Company Quick10K Filing
Quick10K
Natural Resource Partners
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$40.34 12 $495
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-08-08 Earnings, Exhibits
8-K 2019-05-08 Earnings, Exhibits
8-K 2019-04-29 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-04-17 Enter Agreement, Exhibits
8-K 2019-04-04 Officers
8-K 2019-04-03 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-12-11 M&A, Exhibits
8-K 2018-11-16 Enter Agreement, Exhibits
8-K 2018-11-09 Earnings, Exhibits
8-K 2018-10-19 Enter Agreement
8-K 2018-08-09 Earnings, Exhibits
8-K 2018-02-28 Officers
8-K 2018-01-16 Officers, Exhibits
QTWO Q2 Holdings 3,130
RRR Red Rock Resorts 2,950
AIN Albany International 2,470
KLIC Kulicke & Soffa Industries 1,400
NEXA Nexa Resources 1,300
RLGY Realogy Holdings 981
AKRX Akorn 561
SIEB Siebert Financial 289
PWCO PwrCor 0
AXREF Amarc Resources 0
NRP 2019-06-30
Part I. Financial Information
Item 1. Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 a2019q2exhibit311.htm
EX-31.2 a2019q2exhibit312.htm
EX-32.1 a2019q2exhibit321.htm
EX-32.2 a2019q2exhibit322.htm

Natural Resource Partners Earnings 2019-06-30

NRP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 a2019form10-qsecondquarter.htm 10-Q Document

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019 or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
 
 
 
Commission file number: 001-31465
 
nrplogoa20.gif
NATURAL RESOURCE PARTNERS L.P.
 
(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 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  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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  ý    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
 
ý
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  ý
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
 
June 30,
 
December 31,
(In thousands, except unit data)
2019
 
2018
ASSETS
(Unaudited)
 
 
Current assets
 
 
 
Cash and cash equivalents
$
70,850

 
$
101,839

Restricted cash
14,925

 
104,191

Accounts receivable, net
28,553

 
32,058

Prepaid expenses and other
5,963

 
3,462

Current assets of discontinued operations
984

 
993

Total current assets
$
121,275

 
$
242,543

Land
24,008

 
24,008

Plant and equipment, net
825

 
984

Mineral rights, net
736,413

 
743,112

Intangible assets, net
41,008

 
42,513

Equity in unconsolidated investment
251,135

 
247,051

Long-term contracts receivable
37,973

 
38,945

Other assets
6,806

 
2,491

Total assets
$
1,219,443

 
$
1,341,647

LIABILITIES AND CAPITAL
 
 
 
Current liabilities
 
 
 
Accounts payable
$
1,211

 
$
2,414

Accrued liabilities
6,856

 
12,347

Accrued interest
7,201

 
14,345

Current portion of deferred revenue
6,579

 
3,509

Current portion of long-term debt, net
46,040

 
115,184

Current liabilities of discontinued operations
658

 
947

Total current liabilities
$
68,545

 
$
148,746

Deferred revenue
43,290

 
49,044

Long-term debt, net
498,029

 
557,574

Other non-current liabilities
4,731

 
1,150

Total liabilities
$
614,595

 
$
756,514

Commitments and contingencies (see Note 14)
 
 
 
Class A Convertible Preferred Units (250,000 units issued and outstanding at $1,000 par value per unit; liquidation preference of $1,500 per unit)
$
164,587

 
$
164,587

Partners’ capital
 
 
 
Common unitholders’ interest (12,261,199 and 12,249,469 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)
$
374,275

 
$
355,113

General partner’s interest
5,387

 
5,014

Warrant holders’ interest
66,816

 
66,816

Accumulated other comprehensive loss
(3,282
)
 
(3,462
)
Total partners’ capital
$
443,196

 
$
423,481

Non-controlling interest
(2,935
)
 
(2,935
)
Total capital
$
440,261

 
$
420,546

Total liabilities and capital
$
1,219,443


$
1,341,647

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

1

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(In thousands, except per unit data)
2019
 
2018
 
2019
 
2018
Revenues and other income
 
 
 
 
 
 
 
Coal royalty and other
$
64,616

 
$
47,920

 
$
114,118

 
$
92,394

Transportation and processing services
5,274

 
5,002

 
10,875

 
10,385

Equity in earnings of Ciner Wyoming
11,333

 
16,529

 
23,015

 
26,150

Gain on asset sales
246

 
168

 
502

 
819

Total revenues and other income
$
81,469

 
$
69,619

 
$
148,510


$
129,748

 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
Operating and maintenance expenses
$
12,459

 
$
8,117

 
$
20,819

 
$
14,332

Depreciation, depletion and amortization
3,970

 
5,376

 
8,362

 
10,476

General and administrative expenses
4,196

 
3,263

 
8,546

 
7,599

Asset impairments

 

 

 
242

Total operating expenses
$
20,625


$
16,756


$
37,727

 
$
32,649

 
 
 
 
 
 
 
 
Income from operations
$
60,844


$
52,863


$
110,783

 
$
97,099

 
 
 
 
 
 
 
 
Other expenses, net
 
 
 
 
 
 
 
Interest expense, net
$
(12,456
)
 
$
(17,734
)
 
$
(26,630
)
 
$
(35,684
)
Loss on extinguishment of debt
(29,282
)
 

 
(29,282
)
 

Total other expenses, net
$
(41,738
)

$
(17,734
)

$
(55,912
)
 
$
(35,684
)
 
 
 
 
 
 
 
 
Net income from continuing operations
$
19,106


$
35,129


$
54,871

 
$
61,415

Income from discontinued operations
245

 
2,981

 
199

 
1,033

Net income
$
19,351


$
38,110


$
55,070

 
$
62,448

Net income attributable to non-controlling interest

 
(869
)
 

 
(869
)
Net income attributable to NRP
$
19,351

 
$
37,241

 
$
55,070

 
$
61,579

Less: income attributable to preferred unitholders
(7,500
)
 
(7,500
)
 
(15,000
)
 
(15,000
)
Net income attributable to common unitholders and general partner
$
11,851


$
29,741


$
40,070

 
$
46,579

 
 
 
 
 
 
 
 
Net income attributable to common unitholders
$
11,614

 
$
29,146

 
$
39,269

 
$
45,647

Net income attributable to the general partner
237

 
595

 
801

 
932

 
 
 
 
 
 
 
 
Income from continuing operations per common unit (see Note 5)
 
 
 
 
 
 
 
Basic
$
0.93

 
$
2.14

 
$
3.19

 
$
3.65

Diluted
0.85

 
1.57

 
2.58

 
2.78

 
 
 
 
 
 
 
 
Net income per common unit (see Note 5)
 
 
 
 
 
 
 
Basic
$
0.95

 
$
2.38

 
$
3.20

 
$
3.73

Diluted
0.87

 
1.71

 
2.59

 
2.83

 
 
 
 
 
 
 
 
Net income
$
19,351


$
38,110


$
55,070

 
$
62,448

Comprehensive income (loss) from unconsolidated investment and other
(825
)
 
(434
)
 
180

 
(1,559
)
Comprehensive income
$
18,526

 
$
37,676

 
$
55,250

 
$
60,889

Comprehensive income attributable to non-controlling interest

 
(869
)
 

 
(869
)
Comprehensive income attributable to NRP
$
18,526


$
36,807


$
55,250

 
$
60,020

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 Unitholders
 
General Partner
 
Warrant Holders
 
Accumulated
Other
Comprehensive Loss
 
Partners' Capital Excluding Non-Controlling Interest
 
Non-Controlling Interest
 
Total Capital
 
(In thousands)
Units
 
Amounts
 
Balance at December 31, 2018
12,249

 
$
355,113

 
$
5,014

 
$
66,816

 
$
(3,462
)
 
$
423,481

 
$
(2,935
)
 
$
420,546

Net income (1)

 
35,005

 
714

 

 

 
35,719

 

 
35,719

Distributions to common unitholders and general partner

 
(5,513
)
 
(112
)
 

 

 
(5,625
)
 

 
(5,625
)
Distributions to preferred unitholders

 
(7,350
)
 
(150
)
 

 

 
(7,500
)
 

 
(7,500
)
Issuance of unit-based awards
12

 
486

 

 

 

 
486

 

 
486

Unit-based awards amortization and vesting

 
399

 

 

 

 
399

 

 
399

Comprehensive income from unconsolidated investment and other

 

 
10

 

 
1,005

 
1,015

 

 
1,015

Balance at March 31, 2019
12,261

 
$
378,140

 
$
5,476

 
$
66,816

 
$
(2,457
)
 
$
447,975

 
$
(2,935
)
 
$
445,040

Net income (1)

 
18,964

 
387

 

 

 
19,351

 

 
19,351

Distributions to common unitholders and general partner

 
(15,939
)
 
(326
)
 

 

 
(16,265
)
 

 
(16,265
)
Distributions to preferred unitholders

 
(7,350
)
 
(150
)
 

 

 
(7,500
)
 

 
(7,500
)
Unit-based awards amortization and vesting

 
460

 

 

 

 
460

 

 
460

Comprehensive loss from unconsolidated investment and other

 

 

 

 
(825
)
 
(825
)
 

 
(825
)
Balance at June 30, 2019
12,261

 
$
374,275

 
$
5,387

 
$
66,816

 
$
(3,282
)
 
$
443,196

 
$
(2,935
)
 
$
440,261

 
 
 
 
 
(1)
Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.

3

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


 
Common Unitholders
 
General Partner
 
Warrant Holders
 
Accumulated
Other
Comprehensive
Loss
 
Partners' Capital Excluding Non-Controlling Interest
 
Non-Controlling Interest
 
Total Capital
 
(In thousands)
Units
 
Amounts
 
Balance at December 31, 2017
12,232

 
$
199,851

 
$
1,857

 
$
66,816

 
$
(3,313
)
 
$
265,211

 
$
(3,394
)
 
$
261,817

Cumulative effect of adoption of accounting standard

 
69,057

 
1,409

 

 

 
70,466

 

 
70,466

Net income (1)

 
23,851

 
487

 

 

 
24,338

 

 
24,338

Distributions to common unitholders and general partner

 
(5,505
)
 
(112
)
 

 

 
(5,617
)
 

 
(5,617
)
Distributions to preferred unitholders

 
(7,610
)
 
(155
)
 

 

 
(7,765
)
 

 
(7,765
)
Issuance of unit-based awards
14

 
410

 

 

 

 
410

 

 
410

Unit-based awards amortization and vesting

 
197

 

 

 

 
197

 

 
197

Comprehensive income (loss) from unconsolidated investment and other

 

 
8

 

 
(1,125
)
 
(1,117
)
 

 
(1,117
)
Balance at March 31, 2018
12,246

 
$
280,251

 
$
3,494

 
$
66,816

 
$
(4,438
)
 
$
346,123

 
$
(3,394
)
 
$
342,729

Net income (1)

 
36,496

 
745

 

 

 
37,241

 
869

 
38,110

Distributions to common unitholders and general partner

 
(5,510
)
 
(113
)
 

 

 
(5,623
)
 

 
(5,623
)
Distributions to preferred unitholders

 
(7,350
)
 
(150
)
 

 

 
(7,500
)
 

 
(7,500
)
Unit-based awards amortization and vesting

 
136

 

 

 

 
136

 

 
136

Comprehensive income (loss) from unconsolidated investment and other

 
50

 
1

 

 
(434
)
 
(383
)
 
(51
)
 
(434
)
Balance at June 30, 2018
12,246

 
$
304,073

 
$
3,977

 
$
66,816

 
$
(4,872
)
 
$
369,994

 
$
(2,576
)
 
$
367,418

 
 
 
 
 
(1)
Net income includes $7.5 million attributable to preferred unitholders that accumulated during the period, of which $7.35 million is allocated to the common unitholders and $0.15 million is allocated to the general partner.
The accompanying notes are an integral part of these consolidated financial statements.

4

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



 
Six Months Ended June 30,
(In thousands)
2019
 
2018
Cash flows from operating activities
 
 
 
Net income
$
55,070

 
$
62,448

Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
 
 
 
Depreciation, depletion and amortization
8,362

 
10,476

Distributions from unconsolidated investment
19,110

 
22,403

Equity earnings from unconsolidated investment
(23,015
)
 
(26,150
)
Gain on asset sales
(502
)
 
(819
)
Loss on extinguishment of debt
29,282

 

Income from discontinued operations
(199
)
 
(1,033
)
Asset impairments

 
242

Unit-based compensation expense
1,376

 
990

Amortization of debt issuance costs and other
2,151

 
2,815

Change in operating assets and liabilities:
 
 
 
Accounts receivable
3,584

 
(7,043
)
Accounts payable
(1,177
)
 
863

Accrued liabilities
(5,522
)
 
(3,287
)
Accrued interest
(7,144
)
 
(875
)
Deferred revenue
(2,684
)
 
9,006

Other items, net
(2,501
)
 
1,271

Net cash provided by operating activities of continuing operations
$
76,191

 
$
71,307

Net cash provided by operating activities of discontinued operations
355

 
2,836

Net cash provided by operating activities
$
76,546

 
$
74,143

 
 
 
 
Cash flows from investing activities
 
 
 
Distributions from unconsolidated investment in excess of cumulative earnings
$

 
$
2,097

Proceeds from sale of assets
503

 
826

Return of long-term contract receivable
892

 
1,016

Net cash provided by investing activities of continuing operations
$
1,395

 
$
3,939

Net cash used in investing activities of discontinued operations
(434
)
 
(5,772
)
Net cash provided by (used in) investing activities
$
961

 
$
(1,833
)
 
 
 
 
Cash flows from financing activities
 
 
 
Debt borrowings
$
300,000

 
$
35,000

Debt repayments
(434,470
)
 
(48,072
)
Redemption of preferred units paid-in-kind

 
(8,844
)
Distributions to common unitholders and general partner
(21,890
)
 
(11,240
)
Distributions to preferred unitholders
(15,000
)
 
(15,265
)
Contributions to discontinued operations
(79
)
 
(2,250
)
Debt issuance costs and other
(26,402
)
 
(226
)
Net cash used in financing activities of continuing operations
$
(197,841
)
 
$
(50,897
)
Net cash provided by financing activities of discontinued operations
79

 
1,735

Net cash used in financing activities
$
(197,762
)
 
$
(49,162
)

5

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



 
Six Months Ended June 30,
(In thousands)
2019
 
2018
Net increase (decrease) in cash, cash equivalents and restricted cash
$
(120,255
)
 
$
23,148

 
 
 
 
Cash, cash equivalents and restricted cash of continuing operations at beginning of period
$
206,030

 
$
26,980

Cash and cash equivalents of discontinued operations at beginning of period

 
2,847

Cash, cash equivalents and restricted cash at beginning of period
$
206,030

 
$
29,827

 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at end of period
$
85,775

 
$
52,975

Less: cash and cash equivalents of discontinued operations at end of period

 
(1,646
)
Cash, cash equivalents and restricted cash of continuing operations at end of period
$
85,775

 
$
51,329

 
 
 
 
Supplemental cash flow information:
 
 
 
Cash paid during the period for interest of continuing operations
$
33,045

 
$
33,155

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

6

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 Ciner Wyoming LLC ("Ciner 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. 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. In management's opinion, all necessary adjustments to fairly present the Partnership's results of operations, financial position and cash flows for the periods presented have been made and all such adjustments were of a normal and recurring nature. Certain reclassifications have been made to prior period amounts on the Consolidated Balance Sheets, Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows to conform with current period 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.
Recasting of Certain Prior Period Information
As described in Note 3. Discontinued Operations, the Partnership reclassified prior period information for the assets and liabilities, operating results and cash flows of its construction aggregates business as discontinued operations in its consolidated financial statements for all periods presented.
Restricted Cash
Restricted cash at June 30, 2019 and December 31, 2018 represents the remaining net proceeds from the sale of the Partnership's construction aggregates business that is required to be used to repay debt, make acquisitions or make capital expenditures per the terms of the Partnership's and Opco's debt agreements. In the first six months of 2019, the Partnership used $88.8 million of restricted cash to repay principal amounts on Opco's private placement senior notes (the "Opco Senior Notes") and it intends to use the remaining $14.9 million of restricted cash to repay a portion of the remaining 2019 principal payments on the Opco Senior Notes.
Recently Adopted Accounting Standards
Leases
On January 1, 2019, NRP adopted Accounting Standards Codification (ASC) 842, Leases, and all the related amendments (the “new lease standard” and "ASC 842") and recognized assets and liabilities on the its Consolidated Balance Sheet for the present value of the rights and obligations created by all leases with terms of more than 12 months. This standard does not apply to leases that explore for or use minerals, oil, natural gas and similar non-regenerative resources, including the intangible right to explore for those natural resources and rights to use the land in which those natural resources are contained. The guidance also required disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows arising from leases. The guidance was adopted by NRP on January 1, 2019 using a modified retrospective approach.
The Partnership is a lessee in one lease that is accounted for as an operating lease under the new lease standard and the adoption of the new lease standard did not have a material impact to the Partnership's consolidated financial statements. For lease agreements entered into or reassessed after the adoption of ASC 842, the Partnership elected to not combine lease and non-lease components. See Note 16. Leases for more information.

7

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


Recently Issued Accounting Standards
Credit Losses
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326). The new standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new standard replaces today's "incurred loss" model with an "expected credit loss" model that requires entities to estimate an expected lifetime credit loss on financial assets, including trade accounts receivable. The guidance is effective for annual and interim periods beginning after December 15, 2019 and is to be adopted using a modified retrospective approach. The Partnership is continuing to evaluate the provisions of this guidance on its consolidated financial statements, but based on its analysis to date, the Partnership does not expect this standard to have a material effect on its consolidated financial statements.
2.    Revenues from Contracts with Customers
The following table represents the Partnership's Coal Royalty and Other segment revenues by major source:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In thousands)
 
2019
 
2018
 
2019
 
2018
Coal royalty revenues
 
$
30,703

 
$
34,762

 
$
62,834

 
$
65,764

Production lease minimum revenues
 
15,879

 
2,006

 
18,579

 
4,541

Minimum lease straight-line revenues
 
3,854

 
569

 
7,170

 
1,172

Property tax revenues
 
1,377

 
1,523

 
2,810

 
2,705

Wheelage revenues
 
1,945

 
1,609

 
3,360

 
3,583

Coal overriding royalty revenues
 
3,999

 
3,702

 
7,974

 
6,574

Lease amendment revenues
 
4,414

 

 
5,185

 

Aggregates royalty revenues
 
1,237

 
1,572

 
2,701

 
2,663

Oil and gas royalty revenues
 
482

 
1,354

 
2,201

 
4,252

Other revenues
 
726

 
823

 
1,304

 
1,140

Coal royalty and other revenues (1)
 
$
64,616

 
$
47,920

 
$
114,118

 
$
92,394

Transportation and processing services revenues (2)
 
5,274

 
5,002

 
10,875

 
10,385

Total Coal Royalty and Other segment revenues
 
$
69,890

 
$
52,922

 
$
124,993

 
$
102,779

 
 
 
 
 
(1)
Coal royalty and other revenues from contracts with customers as defined under ASC 606.
(2)
Transportation and processing services revenues from contracts with customers as defined under ASC 606 was $2.6 million and $3.1 million for the three months ended June 30, 2019 and 2018, respectively, and $5.6 million and $6.1 million for the six months ended June 30, 2019 and 2018, respectively. The remaining transportation and processing services revenues of $2.6 million and $1.9 million for the three months ended June 30, 2019, and 2018, respectively, and $5.3 million and $4.3 million for the six months ended June 30, 2019, and 2018, respectively, related to other NRP-owned infrastructure leased to and operated by third party operators accounted for under other guidance. See Note 16. Leases for more information.


8

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


The following table details the Partnership's Coal Royalty and Other segment receivables and liabilities resulting from contracts with customers:
 
 
June 30,
 
December 31,
(In thousands)
 
2019
 
2018
Receivables
 
 
 
 
Accounts receivable, net
 
$
25,438

 
$
29,001

Prepaid expenses and other (1)
 
5,445

 
2,483

 
 
 
 
 
Contract liabilities
 
 
 
 
Current portion of deferred revenue
 
$
6,579

 
$
3,509

Deferred revenue
 
43,290

 
49,044

 
 
 
 
 
(1)
Prepaid expenses and other includes notes receivable from contracts with customers.
The following table shows the activity related to the Partnership's Coal Royalty and Other segment deferred revenue:
 
Six Months Ended June 30,
(In thousands)
2019
 
2018
Balance at end of prior period (current and non-current)
$
52,553

 
$
100,605

Cumulative adjustment for change in accounting principle

 
(65,591
)
Balance at beginning of period (current and non-current)
$
52,553

 
$
35,014

Increase due to minimums and lease amendment fees
29,776

 
17,954

Recognition of previously deferred revenue
(32,460
)
 
(10,873
)
Balance at end of period (current and non-current)
$
49,869

 
$
42,095


The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty and overriding royalty leases are as follows (in thousands):
Lease Term (1)
 
Weighted Average Remaining Years as of June 30, 2019
 
Annual Minimum Payments (2)
0 - 5 years
 
2.4
 
$
12,589

5 - 10 years
 
8.0
 
2,176

10+ years
 
13.1
 
47,452

Total
 
10.8
 
$
62,217

 
 
 
 
 
(1)
Lease term does not include renewal periods.
(2)
Annual minimum payments do not include $5.0 million from a coal lease that is accounted for as a financing transaction. See Note 16. Leases for additional information.

9

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


3.    Discontinued Operations
In December 2018, the Partnership sold VantaCore Partners LLC, its construction aggregates business, and in July 2016, the Partnership sold its non-operated oil and gas working interest assets. The Partnership's exit from both its construction aggregates business and non-operated oil and gas working interest business represented strategic shifts to reduce debt and focus on its Coal Royalty and Other and Soda Ash business segments. As a result, the Partnership classified the assets and liabilities, operating results and cash flows of these businesses as discontinued operations in its Consolidated Balance Sheets, Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows for all periods presented.
The following table presents the carrying amounts of the Partnership's assets and liabilities of discontinued operations in the Consolidated Balance Sheets:
 
June 30, 2019
 
December 31, 2018
(In thousands)
Construction Aggregates
 
NRP
Oil and Gas
 
Total
 
Construction Aggregates
 
NRP
Oil and Gas
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable, net
$
(4
)
 
$
988

 
$
984

 
$
5

 
$
988

 
$
993

Total assets of discontinued operations
$
(4
)
 
$
988

 
$
984

 
$
5

 
$
988

 
$
993

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
42

 
$

 
$
42

 
$
181

 
$

 
$
181

Accrued liabilities
616

 

 
616

 
766

 

 
766

Total liabilities of discontinued operations
$
658

 
$

 
$
658

 
$
947

 
$

 
$
947

The following tables present summarized financial results of the Partnership's discontinued operations in the Consolidated Statements of Comprehensive Income:
 
Three Months Ended June 30,
 
2019
 
2018
(In thousands)
Construction Aggregates
 
 NRP
Oil and Gas
 
Total
 
Construction Aggregates
 
 NRP
Oil and Gas
 
Total
Revenues and other income
 
 
 
 
 
 
 
 
 
 
 
Construction aggregates
$

 
$

 
$

 
$
34,233

 
$

 
$
34,233

Road construction and asphalt paving services

 

 

 
6,176

 

 
6,176

Oil and gas

 

 

 

 
(2
)
 
(2
)
Gain on asset sales
246

 

 
246

 
42

 

 
42

Total revenues and other income
$
246

 
$

 
$
246

 
$
40,451

 
$
(2
)
 
$
40,449

 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
 
 
Operating and maintenance expenses
$

 
$
1

 
$
1

 
$
34,249

 
$
32

 
$
34,281

Depreciation, depletion and amortization

 

 

 
3,187

 

 
3,187

Total operating expenses
$

 
$
1

 
$
1

 
$
37,436

 
$
32

 
$
37,468

 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from discontinued operations
$
246

 
$
(1
)
 
$
245

 
$
3,015

 
$
(34
)
 
$
2,981


10

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


 
Six Months Ended June 30,
 
2019
 
2018
(In thousands)
Construction Aggregates
 
 NRP
Oil and Gas
 
Total
 
Construction Aggregates
 
 NRP
Oil and Gas
 
Total
Revenues and other income
 
 
 
 
 
 
 
 
 
 
 
Construction aggregates
$

 
$

 
$

 
$
60,657

 
$

 
$
60,657

Road construction and asphalt paving services

 

 

 
6,904

 

 
6,904

Oil and gas

 

 

 

 
(2
)
 
(2
)
Gain on asset sales
238

 

 
238

 
51

 

 
51

Total revenues and other income
$
238

 
$

 
$
238

 
$
67,612

 
$
(2
)
 
$
67,610

 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
 
 
Operating and maintenance expenses
$
27

 
$
12

 
$
39

 
$
60,467

 
$
46

 
$
60,513

Depreciation, depletion and amortization

 

 

 
6,044

 

 
6,044

Total operating expenses
$
27

 
$
12

 
$
39

 
$
66,511

 
$
46

 
$
66,557

 
 
 
 
 
 
 
 
 
 
 
 
Interest expense

 

 

 
(20
)
 

 
(20
)
Income (loss) from discontinued operations
$
211

 
$
(12
)
 
$
199

 
$
1,081

 
$
(48
)
 
$
1,033

Capital expenditures related to the Partnership's discontinued operations were $5.9 million during the six months ended June 30, 2018.
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 attributable to common unitholders and the general partner by $7.5 million during the three months ended June 30, 2019 and 2018, respectively, and $15.0 million during the six months ended June 30, 2019 and 2018, respectively, as a result of accumulated Preferred Unit distributions earned during the period. During the three months ended March 31, 2018, the Partnership redeemed all of the outstanding PIK Units, which resulted in an $8.8 million cash payment during the period, which is not included in the table below.

11

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


The following table shows the distributions declared and paid to common and preferred unitholders during the six months ended June 30, 2019 and 2018, respectively:
 
 
Common Units
 
Preferred Units
Date Paid
 
Period Covered by Distribution
 
Distribution per Unit
 
Total Distribution (1)
(In thousands)
 
Distribution per Unit
 
Total Distribution
(In thousands)
2019
 
 
 
 
 
 
 
 
 
 
February 2019
 
October 1 - December 31, 2018
 
$
0.45

 
$
5,625

 
$
30.00

 
$
7,500

May 2019
 
January 1 - March 31, 2019
 
0.45

 
5,630

 
30.00

 
7,500

May 2019 (2)
 
Special Distribution
 
0.85

 
10,635

 

 

 
 
 
 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
 
 
 
 
February 2018
 
October 1 - December 31, 2017
 
$
0.45

 
$
5,617

 
$
30.00

 
$
7,500

May 2018
 
January 1 - March 31, 2018
 
0.45

 
5,623

 
30.00

 
7,500

 
 
 
 
 
(1)
Totals include the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.
(2)
The special distribution of $0.85 per common unit was made to cover the common unitholders’ tax liability resulting from the sale of NRP’s construction aggregates business in December 2018.
5.    Net Income Per Common Unit
Basic net income per common unit is computed by dividing net income, after considering income attributable to non-controlling interest, 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 June 30, 2019 does not include the assumed conversion of the Preferred Units because the impact would have been anti-dilutive. The calculation of diluted net income per common unit for the three months ended June 30, 2018 and six months ended June 30, 2019 and 2018 includes the assumed conversion of the Preferred Units.
The dilutive effect of the Warrants is calculated using the treasury stock method, which assumes that the proceeds from the exercise of these instruments are used to purchase common units at the average market price for the period. The calculation of the dilutive effect of the Warrants for the three and six months ended June 30, 2018 includes the net settlement of Warrants to purchase 1.75 million common units with a strike price of $22.81 but did not include the net settlement of Warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive. The calculation of diluted net income per common unit for the three and six months ended June 30, 2019, includes both the net settlement of warrants to purchase 1.75 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.


12

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


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:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(In thousands, except per unit data)
2019
 
2018
 
2019
 
2018
Allocation of net income
 
 
 
 
 
 
 
Net income from continuing operations
$
19,106

 
$
35,129

 
$
54,871

 
$
61,415

Less: net income attributable to non-controlling interest

 
(869
)
 

 
(869
)
Less: income attributable to preferred unitholders
(7,500
)
 
(7,500
)
 
(15,000
)
 
(15,000
)
Net income from continuing operations attributable to common unitholders and general partner
$
11,606

 
$
26,760

 
$
39,871

 
$
45,546

Less: net income from continuing operations attributable to the general partner
(232
)
 
(535
)
 
(797
)
 
(911
)
Net income from continuing operations attributable to common unitholders
$
11,374


$
26,225


$
39,074


$
44,635

 
 
 
 
 
 
 
 
Net income from discontinued operations
$
245

 
$
2,981

 
$
199

 
$
1,033

Less: net income from discontinued operations attributable to the general partner
(5
)
 
(60
)
 
(4
)
 
(21
)
Net income from discontinued operations attributable to common unitholders
$
240


$
2,921


$
195

 
$
1,012

 
 
 
 
 
 
 
 
Net income
$
19,351


$
38,110


$
55,070

 
$
62,448

Less: net income attributable to non-controlling interest

 
(869
)
 

 
(869
)
Less: income attributable to preferred unitholders
(7,500
)
 
(7,500
)
 
(15,000
)
 
(15,000
)
Net income attributable to common unitholders and general partner
$
11,851

 
$
29,741

 
$
40,070

 
$
46,579

Less: net income attributable to the general partner
(237
)

(595
)

(801
)
 
(932
)
Net income attributable to common unitholders
$
11,614


$
29,146


$
39,269


$
45,647

 
 
 
 
 
 
 
 
Basic net income per common unit
 
 
 
 
 
 
 
Weighted average common units—basic
12,261

 
12,246

 
12,258

 
12,242

Basic net income from continuing operations per common unit
$
0.93


$
2.14


$
3.19

 
$
3.65

Basic net income from discontinued operations per common unit
$
0.02


$
0.24


$
0.02

 
$
0.08

Basic net income per common unit
$
0.95


$
2.38


$
3.20

 
$
3.73


13

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


 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(In thousands, except per unit data)
2019
 
2018
 
2019
 
2018
Diluted income per common unit
 
 
 
 
 
 
 
Weighted average common units—basic
12,261

 
12,246

 
12,258

 
12,242

Plus: dilutive effect of Preferred Units

 
8,615

 
7,443

 
8,615

Plus: dilutive effect of Warrants
1,087

 
522

 
1,091

 
476

Plus: dilutive effect of unvested unit-based awards
40

 

 
36

 

Weighted average common units—diluted
13,388


21,383


20,828

 
21,333

 
 
 
 
 
 
 
 
Net income from continuing operations
$
19,106


$
35,129


$
54,871

 
$
61,415

Less: net income attributable to non-controlling interest

 
(869
)
 

 
(869
)
Less: income attributable to preferred unitholders
(7,500
)
 

 

 

Diluted net income from continuing operations attributable to common unitholders and general partner
$
11,606

 
$
34,260

 
$
54,871

 
$
60,546

Less: diluted net income from continuing operations attributable to the general partner
(232
)
 
(685
)
 
(1,097
)
 
(1,211
)
Diluted net income from continuing operations attributable to common unitholders
$
11,374


$
33,575


$
53,774

 
$
59,335

 
 
 
 
 
 
 
 
Diluted net income from discontinued operations attributable to common unitholders
$
240


$
2,921


$
195

 
$
1,012

 
 
 
 
 
 
 
 
Net income
$
19,351


$
38,110


$
55,070

 
$
62,448

Less: net income attributable to non-controlling interest

 
(869
)
 

 
(869
)
Less: income attributable to preferred unitholders
(7,500
)
 

 

 

Diluted net income attributable to common unitholders and general partner
$
11,851

 
$
37,241

 
$
55,070

 
$
61,579

Less: diluted net income attributable to the general partner
(237
)
 
(745
)
 
(1,101
)
 
(1,232
)
Diluted net income attributable to common unitholders
$
11,614


$
36,496


$
53,969

 
$
60,347

 
 
 
 
 
 
 
 
Diluted net income from continuing operations per common unit
$
0.85


$
1.57


$
2.58

 
$
2.78

Diluted net income from discontinued operations per common unit
$
0.02


$
0.14


$
0.01

 
$
0.05

Diluted net income per common unit
$
0.87


$
1.71


$
2.59

 
$
2.83

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. that are managed accordingly. NRP has the following two operating segments:
Coal Royalty and Other—consists primarily of coal royalty properties and coal-related transportation and processing assets. Other assets include industrial mineral royalty properties, aggregates royalty properties, oil and gas royalty properties and timber. The Partnership's coal reserves are primarily located in Appalachia, the Illinois Basin and the Northern Powder River Basin in the United States. The Partnership's industrial minerals and aggregates properties are located in a number of states across the United States. The Partnership's oil and gas royalty assets are primarily located in Louisiana.
Soda Ash—consists of the Partnership's 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining and soda ash production business located in the Green River Basin of Wyoming. Ciner Resources LP, the Partnership's operating partner, mines the trona, processes it into soda ash, and distributes the soda ash both domestically and internationally to the glass and chemicals industries.

14

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


In December 2018, the Partnership sold its construction aggregates business which enabled it to further reduce debt and focus on its Coal Royalty and Other and Soda Ash business segments. See Note 3. Discontinued Operations for more information.
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)
 
Coal Royalty and Other
 
Soda Ash
 
Corporate and Financing
 
Total
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
Revenues
 
$
69,890

 
$
11,333

 
$

 
$
81,223

Gain on asset sales
 
246

 

 

 
246