# Natural Resource Partners LP: Form 10-Q for the period ended Sep 30, 2023

- Company: [Natural Resource Partners LP](/companies/nrp.md) (CIK 1171486)
- Form: 10-Q
- Filed: 2023-11-03
- Accepted by EDGAR: Nov 3, 2023, 12:27 ET
- Period: 2023-09-30
- Accession: 0001437749-23-030163
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1171486/000143774923030163/nrp20230930_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1171486/000143774923030163/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-07-01 to 2023-09-30 | $68.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2023-01-01 to 2023-09-30 | $205.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | $67.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | $223.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-07-01 to 2023-09-30 | $3.8m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2023-01-01 to 2023-09-30 | $10.2m | us-gaap:InterestExpense |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | $63.8m | us-gaap:ProfitLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | $213.5m | us-gaap:ProfitLoss |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | $233.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-01-01 to 2023-09-30 | $10.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-09-30 | $18.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $59.5m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $815.2m | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $52.1m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $264.7m | us-gaap:Liabilities |
| Long-term debt | at 2023-09-30 | $170.7m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2023-09-30 | $36.8m | us-gaap:LongTermDebtCurrent |

## Management's discussion and analysis

As filed, 49,281 characters.

The following review of operations for the three and nine month periods ended September 30, 2023 and 2022 should be read in conjunction with our Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in this Form 10-Q and with the Consolidated Financial Statements, Notes to Consolidated Financial Statements and Management’s Discussion and Analysis included in the Natural Resource Partners L.P. Annual Report on Form 10-K for the year ended December 31, 2022.

As used herein, unless the context otherwise requires: "we," "our," "us" and the "Partnership" refer to Natural Resource Partners L.P. and, where the context requires, our subsidiaries. References to "NRP" and "Natural Resource Partners" refer to Natural Resource Partners L.P. only, and not to NRP (Operating) LLC or any of Natural Resource Partners L.P.’s subsidiaries. References to "Opco" refer to NRP (Operating) LLC, a wholly owned subsidiary of NRP, and its subsidiaries. NRP Finance Corporation ("NRP Finance") is a wholly owned subsidiary of NRP and was a co-issuer with NRP on the 9.125% senior notes due 2025 (the "2025 Senior Notes").

### INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Statements included in this 10-Q may constitute forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are also forward-looking statements. Such forward-looking statements include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on our common and preferred units; our business strategy; our liquidity and access to capital and financing sources; our financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by our lessees; Sisecam Wyoming LLC’s ("Sisecam Wyoming's") trona mining and soda ash refinery operations; distributions from our soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us, and of scheduled or potential regulatory or legal changes; and global and U.S. economic conditions.

These forward-looking statements speak only as of the date hereof and are made based upon our current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. You should not put undue reliance on any forward-looking statements. See "Item 1A. Risk Factors" included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2022 for important factors that could cause our actual results of operations or our actual financial condition to differ.

### NON-GAAP FINANCIAL MEASURES

### Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. For a description of Opco's debt agreements, see Note 9. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note 11. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, 2022. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

### Distributable Cash Flow

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

### Free Cash Flow

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

### Leverage Ratio

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

### Introduction

The following discussion and analysis presents management's view of our business, financial condition and overall performance. Our discussion and analysis consists of the following subjects:

- Executive Overview
- Results of Operations
- Liquidity and Capital Resources
- Off-Balance Sheet Transactions
- Related Party Transactions
- Summary of Critical Accounting Estimates
- Recent Accounting Standards

### Executive Overview

We are a diversified natural resource company engaged principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and own a non-controlling 49% interest in Sisecam Wyoming, a trona ore mining and soda ash production business. Our common units trade on the New York Stock Exchange under the symbol "NRP." Our business is organized into two operating segments:

**Mineral Rights—**consists of approximately 13 million acres of mineral interests and other subsurface rights across the United States. If combined in a single tract, our ownership would cover roughly 20,000 square miles. Our ownership provides critical inputs for the manufacturing of steel, electricity and basic building materials, as well as opportunities for carbon sequestration and renewable energy. We are working to strategically redefine our business as a key player in the transitional energy economy in the years to come.

**Soda Ash—**consists of our 49% non-controlling equity interest in Sisecam Wyoming, a trona ore mining and soda ash production business located in the Green River Basin of Wyoming. Sisecam Wyoming mines the trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries.

Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment.

Our financial results by segment for the nine months ended September 30, 2023 are as follows:

*(In thousands)*

|  | Operating Segments Mineral Rights | Soda Ash | Corporate and Financing | Total |
| --- | ---: | ---: | ---: | ---: |
| Revenues and other income | $218,213 | $58,633 | $— | $276,846 |
| Net income (loss) | $182,400 | $58,408 | $(27,353) | $213,455 |
| Adjusted EBITDA (1) | $194,987 | $65,915 | $(17,157) | $243,745 |
| Cash flow provided by (used in) continuing operations |  |  |  |  |
| Operating activities | $189,836 | $65,901 | $(22,545) | $233,192 |
| Investing activities | $2,791 | $— | $(10) | $2,781 |
| Financing activities | $(583) | $— | $(256,070) | $(256,653) |
| Distributable cash flow (1) | $192,627 | $65,901 | $(22,555) | $235,973 |
| Free cash flow (1) | $191,666 | $65,901 | $(22,555) | $235,012 |

(1) See "—Results of Operations" below for reconciliations to the most comparable GAAP financial measures.

### Current Results/Market Commentary

### Financial Results and Quarterly Distributions

We generated $233.2 million of operating cash flow and $235.0 million of free cash flow during the nine months ended September 30, 2023, and ended the quarter with $45.4 million of liquidity consisting of $18.4 million of cash and cash equivalents and $27.0 million of borrowing capacity under our Opco Credit Facility. As of September 30, 2023 our leverage ratio was 0.7 x.

In May 2023, we declared and paid a cash distribution of $0.75 per common unit of NRP with respect to the first quarter of 2023 as well as a $6.1 million cash distribution on the preferred units with respect to the first quarter of 2023. In August 2023, we declared and paid a cash distribution of $0.75 per common unit of NRP with respect to the second quarter of 2023 as well as a $3.7 million cash distribution on the preferred units with respect to the second quarter of 2023. Future distributions on our common and preferred units will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs.

In February 2023, we received a notice from holders of the Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 47,499 Class A Preferred Units. We chose to redeem the preferred units for $47.5 million in cash rather than issuing common units. In May 2023, we received a notice from holders of our Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 35,834 Class A Preferred Units. We chose to redeem the preferred units for $35.8 million in cash rather than issuing common units. In June 2023, we executed a negotiated transaction with holders of our Class A Preferred Units pursuant to which we repurchased and retired an aggregate of 45,000 Class A Preferred Units for $45.0 million in cash. In August 2023, we executed a negotiated transaction with holders of the Class A Preferred Units pursuant to which we repurchased and retired an aggregate of 35,000 Class A Preferred Units for $35.0 million in cash. In September 2023, we executed a negotiated transaction with holders of the Class A Preferred Units pursuant to which we repurchased and retired an aggregate of 15,001 Class A Preferred Units for $15.0 million in cash. Of the originally issued 250,000 Class A Preferred Units, 71,666 Class A Preferred Units remain outstanding as of September 30, 2023. In connection with these repurchases and effective September 2023, Blackstone no longer holds any Class A Preferred Units and as such, all rights of Blackstone thereof have ceased with respect to the Class A Preferred Units and Blackstone's board designee resigned from the board of the Partnership's general partner.

In September 2023, we negotiated a transaction with holders of the warrants to purchase common units (the "warrants") pursuant to which we repurchased and retired an aggregate of 752,500 warrants with an exercise price of $22.81 and 60,000 warrants with an exercise price of $34.00 for approximately $33.6 million in cash. In October 2023, we executed two negotiated transactions with holders of the warrants pursuant to which we repurchased and retired an aggregate of 650,000 warrants with an exercise price of $34.00 for approximately $22.5 million in cash. Following these transactions, 1.54 million warrants with an exercise price of $34.00 remain outstanding.

### Mineral Rights Business Segment

Revenues and other income in the first nine months of 2023 decreased $29.7 million, or 12%, as compared to the prior year period primarily due to decreased metallurgical coal sales prices and decreased revenues from oil and gas royalties and certain carbon neutral initiative transactions entered into in 2022. Cash provided by operating activities and free cash flow decreased $4.6 million and $3.9 million, respectively, compared to the prior year period primarily due to the lower revenues during the first nine months of 2023 as compared to the prior year period.

Metallurgical coal prices improved, and thermal coal prices remained relatively flat during the third quarter of 2023. Both metallurgical and thermal coal prices were above historical norms but below the record highs seen in 2022. We expect continued price support for coal as limited access to capital, labor shortages and inflationary pressures limit operators' ability to increase production.

We continue to explore carbon neutral revenue opportunities across our large asset portfolio, including the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar and wind energy.

### Soda Ash Business Segment

Revenues and other income in the first nine months of 2023increased $14.6 million, or 33%, 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. Cash provided by operating activities and free cash flow in the first nine months of 2023increased $32.0 million as compared to the prior year period due to higher distributions received from Sisecam Wyoming in 2023 stemming from Sisecam Wyoming's strong operating performance in the first half of the year.

International soda ash prices were significantly lower in the third quarter compared to the first half of the year primarily due to new supply from China. We believe lower international prices will persist throughout the remainder of the year and into next year as the market absorbs the additional supply. Sisecam Wyoming’s domestic soda ash sales prices are expected to remain above the spot market for the rest of this year as a result of negotiated 2023 domestic sales contracts entered into at the end of 2022. As domestic sales contracts for 2024 begin to be negotiated, we believe contracted sales prices will be set at lower levels as the market contends with recessionary headwinds and new supply entering the export markets.

### Results of Operations

### Third Quarter of 2023 and 2022 Compared

### Revenues and Other Income

The following table includes our revenues and other income by operating segment:

| Operating Segment (In thousands) | For the Three Months Ended September 30, 2023 | 2022 | Decrease | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Mineral Rights | $73,966 | $87,702 | $(13,736) | (16)% |
| Soda Ash | 12,401 | 14,556 | (2,155) | (15)% |
| Total | $86,367 | $102,258 | $(15,891) | (16)% |

The changes in revenues and other income are discussed for each of the operating segments below:

### Mineral Rights

The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:

*(In thousands, except per ton data)*

| Coal sales volumes (tons) Appalachia | For the Three Months Ended September 30, 2023 | 2022 | Increase (Decrease) | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Northern | 284 | 440 | (156) | (35)% |
| Central | 3,429 | 3,503 | (74) | (2)% |
| Southern | 741 | 498 | 243 | 49% |
| Total Appalachia | 4,454 | 4,441 | 13 | 0% |
| Illinois Basin | 2,541 | 3,490 | (949) | (27)% |
| Northern Powder River Basin | 1,364 | 835 | 529 | 63% |
| Gulf Coast | 479 | 188 | 291 | 155% |
| Total coal sales volumes | 8,838 | 8,954 | (116) | (1)% |
| Coal royalty revenue per ton |  |  |  |  |
| Appalachia |  |  |  |  |
| Northern | $5.54 | $6.74 | $(1.20) | (18)% |
| Central | 8.20 | 9.04 | (0.84) | (9)% |
| Southern | 11.88 | 9.78 | 2.10 | 21% |
| Illinois Basin | 3.98 | 2.57 | 1.41 | 55% |
| Northern Powder River Basin | 4.86 | 4.56 | 0.30 | 7% |
| Gulf Coast | 0.69 | 0.59 | 0.10 | 17% |
| Combined average coal royalty revenue per ton | 6.29 | 5.85 | 0.44 | 8% |
| Coal royalty revenues |  |  |  |  |
| Appalachia |  |  |  |  |
| Northern | $1,573 | $2,965 | $(1,392) | (47)% |
| Central | 28,111 | 31,680 | (3,569) | (11)% |
| Southern | 8,806 | 4,872 | 3,934 | 81% |
| Total Appalachia | 38,490 | 39,517 | (1,027) | (3)% |
| Illinois Basin | 10,108 | 8,967 | 1,141 | 13% |
| Northern Powder River Basin | 6,627 | 3,805 | 2,822 | 74% |
| Gulf Coast | 330 | 111 | 219 | 197% |
| Unadjusted coal royalty revenues | 55,555 | 52,400 | 3,155 | 6% |
| Coal royalty adjustment for minimum leases | (11) | (19) | 8 | 42% |
| Total coal royalty revenues | $55,544 | $52,381 | $3,163 | 6% |
| Other revenues |  |  |  |  |
| Production lease minimum revenues | $850 | $1,885 | $(1,035) | (55)% |
| Minimum lease straight-line revenues | 4,464 | 4,778 | (314) | (7)% |
| Carbon neutral initiative revenues | 681 | 8,600 | (7,919) | (92)% |
| Wheelage revenues | 2,385 | 2,977 | (592) | (20)% |
| Property tax revenues | 1,770 | 1,360 | 410 | 30% |
| Coal overriding royalty revenues | 827 | 1,367 | (540) | (40)% |
| Lease amendment revenues | 623 | 759 | (136) | (18)% |
| Aggregates royalty revenues | 736 | 884 | (148) | (17)% |
| Oil and gas royalty revenues | 324 | 6,170 | (5,846) | (95)% |
| Other revenues | 329 | 218 | 111 | 51% |
| Total other revenues | $12,989 | $28,998 | $(16,009) | (55)% |
| Royalty and other mineral rights | $68,533 | $81,379 | $(12,846) | (16)% |
| Transportation and processing services revenues | 4,579 | 5,969 | (1,390) | (23)% |
| Gain on asset sales and disposals | 854 | 354 | 500 | 141% |
| Total Mineral Rights segment revenues and other income | $73,966 | $87,702 | $(13,736) | (16)% |

21

#### Coal Royalty Revenues

Approximately 60% of coal royalty revenues and approximately 45% of coal royalty sales volumes were derived from metallurgical coal during the three months ended September 30, 2023. Total coal royalty revenues increased $3.2 million as compared to the prior year quarter. The discussion by region is as follows:

- Appalachia: Coal royalty revenues decreased $1.0 million primarily due to decreased metallurgical coal sales prices during the three months ended September 30, 2023, as compared to the prior year quarter.
- Illinois Basin: Coal royalty revenues increased $1.1 million primarily due to increased sales prices during the three months ended September 30, 2023, as compared to the prior year quarter.
- Northern Powder River Basin: Coal royalty revenues increased $2.8 million primarily due to increased sales volumes during the three months ended September 30, 2023, as compared to the prior year quarter as our lessee mined more on our property during the third quarter of 2023 as compared to the third quarter of 2022 in accordance with its mine plan.

#### Other Revenues

Total other revenues decreased $16.0 million during the three months ended September 30, 2023, as compared to the prior year quarter primarily due a $7.9 million decrease in carbon neutral initiative revenues and a $5.8 million decrease in oil and gas royalty revenues. Carbon neutral initiative revenues recognized during the three months ended September 30, 2023 primarily related to the sale of forest carbon offset credits and carbon neutral initiative revenues recognized during the three months ended September 30, 2022 primarily related to carbon neutral transactions that included subsurface CO2 storage and geothermal energy production. Oil and gas royalty revenues decreased during the three months ended September 30, 2023 primarily as a result of decreased natural gas production and prices as compared to the prior year quarter.

### Soda Ash

Revenues and other income related to our Soda Ash segment decreased $2.2 million as compared to the prior year quarter primarily due to lower international sales prices and an increased sales mix into the lower priced international market in the three months ended September 30, 2023 as compared to the prior year period.

### Operating and Other Expenses

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

*(In thousands)*

| Operating expenses | For the Three Months Ended September 30, 2023 | 2022 | Increase (Decrease) | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Operating and maintenance expenses | $8,358 | $7,898 | $460 | 6% |
| Depreciation, depletion and amortization | 4,594 | 6,850 | (2,256) | (33)% |
| General and administrative expenses | 5,669 | 4,518 | 1,151 | 25% |
| Asset impairments | 63 | 812 | (749) | (92)% |
| Total operating expenses | $18,684 | $20,078 | $(1,394) | (7)% |
| Other expenses, net |  |  |  |  |
| Interest expense, net | $3,837 | $5,141 | $(1,304) | (25)% |
| Loss on extinguishment of debt | — | 2,484 | (2,484) | (100)% |
| Total other expenses, net | $3,837 | $7,625 | $(3,788) | (50)% |

Total operating expenses decreased $1.4 million as compared to the prior year quarter primarily due a decrease in depreciation, depletion and amortization driven by lower Illinois Basin coal sales volumes during the three months ended September 30, 2023 as compared to the prior year quarter.

Total other expenses, net decreased $3.8 million as a result of the loss on extinguishment of debt recognized in 2022 related to the partial retirement of the 2025 Senior Notes during the third quarter of 2022 in addition a decrease in interest expense, net primarily due to less debt outstanding as compared to the prior year quarter.

### Adjusted EBITDA (Non-GAAP Financial Measure)

The following table reconciles net income (loss) (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:

| For the Three Months Ended (In thousands) September 30, 2023 | Operating Segments Mineral Rights | Soda Ash | Corporate and Financing | Total |
| --- | ---: | ---: | ---: | ---: |
| Net income (loss) | $61,009 | $12,348 | $(9,511) | $63,846 |
| Less: equity earnings from unconsolidated investment | — | (12,401) | — | (12,401) |
| Add: total distributions from unconsolidated investment | — | 23,010 | — | 23,010 |
| Add: interest expense, net | — | — | 3,837 | 3,837 |
| Add: depreciation, depletion and amortization | 4,589 | — | 5 | 4,594 |
| Add: asset impairments | 63 | — | — | 63 |
| Adjusted EBITDA | $65,661 | $22,957 | $(5,669) | $82,949 |
| September 30, 2022 |  |  |  |  |
| Net income (loss) | $72,173 | $14,525 | $(12,143) | $74,555 |
| Less: equity earnings from unconsolidated investment | — | (14,556) | — | (14,556) |
| Add: total distributions from unconsolidated investment | — | 10,339 | — | 10,339 |
| Add: interest expense, net | — | — | 5,141 | 5,141 |
| Add: loss on extinguishment of debt | — | — | 2,484 | 2,484 |
| Add: depreciation, depletion and amortization | 6,850 | — | — | 6,850 |
| Add: asset impairments | 812 | — | — | 812 |
| Adjusted EBITDA | $79,835 | $10,308 | $(4,518) | $85,625 |

Net income decreased $10.7 million as compared to the prior year quarter primarily due to the decrease in revenues and other income, partially offset by the decrease in operating and other expenses, net, both discussed above. Adjusted EBITDA decreased $2.7 million as compared to the prior year quarter primarily due to a $14.2 million decrease in Adjusted EBITDA within our Mineral Rights segment primarily as a result of lower revenues and other income as discussed above. This decrease was partially offset by a $12.6 million increase in Adjusted EBITDA within our Soda Ash segment due to a higher distribution received from Sisecam Wyoming driven by their strong operating performance in the first half of 2023.

### Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)

The following table presents the three major categories of the statement of cash flows by business segment:

| For the Three Months Ended (In thousands) September 30, 2023 Cash flow provided by (used in) | Operating Segments Mineral Rights | Soda Ash | Corporate and Financing | Total |
| --- | ---: | ---: | ---: | ---: |
| Operating activities | $60,938 | $22,958 | $(4,954) | $78,942 |
| Investing activities | 1,477 | — | — | 1,477 |
| Financing activities | — | — | (72,738) | (72,738) |
| September 30, 2022 |  |  |  |  |
| Cash flow provided by (used in) |  |  |  |  |
| Operating activities | $75,948 | $10,309 | $(3,761) | $82,496 |
| Investing activities | 928 | — | (59) | 869 |
| Financing activities | — | — | (81,784) | (81,784) |

23

The following table reconciles net cash provided by (used in) operating activities (the most comparable GAAP financial measure) by business segment to DCF and FCF:

| For the Three Months Ended (In thousands) September 30, 2023 | Operating Segments Mineral Rights | Soda Ash | Corporate and Financing | Total |
| --- | ---: | ---: | ---: | ---: |
| Net cash provided by (used in) operating activities | $60,938 | $22,958 | $(4,954) | $78,942 |
| Add: proceeds from asset sales and disposals | 855 | — | — | 855 |
| Add: return of long-term contract receivable | 622 | — | — | 622 |
| Less: maintenance capital expenditures | — | — | — | — |
| Distributable cash flow | $62,415 | $22,958 | $(4,954) | $80,419 |
| Less: proceeds from asset sales and disposals | (855) | — | — | (855) |
| Free cash flow | $61,560 | $22,958 | $(4,954) | $79,564 |
| September 30, 2022 |  |  |  |  |
| Net cash provided by (used in) operating activities | $75,948 | $10,309 | $(3,761) | $82,496 |
| Add: proceeds from asset sales and disposals | 353 | — | — | 353 |
| Add: return of long-term contract receivable | 575 | — | — | 575 |
| Less: maintenance capital expenditures | — | — | (59) | (59) |
| Distributable cash flow | $76,876 | $10,309 | $(3,820) | $83,365 |
| Less: proceeds from asset sales and disposals | (353) | — | — | (353) |
| Free cash flow | $76,523 | $10,309 | $(3,820) | $83,012 |

Operating cash flow, DCF and FCF decreased $3.6 million, $2.9 million and $3.4 million, respectively, as compared to the prior year quarter primarily due to a decrease in cash flow within our Mineral Rights segment, partially offset by an increase in cash flow within our Soda Ash segment. The discussion by segment is as follows:

- Mineral Rights Segment
- Operating cash flow, DCF and FCF decreased $15.0 million, $14.5 million and $15.0 million, respectively, primarily driven by cash received from certain carbon neutral initiatives entered into in the third quarter of 2022 and lower natural gas production and prices in the third quarter of 2023 as compared to the prior year quarter.
- Soda Ash Segment
- Operating cash flow, DCF and FCF increased $12.6 million as compared to the prior year quarter primarily due to a higher distribution received from Sisecam Wyoming driven by Sisecam Wyoming's strong operating performance in the first half of 2023.

### First Nine Months of 2023 and 2022 Compared

### Revenues and Other Income

The following table includes our revenues and other income by operating segment:

| Operating Segment (In thousands) | For the Nine Months Ended September 30, 2023 | 2022 | Increase (Decrease) | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Mineral Rights | $218,213 | $247,871 | $(29,658) | (12)% |
| Soda Ash | 58,633 | 44,036 | 14,597 | 33% |
| Total | $276,846 | $291,907 | $(15,061) | (5)% |

The changes in revenues and other income are discussed for each of the operating segments below:

### Mineral Rights

The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:

*(In thousands, except per ton data)*

| Coal sales volumes (tons) Appalachia | For the Nine Months Ended September 30, 2023 | 2022 | Increase (Decrease) | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Northern | 1,053 | 1,260 | (207) | (16)% |
| Central | 10,390 | 10,238 | 152 | 1% |
| Southern | 2,016 | 1,171 | 845 | 72% |
| Total Appalachia | 13,459 | 12,669 | 790 | 6% |
| Illinois Basin | 5,482 | 8,395 | (2,913) | (35)% |
| Northern Powder River Basin | 3,330 | 2,772 | 558 | 20% |
| Gulf Coast | 676 | 324 | 352 | 109% |
| Total coal sales volumes | 22,947 | 24,160 | (1,213) | (5)% |
| Coal royalty revenue per ton |  |  |  |  |
| Appalachia |  |  |  |  |
| Northern | $7.59 | $9.48 | $(1.89) | (20)% |
| Central | 8.89 | 10.85 | (1.96) | (18)% |
| Southern | 12.41 | 14.28 | (1.87) | (13)% |
| Illinois Basin | 3.63 | 2.30 | 1.33 | 58% |
| Northern Powder River Basin | 4.74 | 4.24 | 0.50 | 12% |
| Gulf Coast | 0.68 | 0.58 | 0.10 | 17% |
| Combined average coal royalty revenue per ton | 7.04 | 7.08 | (0.04) | (1)% |
| Coal royalty revenues |  |  |  |  |
| Appalachia |  |  |  |  |
| Northern | $7,991 | $11,946 | $(3,955) | (33)% |
| Central | 92,362 | 111,121 | (18,759) | (17)% |
| Southern | 25,024 | 16,725 | 8,299 | 50% |
| Total Appalachia | 125,377 | 139,792 | (14,415) | (10)% |
| Illinois Basin | 19,924 | 19,331 | 593 | 3% |
| Northern Powder River Basin | 15,768 | 11,751 | 4,017 | 34% |
| Gulf Coast | 461 | 187 | 274 | 147% |
| Unadjusted coal royalty revenues | 161,530 | 171,061 | (9,531) | (6)% |
| Coal royalty adjustment for minimum leases | (3) | (286) | 283 | 99% |
| Total coal royalty revenues | $161,527 | $170,775 | $(9,248) | (5)% |
| Other revenues |  |  |  |  |
| Production lease minimum revenues | $2,025 | $3,542 | $(1,517) | (43)% |
| Minimum lease straight-line revenues | 13,414 | 14,235 | (821) | (6)% |
| Carbon neutral initiative revenues | 2,914 | 8,600 | (5,686) | (66)% |
| Wheelage revenues | 9,538 | 11,073 | (1,535) | (14)% |
| Property tax revenues | 4,710 | 4,527 | 183 | 4% |
| Coal overriding royalty revenues | 1,165 | 2,307 | (1,142) | (50)% |
| Lease amendment revenues | 2,322 | 2,450 | (128) | (5)% |
| Aggregates royalty revenues | 2,175 | 2,691 | (516) | (19)% |
| Oil and gas royalty revenues | 5,126 | 10,890 | (5,764) | (53)% |
| Other revenues | 895 | 705 | 190 | 27% |
| Total other revenues | $44,284 | $61,020 | $(16,736) | (27)% |
| Royalty and other mineral rights | $205,811 | $231,795 | $(25,984) | (11)% |
| Transportation and processing services revenues | 11,447 | 15,377 | (3,930) | (26)% |
| Gain on asset sales and disposals | 955 | 699 | 256 | 37% |
| Total Mineral Rights segment revenues and other income | $218,213 | $247,871 | $(29,658) | (12)% |

25

#### Coal Royalty Revenues

Approximately 70% of coal royalty revenues and approximately 50% of coal royalty sales volumes were derived from metallurgical coal during the nine months ended September 30, 2023. Total coal royalty revenues decreased $9.2 million as compared to the prior year period. The discussion by region is as follows:

- Appalachia: Coal royalty revenues decreased $14.4 million primarily due to decreased metallurgical coal sales prices during the nine months ended September 30, 2023, as compared to the prior year period.
- Illinois Basin: Coal royalty revenues increased $0.6 million during the nine months ended September 30, 2023, as compared to the prior year period primarily due to higher coal sales prices, partially offset by lower coal sales volumes as compared to the prior year period.
- Northern Powder River Basin: Coal royalty revenues increased $4.0 million primarily due to increased sales volumes during the nine months ended September 30, 2023, as compared to the prior year period as our lessee mined more on our property during the first nine months of 2023 as compared to the first nine months of 2022 in accordance with its mine plan.

#### Other Revenues

Total other revenues decreased $16.7 million during the nine months ended September 30, 2023, as compared to the prior year period primarily due a $5.8 million decrease in oil and gas royalty revenues and a $5.7 million decrease in carbon neutral initiative revenues. Oil and gas royalty revenues decreased during the nine months ended September 30, 2023 primarily as a result of decreased natural gas production and prices as compared to the prior year period. Carbon neutral initiative revenues recognized during the nine months ended September 30, 2023 primarily related to subsurface CO2 storage and forest carbon offset credits. Carbon neutral initiative revenues recognized during the nine months ended September 30, 2022 primarily related to subsurface CO2 storage and geothermal energy transactions.

#### Transportation and Processing Services Revenues

Transportation and processing services revenues decreased $3.9 million during the nine months ended September 30, 2023, as compared to the prior year period primarily due to a temporary relocation of certain production off of NRP's coal reserves. The fee per ton associated with the transportation and processing of the non-NRP coal is less than the fee per ton associated with the transportation and processing of NRP coal.

### Soda Ash

Revenues and other income related to our Soda Ash segment increased $14.6 million during the nine months ended September 30, 2023 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 and Other Expenses

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

*(In thousands)*

| Operating expenses | For the Nine Months Ended September 30, 2023 | 2022 | Increase (Decrease) | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Operating and maintenance expenses | $23,451 | $25,989 | $(2,538) | (10)% |
| Depreciation, depletion and amortization | 12,469 | 16,565 | (4,096) | (25)% |
| General and administrative expenses | 17,157 | 14,037 | 3,120 | 22% |
| Asset impairments | 132 | 874 | (742) | (85)% |
| Total operating expenses | $53,209 | $57,465 | $(4,256) | (7)% |
| Other expenses, net |  |  |  |  |
| Interest expense, net | $10,182 | $22,636 | $(12,454) | (55)% |
| Loss on extinguishment of debt | — | 6,532 | (6,532) | (100)% |
| Total other expenses, net | $10,182 | $29,168 | $(18,986) | (65)% |

Total operating expenses decreased $4.3 million primarily due to a $4.1 million decrease in depreciation, depletion and amortization and a $2.5 million decrease in operating and maintenance expenses, partially offset by a $3.1 million increase in general and administrative expenses. The decrease in depreciation, depletion and amortization was primarily driven by lower Illinois Basin coal sales volumes as compared to the prior year period. The decrease in operating and maintenance expenses was primarily driven by lower overriding royalty expense from an agreement with WPPLP in the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. This overriding royalty expense is fully offset by coal royalty revenue we receive from this property. The increase in general and administrative expenses was primarily due to increased incentive compensation expense as compared to theprior year period.

Total other expenses, net decreased $19.0 million as a result of less debt outstanding as compared to the prior year period, in addition to the loss on extinguishment of debt recognized in 2022 related to the partial retirement of the 2025 Senior Notes during the second and third quarters of 2022.

### Adjusted EBITDA (Non-GAAP Financial Measure)

The following table reconciles net income (loss) (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:

| For the Nine Months Ended (In thousands) September 30, 2023 | Operating Segments Mineral Rights | Soda Ash | Corporate and Financing | Total |
| --- | ---: | ---: | ---: | ---: |
| Net income (loss) | $182,400 | $58,408 | $(27,353) | $213,455 |
| Less: equity earnings from unconsolidated investment | — | (58,633) | — | (58,633) |
| Add: total distributions from unconsolidated investment | — | 66,140 | — | 66,140 |
| Add: interest expense, net | — | — | 10,182 | 10,182 |
| Add: depreciation, depletion and amortization | 12,455 | — | 14 | 12,469 |
| Add: asset impairments | 132 | — | — | 132 |
| Adjusted EBITDA | $194,987 | $65,915 | $(17,157) | $243,745 |
| September 30, 2022 |  |  |  |  |
| Net income (loss) | $204,548 | $43,931 | $(43,205) | $205,274 |
| Less: equity earnings from unconsolidated investment | — | (44,036) | — | (44,036) |
| Add: total distributions from unconsolidated investment | — | 34,055 | — | 34,055 |
| Add: interest expense, net | — | — | 22,636 | 22,636 |
| Add: loss on extinguishment of debt | — | — | 6,532 | 6,532 |
| Add: depreciation, depletion and amortization | 16,565 | — | — | 16,565 |
| Add: asset impairments | 874 | — | — | 874 |
| Adjusted EBITDA | $221,987 | $33,950 | $(14,037) | $241,900 |

Net income increased $8.2 million during the first nine months of 2023 as compared to the prior year period primarily due to the decrease in operating and other expenses, net, partially offset by the decrease in revenues and other income, both discussed above. Adjusted EBITDA decreased $1.8 million as compared to the prior year period primarily due to a $27.0 million decrease in Adjusted EBITDA within our Mineral Rights segment as a result of lower revenues and other income as discussed above and a $3.1 million decrease in Adjusted EBITDA within our Corporate and Financing segment as a result of the increase in general and administrative expenses as discussed above. These decreases in Adjusted EBITDA were partially offset by a $32.0 million increase in Adjusted EBITDA within our Soda Ash segment due to higher distributions received from Sisecam Wyoming driven by Sisecam Wyoming's strong operating performance in the first nine months of 2023.

### Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)

The following table presents the three major categories of the statement of cash flows by business segment:

| For the Nine Months Ended (In thousands) September 30, 2023 Cash flow provided by (used in) | Operating Segments Mineral Rights | Soda Ash | Corporate and Financing | Total |
| --- | ---: | ---: | ---: | ---: |
| Operating activities | $189,836 | $65,901 | $(22,545) | $233,192 |
| Investing activities | 2,791 | — | (10) | 2,781 |
| Financing activities | (583) | — | (256,070) | (256,653) |
| September 30, 2022 |  |  |  |  |
| Cash flow provided by (used in) |  |  |  |  |
| Operating activities | $194,475 | $33,934 | $(30,459) | $197,950 |
| Investing activities | 1,837 | — | (59) | 1,778 |
| Financing activities | (614) | — | (273,697) | (274,311) |

27

The following table reconciles net cash provided by (used in) operating activities (the most comparable GAAP financial measure) by business segment to DCF and FCF:

| For the Nine Months Ended (In thousands) September 30, 2023 | Operating Segments Mineral Rights | Soda Ash | Corporate and Financing | Total |
| --- | ---: | ---: | ---: | ---: |
| Net cash provided by (used in) operating activities | $189,836 | $65,901 | $(22,545) | $233,192 |
| Add: proceeds from asset sales and disposals | 961 | — | — | 961 |
| Add: return of long-term contract receivable | 1,830 | — | — | 1,830 |
| Less: maintenance capital expenditures | — | — | (10) | (10) |
| Distributable cash flow | $192,627 | $65,901 | $(22,555) | $235,973 |
| Less: proceeds from asset sales and disposals | (961) | — | — | (961) |
| Free cash flow | $191,666 | $65,901 | $(22,555) | $235,012 |
| September 30, 2022 |  |  |  |  |
| Net cash provided by (used in) operating activities | $194,475 | $33,934 | $(30,459) | $197,950 |
| Add: proceeds from asset sales and disposals | 699 | — | — | 699 |
| Add: return of long-term contract receivable | 1,138 | — | — | 1,138 |
| Less: maintenance capital expenditures | — | — | (59) | (59) |
| Distributable cash flow | $196,312 | $33,934 | $(30,518) | $199,728 |
| Less: proceeds from asset sales and disposals | (699) | — | — | (699) |
| Free cash flow | $195,613 | $33,934 | $(30,518) | $199,029 |

Operating cash flow, DCF and FCF increased $35.2 million, $36.2 million and $36.0 million, respectively, as compared to the prior year period due to increased cash flow within our Soda Ash and Corporate and Financing segments, partially offset by decreased cash flow within our Mineral Rights segment. The discussion by segment is as follows:

- Mineral Rights Segment
- Operating cash flow, DCF and FCF decreased $4.6 million, $3.7 million and $3.9 million, respectively, primarily due to lower revenues and other income in the nine months ended September 30, 2023 as compared to the prior year period primarily due to decreased metallurgical coal sales prices and decreased revenues from oil and gas royalties and certain carbon neutral initiative transactions entered into in 2022.
- Soda Ash Segment
- Operating cash flow, DCF and FCF increased $32.0 million as compared to the prior year period primarily due to higher distributions received from Sisecam Wyoming driven by Sisecam Wyoming's strong operating performance in the first half of 2023.
- Corporate and Financing Segment
- Operating cash flow, DCF and FCF increased $7.9 million, $8.0 million and $8.0 million, respectively, primarily due to lower cash paid for interest as a result of the retirement of the 2025 Senior Notes in 2022.

### Liquidity and Capital Resources

### Current Liquidity

As of September 30, 2023, we had total liquidity of $45.4 million, consisting of $18.4 million of cash and cash equivalents and $27.0 million of borrowing capacity under our Opco Credit Facility. We have debt service obligations, including approximately $20 million of principal repayments on Opco’s senior notes, throughout the remainder of 2023. The following table calculates our leverage ratio as of September 30, 2023:

*(In thousands)*

|  | For the Three Months Ended December 31, 2022 | March 31, 2023 | June 30, 2023 | September 30, 2023 | Last 12 Months |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net income | $63,218 | $79,275 | $70,334 | $63,846 | $276,673 |
| Less: equity earnings from unconsolidated investment | (15,759) | (19,254) | (26,978) | (12,401) | (74,392) |
| Add: total distributions from unconsolidated investment | 10,780 | 10,780 | 32,350 | 23,010 | 76,920 |
| Add: interest expense, net | 3,638 | 2,853 | 3,492 | 3,837 | 13,820 |
| Add: loss on extinguishment of debt | 3,933 | — | — | — | 3,933 |
| Add: depreciation, depletion and amortization | 5,954 | 4,083 | 3,792 | 4,594 | 18,423 |
| Add: asset impairments | 3,583 | — | 69 | 63 | 3,715 |
| Adjusted EBITDA | $75,347 | $77,737 | $83,059 | $82,949 | $319,092 |
| Debt—at September 30, 2023 |  |  |  |  | $208,059 |
| Leverage Ratio |  |  |  |  | 0.7 x |

28

### Cash Flows

Cash flows provided by operating activities increased $35.2 million, from $198.0 million in the nine months ended September 30, 2022 to $233.2 million in the nine months ended September 30, 2023, due to increased cash flow within our Soda Ash and Corporate and Financing segments, partially offset by decreased cash flow within our Mineral Rights segment, all discussed above.

Cash used in financing activities decreased $17.7 million, from $274.3 million used in the nine months ended September 30, 2022 to $256.7 million used in the nine months ended September 30, 2023, primarily due to the following:

- $215.0 million of borrowings on the Opco Credit Facility in 2023;
- $178.6 million of cash used to retire a portion of the 2025 Senior Notes in 2022;
- $19.3 million of cash used to redeem the preferred units paid-in-kind during the first quarter of 2022;
- $6.2 million of decreased cash used for other items, net primarily due to the premiums paid related to the repayment of the 2025 Senior Notes during the nine months ended September 30, 2022; and
- $2.8 million of decreased cash used for preferred unit distributions as a result of the redemption of preferred units in 2023.

These decreases in cash flow used were partially offset by the following:

- $178.3 million of cash used to redeem the preferred units in 2023;
- $157.0 million of cash used to repay a portion of the Opco Credit Facility in 2023;
- $35.4 million of increased cash distributions to common unitholders and the general partner as a result of increasing our quarterly cash distribution to $0.75/unit beginning in the second quarter of 2022 in addition to the special distribution paid in the first quarter of 2023; and
- $33.6 million of cash used to settle the warrants in the third quarter of 2023.

### Capital Resources and Obligations

### Debt, Net

We had the following debt outstanding as of September 30, 2023 and December 31, 2022:

*(In thousands)*

|  | September 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Current portion of long-term debt, net | $36,780 | $39,076 |
| Long-term debt, net | 170,735 | 129,205 |
| Total debt, net | $207,515 | $168,281 |

We have been and continue to be in compliance with the terms of the financial covenants contained in our debt agreements. For additional information regarding our debt and the agreements governing our debt, including the covenants contained therein, see Note 9. Debt, Net to the Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

### Off-Balance Sheet Transactions

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

### Related Party Transactions

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

### Summary of Critical Accounting Estimates

The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

### Recent Accounting Standards

We do not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

## Market risk

As filed, 2,356 characters.

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

### Commodity Price Risk

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

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

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

### Interest Rate Risk

Our exposure to changes in interest rates results from our borrowings under the Opco Credit Facility, which is subject to variably interest rates based upon SOFR. At September 30, 2023, we had $128.0 million in borrowings outstanding under the Opco Credit Facility. If interest rates were to increase by 1%, annual interest expense would increase approximately $1.3 million, assuming the same principal amount remained outstanding during the year.

## Controls and procedures

As filed, 1,526 characters.

### Evaluation of Disclosure Controls and Procedures

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

**Changes in the Partnership’s Internal Control Over Financial Reporting**

There were no material changes in the Partnership’s internal control over financial reporting during the first nine months of 2023 that materially affected, or were reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

## Risk factors

As filed, 216 characters.

During the period covered by this report, there were no material changes from the risk factors previously disclosed in Natural Resource Partners L.P.’s Annual Report on Form 10-K for the year ended December 31, 2022.

Filed Nov 3, 2023.
Source: SEC EDGAR, the filing index for accession 0001437749-23-030163. Last ingested by Listed: Nov 4, 2026, 12:57 ET. No prices; not investment advice.