10-Q 1 nrp-20220331.htm 10-Q nrp-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022 or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-31465
nrp-20220331_g1.gif
NATURAL RESOURCE PARTNERS LP
(Exact name of registrant as specified in its charter)
Delaware 35-2164875
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
1201 Louisiana Street, Suite 3400
Houston, Texas 77002
(Address of principal executive offices)
(Zip Code)
(713) 751-7507
(Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Units representing limited partner interestsNRPNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes     No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of "accelerated filer", "large accelerated filer", "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated Filer 
Non-accelerated Filer
  (Do not check if a smaller reporting company)
Smaller Reporting Company 
Emerging Growth Company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes      No  
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


NATURAL RESOURCE PARTNERS, L.P.
TABLE OF CONTENTS




i

PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS

March 31,December 31,
(In thousands, except unit data)20222021
ASSETS(Unaudited)
Current assets
Cash and cash equivalents$135,590 $135,520 
Accounts receivable, net32,729 24,538 
Other current assets, net3,510 2,723 
Total current assets$171,829 $162,781 
Land24,008 24,008 
Mineral rights, net433,965 437,697 
Intangible assets, net16,019 16,130 
Equity in unconsolidated investment280,156 276,004 
Long-term contract receivable, net30,783 31,371 
Other long-term assets, net5,528 5,832 
Total assets$962,288 $953,823 
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable$1,896 $1,956 
Accrued liabilities3,388 10,297 
Accrued interest8,463 1,213 
Current portion of deferred revenue15,420 11,817 
Current portion of long-term debt, net39,046 39,102 
Total current liabilities$68,213 $64,385 
Deferred revenue39,126 50,045 
Long-term debt, net378,163 394,443 
Other non-current liabilities4,803 5,018 
Total liabilities$490,305 $513,891 
Commitments and contingencies (see Note 12)
Class A Convertible Preferred Units (250,000 and 269,321 units issued and outstanding at March 31, 2022 and December 31, 2021, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at March 31, 2022 and December 31, 2021)
$164,587 $183,908 
Partners’ capital
Common unitholders’ interest (12,505,996 and 12,351,306 units issued and outstanding at March 31, 2022 and December 31, 2021, respectively)
$250,767 $203,062 
General partner’s interest2,909 1,787 
Warrant holders’ interest47,964 47,964 
Accumulated other comprehensive income 5,756 3,211 
Total partners’ capital$307,396 $256,024 
Total liabilities and partners' capital$962,288 $953,823 

The accompanying notes are an integral part of these consolidated financial statements.
1

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 For the Three Months Ended March 31,
(In thousands, except per unit data)20222021
Revenues and other income
Royalty and other mineral rights$71,083 $32,927 
Transportation and processing services3,796 2,192 
Equity in earnings of Sisecam Wyoming14,837 1,973 
Gain on asset sales and disposals 59 
Total revenues and other income$89,716 $37,151 
Operating expenses
Operating and maintenance expenses$8,076 $5,552 
Depreciation, depletion and amortization3,868 5,092 
General and administrative expenses4,467 4,110 
Asset impairments19 4,043 
Total operating expenses$16,430 $18,797 
Income from operations$73,286 $18,354 
Interest expense, net$(9,387)$(9,973)
Net income $63,899 $8,381 
Less: income attributable to preferred unitholders(7,500)(7,727)
Net income attributable to common unitholders and the general partner$56,399 $654 
Net income attributable to common unitholders$55,271 $641 
Net income attributable to the general partner1,128 13 
Net income per common unit (see Note 4)
Basic$4.45 $0.05 
Diluted3.11 0.05 
Net income $63,899 $8,381 
Comprehensive income from unconsolidated investment and other2,545 732 
Comprehensive income $66,444 $9,113 

The accompanying notes are an integral part of these consolidated financial statements.
2

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(Unaudited)

 Common UnitholdersGeneral PartnerWarrant HoldersAccumulated
Other
Comprehensive Income
Total Partners' Capital
 
(In thousands)UnitsAmounts
Balance at December 31, 202112,351 $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 awards155 — — — —  
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, 202212,506 $250,767 $2,909 $47,964 $5,756 $307,396 
(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.
 Common UnitholdersGeneral PartnerWarrant HoldersAccumulated
Other
Comprehensive
Income
Total Partners' Capital
 
(In thousands)UnitsAmounts
Balance at December 31, 202012,261 $136,927 $459 $66,816 $322 $204,524 
Net income (1)
— 8,213 168 — — 8,381 
Distributions to common unitholders and the general partner— (5,517)(113)— — (5,630)
Distributions to preferred unitholders— (7,461)(152)— — (7,613)
Issuance of unit-based awards90 — — — —  
Unit-based awards amortization and vesting, net— 215 — — — 215 
Capital contribution— — 32 — — 32 
Comprehensive income from unconsolidated investment and other— — — — 732 732 
Balance at March 31, 202112,351 $132,377 $394 $66,816 $1,054 $200,641 
(1)Net income includes $7.7 million of income attributable to preferred unitholders that accumulated during the period, of which $7.6 million is allocated to the common unitholders and $0.2 million is allocated to the general partner.



The accompanying notes are an integral part of these consolidated financial statements.
3

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


 For the Three Months Ended March 31,
(In thousands)20222021
Cash flows from operating activities
Net income$63,899 $8,381 
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization3,868 5,092 
Distributions from unconsolidated investment13,230 3,920 
Equity earnings from unconsolidated investment(14,837)(1,973)
Gain on asset sales and disposals (59)
Asset impairments19 4,043 
Bad debt expense1,028 383 
Unit-based compensation expense1,448 1,126 
Amortization of debt issuance costs and other375 269 
Change in operating assets and liabilities:
Accounts receivable(7,579)(3,331)
Accounts payable(60)(10)
Accrued liabilities(7,156)(3,034)
Accrued interest7,250 7,133 
Deferred revenue(7,316)(146)
Other items, net(1,838)1,406 
Net cash provided by operating activities$52,331 $23,200 
Cash flows from investing activities
Proceeds from asset sales and disposals$ $59 
Return of long-term contract receivable 541 
Net cash provided by investing activities$ $600 
Cash flows from financing activities
Debt repayments$(16,697)$(16,696)
Distributions to common unitholders and the general partner(5,672)(5,630)
Distributions to preferred unitholders(7,500)(3,806)
Redemption of preferred units paid-in-kind(19,579) 
Other items(2,813)(691)
Net cash used in financing activities$(52,261)$(26,823)
Net increase (decrease) in cash and cash equivalents$70 $(3,023)
Cash and cash equivalents at beginning of period135,520 99,790 
Cash and cash equivalents at end of period$135,590 $96,767 
Supplemental cash flow information:
Cash paid for interest$1,644 $2,320 
Non-cash investing and financing activities:
Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities$ $992 
Preferred unit distributions paid-in-kind 3,806 
The accompanying notes are an integral part of these consolidated financial statements.
4

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1.    Basis of Presentation
Nature of Business
Natural Resource Partners L.P. (the "Partnership") engages principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and owns a non-controlling 49% interest in Sisecam Wyoming LLC ("Sisecam Wyoming"), a trona ore mining and soda ash production business. The Partnership is organized into two operating segments further described in Note 5. Segment Information. As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context.
Principles of Consolidation and Reporting
The accompanying unaudited Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2021 and notes thereto included in the Partnership's Annual Report on Form 10-K, which was filed with the SEC on March 15, 2022. Certain reclassifications have been made to prior year amounts in the Notes to Consolidated Financial Statements to conform with current year presentation. These reclassifications had no impact on previously reported total assets, total liabilities, partners' capital, net income or cash flows from operating, investing or financing activities.

2.    Revenues from Contracts with Customers
The following table presents the Partnership's Mineral Rights segment revenues by major source:
For the Three Months Ended March 31,
(In thousands)20222021
Coal royalty revenues$55,449 $15,365 
Production lease minimum revenues1,592 3,450 
Minimum lease straight-line revenues4,783 6,096 
Property tax revenues1,472 1,469 
Wheelage revenues 3,717 1,781 
Coal overriding royalty revenues 258 1,859 
Lease amendment revenues880 868 
Aggregates royalty revenues770 454 
Oil and gas royalty revenues1,814 1,366 
Other revenues348 219 
Royalty and other mineral rights revenues$71,083 $32,927 
Transportation and processing services revenues (1)
3,796 2,192 
Total Mineral Rights segment revenues $74,879 $35,119 
(1)Transportation and processing services revenues from contracts with customers as defined under ASC 606 was $3.1 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively. The remaining transportation and processing services revenues of $0.7 million and $0.9 million for the three months ended March 31, 2022 and 2021, respectively, related to other NRP-owned infrastructure leased to and operated by third-party operators accounted for under other guidance. See Note 14. Financing Transaction for more information.




5

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The following table details the Partnership's Mineral Rights segment receivables and liabilities resulting from contracts with customers:
March 31,December 31,
(In thousands)20222021
Receivables
Accounts receivable, net$29,131 $22,277 
Other current assets, net (1)
2,063 769 
Other long-term assets, net (2)
250 250 
Contract liabilities
Current portion of deferred revenue$15,420 $11,817 
Deferred revenue39,126 50,045 
(1)Other current assets, net includes short-term notes receivables from contracts with customers.
(2)Other long-term assets, net includes long-term lease amendment fee receivables from contracts with customers.
The following table shows the activity related to the Partnership's Mineral Rights segment deferred revenue:
For the Three Months Ended
March 31,
(In thousands)20222021
Balance at beginning of period (current and non-current)$61,862 $61,554 
Increase due to minimums and lease amendment fees5,059 4,358 
Recognition of previously deferred revenue(12,375)(4,504)
Balance at end of period (current and non-current)$54,546 $61,408 

The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty leases are as follows as of March 31, 2022 (in thousands):
Lease Term (1)
Weighted Average Remaining YearsAnnual Minimum Payments
0 - 5 years2.4$19,021 
5 - 10 years3.96,772 
10+ years13.427,438 
Total8.3$53,231 
(1)Lease term does not include renewal periods.

3.    Common and Preferred Unit Distributions
The Partnership makes cash distributions to common and preferred unitholders on a quarterly basis, subject to approval by the Board of Directors of GP Natural Resource Partners LLC (the "Board of Directors"). NRP recognizes both common unit and preferred unit distributions on the date the distribution is declared.
Distributions made on the common units and the general partner's general partner ("GP") interest are made on a pro-rata basis in accordance with their relative percentage interests in the Partnership. The general partner is entitled to receive 2% of such distributions.

Income available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income available to common unitholders and the general partner by $7.5 million and $7.7 million during the three months ended March 31, 2022 and 2021, respectively, as a result of accumulated preferred unit distributions earned during the period.
6

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)


The following table shows the cash distributions declared and paid to common and preferred unitholders during the three months ended March 31, 2022 and 2021, respectively:
Cash DistributionsPaid-in-kind Distributions
Common UnitsPreferred Units
Month PaidPeriod Covered by DistributionDistribution per Unit
Total Distribution (1)
(In thousands)
Distribution per UnitTotal Distribution
(In thousands)
Total Distribution
(In units)
2022
February 2022October 1 - December 31, 2021$0.45 $5,672 $30.00 $7,500 $ 
2021
February 2021October 1 - December 31, 2020$0.45 $5,630 $15.00 $3,806 3,806 
(1)Totals include the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.

4.    Net Income Per Common Unit
Basic net income per common unit is computed by dividing net income, after considering income attributable to preferred unitholders and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income per common unit includes the effect of NRP's preferred units, warrants, and unvested unit-based awards if the inclusion of these items is dilutive.
The dilutive effect of the preferred units is calculated using the if-converted method. Under the if-converted method, the preferred units are assumed to be converted at the beginning of the period, and the resulting common units are included in the denominator of the diluted net income per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the preferred units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation. The calculation of diluted net income per common unit for the three months ended March 31, 2022 includes the assumed conversion of the preferred units. The calculation of diluted net income per common unit for the three months ended March 31, 2021 does not include the assumed conversion of the preferred units because the impact would have been 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 three months ended March 31, 2022 includes the net settlement of warrants to purchase 0.75 million common units at a strike price of $22.81 and the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00 whereas the calculation of diluted net income per common unit for the three months ended March 31, 2021 does not include the net settlement of warrants to purchase 1.75 million common units at a strike price of $22.81 or the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive.
7

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The following tables reconcile the numerator and denominator of the basic and diluted net income per common unit computations and calculates basic and diluted net income per common unit:
 For the Three Months Ended March 31,
(In thousands, except per unit data)20222021
Allocation of net income
Net income $63,899 $8,381 
Less: income attributable to preferred unitholders(7,500)(7,727)
Net income attributable to common unitholders and the general partner$56,399 $654 
Less: net income attributable to the general partner(1,128)(13)
Net income attributable to common unitholders$55,271 $641 
Basic net income per common unit
Weighted average common units—basic12,415 12,292 
Basic net income per common unit$4.45 $0.05 
Diluted net income per common unit
Weighted average common units—basic 12,415 12,292 
Plus: dilutive effect of preferred units6,974  
Plus: dilutive effect of warrants531  
Plus: dilutive effect of unvested unit-based awards240 116 
Weighted average common units—diluted20,160 12,408 
Net income $63,899 $8,381 
Less: income attributable to preferred unitholders (7,727)
Diluted net income attributable to common unitholders and the general partner$63,899 $654 
Less: diluted net income attributable to the general partner (1,278)(13)
Diluted net income attributable to common unitholders$62,621 $641 
Diluted net income per common unit$3.11 $0.05 


8

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

5.    Segment Information
The Partnership's segments are strategic business units that offer distinct products and services to different customers in different geographies within the U.S. and that are managed accordingly. NRP has the following two operating segments:
Mineral Rights—consists of mineral interests and other subsurface rights across the United States. NRP's ownership provides critical inputs for the manufacturing of steel, electricity and basic building materials, as well as opportunities for carbon sequestration and renewable energy. The Partnership is working to strategically redefine its business as a key player in the transitional energy economy in the years to come.
Soda Ash—consists of the Partnership's 49% non-controlling equity interest in Sisecam Wyoming, a trona ore mining operation and soda ash refinery in the Green River Basin of Wyoming. Sisecam Wyoming mines trona and processes it into soda ash that is sold both domestically and internationally to the glass and chemicals industries.
Direct segment costs and certain other costs incurred at the corporate level that are identifiable and that benefit the Partnership's segments are allocated to the operating segments accordingly. These allocated costs generally include salaries and benefits, insurance, property taxes, legal, royalty, information technology and shared facilities services and are included in operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income.
Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment and are included in general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income.
The following table summarizes certain financial information for each of the Partnership's business segments:
Operating Segments
(In thousands)Mineral RightsSoda AshCorporate and FinancingTotal
For the Three Months Ended March 31, 2022
Revenues $74,879 $14,837 $ $89,716 
Operating and maintenance expenses8,025 51  8,076 
Depreciation, depletion and amortization 3,868   3,868 
General and administrative expenses  4,467 4,467 
Asset impairments19   19 
Interest expense, net  9,387 9,387 
Net income (loss)62,967 14,786 (13,854)63,899 
For the Three Months Ended March 31, 2021
Revenues $35,119 $1,973 $ $37,092 
Gain on asset sales and disposals59   59 
Operating and maintenance expenses5,532 20  5,552 
Depreciation, depletion and amortization 5,092   5,092 
General and administrative expenses  4,110 4,110 
Asset impairments4,043   4,043 
Interest expense, net23  9,950 9,973 
Net income (loss)20,488 1,953 (14,060)8,381 


9

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

6.    Equity Investment
The Partnership accounts for its 49% investment in Sisecam Wyoming using the equity method of accounting. Activity related to this investment is as follows:
For the Three Months Ended March 31,
(In thousands)20222021
Balance at beginning of period$276,004 $262,514 
Income allocation to NRP’s equity interests16,065 3,216 
Amortization of basis difference(1,228)(1,243)
Other comprehensive income 2,545 732 
Distribution(13,230)(3,920)
Balance at end of period$280,156 $261,299 
The following table represents summarized financial information for Sisecam Wyoming as derived from their respective unaudited financial statements for the three months ended March 31, 2022 and 2021:
For the Three Months Ended March 31,
(In thousands)20222021
Net sales$163,437 $127,791 
Gross profit39,765 12,700 
Net income32,786 6,563 

7.    Mineral Rights, Net
The Partnership’s mineral rights consist of the following:
 March 31, 2022December 31, 2021
(In thousands)Carrying ValueAccumulated DepletionNet Book ValueCarrying ValueAccumulated DepletionNet Book Value
Coal properties$670,626 $(256,963)$413,663 $670,650 $(253,503)$417,147 
Aggregates properties8,747 (3,102)5,645 8,747 (2,975)5,772 
Oil and gas royalty properties12,354 (9,236)3,118 12,354 (9,115)3,239 
Other13,151 (1,612)11,539 13,151 (1,612)11,539 
Total mineral rights, net$704,878 $(270,913)$433,965 $704,902 $(267,205)$437,697 
Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income and totaled $3.7 million and $4.7 million for the three months ended March 31, 2022 and 2021, respectively.

During the three ended March 31, 2022, the Partnership recorded $0.02 million of impairment expense. During the three months ended March 31, 2021, the Partnership recorded $4.0 million of expense primarily due to a lease termination that resulted in the full impairment of a coal property. The Partnership has developed procedures to evaluate its long-lived assets for possible impairment periodically or whenever events or changes in circumstances indicate an asset's net book value may not be recoverable. Potential events or circumstances include, but are not limited to, specific events such as a reduction in economically recoverable reserves or production ceasing on a property for an extended period. This analysis is based on historic, current and future performance and considers both quantitative and qualitative information. While the Partnership's impairment evaluation as of March 31, 2022 incorporated an estimated impact of the global COVID-19 pandemic, there is significant uncertainty as to the severity and duration of this disruption. If the impact is worse than current estimates, an additional impairment charge may be recognized in future periods.

10

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

8.    Debt, Net
The Partnership's debt consists of the following:
March 31,December 31,
(In thousands)20222021
NRP LP debt:
9.125% senior notes, with semi-annual interest payments in June and December, due June 2025, issued at par ("2025 Senior Notes")
$300,000 $300,000 
Opco debt:
Revolving credit facility$ $ 
Senior Notes
5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023
$4,730 $4,730 
4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023
12,008 12,008 
5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024
25,368 38,053 
8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024
8,023 12,035 
5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026
57,104 57,104 
5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026
14,554 14,554 
Total Opco Senior Notes$121,787 $138,484 
Total debt at face value$421,787 $438,484 
Net unamortized debt issuance costs(4,578)(4,939)
Total debt, net$417,209 $433,545 
Less: current portion of long-term debt(39,046)(39,102)
Total long-term debt, net$378,163 $394,443 

NRP LP Debt
2025 Senior Notes
The 2025 Senior Notes were issued under an Indenture dated as of April 29, 2019 (the "2025 Indenture"), bear interest at 9.125% per year and mature on June 30, 2025. Interest is payable semi-annually on June 30 and December 30. NRP and NRP Finance have the option to redeem the 2025 Senior Notes, in whole or in part, at any time on or after October 30, 2021, at the redemption prices (expressed as percentages of principal amount) of 104.563% for the 12-month period beginning October 30, 2021, 102.281% for the 12-month period beginning October 30, 2022, and thereafter at 100.000%, together, in each case, with any accrued and unpaid interest to the date of redemption. Furthermore, before October 30, 2021, NRP may on any one or more occasions redeem up to 35% of the aggregate principal amount of the 2025 Senior Notes with the net proceeds of certain public or private equity offerings at a redemption price of 109.125% of the principal amount of 2025 Senior Notes, plus any accrued and unpaid interest, if any, to the date of redemption, if at least 65% of the aggregate principal amount of the 2025 Senior Notes issued under the 2025 Indenture remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering. In the event of a change of control, as defined in the 2025 Indenture, the holders of the 2025 Senior Notes may require us to purchase their 2025 Senior Notes at a purchase price equal to 101% of the principal amount of the 2025 Senior Notes, plus accrued and unpaid interest, if any. The 2025 Senior Notes were issued at par.
11

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

The 2025 Senior Notes are the senior unsecured obligations of NRP and NRP Finance. The 2025 Senior Notes rank equal in right of payment to all existing and future senior unsecured debt of NRP and NRP Finance and senior in right of payment to any of NRP's subordinated debt. The 2025 Senior Notes are effectively subordinated in right of payment to all future secured debt of NRP and NRP Finance to the extent of the value of the collateral securing such indebtedness and are structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries, including the Opco Credit Facility and each series of Opco’s existing senior notes. "Opco" refers to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. None of NRP's subsidiaries guarantee the 2025 Senior Notes. As of March 31, 2022 and December 31, 2021, NRP and NRP Finance were in compliance with the terms of the Indenture relating to their 2025 Senior Notes.
Opco Debt
All of Opco’s debt is guaranteed by its wholly owned subsidiaries and is secured by certain of the assets of Opco and its wholly owned subsidiaries, other than BRP LLC and NRP Trona LLC. As of March 31, 2022 and December 31, 2021, Opco was in compliance with the terms of the financial covenants contained in its debt agreements.
Opco Credit Facility
In April 2019, the Partnership entered into the Fourth Amendment (the “Fourth Amendment”) to the Opco Credit Facility (the "Opco Credit Facility"). The Fourth Amendment extended the term of the Opco Credit Facility until April 2023. Lender commitments under the Opco Credit Facility remain at $100.0 million. The Opco Credit Facility contains financial covenants requiring Opco to maintain:
A leverage ratio of consolidated indebtedness to EBITDDA (as defined in the Opco Credit Facility) not to exceed 4.0x; provided, however, that if the Partnership increases its quarterly distribution to its common unitholders above $0.45 per common unit, the maximum leverage ratio under the Opco Credit Facility will permanently decrease from 4.0x to 3.0x; and
a fixed charge coverage ratio of consolidated EBITDDA to consolidated fixed charges (consisting of consolidated interest expense and consolidated lease expense) of not less than 3.5 to 1.0.
During the three months ended March 31, 2022 and 2021, the Partnership did not have any borrowings outstanding under the Opco Credit Facility and had $100.0 million in available borrowing capacity at both March 31, 2022 and December 31, 2021.
The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of $341.7 million and $345.0 million classified as mineral rights, net and other long-term assets, net on the Partnership’s Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, respectively.
Opco Senior Notes   
Opco has issued several series of private placement senior notes (the "Opco Senior Notes") with various interest rates and principal due dates. As of March 31, 2022 and December 31, 2021, the Opco Senior Notes had cumulative principal balances of $121.8 million and $138.5 million, respectively. Opco made mandatory principal payments of $16.7 million during the three months ended March 31, 2022 and 2021.
The 8.92% Opco Senior Notes also provides that in the event that Opco’s leverage ratio of consolidated indebtedness to consolidated EBITDDA (as defined in the Note Purchase Agreements) exceeds 3.75 to 1.00 at the end of any fiscal quarter, then in addition to all other interest accruing on these notes, additional interest in the amount of 2.00% per annum shall accrue on the notes for the two succeeding quarters and for as long thereafter as the leverage ratio remains above 3.75 to 1.00. Opco has not exceeded the 3.75 to 1.00 ratio at the end of any fiscal quarter through March 31, 2022.
12

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

9.    Fair Value Measurements
Fair Value of Financial Assets and Liabilities
The Partnership’s financial assets and liabilities consist of cash and cash equivalents, a contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents approximate fair value due to their short-term nature. The Partnership uses available market data and valuation methodologies to estimate the fair value of its debt and contract receivable.
The following table shows the carrying value and estimated fair value of the Partnership's debt and contract receivable:
 March 31, 2022December 31, 2021
(In thousands)Fair Value Hierarchy LevelCarrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Debt:
NRP 2025 Senior Notes1$296,504 $304,500 $296,236 $300,000 
Opco Senior Notes (1)
3120,705 123,614 137,309 138,484 
Opco Credit Facility3    
Assets:
Contract receivable, net (current and
long-term) (2)
3$33,068 $25,732 $33,612 $26,010 
(1)The fair value of the Opco Senior Notes are estimated by management using quotations obtained for the NRP 2025 Senior Notes on the closing trading prices near period end, which were at 102% and 100% of par value at March 31, 2022 and December 31, 2021, respectively.
(2)The fair value of the Partnership's contract receivable is determined based on the present value of future cash flow projections related to the underlying asset at a discount rate of 15% at March 31, 2022 and December 31, 2021.
NRP has embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that are accounted for separately from the preferred units as assets and liabilities at fair value on the Partnership's Consolidated Balance Sheets. Level 3 valuation of the embedded derivatives are based on numerous factors including the likelihood of the event occurring. The embedded derivatives are revalued quarterly and changes in their fair value would be recorded in other expenses, net on the Partnership's Consolidated Statements of Comprehensive Income. The embedded derivatives had zero value as of March 31, 2022 and December 31, 2021.

10.    Related Party Transactions
Affiliates of our General Partner
The Partnership’s general partner does not receive any management fee or other compensation for its management of NRP. However, in accordance with the partnership agreement, the general partner and its affiliates are reimbursed for services provided to the Partnership and for expenses incurred on the Partnership’s behalf. Employees of Quintana Minerals Corporation ("QMC") and Western Pocahontas Properties Limited Partnership ("WPPLP"), affiliates of the Partnership, provide their services to manage the Partnership's business. QMC and WPPLP charge the Partnership the portion of their employee salary and benefits costs related to their employee services provided to NRP. These QMC and WPPLP employee management service costs are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income. NRP also reimburses overhead costs incurred by its affiliates, including Quintana Infrastructure Development ("QID"), to manage the Partnership's business. These overhead costs include certain rent, information technology, administration of employee benefits and other corporate services incurred by or on behalf of the Partnership’s general partner and its affiliates and are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income.
13

NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)

Direct general and administrative expenses charged to the Partnership by QMC, WPPLP and QID are included on the Partnership's Consolidated Statement of Comprehensive Income as follows:
For the Three Months Ended March 31,
(In thousands)20222021
Operating and maintenance expenses$1,659 $1,607 
General and administrative expenses1,240 1,186 
The Partnership had accounts payable on its Consolidated Balance Sheets of $0.4 million to QMC at both March 31, 2022 and December 31, 2021 and $0.8 million and $0.9 million to WPPLP at March 31, 2022 and December 31, 2021, respectively.
During the three months ended March 31, 2022 and 2021, the Partnership recognized $1.6 million and $0.2 million, respectively, in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to an overriding royalty agreement with WPPLP.
Corbin J. Robertson, Jr. owns 85% of the general partner of Great Northern Properties Limited Partnership ("GNP"), a privately held company primarily engaged in owning and managing mineral properties and surface leases. As of March 31, 2022 and December 31, 2021 the Partnership had $0.0 million and $0.1 million, respectively, of accounts receivable from GNP included in accounts receivable, net on its Consolidated Balance Sheets related to amounts collected for surface leases that belong to NRP.
11.    Major Customers
Revenues from customers that exceeded 10 percent of total revenues for any of the periods presented below are as follows:
 For the Three Months Ended March 31,