facility. 

 

 

 

Segment Performance

 

Mineral Rights

 

Mineral Rights net income, operating cash flow, and free cash flow for the second quarter of 2023 decreased $16.9 million, $15.3 million, and $15.3 million, respectively, as compared to the prior year period primarily due to decreased metallurgical coal sales prices in the second quarter of 2023. Approximately 70% of coal royalty revenues and approximately 55% of coal royalty sales volumes were derived from metallurgical coal in the second quarter of 2023.

 

While metallurgical and thermal coal prices have decreased from the beginning of the year and decreased significantly from the record highs seen in 2022, they both remain strong relative to historical norms. Transportation and logistics challenges, limited access to capital, and labor shortages limit operators' ability to increase production and sales which should provide continued price support.

 

NRP continues to explore opportunities for carbon neutral revenue across its large portfolio of land, mineral, and timber assets, including the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar, and wind energy. 

 

Soda Ash

 

Soda Ash net income in the second quarter of 2023 increased $12.3 million as compared to the prior year period primarily due to higher sales prices driven by strong demand in domestic and international markets, partially offset by lower soda ash production and sales volumes. Operating cash flow and free cash flow in the second quarter of 2023 improved $21.9 million as compared to the prior year period due to the early timing of distributions received from Sisecam Wyoming and a higher distribution amount driven by Sisecam Wyoming's strong operating performance in the second quarter of 2023. 

 

After starting the year at historically high levels, global soda ash prices have fallen throughout the first half of the year. New supply from China entering the market in the second half of the year is expected to continue to put downward pressure on international soda ash pricing. However, NRP expects Sisecam Wyoming's domestic soda ash sales prices to remain elevated versus the spot market in the second half of the year as a result of negotiated 2023 domestic sales contracts entered into at the end of 2022.

 

Corporate and Financing

 

Corporate and Financing costs in the second quarter of 2023 decreased $8.1 million as compared to the prior year period primarily due to lower interest expense resulting from less debt outstanding. Operating cash flow and free cash flow in the second quarter of 2023 improved $11.6 million as compared to the prior year period primarily due to lower cash paid for interest as a result of the retirement of the 9.125% Senior Notes in 2022. 

 

NRP retired an aggregate of 80,834 Class A Preferred Units in the second quarter of 2023, saving NRP $9.7 million annually in preferred unit cash distributions. Of the originally issued 250,000 Class A Preferred Units, 121,667 Class A Preferred Units remain outstanding. 

 

In May 2023, NRP declared and paid a first quarter 2023 cash distribution of $0.75 per common unit and a $6.1 million cash distribution on the preferred units. Today, NRP declared a second quarter 2023 cash distribution of $0.75 per common unit and a $3.65 million cash distribution on its outstanding preferred units.  

 

NRP's consolidated leverage ratio was 0.6x at June 30, 2023. 

 

Conference Call

 

A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link: https://conferencingportals.com/event/mQRabxXg. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full conference call we suggest registering at minimum 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website.

 

Withholding Information for Foreign Investors

 

Concurrent with this announcement, we are providing qualified notice to brokers and nominees that hold NRP units on behalf of non-U.S. investors under Treasury Regulation Section 1.1446-4(b) and (d) and Treasury Regulation Section 1.1446(f)-4(c)(2)(iii). Brokers and nominees should treat one hundred percent (100%) of NRP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. In addition, brokers and nominees should treat one hundred percent (100%) of the distribution as being in excess of cumulative net income for purposes of determining the amount to withhold. Accordingly, NRP's distributions to non-U.S. investors are subject to federal income tax withholding at a rate equal to the sum of the highest applicable rate plus ten percent (10%).

 

Company Profile

 

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of properties in the United States including coal, industrial minerals and other natural resources, as well as rights to conduct carbon sequestration and renewable energy activities. NRP also owns an equity investment in Sisecam Wyoming LLC, one of the world’s lowest-cost producers of soda ash.

 

For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com.

 

 

Forward-Looking Statements

 

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees; Sisecam Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

Non-GAAP Financial Measures

 

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

 

“Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities 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, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

 

“Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities 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. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

 

"Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions, redemption of preferred units, redemption of PIK units, common unit distributions, and warrant cash settlements. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units.

 

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

 

 

-Financial Tables and Reconciliation of Non-GAAP Measures Follow-

 

Consolidated Statements of Comprehensive Income

 

		For the Three Months Ended												For the Six Months Ended
		June 30,								March 31,				June 30,
(In thousands, except per unit data)		2023				2022				2023				2023				2022
Revenues and other income
Royalty and other mineral rights		$	61,007			$	79,333			$	76,271			$	137,278			$	150,416
Transportation and processing services			3,270				5,612				3,598				6,868				9,408
Equity in earnings of Sisecam Wyoming			26,978				14,643				19,254				46,232				29,480
Gain on asset sales and disposals			5				345				96				101				345
Total revenues and other income		$	91,260			$	99,933			$	99,219			$	190,479			$	189,649
Operating expenses
Operating and maintenance expenses		$	7,930			$	10,015			$	7,163			$	15,093			$	18,091
Depreciation, depletion and amortization			3,792				5,847				4,083				7,875				9,715
General and administrative expenses			5,643				5,052				5,845				11,488				9,519
Asset impairments			69				43				—				69				62
Total operating expenses		$	17,434			$	20,957			$	17,091			$	34,525			$	37,387
Income from operations		$	73,826			$	78,976			$	82,128			$	155,954			$	152,262
Other expenses, net
Interest expense, net		$	(3,492	)		$	(8,108	)		$	(2,853	)		$	(6,345	)		$	(17,495	)
Loss on extinguishment of debt			—				(4,048	)			—				—				(4,048	)
Total other expenses, net		$	(3,492	)		$	(12,156	)		$	(2,853	)		$	(6,345	)		$	(21,543	)
Net income		$	70,334			$	66,820			$	79,275			$	149,609			$	130,719
Less: income attributable to preferred unitholders			(4,971	)			(7,500	)			(6,661	)			(11,632	)			(15,000	)
Less: redemption of preferred units			(27,618	)			—				(16,228	)			(43,846	)			—
Net income attributable to common unitholders and the general partner		$	37,745			$	59,320			$	56,386			$	94,131			$	115,719
Net income attributable to common unitholders		$	36,990			$	58,134			$	55,258			$	92,248			$	113,405
Net income attributable to the general partner			755				1,186				1,128				1,883				2,314
Net income per common unit
Basic		$	2.93			$	4.65			$	4.40			$	7.32			$	9.10
Diluted			2.49				3.29				3.44				5.96				6.50
Net income		$	70,334			$	66,820			$	79,275			$	149,609			$	130,719
Comprehensive income (loss) from unconsolidated investment and other			911				(4,013	)			(19,583	)			(18,672	)			(1,468	)
Comprehensive income		$	71,245			$	62,807			$	59,692			$	130,937			$	129,251

 

 

Consolidated Statements of Cash Flows

 

		For the Three Months Ended												For the Six Months Ended
		June 30,								March 31,				June 30,
(In thousands)		2023				2022				2023				2023				2022
Cash flows from operating activities
Net income		$	70,334			$	66,820			$	79,275			$	149,609			$	130,719
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization			3,792				5,847				4,083				7,875				9,715
Distributions from unconsolidated investment			32,350				10,486				10,780				43,130				23,716
Equity earnings from unconsolidated investment			(26,978	)			(14,643	)			(19,254	)			(46,232	)			(29,480	)
Gain on asset sales and disposals			(5	)			(345	)			(96	)			(101	)			(345	)
Loss on extinguishment of debt			—				4,048				—				—				4,048
Asset impairments			69				43				—				69				62
Bad debt expense			(198	)			(388	)			(610	)			(808	)			640
Unit-based compensation expense			2,646				1,339				2,491				5,137				2,787
Amortization of debt issuance costs and other			541				1,297				25				566				1,672
Change in operating assets and liabilities:
Accounts receivable			(361	)			(5,033	)			7,061				6,700				(12,612	)
Accounts payable			72				73				(541	)			(469	)			13
Accrued liabilities			2,019				2,047				(8,805	)			(6,786	)			(5,109	)
Accrued interest			(627	)			(7,413	)			263				(364	)			(163	)
Deferred revenue			(2,646	)			(2,259	)			(154	)			(2,800	)			(9,575	)
Other items, net			342				1,204				(1,618	)			(1,276	)			(634	)
Net cash provided by operating activities		$	81,350			$	63,123			$	72,900			$	154,250			$	115,454
Cash flows from investing activities
Proceeds from asset sales and disposals		$	5			$	346			$	101			$	106			$	346
Return of long-term contract receivable			610				563				598				1,208				563
Capital expenditures			(8	)			—				(2	)			(10	)			—
Net cash provided by investing activities		$	607			$	909			$	697			$	1,304			$	909
Cash flows from financing activities
Debt borrowings		$	70,834			$	—			$	94,200			$	165,034			$	—
Debt repayments			(61,365	)			(120,474	)			(89,696	)			(151,061	)			(137,171	)
Distributions to common unitholders and the general partner			(9,669	)			(9,570	)			(40,900	)			(50,569	)			(15,242	)
Distributions to preferred unitholders			(7,396	)			(7,500	)			(8,086	)			(15,482	)			(15,258	)
Redemption of preferred units			(80,834	)			—				(47,499	)			(128,333	)			—
Redemption of preferred units paid-in-kind			—				—				—				—				(19,321	)
Other items, net			(452	)			(2,722	)			(3,052	)			(3,504	)			(5,535	)
Net cash used in financing activities		$	(88,882	)		$	(140,266	)		$	(95,033	)		$	(183,915	)		$	(192,527	)
Net decrease in cash and cash equivalents		$	(6,925	)		$	(76,234	)		$	(21,436	)		$	(28,361	)		$	(76,164	)
Cash and cash equivalents at beginning of period			17,655				135,590				39,091				39,091				135,520
Cash and cash equivalents at end of period		$	10,730			$	59,356			$	17,655			$	10,730			$	59,356
Supplemental cash flow information:
Cash paid for interest		$	3,960			$	15,128			$	2,474			$	6,434			$	16,772

 

 

Consolidated Balance Sheets

 

		June 30,				December 31,
		2023				2022
(In thousands, except unit data)		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	10,730			$	39,091
Accounts receivable, net			37,120				42,701
Other current assets, net			2,865				1,822
Total current assets		$	50,715			$	83,614
Land			24,008				24,008
Mineral rights, net			404,741				412,312
Intangible assets, net			14,432				14,713
Equity in unconsolidated investment			290,900				306,470
Long-term contract receivable, net			27,659				28,946
Other long-term assets, net			7,804				7,068
Total assets		$	820,259			$	877,131
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable		$	1,524			$	1,992
Accrued liabilities			5,715				11,916
Accrued interest			625				989
Current portion of deferred revenue			6,823				6,256
Current portion of long-term debt, net			36,743				39,076
Total current liabilities		$	51,430			$	60,229
Deferred revenue			36,815				40,181
Long-term debt, net			145,693				129,205
Other non-current liabilities			6,462				5,472
Total liabilities		$	240,400			$	235,087
Commitments and contingencies
Class A Convertible Preferred Units (121,667 and 250,000 units issued and outstanding at June 30, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at June 30, 2023 and December 31, 2022)		$	80,099			$	164,587
Partners’ capital
Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at June 30, 2023 and December 31, 2022, respectively)		$	444,838			$	404,799
General partner’s interest			6,913				5,977
Warrant holders’ interest			47,964				47,964
Accumulated other comprehensive income			45				18,717
Total partners’ capital		$	499,760			$	477,457
Total liabilities and partners' capital		$	820,259			$	877,131

 

 

 

Consolidated Statements of Partners' Capital

 

																		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

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

 

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

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

 

 

 

The following table presents NRP's unaudited business results by segment for the three months ended June 30, 2023 and 2022 and March 31, 2023:

 

		Operating Segments
		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Three Months Ended June 30, 2023
Revenues		$	64,277			$	26,978			$	—			$	91,255
Gain on asset sales and disposals			5				—				—				5
Total revenues and other income		$	64,282			$	26,978			$	—			$	91,260
Asset impairments		$	69			$	—			$	—			$	69
Net income (loss)		$	52,510			$	26,964			$	(9,140	)		$	70,334
Adjusted EBITDA (1)		$	56,366			$	32,336			$	(5,643	)		$	83,059
Cash flow provided by (used in) continuing operations:
Operating activities		$	55,040			$	32,326			$	(6,016	)		$	81,350
Investing activities		$	615			$	—			$	(8	)		$	607
Financing activities		$	—			$	—			$	(88,882	)		$	(88,882	)
Distributable cash flow (1)		$	55,655			$	32,326			$	(6,024	)		$	81,957
Free cash flow (1)		$	55,650			$	32,326			$	(6,024	)		$	81,952
For the Three Months Ended June 30, 2022
Revenues		$	84,945			$	14,643			$	—			$	99,588
Gain on asset sales and disposals			345				—				—				345
Total revenues and other income		$	85,290			$	14,643			$	—			$	99,933
Asset impairments		$	43			$	—			$	—			$	43
Net income (loss)		$	69,408			$	14,620			$	(17,208	)		$	66,820
Adjusted EBITDA (1)		$	75,298			$	10,463			$	(5,052	)		$	80,709
Cash flow provided by (used in) continuing operations:
Operating activities		$	70,351			$	10,430			$	(17,658	)		$	63,123
Investing activities		$	909			$	—			$	—			$	909
Financing activities		$	—			$	—			$	(140,266	)		$	(140,266	)
Distributable cash flow (1)		$	71,260			$	10,430			$	(17,658	)		$	64,032
Free cash flow (1)		$	70,914			$	10,430			$	(17,658	)		$	63,686
For the Three Months Ended March 31, 2023
Revenues		$	79,869			$	19,254			$	—			$	99,123
Gain on asset sales and disposals			96				—				—				96
Total revenues and other income		$	79,965			$	19,254			$	—			$	99,219
Asset impairments		$	—			$	—			$	—			$	—
Net income (loss)		$	68,881			$	19,096			$	(8,702	)		$	79,275
Adjusted EBITDA (1)		$	72,960			$	10,622			$	(5,845	)		$	77,737
Cash flow provided by (used in) continuing operations:
Operating activities		$	73,858			$	10,617			$	(11,575	)		$	72,900
Investing activities		$	699			$	—			$	(2	)		$	697
Financing activities		$	(583	)		$	—			$	(94,450	)		$	(95,033	)
Distributable cash flow (1)		$	74,557			$	10,617			$	(11,577	)		$	73,597
Free cash flow (1)		$	74,456			$	10,617			$	(11,577	)		$	73,496

(1)

See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

  

 

The following table presents NRP's unaudited business results by segment for the six months ended June 30, 2023 and 2022:

 

		Operating Segments
		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Six Months Ended June 30, 2023
Revenues		$	144,146			$	46,232			$	—			$	190,378
Gain on asset sales and disposals			101				—				—				101
Total revenues and other income		$	144,247			$	46,232			$	—			$	190,479
Asset impairments		$	69			$	—			$	—			$	69
Net income (loss)		$	121,391			$	46,060			$	(17,842	)		$	149,609
Adjusted EBITDA (1)		$	129,326			$	42,958			$	(11,488	)		$	160,796
Cash flow provided by (used in) continuing operations:
Operating activities		$	128,898			$	42,943			$	(17,591	)		$	154,250
Investing activities		$	1,314			$	—			$	(10	)		$	1,304
Financing activities		$	(583	)		$	—			$	(183,332	)		$	(183,915	)
Distributable cash flow (1)		$	130,212			$	42,943			$	(17,601	)		$	155,554
Free cash flow (1)		$	130,106			$	42,943			$	(17,601	)		$	155,448
For the Six Months Ended June 30, 2022
Revenues		$	159,824			$	29,480			$	—			$	189,304
Gain on asset sales and disposals			345				—				—				345
Total revenues and other income		$	160,169			$	29,480			$	—			$	189,649
Asset impairments		$	62			$	—			$	—			$	62
Net income (loss)		$	132,375			$	29,406			$	(31,062	)		$	130,719
Adjusted EBITDA (1)		$	142,152			$	23,642			$	(9,519	)		$	156,275
Cash flow provided by (used in) continuing operations:
Operating activities		$	118,527			$	23,625			$	(26,698	)		$	115,454
Investing activities		$	909			$	—			$	—			$	909
Financing activities		$	(614	)		$	—			$	(191,913	)		$	(192,527	)
Distributable cash flow (1)		$	119,436			$	23,625			$	(26,698	)		$	116,363
Free cash flow (1)		$	119,090			$	23,625			$	(26,698	)		$	116,017

(1)

See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

 

Operating Statistics - Mineral Rights

 

		For the Three Months Ended												For the Six Months Ended
		June 30,								March 31,				June 30,
(In thousands, except per ton data)		2023				2022				2023				2023				2022
Coal sales volumes (tons)
Appalachia
Northern			390				392				379				769				820
Central			3,352				3,484				3,609				6,961				6,735
Southern			693				312				582				1,275				673
Total Appalachia			4,435				4,188				4,570				9,005				8,228
Illinois Basin			1,631				3,403				1,310				2,941				4,905
Northern Powder River Basin			881				699				1,085				1,966				1,937
Gulf Coast			139				67				58				197				136
Total coal sales volumes			7,086				8,357				7,023				14,109				15,206
Coal royalty revenue per ton
Appalachia
Northern		$	6.87			$	11.84			$	9.86			$	8.35			$	10.95
Central			8.49				12.19				9.92				9.23				11.80
Southern			10.85				17.67				14.94				12.72				17.61
Illinois Basin			3.15				2.07				3.57				3.34				2.11
Northern Powder River Basin			4.62				4.74				4.68				4.65				4.10
Gulf Coast			0.71				0.57				0.57				0.66				0.56
Combined average coal royalty revenue per ton			6.77				7.54				8.26				7.51				7.80
Coal royalty revenues
Appalachia
Northern		$	2,681			$	4,640			$	3,737			$	6,418			$	8,981
Central			28,445				42,461				35,806				64,251				79,441
Southern			7,521				5,513				8,697				16,218				11,853
Total Appalachia			38,647				52,614				48,240				86,887				100,275
Illinois Basin			5,141				7,061				4,675				9,816				10,364
Northern Powder River Basin			4,066				3,314				5,075				9,141				7,946
Gulf Coast			98				38				33				131				76
Unadjusted coal royalty revenues			47,952				63,027				58,023				105,975				118,661
Coal royalty adjustment for minimum leases			8				(82	)			—				8				(267	)
Total coal royalty revenues		$	47,960			$	62,945			$	58,023			$	105,983			$	118,394
Other revenues
Production lease minimum revenues		$	562			$	65			$	613			$	1,175			$	1,657
Minimum lease straight-line revenues			4,447				4,674				4,503				8,950				9,457
Carbon neutral initiative revenues			115				—				2,118				2,233				—
Wheelage revenues			3,284				4,379				3,869				7,153				8,096
Property tax revenues			1,470				1,695				1,470				2,940				3,167
Coal overriding royalty revenues			150				682				188				338				940
Lease amendment revenues			848				811				851				1,699				1,691
Aggregates royalty revenues			686				1,037				753				1,439				1,807
Oil and gas royalty revenues			1,214				2,906				3,588				4,802				4,720
Other revenues			271				139				295				566				487
Total other revenues		$	13,047			$	16,388			$	18,248			$	31,295			$	32,022
Royalty and other mineral rights		$	61,007			$	79,333			$	76,271			$	137,278			$	150,416
Transportation and processing services revenues			3,270				5,612				3,598				6,868				9,408
Gain on asset sales and disposals			5				345				96				101				345
Total Mineral Rights segment revenues and other income		$	64,282			$	85,290			$	79,965			$	144,247			$	160,169

 

 

 

Adjusted EBITDA

 

		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Three Months Ended June 30, 2023
Net income (loss)		$	52,510			$	26,964			$	(9,140	)		$	70,334
Less: equity earnings from unconsolidated investment			—				(26,978	)			—				(26,978	)
Add: total distributions from unconsolidated investment			—				32,350				—				32,350
Add: interest expense, net			—				—				3,492				3,492
Add: loss on extinguishment of debt			—				—				—				—
Add: depreciation, depletion and amortization			3,787				—				5				3,792
Add: asset impairments			69				—				—				69
Adjusted EBITDA		$	56,366			$	32,336			$	(5,643	)		$	83,059
For the Three Months Ended June 30, 2022
Net income (loss)		$	69,408			$	14,620			$	(17,208	)		$	66,820
Less: equity earnings from unconsolidated investment			—				(14,643	)			—				(14,643	)
Add: total distributions from unconsolidated investment			—				10,486				—				10,486
Add: interest expense, net			—				—				8,108				8,108
Add: loss on extinguishment of debt			—				—				4,048				4,048
Add: depreciation, depletion and amortization			5,847				—				—				5,847
Add: asset impairments			43				—				—				43
Adjusted EBITDA		$	75,298			$	10,463			$	(5,052	)		$	80,709
For the Three Months Ended March 31, 2023
Net income (loss)		$	68,881			$	19,096			$	(8,702	)		$	79,275
Less: equity earnings from unconsolidated investment			—				(19,254	)			—				(19,254	)
Add: total distributions from unconsolidated investment			—				10,780				—				10,780
Add: interest expense, net			—				—				2,853				2,853
Add: loss on extinguishment of debt			—				—				—				—
Add: depreciation, depletion and amortization			4,079				—				4				4,083
Add: asset impairments			—				—				—				—
Adjusted EBITDA		$	72,960			$	10,622			$	(5,845	)		$	77,737

 

 

Adjusted EBITDA

 

		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Six Months Ended June 30, 2023
Net income (loss)		$	121,391			$	46,060			$	(17,842	)		$	149,609
Less: equity earnings from unconsolidated investment			—				(46,232	)			—				(46,232	)
Add: total distributions from unconsolidated investment			—				43,130				—				43,130
Add: interest expense, net			—				—				6,345				6,345
Add: loss on extinguishment of debt			—				—				—				—
Add: depreciation, depletion and amortization			7,866				—				9				7,875
Add: asset impairments			69				—				—				69
Adjusted EBITDA		$	129,326			$	42,958			$	(11,488	)		$	160,796
For the Six Months Ended June 30, 2022
Net income (loss)		$	132,375			$	29,406			$	(31,062	)		$	130,719
Less: equity earnings from unconsolidated investment			—				(29,480	)			—				(29,480	)
Add: total distributions from unconsolidated investment			—				23,716				—				23,716
Add: interest expense, net			—				—				17,495				17,495
Add: loss on extinguishment of debt			—				—				4,048				4,048
Add: depreciation, depletion and amortization			9,715				—				—				9,715
Add: asset impairments			62				—				—				62
Adjusted EBITDA		$	142,152			$	23,642			$	(9,519	)		$	156,275

 

 

Distributable Cash Flow and Free Cash Flow

 

		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Three Months Ended June 30, 2023
Net cash provided by (used in) operating activities		$	55,040			$	32,326			$	(6,016	)		$	81,350
Add: proceeds from asset sales and disposals			5				—				—				5
Add: return of long-term contract receivable			610				—				—				610
Less: maintenance capital expenditures			—				—				(8	)			(8	)
Distributable cash flow		$	55,655			$	32,326			$	(6,024	)		$	81,957
Less: proceeds from asset sales and disposals			(5	)			—				—				(5	)
Free cash flow		$	55,650			$	32,326			$	(6,024	)		$	81,952
Net cash provided by (used in) investing activities		$	615			$	—			$	(8	)		$	607
Net cash used in financing activities			—				—				(88,882	)			(88,882	)
For the Three Months Ended June 30, 2022
Net cash provided by (used in) operating activities		$	70,351			$	10,430			$	(17,658	)		$	63,123
Add: proceeds from asset sales and disposals			346				—				—				346
Add: return of long-term contract receivable			563				—				—				563
Less: maintenance capital expenditures			—				—				—				—
Distributable cash flow		$	71,260			$	10,430			$	(17,658	)		$	64,032
Less: proceeds from asset sales and disposals			(346	)			—				—				(346	)
Free cash flow		$	70,914			$	10,430			$	(17,658	)		$	63,686
Net cash provided by investing activities		$	909			$	—			$	—			$	909
Net cash used in financing activities			—				—				(140,266	)			(140,266	)
For the Three Months Ended March 31, 2023
Net cash provided by (used in) operating activities		$	73,858			$	10,617			$	(11,575	)		$	72,900
Add: proceeds from asset sales and disposals			101				—				—				101
Add: return of long-term contract receivable			598				—				—				598
Less: maintenance capital expenditures			—				—				(2	)			(2	)
Distributable cash flow		$	74,557			$	10,617			$	(11,577	)		$	73,597
Less: proceeds from asset sales and disposals			(101	)			—				—				(101	)
Free cash flow		$	74,456			$	10,617			$	(11,577	)		$	73,496
Net cash provided by (used in) investing activities		$	699			$	—			$	(2	)		$	697
Net cash used in financing activities			(583	)			—				(94,450	)			(95,033	)

 

 

Distributable Cash Flow and Free Cash Flow

 

			Mineral									Corporate and
(In thousands)			Rights				Soda Ash				Financing				Total
For the Six Months Ended June 30, 2023
Net cash provided by (used in) operating activities			$	128,898			$	42,943			$	(17,591	)		$	154,250
Add: proceeds from asset sales and disposals				106				—				—				106
Add: return of long-term contract receivable				1,208				—				—				1,208
Less: maintenance capital expenditures				—				—				(10	)			(10	)
Distributable cash flow			$	130,212			$	42,943			$	(17,601	)		$	155,554
Less: proceeds from asset sales and disposals				(106	)			—				—				(106	)
Free cash flow			$	130,106			$	42,943			$	(17,601	)		$	155,448
Net cash provided by (used in) investing activities			$	1,314			$	—			$	(10	)		$	1,304
Net cash used in financing activities				(583	)			—				(183,332	)			(183,915	)
For the Six Months Ended June 30, 2022
Net cash provided by (used in) operating activities			$	118,527			$	23,625			$	(26,698	)		$	115,454
Add: proceeds from asset sales and disposals				346				—				—				346
Add: return of long-term contract receivable				563				—				—				563
Less: maintenance capital expenditures				—				—				—				—
Distributable cash flow			$	119,436			$	23,625			$	(26,698	)		$	116,363
Less: proceeds from asset sales and disposals				(346	)			—				—				(346	)
Free cash flow			$	119,090			$	23,625			$	(26,698	)		$	116,017
Net cash provided by investing activities			$	909			$	—			$	—			$	909
Net cash used in financing activities				(614	)			—				(191,913	)			(192,527	)

 

 

 

Cash Flow Cushion

 

		For the Three Months Ended
(In thousands)		September 30, 2022				December 31, 2022				March 31, 2023				June 30, 2023				Last 12 Months
Net cash provided by operating activities		$	82,496			$	68,888			$	72,900			$	81,350			$	305,634
Add: proceeds from asset sales and disposals			353				384				101				5				843
Add: return of long-term contract receivable			575				585				598				610				2,368
Less: maintenance capital expenditures			(59	)			(59	)			(2	)			(8	)			(128	)
Distributable cash flow		$	83,365			$	69,798			$	73,597			$	81,957			$	308,717
Less: proceeds from asset sales and disposals			(353	)			(384	)			(101	)			(5	)			(843	)
Free cash flow		$	83,012			$	69,414			$	73,496			$	81,952			$	307,874
Less: mandatory Opco debt repayments			—				(20,334	)			(16,696	)			(2,365	)			(39,395	)
Less: preferred unit distributions			(7,500	)			(7,500	)			(8,086	)			(7,396	)			(30,482	)
Less: redemption of preferred units			—				—				(47,499	)			(80,834	)			(128,333	)
Less: common unit distributions			(9,571	)			(9,571	)			(40,900	)			(9,669	)			(69,711	)
Cash flow cushion		$	65,941			$	32,009			$	(39,685	)		$	(18,312	)		$	39,953

 

Leverage Ratio

 

		For the Three Months Ended
(In thousands)		September 30, 2022				December 31, 2022				March 31, 2023				June 30, 2023				Last 12 Months
Net income		$	74,555			$	63,218			$	79,275			$	70,334			$	287,382
Less: equity earnings from unconsolidated investment			(14,556	)			(15,759	)			(19,254	)			(26,978	)			(76,547	)
Add: total distributions from unconsolidated investment			10,339				10,780				10,780				32,350				64,249
Add: interest expense, net			5,141				3,638				2,853				3,492				15,124
Add: loss on extinguishment of debt			2,484				3,933				—				—				6,417
Add: depreciation, depletion and amortization			6,850				5,954				4,083				3,792				20,679
Add: asset impairments			812				3,583				—				69				4,464
Adjusted EBITDA		$	85,625			$	75,347			$	77,737			$	83,059			$	321,768
Debt—at June 30, 2023																		$	183,059
Leverage Ratio																		0.6 x

		For the Three Months Ended
(In thousands)		September 30, 2021				December 31, 2021				March 31, 2022				June 30, 2022				Last 12 Months
Net income		$	29,498			$	55,641			$	63,899			$	66,820			$	215,858
Less: equity earnings from unconsolidated investment			(6,672	)			(10,625	)			(14,837	)			(14,643	)			(46,777	)
Add: total distributions from unconsolidated investment			—				7,350				13,230				10,486				31,066
Add: interest expense, net			9,652				9,568				9,387				8,108				36,715
Add: loss on extinguishment of debt			—				—				—				4,048				4,048
Add: depreciation, depletion and amortization			5,182				3,930				3,868				5,847				18,827
Add: asset impairments			57				986				19				43				1,105
Adjusted EBITDA		$	37,717			$	66,850			$	75,566			$	80,709			$	260,842
Debt—at June 30, 2022																		$	301,313
Leverage Ratio																		1.2 x

 

-end-

v3.23.2

Document And Entity Information	Aug. 04, 2023
Document Information [Line Items]
Entity, Registrant Name	NATURAL RESOURCE PARTNERS LP
Document, Type	8-K
Document, Period End Date	Aug. 04, 2023
Entity, Incorporation, State or Country Code	DE
Entity, File Number	001-31465
Entity, Tax Identification Number	35-2164875
Entity, Address, Address Line One	1415 Louisiana Street,
Entity, Address, Address Line Two	Suite 3325
Entity, Address, City or Town	Houston
Entity, Address, State or Province	TX
Entity, Address, Postal Zip Code	77002
City Area Code	713
Local Phone Number	751-7507
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Units representing limited partner interests
Trading Symbol	NRP
Security Exchange Name	NYSE
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001171486

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