Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Natural Resource Partners L.P. Reports Third Quarter 2023 Results and Declares Third Quarter 2023 Distribution of $0.75 per Common Unit By: Natural Resource Partners L.P. via Business Wire November 03, 2023 at 06:55 AM EDT Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2023 results as follows: For the Three Months Ended Last Twelve Months Ended (In thousands) (Unaudited) September 30, 2023 Net income $ 63,846 $ 276,673 Operating cash flow 78,942 302,080 Free cash flow (1) 79,564 304,426 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Highlights: Generated $80 million of free cash flow Paid second quarter 2023 common unit distribution of $0.75 per unit Redeemed $50 million of preferred units at par with cash; $72 million of original $250 million preferred units remain outstanding Repurchased 812,500 warrants in September and 650,000 warrants in October with $56 million in cash; 1.54 million of original 4 million warrants remain outstanding Declares third quarter 2023 common unit distribution of $0.75 per unit "NRP had another robust quarter with $80 million of free cash flow generated in the third quarter of 2023 as a result of continued strong performance from our mineral rights assets and a significant cash distribution from our soda ash investment," said Craig Nunez, NRP's president and chief operating officer. "We also made noteworthy progress towards our goal of eliminating all preferred units and warrants by redeeming $50 million of preferred units at par with cash and repurchasing a total of 1.46 million warrants for $56 million in cash. I am proud of the NRP team for the continued strong performance and am confident our strategy to retire all outstanding debt, preferred equity, and warrants while maintaining common unit distributions will continue to maximize long-term unitholder value.” NRP announced today that the board of directors of its general partner declared a third quarter 2023 cash distribution of $0.75 per common unit to be paid on November 21, 2023, to unitholders of record on November 14, 2023. In addition, the board declared a $2.15 million cash distribution on NRP's outstanding preferred units. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the board of directors. The board of directors considers numerous factors each quarter in determining cash distributions including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability, and the level of cash reserves that the board determines is necessary for future operating and capital needs. NRP's available liquidity was $45.4 million at September 30, 2023, consisting of $18.4 million of cash and $27.0 million of borrowing capacity available under its revolving credit facility. Segment Performance Mineral Rights Mineral Rights net income, operating cash flow, and free cash flow for the third quarter of 2023 decreased $11.2 million, $15.0 million, and $15.0 million, respectively, as compared to the prior year period. These decreases were primarily due to certain carbon neutral initiative transactions entered into during the third quarter of 2022 and higher oil and gas royalty revenues as a result of higher natural gas production and prices in the third quarter of 2022. Approximately 60% of coal royalty revenues and approximately 45% of coal royalty sales volumes were derived from metallurgical coal in the third quarter of 2023. 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. NRP expects continued price support for coal as limited access to capital, labor shortages, and inflationary pressures limit operators’ ability to increase production. In addition, NRP continues to explore carbon neutral revenue opportunities across its 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 Soda Ash net income in the third quarter of 2023 decreased $2.2 million as compared to the prior year period primarily due to lower international sales prices and an increased sales mix into the lower priced international market in the third quarter of 2023 as compared to the prior year period. Operating cash flow and free cash flow in the third quarter of 2023 improved $12.6 million as compared to the prior year period due to a higher cash distribution received from Sisecam Wyoming in the third quarter of 2023 stemming from strong operating performance in the first half of the year. International soda ash prices were significantly lower in the third quarter of 2023 compared to the first half of the year primarily due to new supply from China. NRP believes 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, NRP believes contracted sales prices will be set at lower levels as the market contends with recessionary headwinds and new supply entering the export markets. Corporate and Financing Corporate and Financing costs in the third quarter of 2023 decreased $2.6 million as compared to the prior year period primarily due to the loss on extinguishment of debt recognized in 2022. Operating cash flow and free cash flow in the third quarter of 2023 decreased $1.1 million as compared to the prior year period primarily due to higher cash paid for interest in the third quarter of 2023 due to borrowings on the credit facility used for the preferred unit redemptions and warrant repurchases. NRP redeemed an aggregate of 50,001 preferred units at par with cash in the third quarter of 2023, saving NRP $6.0 million annually in preferred unit cash distributions. Of the originally issued 250,000 preferred units, 71,666 remain outstanding. In addition, NRP repurchased 752,500 warrants with an exercise price of $22.81 and 60,000 warrants with an exercise price of $34.00 for $33.6 million in cash during the third quarter of 2023. In October, NRP repurchased 650,000 warrants with an exercise price of $34.00 for $22.5 million in cash. After the warrant repurchases in October, 1.54 million warrants with an exercise price of $34.00 remain outstanding. In August 2023, NRP declared and paid a second quarter 2023 cash distribution of $0.75 per common unit and a $3.65 million cash distribution on its preferred units. Today, NRP declared a third quarter 2023 cash distribution of $0.75 per common unit and a $2.15 million cash distribution on its outstanding preferred units. NRP's consolidated leverage ratio was 0.7x at September 30, 2023. Conference Call A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link: https://conferencingportals.com/event/cHhtshxF. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full conference call we suggest registering at minimum 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website. Withholding Information for Foreign Investors Concurrent with this announcement, we are providing qualified notice to brokers and nominees that hold NRP units on behalf of non-U.S. investors under Treasury Regulation Section 1.1446-4(b) and (d) and Treasury Regulation Section 1.1446(f)-4(c)(2)(iii). Brokers and nominees should treat one hundred percent (100%) of NRP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. In addition, brokers and nominees should treat one hundred percent (100%) of the distribution as being in excess of cumulative net income for purposes of determining the amount to withhold. Accordingly, NRP's distributions to non-U.S. investors are subject to federal income tax withholding at a rate equal to the sum of the highest applicable rate plus ten percent (10%). Company Profile Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of properties in the United States including coal, industrial minerals and other natural resources, as well as rights to conduct carbon sequestration and renewable energy activities. NRP also owns an equity investment in Sisecam Wyoming LLC, one of the world’s lowest-cost producers of soda ash. For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com. Forward-Looking Statements This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees; Sisecam Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures "Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis. “Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. “Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. "Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions, redemption of preferred units, redemption of PIK units, common unit distributions, and warrant cash settlements. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units. "Leverage ratio" represents the outstanding principal of NRP's debt at the end of the period divided by the last twelve months' Adjusted EBITDA as defined above. NRP believes that leverage ratio is a useful measure to management and investors to evaluate and monitor the indebtedness of NRP relative to its ability to generate income to service such debt and in understanding trends in NRP’s overall financial condition. Leverage ratio may not be calculated the same for NRP as for other companies and is not a substitute for, and should not be used in conjunction with, GAAP financial ratios. -Financial Tables and Reconciliation of Non-GAAP Measures Follow- Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Comprehensive Income For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands, except per unit data) 2023 2022 2023 2023 2022 Revenues and other income Royalty and other mineral rights $ 68,533 $ 81,379 $ 61,007 $ 205,811 $ 231,795 Transportation and processing services 4,579 5,969 3,270 11,447 15,377 Equity in earnings of Sisecam Wyoming 12,401 14,556 26,978 58,633 44,036 Gain on asset sales and disposals 854 354 5 955 699 Total revenues and other income $ 86,367 $ 102,258 $ 91,260 $ 276,846 $ 291,907 Operating expenses Operating and maintenance expenses $ 8,358 $ 7,898 $ 7,930 $ 23,451 $ 25,989 Depreciation, depletion and amortization 4,594 6,850 3,792 12,469 16,565 General and administrative expenses 5,669 4,518 5,643 17,157 14,037 Asset impairments 63 812 69 132 874 Total operating expenses $ 18,684 $ 20,078 $ 17,434 $ 53,209 $ 57,465 Income from operations $ 67,683 $ 82,180 $ 73,826 $ 223,637 $ 234,442 Other expenses, net Interest expense, net $ (3,837 ) $ (5,141 ) $ (3,492 ) $ (10,182 ) $ (22,636 ) Loss on extinguishment of debt — (2,484 ) — — (6,532 ) Total other expenses, net $ (3,837 ) $ (7,625 ) $ (3,492 ) $ (10,182 ) $ (29,168 ) Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Less: income attributable to preferred unitholders (2,936 ) (7,500 ) (4,971 ) (14,568 ) (22,500 ) Less: redemption of preferred units (17,083 ) — (27,618 ) (60,929 ) — Net income attributable to common unitholders and the general partner $ 43,827 $ 67,055 $ 37,745 $ 137,958 $ 182,774 Net income attributable to common unitholders $ 42,951 $ 65,714 $ 36,990 $ 135,199 $ 179,119 Net income attributable to the general partner 876 1,341 755 2,759 3,655 Net income per common unit Basic $ 3.40 $ 5.25 $ 2.93 $ 10.72 $ 14.36 Diluted 2.91 3.71 2.49 8.88 10.24 Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Comprehensive income (loss) from unconsolidated investment and other 2,200 289 911 (16,472 ) (1,179 ) Comprehensive income $ 66,046 $ 74,844 $ 71,245 $ 196,983 $ 204,095 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Cash Flows For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands) 2023 2022 2023 2023 2022 Cash flows from operating activities Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 4,594 6,850 3,792 12,469 16,565 Distributions from unconsolidated investment 23,010 10,339 32,350 66,140 34,055 Equity earnings from unconsolidated investment (12,401 ) (14,556 ) (26,978 ) (58,633 ) (44,036 ) Gain on asset sales and disposals (854 ) (354 ) (5 ) (955 ) (699 ) Loss on extinguishment of debt — 2,484 — — 6,532 Asset impairments 63 812 69 132 874 Bad debt expense 1,621 1 (198 ) 813 641 Unit-based compensation expense 2,766 1,429 2,646 7,903 4,216 Amortization of debt issuance costs and other 477 215 541 1,043 1,887 Change in operating assets and liabilities: Accounts receivable (2,610 ) 2,494 (361 ) 4,090 (10,118 ) Accounts payable (381 ) 210 72 (850 ) 223 Accrued liabilities 498 278 2,019 (6,288 ) (4,831 ) Accrued interest 599 3,177 (627 ) 235 3,014 Deferred revenue (2,163 ) (7,519 ) (2,646 ) (4,963 ) (17,094 ) Other items, net (123 ) 2,081 342 (1,399 ) 1,447 Net cash provided by operating activities $ 78,942 $ 82,496 $ 81,350 $ 233,192 $ 197,950 Cash flows from investing activities Proceeds from asset sales and disposals $ 855 $ 353 $ 5 $ 961 $ 699 Return of long-term contract receivable 622 575 610 1,830 1,138 Capital expenditures — (59 ) (8 ) (10 ) (59 ) Net cash provided by investing activities $ 1,477 $ 869 $ 607 $ 2,781 $ 1,778 Cash flows from financing activities Debt borrowings $ 50,000 $ — $ 70,834 $ 215,034 $ — Debt repayments (25,000 ) (60,494 ) (61,365 ) (176,061 ) (197,665 ) Distributions to common unitholders and the general partner (9,669 ) (9,571 ) (9,669 ) (60,238 ) (24,813 ) Distributions to preferred unitholders (4,437 ) (7,500 ) (7,396 ) (19,919 ) (22,758 ) Redemption of preferred units (50,001 ) — (80,834 ) (178,334 ) — Redemption of preferred units paid-in-kind — — — — (19,321 ) Warrant settlement (33,608 ) — — (33,608 ) — Other items, net (23 ) (4,219 ) (452 ) (3,527 ) (9,754 ) Net cash used in financing activities $ (72,738 ) $ (81,784 ) $ (88,882 ) $ (256,653 ) $ (274,311 ) Net increase (decrease) in cash and cash equivalents $ 7,681 $ 1,581 $ (6,925 ) $ (20,680 ) $ (74,583 ) Cash and cash equivalents at beginning of period 10,730 59,356 17,655 39,091 135,520 Cash and cash equivalents at end of period $ 18,411 $ 60,937 $ 10,730 $ 18,411 $ 60,937 Supplemental cash flow information: Cash paid for interest $ 3,050 $ 1,729 $ 3,960 $ 9,484 $ 18,501 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Balance Sheets September 30, December 31, 2023 2022 (In thousands, except unit data) (Unaudited) ASSETS Current assets Cash and cash equivalents $ 18,411 $ 39,091 Accounts receivable, net 38,569 42,701 Other current assets, net 2,570 1,822 Total current assets $ 59,550 $ 83,614 Land 24,008 24,008 Mineral rights, net 400,548 412,312 Intangible assets, net 14,014 14,713 Equity in unconsolidated investment 282,491 306,470 Long-term contract receivable, net 26,997 28,946 Other long-term assets, net 7,601 7,068 Total assets $ 815,209 $ 877,131 LIABILITIES AND CAPITAL Current liabilities Accounts payable $ 1,143 $ 1,992 Accrued liabilities 6,511 11,916 Accrued interest 1,224 989 Current portion of deferred revenue 6,399 6,256 Current portion of long-term debt, net 36,780 39,076 Total current liabilities $ 52,057 $ 60,229 Deferred revenue 35,076 40,181 Long-term debt, net 170,735 129,205 Other non-current liabilities 6,833 5,472 Total liabilities $ 264,701 $ 235,087 Commitments and contingencies Class A Convertible Preferred Units (71,666 and 250,000 units issued and outstanding at September 30, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at September 30, 2023 and December 31, 2022) $ 47,181 $ 164,587 Partners’ capital Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at September 30, 2023 and December 31, 2022, respectively) $ 461,043 $ 404,799 General partner’s interest 7,196 5,977 Warrant holders’ interest 32,843 47,964 Accumulated other comprehensive income 2,245 18,717 Total partners’ capital $ 503,327 $ 477,457 Total liabilities and partners' capital $ 815,209 $ 877,131 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Partners' Capital Accumulated Other Total Common Unitholders General Warrant Comprehensive Partners' (In thousands) Units Amounts Partner Holders Income (Loss) Capital Balance at December 31, 2022 12,506 $ 404,799 $ 5,977 $ 47,964 $ 18,717 $ 477,457 Net income (1) — 77,690 1,585 — — 79,275 Redemption of preferred units — (15,904 ) (324 ) — — (16,228 ) Distributions to common unitholders and the general partner — (40,082 ) (818 ) — — (40,900 ) Distributions to preferred unitholders — (7,924 ) (162 ) — — (8,086 ) Issuance of unit-based awards 129 — — — — — Unit-based awards amortization and vesting, net — (1,178 ) — — — (1,178 ) Capital contribution — — 142 — — 142 Comprehensive loss from unconsolidated investment and other — — — — (19,583 ) (19,583 ) Balance at March 31, 2023 12,635 $ 417,401 $ 6,400 $ 47,964 $ (866 ) $ 470,899 Net income (2) — 68,927 1,407 — — 70,334 Redemption of preferred units — (27,065 ) (553 ) — — (27,618 ) Distributions to common unitholders and the general partner — (9,476 ) (193 ) — — (9,669 ) Distributions to preferred unitholders — (7,248 ) (148 ) — — (7,396 ) Unit-based awards amortization and vesting — 2,299 — — — 2,299 Comprehensive income from unconsolidated investment and other — — — — 911 911 Balance at June 30, 2023 12,635 $ 444,838 $ 6,913 $ 47,964 $ 45 $ 499,760 Net income (3) — 62,569 1,277 — — 63,846 Redemption of preferred units — (16,741 ) (342 ) — — (17,083 ) Distributions to common unitholders and the general partner — (9,475 ) (194 ) — — (9,669 ) Distributions to preferred unitholders — (4,349 ) (88 ) — — (4,437 ) Unit-based awards amortization and vesting — 2,318 — — — 2,318 Warrant settlement — (18,117 ) (370 ) (15,121 ) — (33,608 ) Comprehensive income from unconsolidated investment and other — — — — 2,200 2,200 Balance at September 30, 2023 12,635 $ 461,043 $ 7,196 $ 32,843 $ 2,245 $ 503,327 (1) Net income includes $6.7 million of income attributable to preferred unitholders that accumulated during the period, of which $6.5 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. (2) Net income includes $5.0 million of income attributable to preferred unitholders that accumulated during the period, of which $4.9 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. (3) Net income includes $2.9 million of income attributable to preferred unitholders that accumulated during the period, of which $2.9 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Partners' Capital Accumulated Other Total Common Unitholders General Warrant Comprehensive Partners' (In thousands) Units Amounts Partner Holders Income Capital Balance at December 31, 2021 12,351 $ 203,062 $ 1,787 $ 47,964 $ 3,211 $ 256,024 Net income (1) — 62,621 1,278 — — 63,899 Distributions to common unitholders and the general partner — (5,559 ) (113 ) — — (5,672 ) Distributions to preferred unitholders — (7,603 ) (155 ) — — (7,758 ) Issuance of unit-based awards 155 — — — — — Unit-based awards amortization and vesting, net — (1,754 ) — — — (1,754 ) Capital contribution — — 112 — — 112 Comprehensive income from unconsolidated investment and other — — — — 2,545 2,545 Balance at March 31, 2022 12,506 $ 250,767 $ 2,909 $ 47,964 $ 5,756 $ 307,396 Net income (1) — 65,484 1,336 — — 66,820 Distributions to common unitholders and the general partner — (9,379 ) (191 ) — — (9,570 ) Distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) Unit-based awards amortization and vesting — 1,231 — — — 1,231 Comprehensive loss from unconsolidated investment and other — — — — (4,013 ) (4,013 ) Balance at June 30, 2022 12,506 $ 300,753 $ 3,904 $ 47,964 $ 1,743 $ 354,364 Net income (1) — 73,064 1,491 — — 74,555 Distributions to common unitholders and the general partner — (9,380 ) (191 ) — — (9,571 ) Distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) Unit-based awards amortization and vesting — 1,245 — — — 1,245 Comprehensive income from unconsolidated investment and other — — — — 289 289 Balance at September 30, 2022 12,506 $ 358,332 $ 5,054 $ 47,964 $ 2,032 $ 413,382 (1) Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. Natural Resource Partners L.P. Financial Tables (Unaudited) The following table presents NRP's unaudited business results by segment for the three months ended September 30, 2023 and 2022 and June 30, 2023: Operating Segments Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Revenues $ 73,112 $ 12,401 $ — $ 85,513 Gain on asset sales and disposals 854 — — 854 Total revenues and other income $ 73,966 $ 12,401 $ — $ 86,367 Asset impairments $ 63 $ — $ — $ 63 Net income (loss) $ 61,009 $ 12,348 $ (9,511 ) $ 63,846 Adjusted EBITDA (1) $ 65,661 $ 22,957 $ (5,669 ) $ 82,949 Cash flow provided by (used in) continuing operations: Operating activities $ 60,938 $ 22,958 $ (4,954 ) $ 78,942 Investing activities $ 1,477 $ — $ — $ 1,477 Financing activities $ — $ — $ (72,738 ) $ (72,738 ) Distributable cash flow (1) $ 62,415 $ 22,958 $ (4,954 ) $ 80,419 Free cash flow (1) $ 61,560 $ 22,958 $ (4,954 ) $ 79,564 For the Three Months Ended September 30, 2022 Revenues $ 87,348 $ 14,556 $ — $ 101,904 Gain on asset sales and disposals 354 — — 354 Total revenues and other income $ 87,702 $ 14,556 $ — $ 102,258 Asset impairments $ 812 $ — $ — $ 812 Net income (loss) $ 72,173 $ 14,525 $ (12,143 ) $ 74,555 Adjusted EBITDA (1) $ 79,835 $ 10,308 $ (4,518 ) $ 85,625 Cash flow provided by (used in) continuing operations: Operating activities $ 75,948 $ 10,309 $ (3,761 ) $ 82,496 Investing activities $ 928 $ — $ (59 ) $ 869 Financing activities $ — $ — $ (81,784 ) $ (81,784 ) Distributable cash flow (1) $ 76,876 $ 10,309 $ (3,820 ) $ 83,365 Free cash flow (1) $ 76,523 $ 10,309 $ (3,820 ) $ 83,012 For the Three Months Ended June 30, 2023 Revenues $ 64,277 $ 26,978 $ — $ 91,255 Gain on asset sales and disposals 5 — — 5 Total revenues and other income $ 64,282 $ 26,978 $ — $ 91,260 Asset impairments $ 69 $ — $ — $ 69 Net income (loss) $ 52,510 $ 26,964 $ (9,140 ) $ 70,334 Adjusted EBITDA (1) $ 56,366 $ 32,336 $ (5,643 ) $ 83,059 Cash flow provided by (used in) continuing operations: Operating activities $ 55,040 $ 32,326 $ (6,016 ) $ 81,350 Investing activities $ 615 $ — $ (8 ) $ 607 Financing activities $ — $ — $ (88,882 ) $ (88,882 ) Distributable cash flow (1) $ 55,655 $ 32,326 $ (6,024 ) $ 81,957 Free cash flow (1) $ 55,650 $ 32,326 $ (6,024 ) $ 81,952 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Natural Resource Partners L.P. Financial Tables (Unaudited) The following table presents NRP's unaudited business results by segment for the nine months ended September 30, 2023 and 2022: Operating Segments Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Revenues $ 217,258 $ 58,633 $ — $ 275,891 Gain on asset sales and disposals 955 — — 955 Total revenues and other income $ 218,213 $ 58,633 $ — $ 276,846 Asset impairments $ 132 $ — $ — $ 132 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 For the Nine Months Ended September 30, 2022 Revenues $ 247,172 $ 44,036 $ — $ 291,208 Gain on asset sales and disposals 699 — — 699 Total revenues and other income $ 247,871 $ 44,036 $ — $ 291,907 Asset impairments $ 874 $ — $ — $ 874 Net income (loss) $ 204,548 $ 43,931 $ (43,205 ) $ 205,274 Adjusted EBITDA (1) $ 221,987 $ 33,950 $ (14,037 ) $ 241,900 Cash flow provided by (used in) continuing operations: Operating activities $ 194,475 $ 33,934 $ (30,459 ) $ 197,950 Investing activities $ 1,837 $ — $ (59 ) $ 1,778 Financing activities $ (614 ) $ — $ (273,697 ) $ (274,311 ) Distributable cash flow (1) $ 196,312 $ 33,934 $ (30,518 ) $ 199,728 Free cash flow (1) $ 195,613 $ 33,934 $ (30,518 ) $ 199,029 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Natural Resource Partners L.P. Financial Tables (Unaudited) Operating Statistics - Mineral Rights For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands, except per ton data) 2023 2022 2023 2023 2022 Coal sales volumes (tons) Appalachia Northern 284 440 390 1,053 1,260 Central 3,429 3,503 3,352 10,390 10,238 Southern 741 498 693 2,016 1,171 Total Appalachia 4,454 4,441 4,435 13,459 12,669 Illinois Basin 2,541 3,490 1,631 5,482 8,395 Northern Powder River Basin 1,364 835 881 3,330 2,772 Gulf Coast 479 188 139 676 324 Total coal sales volumes 8,838 8,954 7,086 22,947 24,160 Coal royalty revenue per ton Appalachia Northern $ 5.54 $ 6.74 $ 6.87 $ 7.59 $ 9.48 Central 8.20 9.04 8.49 8.89 10.85 Southern 11.88 9.78 10.85 12.41 14.28 Illinois Basin 3.98 2.57 3.15 3.63 2.30 Northern Powder River Basin 4.86 4.56 4.62 4.74 4.24 Gulf Coast 0.69 0.59 0.71 0.68 0.58 Combined average coal royalty revenue per ton 6.29 5.85 6.77 7.04 7.08 Coal royalty revenues Appalachia Northern $ 1,573 $ 2,965 $ 2,681 $ 7,991 $ 11,946 Central 28,111 31,680 28,445 92,362 111,121 Southern 8,806 4,872 7,521 25,024 16,725 Total Appalachia 38,490 39,517 38,647 125,377 139,792 Illinois Basin 10,108 8,967 5,141 19,924 19,331 Northern Powder River Basin 6,627 3,805 4,066 15,768 11,751 Gulf Coast 330 111 98 461 187 Unadjusted coal royalty revenues 55,555 52,400 47,952 161,530 171,061 Coal royalty adjustment for minimum leases (11 ) (19 ) 8 (3 ) (286 ) Total coal royalty revenues $ 55,544 $ 52,381 $ 47,960 $ 161,527 $ 170,775 Other revenues Production lease minimum revenues $ 850 $ 1,885 $ 562 $ 2,025 $ 3,542 Minimum lease straight-line revenues 4,464 4,778 4,447 13,414 14,235 Carbon neutral initiative revenues 681 8,600 115 2,914 8,600 Wheelage revenues 2,385 2,977 3,284 9,538 11,073 Property tax revenues 1,770 1,360 1,470 4,710 4,527 Coal overriding royalty revenues 827 1,367 150 1,165 2,307 Lease amendment revenues 623 759 848 2,322 2,450 Aggregates royalty revenues 736 884 686 2,175 2,691 Oil and gas royalty revenues 324 6,170 1,214 5,126 10,890 Other revenues 329 218 271 895 705 Total other revenues $ 12,989 $ 28,998 $ 13,047 $ 44,284 $ 61,020 Royalty and other mineral rights $ 68,533 $ 81,379 $ 61,007 $ 205,811 $ 231,795 Transportation and processing services revenues 4,579 5,969 3,270 11,447 15,377 Gain on asset sales and disposals 854 354 5 955 699 Total Mineral Rights segment revenues and other income $ 73,966 $ 87,702 $ 64,282 $ 218,213 $ 247,871 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Adjusted EBITDA Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Net income (loss) $ 61,009 $ 12,348 $ (9,511 ) $ 63,846 Less: equity earnings from unconsolidated investment — (12,401 ) — (12,401 ) Add: total distributions from unconsolidated investment — 23,010 — 23,010 Add: interest expense, net — — 3,837 3,837 Add: loss on extinguishment of debt — — — — 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 For the Three Months Ended 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 For the Three Months Ended June 30, 2023 Net income (loss) $ 52,510 $ 26,964 $ (9,140 ) $ 70,334 Less: equity earnings from unconsolidated investment — (26,978 ) — (26,978 ) Add: total distributions from unconsolidated investment — 32,350 — 32,350 Add: interest expense, net — — 3,492 3,492 Add: loss on extinguishment of debt — — — — Add: depreciation, depletion and amortization 3,787 — 5 3,792 Add: asset impairments 69 — — 69 Adjusted EBITDA $ 56,366 $ 32,336 $ (5,643 ) $ 83,059 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Adjusted EBITDA Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Net income (loss) $ 182,400 $ 58,408 $ (27,353 ) $ 213,455 Less: equity earnings from unconsolidated investment — (58,633 ) — (58,633 ) Add: total distributions from unconsolidated investment — 66,140 — 66,140 Add: interest expense, net — — 10,182 10,182 Add: loss on extinguishment of debt — — — — 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 For the Nine Months Ended 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 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Distributable Cash Flow and Free Cash Flow Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Net cash provided by (used in) operating activities $ 60,938 $ 22,958 $ (4,954 ) $ 78,942 Add: proceeds from asset sales and disposals 855 — — 855 Add: return of long-term contract receivable 622 — — 622 Less: maintenance capital expenditures — — — — Distributable cash flow $ 62,415 $ 22,958 $ (4,954 ) $ 80,419 Less: proceeds from asset sales and disposals (855 ) — — (855 ) Free cash flow $ 61,560 $ 22,958 $ (4,954 ) $ 79,564 Net cash provided by investing activities $ 1,477 $ — $ — $ 1,477 Net cash used in financing activities — — (72,738 ) (72,738 ) For the Three Months Ended 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 Net cash provided by (used in) investing activities $ 928 $ — $ (59 ) $ 869 Net cash used in financing activities — — (81,784 ) (81,784 ) For the Three Months Ended June 30, 2023 Net cash provided by (used in) operating activities $ 55,040 $ 32,326 $ (6,016 ) $ 81,350 Add: proceeds from asset sales and disposals 5 — — 5 Add: return of long-term contract receivable 610 — — 610 Less: maintenance capital expenditures — — (8 ) (8 ) Distributable cash flow $ 55,655 $ 32,326 $ (6,024 ) $ 81,957 Less: proceeds from asset sales and disposals (5 ) — — (5 ) Free cash flow $ 55,650 $ 32,326 $ (6,024 ) $ 81,952 Net cash provided by (used in) investing activities $ 615 $ — $ (8 ) $ 607 Net cash used in financing activities — — (88,882 ) (88,882 ) Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Distributable Cash Flow and Free Cash Flow Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Net cash provided by (used in) operating activities $ 189,836 $ 65,901 $ (22,545 ) $ 233,192 Add: proceeds from asset sales and disposals 961 — — 961 Add: return of long-term contract receivable 1,830 — — 1,830 Less: maintenance capital expenditures — — (10 ) (10 ) Distributable cash flow $ 192,627 $ 65,901 $ (22,555 ) $ 235,973 Less: proceeds from asset sales and disposals (961 ) — — (961 ) Free cash flow $ 191,666 $ 65,901 $ (22,555 ) $ 235,012 Net cash provided by (used in) investing activities $ 2,791 $ — $ (10 ) $ 2,781 Net cash used in financing activities (583 ) — (256,070 ) (256,653 ) For the Nine Months Ended 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 Net cash provided by (used in) investing activities $ 1,837 $ — $ (59 ) $ 1,778 Net cash used in financing activities (614 ) — (273,697 ) (274,311 ) Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Last Twelve Months (LTM) Free Cash Flow For the Three Months Ended (In thousands) December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Last 12 Months Net cash provided by operating activities $ 68,888 $ 72,900 $ 81,350 $ 78,942 $ 302,080 Add: proceeds from asset sales and disposals 384 101 5 855 1,345 Add: return of long-term contract receivable 585 598 610 622 2,415 Less: maintenance capital expenditures (59 ) (2 ) (8 ) — (69 ) Distributable cash flow $ 69,798 $ 73,597 $ 81,957 $ 80,419 $ 305,771 Less: proceeds from asset sales and disposals (384 ) (101 ) (5 ) (855 ) (1,345 ) Free cash flow $ 69,414 $ 73,496 $ 81,952 $ 79,564 $ 304,426 Leverage Ratio For the Three Months Ended (In thousands) 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 For the Three Months Ended (In thousands) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 Last 12 Months Net income $ 55,641 $ 63,899 $ 66,820 $ 74,555 $ 260,915 Less: equity earnings from unconsolidated investment (10,625 ) (14,837 ) (14,643 ) (14,556 ) (54,661 ) Add: total distributions from unconsolidated investment 7,350 13,230 10,486 10,339 41,405 Add: interest expense, net 9,568 9,387 8,108 5,141 32,204 Add: loss on extinguishment of debt — — 4,048 2,484 6,532 Add: depreciation, depletion and amortization 3,930 3,868 5,847 6,850 20,495 Add: asset impairments 986 19 43 812 1,860 Adjusted EBITDA $ 66,850 $ 75,566 $ 80,709 $ 85,625 $ 308,750 Debt—at September 30, 2022 $ 240,819 Leverage Ratio 0.8 x View source version on businesswire.com: https://www.businesswire.com/news/home/20231103376145/en/Contacts Tiffany Sammis 713-751-7515 tsammis@nrplp.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Natural Resource Partners L.P. Reports Third Quarter 2023 Results and Declares Third Quarter 2023 Distribution of $0.75 per Common Unit By: Natural Resource Partners L.P. via Business Wire November 03, 2023 at 06:55 AM EDT Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2023 results as follows: For the Three Months Ended Last Twelve Months Ended (In thousands) (Unaudited) September 30, 2023 Net income $ 63,846 $ 276,673 Operating cash flow 78,942 302,080 Free cash flow (1) 79,564 304,426 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Highlights: Generated $80 million of free cash flow Paid second quarter 2023 common unit distribution of $0.75 per unit Redeemed $50 million of preferred units at par with cash; $72 million of original $250 million preferred units remain outstanding Repurchased 812,500 warrants in September and 650,000 warrants in October with $56 million in cash; 1.54 million of original 4 million warrants remain outstanding Declares third quarter 2023 common unit distribution of $0.75 per unit "NRP had another robust quarter with $80 million of free cash flow generated in the third quarter of 2023 as a result of continued strong performance from our mineral rights assets and a significant cash distribution from our soda ash investment," said Craig Nunez, NRP's president and chief operating officer. "We also made noteworthy progress towards our goal of eliminating all preferred units and warrants by redeeming $50 million of preferred units at par with cash and repurchasing a total of 1.46 million warrants for $56 million in cash. I am proud of the NRP team for the continued strong performance and am confident our strategy to retire all outstanding debt, preferred equity, and warrants while maintaining common unit distributions will continue to maximize long-term unitholder value.” NRP announced today that the board of directors of its general partner declared a third quarter 2023 cash distribution of $0.75 per common unit to be paid on November 21, 2023, to unitholders of record on November 14, 2023. In addition, the board declared a $2.15 million cash distribution on NRP's outstanding preferred units. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the board of directors. The board of directors considers numerous factors each quarter in determining cash distributions including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability, and the level of cash reserves that the board determines is necessary for future operating and capital needs. NRP's available liquidity was $45.4 million at September 30, 2023, consisting of $18.4 million of cash and $27.0 million of borrowing capacity available under its revolving credit facility. Segment Performance Mineral Rights Mineral Rights net income, operating cash flow, and free cash flow for the third quarter of 2023 decreased $11.2 million, $15.0 million, and $15.0 million, respectively, as compared to the prior year period. These decreases were primarily due to certain carbon neutral initiative transactions entered into during the third quarter of 2022 and higher oil and gas royalty revenues as a result of higher natural gas production and prices in the third quarter of 2022. Approximately 60% of coal royalty revenues and approximately 45% of coal royalty sales volumes were derived from metallurgical coal in the third quarter of 2023. 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. NRP expects continued price support for coal as limited access to capital, labor shortages, and inflationary pressures limit operators’ ability to increase production. In addition, NRP continues to explore carbon neutral revenue opportunities across its 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 Soda Ash net income in the third quarter of 2023 decreased $2.2 million as compared to the prior year period primarily due to lower international sales prices and an increased sales mix into the lower priced international market in the third quarter of 2023 as compared to the prior year period. Operating cash flow and free cash flow in the third quarter of 2023 improved $12.6 million as compared to the prior year period due to a higher cash distribution received from Sisecam Wyoming in the third quarter of 2023 stemming from strong operating performance in the first half of the year. International soda ash prices were significantly lower in the third quarter of 2023 compared to the first half of the year primarily due to new supply from China. NRP believes 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, NRP believes contracted sales prices will be set at lower levels as the market contends with recessionary headwinds and new supply entering the export markets. Corporate and Financing Corporate and Financing costs in the third quarter of 2023 decreased $2.6 million as compared to the prior year period primarily due to the loss on extinguishment of debt recognized in 2022. Operating cash flow and free cash flow in the third quarter of 2023 decreased $1.1 million as compared to the prior year period primarily due to higher cash paid for interest in the third quarter of 2023 due to borrowings on the credit facility used for the preferred unit redemptions and warrant repurchases. NRP redeemed an aggregate of 50,001 preferred units at par with cash in the third quarter of 2023, saving NRP $6.0 million annually in preferred unit cash distributions. Of the originally issued 250,000 preferred units, 71,666 remain outstanding. In addition, NRP repurchased 752,500 warrants with an exercise price of $22.81 and 60,000 warrants with an exercise price of $34.00 for $33.6 million in cash during the third quarter of 2023. In October, NRP repurchased 650,000 warrants with an exercise price of $34.00 for $22.5 million in cash. After the warrant repurchases in October, 1.54 million warrants with an exercise price of $34.00 remain outstanding. In August 2023, NRP declared and paid a second quarter 2023 cash distribution of $0.75 per common unit and a $3.65 million cash distribution on its preferred units. Today, NRP declared a third quarter 2023 cash distribution of $0.75 per common unit and a $2.15 million cash distribution on its outstanding preferred units. NRP's consolidated leverage ratio was 0.7x at September 30, 2023. Conference Call A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link: https://conferencingportals.com/event/cHhtshxF. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full conference call we suggest registering at minimum 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website. Withholding Information for Foreign Investors Concurrent with this announcement, we are providing qualified notice to brokers and nominees that hold NRP units on behalf of non-U.S. investors under Treasury Regulation Section 1.1446-4(b) and (d) and Treasury Regulation Section 1.1446(f)-4(c)(2)(iii). Brokers and nominees should treat one hundred percent (100%) of NRP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. In addition, brokers and nominees should treat one hundred percent (100%) of the distribution as being in excess of cumulative net income for purposes of determining the amount to withhold. Accordingly, NRP's distributions to non-U.S. investors are subject to federal income tax withholding at a rate equal to the sum of the highest applicable rate plus ten percent (10%). Company Profile Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of properties in the United States including coal, industrial minerals and other natural resources, as well as rights to conduct carbon sequestration and renewable energy activities. NRP also owns an equity investment in Sisecam Wyoming LLC, one of the world’s lowest-cost producers of soda ash. For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com. Forward-Looking Statements This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees; Sisecam Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures "Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis. “Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. “Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. "Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions, redemption of preferred units, redemption of PIK units, common unit distributions, and warrant cash settlements. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units. "Leverage ratio" represents the outstanding principal of NRP's debt at the end of the period divided by the last twelve months' Adjusted EBITDA as defined above. NRP believes that leverage ratio is a useful measure to management and investors to evaluate and monitor the indebtedness of NRP relative to its ability to generate income to service such debt and in understanding trends in NRP’s overall financial condition. Leverage ratio may not be calculated the same for NRP as for other companies and is not a substitute for, and should not be used in conjunction with, GAAP financial ratios. -Financial Tables and Reconciliation of Non-GAAP Measures Follow- Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Comprehensive Income For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands, except per unit data) 2023 2022 2023 2023 2022 Revenues and other income Royalty and other mineral rights $ 68,533 $ 81,379 $ 61,007 $ 205,811 $ 231,795 Transportation and processing services 4,579 5,969 3,270 11,447 15,377 Equity in earnings of Sisecam Wyoming 12,401 14,556 26,978 58,633 44,036 Gain on asset sales and disposals 854 354 5 955 699 Total revenues and other income $ 86,367 $ 102,258 $ 91,260 $ 276,846 $ 291,907 Operating expenses Operating and maintenance expenses $ 8,358 $ 7,898 $ 7,930 $ 23,451 $ 25,989 Depreciation, depletion and amortization 4,594 6,850 3,792 12,469 16,565 General and administrative expenses 5,669 4,518 5,643 17,157 14,037 Asset impairments 63 812 69 132 874 Total operating expenses $ 18,684 $ 20,078 $ 17,434 $ 53,209 $ 57,465 Income from operations $ 67,683 $ 82,180 $ 73,826 $ 223,637 $ 234,442 Other expenses, net Interest expense, net $ (3,837 ) $ (5,141 ) $ (3,492 ) $ (10,182 ) $ (22,636 ) Loss on extinguishment of debt — (2,484 ) — — (6,532 ) Total other expenses, net $ (3,837 ) $ (7,625 ) $ (3,492 ) $ (10,182 ) $ (29,168 ) Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Less: income attributable to preferred unitholders (2,936 ) (7,500 ) (4,971 ) (14,568 ) (22,500 ) Less: redemption of preferred units (17,083 ) — (27,618 ) (60,929 ) — Net income attributable to common unitholders and the general partner $ 43,827 $ 67,055 $ 37,745 $ 137,958 $ 182,774 Net income attributable to common unitholders $ 42,951 $ 65,714 $ 36,990 $ 135,199 $ 179,119 Net income attributable to the general partner 876 1,341 755 2,759 3,655 Net income per common unit Basic $ 3.40 $ 5.25 $ 2.93 $ 10.72 $ 14.36 Diluted 2.91 3.71 2.49 8.88 10.24 Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Comprehensive income (loss) from unconsolidated investment and other 2,200 289 911 (16,472 ) (1,179 ) Comprehensive income $ 66,046 $ 74,844 $ 71,245 $ 196,983 $ 204,095 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Cash Flows For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands) 2023 2022 2023 2023 2022 Cash flows from operating activities Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 4,594 6,850 3,792 12,469 16,565 Distributions from unconsolidated investment 23,010 10,339 32,350 66,140 34,055 Equity earnings from unconsolidated investment (12,401 ) (14,556 ) (26,978 ) (58,633 ) (44,036 ) Gain on asset sales and disposals (854 ) (354 ) (5 ) (955 ) (699 ) Loss on extinguishment of debt — 2,484 — — 6,532 Asset impairments 63 812 69 132 874 Bad debt expense 1,621 1 (198 ) 813 641 Unit-based compensation expense 2,766 1,429 2,646 7,903 4,216 Amortization of debt issuance costs and other 477 215 541 1,043 1,887 Change in operating assets and liabilities: Accounts receivable (2,610 ) 2,494 (361 ) 4,090 (10,118 ) Accounts payable (381 ) 210 72 (850 ) 223 Accrued liabilities 498 278 2,019 (6,288 ) (4,831 ) Accrued interest 599 3,177 (627 ) 235 3,014 Deferred revenue (2,163 ) (7,519 ) (2,646 ) (4,963 ) (17,094 ) Other items, net (123 ) 2,081 342 (1,399 ) 1,447 Net cash provided by operating activities $ 78,942 $ 82,496 $ 81,350 $ 233,192 $ 197,950 Cash flows from investing activities Proceeds from asset sales and disposals $ 855 $ 353 $ 5 $ 961 $ 699 Return of long-term contract receivable 622 575 610 1,830 1,138 Capital expenditures — (59 ) (8 ) (10 ) (59 ) Net cash provided by investing activities $ 1,477 $ 869 $ 607 $ 2,781 $ 1,778 Cash flows from financing activities Debt borrowings $ 50,000 $ — $ 70,834 $ 215,034 $ — Debt repayments (25,000 ) (60,494 ) (61,365 ) (176,061 ) (197,665 ) Distributions to common unitholders and the general partner (9,669 ) (9,571 ) (9,669 ) (60,238 ) (24,813 ) Distributions to preferred unitholders (4,437 ) (7,500 ) (7,396 ) (19,919 ) (22,758 ) Redemption of preferred units (50,001 ) — (80,834 ) (178,334 ) — Redemption of preferred units paid-in-kind — — — — (19,321 ) Warrant settlement (33,608 ) — — (33,608 ) — Other items, net (23 ) (4,219 ) (452 ) (3,527 ) (9,754 ) Net cash used in financing activities $ (72,738 ) $ (81,784 ) $ (88,882 ) $ (256,653 ) $ (274,311 ) Net increase (decrease) in cash and cash equivalents $ 7,681 $ 1,581 $ (6,925 ) $ (20,680 ) $ (74,583 ) Cash and cash equivalents at beginning of period 10,730 59,356 17,655 39,091 135,520 Cash and cash equivalents at end of period $ 18,411 $ 60,937 $ 10,730 $ 18,411 $ 60,937 Supplemental cash flow information: Cash paid for interest $ 3,050 $ 1,729 $ 3,960 $ 9,484 $ 18,501 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Balance Sheets September 30, December 31, 2023 2022 (In thousands, except unit data) (Unaudited) ASSETS Current assets Cash and cash equivalents $ 18,411 $ 39,091 Accounts receivable, net 38,569 42,701 Other current assets, net 2,570 1,822 Total current assets $ 59,550 $ 83,614 Land 24,008 24,008 Mineral rights, net 400,548 412,312 Intangible assets, net 14,014 14,713 Equity in unconsolidated investment 282,491 306,470 Long-term contract receivable, net 26,997 28,946 Other long-term assets, net 7,601 7,068 Total assets $ 815,209 $ 877,131 LIABILITIES AND CAPITAL Current liabilities Accounts payable $ 1,143 $ 1,992 Accrued liabilities 6,511 11,916 Accrued interest 1,224 989 Current portion of deferred revenue 6,399 6,256 Current portion of long-term debt, net 36,780 39,076 Total current liabilities $ 52,057 $ 60,229 Deferred revenue 35,076 40,181 Long-term debt, net 170,735 129,205 Other non-current liabilities 6,833 5,472 Total liabilities $ 264,701 $ 235,087 Commitments and contingencies Class A Convertible Preferred Units (71,666 and 250,000 units issued and outstanding at September 30, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at September 30, 2023 and December 31, 2022) $ 47,181 $ 164,587 Partners’ capital Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at September 30, 2023 and December 31, 2022, respectively) $ 461,043 $ 404,799 General partner’s interest 7,196 5,977 Warrant holders’ interest 32,843 47,964 Accumulated other comprehensive income 2,245 18,717 Total partners’ capital $ 503,327 $ 477,457 Total liabilities and partners' capital $ 815,209 $ 877,131 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Partners' Capital Accumulated Other Total Common Unitholders General Warrant Comprehensive Partners' (In thousands) Units Amounts Partner Holders Income (Loss) Capital Balance at December 31, 2022 12,506 $ 404,799 $ 5,977 $ 47,964 $ 18,717 $ 477,457 Net income (1) — 77,690 1,585 — — 79,275 Redemption of preferred units — (15,904 ) (324 ) — — (16,228 ) Distributions to common unitholders and the general partner — (40,082 ) (818 ) — — (40,900 ) Distributions to preferred unitholders — (7,924 ) (162 ) — — (8,086 ) Issuance of unit-based awards 129 — — — — — Unit-based awards amortization and vesting, net — (1,178 ) — — — (1,178 ) Capital contribution — — 142 — — 142 Comprehensive loss from unconsolidated investment and other — — — — (19,583 ) (19,583 ) Balance at March 31, 2023 12,635 $ 417,401 $ 6,400 $ 47,964 $ (866 ) $ 470,899 Net income (2) — 68,927 1,407 — — 70,334 Redemption of preferred units — (27,065 ) (553 ) — — (27,618 ) Distributions to common unitholders and the general partner — (9,476 ) (193 ) — — (9,669 ) Distributions to preferred unitholders — (7,248 ) (148 ) — — (7,396 ) Unit-based awards amortization and vesting — 2,299 — — — 2,299 Comprehensive income from unconsolidated investment and other — — — — 911 911 Balance at June 30, 2023 12,635 $ 444,838 $ 6,913 $ 47,964 $ 45 $ 499,760 Net income (3) — 62,569 1,277 — — 63,846 Redemption of preferred units — (16,741 ) (342 ) — — (17,083 ) Distributions to common unitholders and the general partner — (9,475 ) (194 ) — — (9,669 ) Distributions to preferred unitholders — (4,349 ) (88 ) — — (4,437 ) Unit-based awards amortization and vesting — 2,318 — — — 2,318 Warrant settlement — (18,117 ) (370 ) (15,121 ) — (33,608 ) Comprehensive income from unconsolidated investment and other — — — — 2,200 2,200 Balance at September 30, 2023 12,635 $ 461,043 $ 7,196 $ 32,843 $ 2,245 $ 503,327 (1) Net income includes $6.7 million of income attributable to preferred unitholders that accumulated during the period, of which $6.5 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. (2) Net income includes $5.0 million of income attributable to preferred unitholders that accumulated during the period, of which $4.9 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. (3) Net income includes $2.9 million of income attributable to preferred unitholders that accumulated during the period, of which $2.9 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Partners' Capital Accumulated Other Total Common Unitholders General Warrant Comprehensive Partners' (In thousands) Units Amounts Partner Holders Income Capital Balance at December 31, 2021 12,351 $ 203,062 $ 1,787 $ 47,964 $ 3,211 $ 256,024 Net income (1) — 62,621 1,278 — — 63,899 Distributions to common unitholders and the general partner — (5,559 ) (113 ) — — (5,672 ) Distributions to preferred unitholders — (7,603 ) (155 ) — — (7,758 ) Issuance of unit-based awards 155 — — — — — Unit-based awards amortization and vesting, net — (1,754 ) — — — (1,754 ) Capital contribution — — 112 — — 112 Comprehensive income from unconsolidated investment and other — — — — 2,545 2,545 Balance at March 31, 2022 12,506 $ 250,767 $ 2,909 $ 47,964 $ 5,756 $ 307,396 Net income (1) — 65,484 1,336 — — 66,820 Distributions to common unitholders and the general partner — (9,379 ) (191 ) — — (9,570 ) Distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) Unit-based awards amortization and vesting — 1,231 — — — 1,231 Comprehensive loss from unconsolidated investment and other — — — — (4,013 ) (4,013 ) Balance at June 30, 2022 12,506 $ 300,753 $ 3,904 $ 47,964 $ 1,743 $ 354,364 Net income (1) — 73,064 1,491 — — 74,555 Distributions to common unitholders and the general partner — (9,380 ) (191 ) — — (9,571 ) Distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) Unit-based awards amortization and vesting — 1,245 — — — 1,245 Comprehensive income from unconsolidated investment and other — — — — 289 289 Balance at September 30, 2022 12,506 $ 358,332 $ 5,054 $ 47,964 $ 2,032 $ 413,382 (1) Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. Natural Resource Partners L.P. Financial Tables (Unaudited) The following table presents NRP's unaudited business results by segment for the three months ended September 30, 2023 and 2022 and June 30, 2023: Operating Segments Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Revenues $ 73,112 $ 12,401 $ — $ 85,513 Gain on asset sales and disposals 854 — — 854 Total revenues and other income $ 73,966 $ 12,401 $ — $ 86,367 Asset impairments $ 63 $ — $ — $ 63 Net income (loss) $ 61,009 $ 12,348 $ (9,511 ) $ 63,846 Adjusted EBITDA (1) $ 65,661 $ 22,957 $ (5,669 ) $ 82,949 Cash flow provided by (used in) continuing operations: Operating activities $ 60,938 $ 22,958 $ (4,954 ) $ 78,942 Investing activities $ 1,477 $ — $ — $ 1,477 Financing activities $ — $ — $ (72,738 ) $ (72,738 ) Distributable cash flow (1) $ 62,415 $ 22,958 $ (4,954 ) $ 80,419 Free cash flow (1) $ 61,560 $ 22,958 $ (4,954 ) $ 79,564 For the Three Months Ended September 30, 2022 Revenues $ 87,348 $ 14,556 $ — $ 101,904 Gain on asset sales and disposals 354 — — 354 Total revenues and other income $ 87,702 $ 14,556 $ — $ 102,258 Asset impairments $ 812 $ — $ — $ 812 Net income (loss) $ 72,173 $ 14,525 $ (12,143 ) $ 74,555 Adjusted EBITDA (1) $ 79,835 $ 10,308 $ (4,518 ) $ 85,625 Cash flow provided by (used in) continuing operations: Operating activities $ 75,948 $ 10,309 $ (3,761 ) $ 82,496 Investing activities $ 928 $ — $ (59 ) $ 869 Financing activities $ — $ — $ (81,784 ) $ (81,784 ) Distributable cash flow (1) $ 76,876 $ 10,309 $ (3,820 ) $ 83,365 Free cash flow (1) $ 76,523 $ 10,309 $ (3,820 ) $ 83,012 For the Three Months Ended June 30, 2023 Revenues $ 64,277 $ 26,978 $ — $ 91,255 Gain on asset sales and disposals 5 — — 5 Total revenues and other income $ 64,282 $ 26,978 $ — $ 91,260 Asset impairments $ 69 $ — $ — $ 69 Net income (loss) $ 52,510 $ 26,964 $ (9,140 ) $ 70,334 Adjusted EBITDA (1) $ 56,366 $ 32,336 $ (5,643 ) $ 83,059 Cash flow provided by (used in) continuing operations: Operating activities $ 55,040 $ 32,326 $ (6,016 ) $ 81,350 Investing activities $ 615 $ — $ (8 ) $ 607 Financing activities $ — $ — $ (88,882 ) $ (88,882 ) Distributable cash flow (1) $ 55,655 $ 32,326 $ (6,024 ) $ 81,957 Free cash flow (1) $ 55,650 $ 32,326 $ (6,024 ) $ 81,952 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Natural Resource Partners L.P. Financial Tables (Unaudited) The following table presents NRP's unaudited business results by segment for the nine months ended September 30, 2023 and 2022: Operating Segments Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Revenues $ 217,258 $ 58,633 $ — $ 275,891 Gain on asset sales and disposals 955 — — 955 Total revenues and other income $ 218,213 $ 58,633 $ — $ 276,846 Asset impairments $ 132 $ — $ — $ 132 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 For the Nine Months Ended September 30, 2022 Revenues $ 247,172 $ 44,036 $ — $ 291,208 Gain on asset sales and disposals 699 — — 699 Total revenues and other income $ 247,871 $ 44,036 $ — $ 291,907 Asset impairments $ 874 $ — $ — $ 874 Net income (loss) $ 204,548 $ 43,931 $ (43,205 ) $ 205,274 Adjusted EBITDA (1) $ 221,987 $ 33,950 $ (14,037 ) $ 241,900 Cash flow provided by (used in) continuing operations: Operating activities $ 194,475 $ 33,934 $ (30,459 ) $ 197,950 Investing activities $ 1,837 $ — $ (59 ) $ 1,778 Financing activities $ (614 ) $ — $ (273,697 ) $ (274,311 ) Distributable cash flow (1) $ 196,312 $ 33,934 $ (30,518 ) $ 199,728 Free cash flow (1) $ 195,613 $ 33,934 $ (30,518 ) $ 199,029 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Natural Resource Partners L.P. Financial Tables (Unaudited) Operating Statistics - Mineral Rights For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands, except per ton data) 2023 2022 2023 2023 2022 Coal sales volumes (tons) Appalachia Northern 284 440 390 1,053 1,260 Central 3,429 3,503 3,352 10,390 10,238 Southern 741 498 693 2,016 1,171 Total Appalachia 4,454 4,441 4,435 13,459 12,669 Illinois Basin 2,541 3,490 1,631 5,482 8,395 Northern Powder River Basin 1,364 835 881 3,330 2,772 Gulf Coast 479 188 139 676 324 Total coal sales volumes 8,838 8,954 7,086 22,947 24,160 Coal royalty revenue per ton Appalachia Northern $ 5.54 $ 6.74 $ 6.87 $ 7.59 $ 9.48 Central 8.20 9.04 8.49 8.89 10.85 Southern 11.88 9.78 10.85 12.41 14.28 Illinois Basin 3.98 2.57 3.15 3.63 2.30 Northern Powder River Basin 4.86 4.56 4.62 4.74 4.24 Gulf Coast 0.69 0.59 0.71 0.68 0.58 Combined average coal royalty revenue per ton 6.29 5.85 6.77 7.04 7.08 Coal royalty revenues Appalachia Northern $ 1,573 $ 2,965 $ 2,681 $ 7,991 $ 11,946 Central 28,111 31,680 28,445 92,362 111,121 Southern 8,806 4,872 7,521 25,024 16,725 Total Appalachia 38,490 39,517 38,647 125,377 139,792 Illinois Basin 10,108 8,967 5,141 19,924 19,331 Northern Powder River Basin 6,627 3,805 4,066 15,768 11,751 Gulf Coast 330 111 98 461 187 Unadjusted coal royalty revenues 55,555 52,400 47,952 161,530 171,061 Coal royalty adjustment for minimum leases (11 ) (19 ) 8 (3 ) (286 ) Total coal royalty revenues $ 55,544 $ 52,381 $ 47,960 $ 161,527 $ 170,775 Other revenues Production lease minimum revenues $ 850 $ 1,885 $ 562 $ 2,025 $ 3,542 Minimum lease straight-line revenues 4,464 4,778 4,447 13,414 14,235 Carbon neutral initiative revenues 681 8,600 115 2,914 8,600 Wheelage revenues 2,385 2,977 3,284 9,538 11,073 Property tax revenues 1,770 1,360 1,470 4,710 4,527 Coal overriding royalty revenues 827 1,367 150 1,165 2,307 Lease amendment revenues 623 759 848 2,322 2,450 Aggregates royalty revenues 736 884 686 2,175 2,691 Oil and gas royalty revenues 324 6,170 1,214 5,126 10,890 Other revenues 329 218 271 895 705 Total other revenues $ 12,989 $ 28,998 $ 13,047 $ 44,284 $ 61,020 Royalty and other mineral rights $ 68,533 $ 81,379 $ 61,007 $ 205,811 $ 231,795 Transportation and processing services revenues 4,579 5,969 3,270 11,447 15,377 Gain on asset sales and disposals 854 354 5 955 699 Total Mineral Rights segment revenues and other income $ 73,966 $ 87,702 $ 64,282 $ 218,213 $ 247,871 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Adjusted EBITDA Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Net income (loss) $ 61,009 $ 12,348 $ (9,511 ) $ 63,846 Less: equity earnings from unconsolidated investment — (12,401 ) — (12,401 ) Add: total distributions from unconsolidated investment — 23,010 — 23,010 Add: interest expense, net — — 3,837 3,837 Add: loss on extinguishment of debt — — — — 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 For the Three Months Ended 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 For the Three Months Ended June 30, 2023 Net income (loss) $ 52,510 $ 26,964 $ (9,140 ) $ 70,334 Less: equity earnings from unconsolidated investment — (26,978 ) — (26,978 ) Add: total distributions from unconsolidated investment — 32,350 — 32,350 Add: interest expense, net — — 3,492 3,492 Add: loss on extinguishment of debt — — — — Add: depreciation, depletion and amortization 3,787 — 5 3,792 Add: asset impairments 69 — — 69 Adjusted EBITDA $ 56,366 $ 32,336 $ (5,643 ) $ 83,059 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Adjusted EBITDA Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Net income (loss) $ 182,400 $ 58,408 $ (27,353 ) $ 213,455 Less: equity earnings from unconsolidated investment — (58,633 ) — (58,633 ) Add: total distributions from unconsolidated investment — 66,140 — 66,140 Add: interest expense, net — — 10,182 10,182 Add: loss on extinguishment of debt — — — — 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 For the Nine Months Ended 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 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Distributable Cash Flow and Free Cash Flow Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Net cash provided by (used in) operating activities $ 60,938 $ 22,958 $ (4,954 ) $ 78,942 Add: proceeds from asset sales and disposals 855 — — 855 Add: return of long-term contract receivable 622 — — 622 Less: maintenance capital expenditures — — — — Distributable cash flow $ 62,415 $ 22,958 $ (4,954 ) $ 80,419 Less: proceeds from asset sales and disposals (855 ) — — (855 ) Free cash flow $ 61,560 $ 22,958 $ (4,954 ) $ 79,564 Net cash provided by investing activities $ 1,477 $ — $ — $ 1,477 Net cash used in financing activities — — (72,738 ) (72,738 ) For the Three Months Ended 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 Net cash provided by (used in) investing activities $ 928 $ — $ (59 ) $ 869 Net cash used in financing activities — — (81,784 ) (81,784 ) For the Three Months Ended June 30, 2023 Net cash provided by (used in) operating activities $ 55,040 $ 32,326 $ (6,016 ) $ 81,350 Add: proceeds from asset sales and disposals 5 — — 5 Add: return of long-term contract receivable 610 — — 610 Less: maintenance capital expenditures — — (8 ) (8 ) Distributable cash flow $ 55,655 $ 32,326 $ (6,024 ) $ 81,957 Less: proceeds from asset sales and disposals (5 ) — — (5 ) Free cash flow $ 55,650 $ 32,326 $ (6,024 ) $ 81,952 Net cash provided by (used in) investing activities $ 615 $ — $ (8 ) $ 607 Net cash used in financing activities — — (88,882 ) (88,882 ) Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Distributable Cash Flow and Free Cash Flow Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Net cash provided by (used in) operating activities $ 189,836 $ 65,901 $ (22,545 ) $ 233,192 Add: proceeds from asset sales and disposals 961 — — 961 Add: return of long-term contract receivable 1,830 — — 1,830 Less: maintenance capital expenditures — — (10 ) (10 ) Distributable cash flow $ 192,627 $ 65,901 $ (22,555 ) $ 235,973 Less: proceeds from asset sales and disposals (961 ) — — (961 ) Free cash flow $ 191,666 $ 65,901 $ (22,555 ) $ 235,012 Net cash provided by (used in) investing activities $ 2,791 $ — $ (10 ) $ 2,781 Net cash used in financing activities (583 ) — (256,070 ) (256,653 ) For the Nine Months Ended 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 Net cash provided by (used in) investing activities $ 1,837 $ — $ (59 ) $ 1,778 Net cash used in financing activities (614 ) — (273,697 ) (274,311 ) Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Last Twelve Months (LTM) Free Cash Flow For the Three Months Ended (In thousands) December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Last 12 Months Net cash provided by operating activities $ 68,888 $ 72,900 $ 81,350 $ 78,942 $ 302,080 Add: proceeds from asset sales and disposals 384 101 5 855 1,345 Add: return of long-term contract receivable 585 598 610 622 2,415 Less: maintenance capital expenditures (59 ) (2 ) (8 ) — (69 ) Distributable cash flow $ 69,798 $ 73,597 $ 81,957 $ 80,419 $ 305,771 Less: proceeds from asset sales and disposals (384 ) (101 ) (5 ) (855 ) (1,345 ) Free cash flow $ 69,414 $ 73,496 $ 81,952 $ 79,564 $ 304,426 Leverage Ratio For the Three Months Ended (In thousands) 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 For the Three Months Ended (In thousands) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 Last 12 Months Net income $ 55,641 $ 63,899 $ 66,820 $ 74,555 $ 260,915 Less: equity earnings from unconsolidated investment (10,625 ) (14,837 ) (14,643 ) (14,556 ) (54,661 ) Add: total distributions from unconsolidated investment 7,350 13,230 10,486 10,339 41,405 Add: interest expense, net 9,568 9,387 8,108 5,141 32,204 Add: loss on extinguishment of debt — — 4,048 2,484 6,532 Add: depreciation, depletion and amortization 3,930 3,868 5,847 6,850 20,495 Add: asset impairments 986 19 43 812 1,860 Adjusted EBITDA $ 66,850 $ 75,566 $ 80,709 $ 85,625 $ 308,750 Debt—at September 30, 2022 $ 240,819 Leverage Ratio 0.8 x View source version on businesswire.com: https://www.businesswire.com/news/home/20231103376145/en/Contacts Tiffany Sammis 713-751-7515 tsammis@nrplp.com
Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2023 results as follows: For the Three Months Ended Last Twelve Months Ended (In thousands) (Unaudited) September 30, 2023 Net income $ 63,846 $ 276,673 Operating cash flow 78,942 302,080 Free cash flow (1) 79,564 304,426 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Highlights: Generated $80 million of free cash flow Paid second quarter 2023 common unit distribution of $0.75 per unit Redeemed $50 million of preferred units at par with cash; $72 million of original $250 million preferred units remain outstanding Repurchased 812,500 warrants in September and 650,000 warrants in October with $56 million in cash; 1.54 million of original 4 million warrants remain outstanding Declares third quarter 2023 common unit distribution of $0.75 per unit "NRP had another robust quarter with $80 million of free cash flow generated in the third quarter of 2023 as a result of continued strong performance from our mineral rights assets and a significant cash distribution from our soda ash investment," said Craig Nunez, NRP's president and chief operating officer. "We also made noteworthy progress towards our goal of eliminating all preferred units and warrants by redeeming $50 million of preferred units at par with cash and repurchasing a total of 1.46 million warrants for $56 million in cash. I am proud of the NRP team for the continued strong performance and am confident our strategy to retire all outstanding debt, preferred equity, and warrants while maintaining common unit distributions will continue to maximize long-term unitholder value.” NRP announced today that the board of directors of its general partner declared a third quarter 2023 cash distribution of $0.75 per common unit to be paid on November 21, 2023, to unitholders of record on November 14, 2023. In addition, the board declared a $2.15 million cash distribution on NRP's outstanding preferred units. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the board of directors. The board of directors considers numerous factors each quarter in determining cash distributions including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability, and the level of cash reserves that the board determines is necessary for future operating and capital needs. NRP's available liquidity was $45.4 million at September 30, 2023, consisting of $18.4 million of cash and $27.0 million of borrowing capacity available under its revolving credit facility. Segment Performance Mineral Rights Mineral Rights net income, operating cash flow, and free cash flow for the third quarter of 2023 decreased $11.2 million, $15.0 million, and $15.0 million, respectively, as compared to the prior year period. These decreases were primarily due to certain carbon neutral initiative transactions entered into during the third quarter of 2022 and higher oil and gas royalty revenues as a result of higher natural gas production and prices in the third quarter of 2022. Approximately 60% of coal royalty revenues and approximately 45% of coal royalty sales volumes were derived from metallurgical coal in the third quarter of 2023. 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. NRP expects continued price support for coal as limited access to capital, labor shortages, and inflationary pressures limit operators’ ability to increase production. In addition, NRP continues to explore carbon neutral revenue opportunities across its 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 Soda Ash net income in the third quarter of 2023 decreased $2.2 million as compared to the prior year period primarily due to lower international sales prices and an increased sales mix into the lower priced international market in the third quarter of 2023 as compared to the prior year period. Operating cash flow and free cash flow in the third quarter of 2023 improved $12.6 million as compared to the prior year period due to a higher cash distribution received from Sisecam Wyoming in the third quarter of 2023 stemming from strong operating performance in the first half of the year. International soda ash prices were significantly lower in the third quarter of 2023 compared to the first half of the year primarily due to new supply from China. NRP believes 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, NRP believes contracted sales prices will be set at lower levels as the market contends with recessionary headwinds and new supply entering the export markets. Corporate and Financing Corporate and Financing costs in the third quarter of 2023 decreased $2.6 million as compared to the prior year period primarily due to the loss on extinguishment of debt recognized in 2022. Operating cash flow and free cash flow in the third quarter of 2023 decreased $1.1 million as compared to the prior year period primarily due to higher cash paid for interest in the third quarter of 2023 due to borrowings on the credit facility used for the preferred unit redemptions and warrant repurchases. NRP redeemed an aggregate of 50,001 preferred units at par with cash in the third quarter of 2023, saving NRP $6.0 million annually in preferred unit cash distributions. Of the originally issued 250,000 preferred units, 71,666 remain outstanding. In addition, NRP repurchased 752,500 warrants with an exercise price of $22.81 and 60,000 warrants with an exercise price of $34.00 for $33.6 million in cash during the third quarter of 2023. In October, NRP repurchased 650,000 warrants with an exercise price of $34.00 for $22.5 million in cash. After the warrant repurchases in October, 1.54 million warrants with an exercise price of $34.00 remain outstanding. In August 2023, NRP declared and paid a second quarter 2023 cash distribution of $0.75 per common unit and a $3.65 million cash distribution on its preferred units. Today, NRP declared a third quarter 2023 cash distribution of $0.75 per common unit and a $2.15 million cash distribution on its outstanding preferred units. NRP's consolidated leverage ratio was 0.7x at September 30, 2023. Conference Call A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link: https://conferencingportals.com/event/cHhtshxF. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full conference call we suggest registering at minimum 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website. Withholding Information for Foreign Investors Concurrent with this announcement, we are providing qualified notice to brokers and nominees that hold NRP units on behalf of non-U.S. investors under Treasury Regulation Section 1.1446-4(b) and (d) and Treasury Regulation Section 1.1446(f)-4(c)(2)(iii). Brokers and nominees should treat one hundred percent (100%) of NRP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. In addition, brokers and nominees should treat one hundred percent (100%) of the distribution as being in excess of cumulative net income for purposes of determining the amount to withhold. Accordingly, NRP's distributions to non-U.S. investors are subject to federal income tax withholding at a rate equal to the sum of the highest applicable rate plus ten percent (10%). Company Profile Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of properties in the United States including coal, industrial minerals and other natural resources, as well as rights to conduct carbon sequestration and renewable energy activities. NRP also owns an equity investment in Sisecam Wyoming LLC, one of the world’s lowest-cost producers of soda ash. For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com. Forward-Looking Statements This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees; Sisecam Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures "Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis. “Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. “Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. "Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions, redemption of preferred units, redemption of PIK units, common unit distributions, and warrant cash settlements. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units. "Leverage ratio" represents the outstanding principal of NRP's debt at the end of the period divided by the last twelve months' Adjusted EBITDA as defined above. NRP believes that leverage ratio is a useful measure to management and investors to evaluate and monitor the indebtedness of NRP relative to its ability to generate income to service such debt and in understanding trends in NRP’s overall financial condition. Leverage ratio may not be calculated the same for NRP as for other companies and is not a substitute for, and should not be used in conjunction with, GAAP financial ratios. -Financial Tables and Reconciliation of Non-GAAP Measures Follow- Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Comprehensive Income For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands, except per unit data) 2023 2022 2023 2023 2022 Revenues and other income Royalty and other mineral rights $ 68,533 $ 81,379 $ 61,007 $ 205,811 $ 231,795 Transportation and processing services 4,579 5,969 3,270 11,447 15,377 Equity in earnings of Sisecam Wyoming 12,401 14,556 26,978 58,633 44,036 Gain on asset sales and disposals 854 354 5 955 699 Total revenues and other income $ 86,367 $ 102,258 $ 91,260 $ 276,846 $ 291,907 Operating expenses Operating and maintenance expenses $ 8,358 $ 7,898 $ 7,930 $ 23,451 $ 25,989 Depreciation, depletion and amortization 4,594 6,850 3,792 12,469 16,565 General and administrative expenses 5,669 4,518 5,643 17,157 14,037 Asset impairments 63 812 69 132 874 Total operating expenses $ 18,684 $ 20,078 $ 17,434 $ 53,209 $ 57,465 Income from operations $ 67,683 $ 82,180 $ 73,826 $ 223,637 $ 234,442 Other expenses, net Interest expense, net $ (3,837 ) $ (5,141 ) $ (3,492 ) $ (10,182 ) $ (22,636 ) Loss on extinguishment of debt — (2,484 ) — — (6,532 ) Total other expenses, net $ (3,837 ) $ (7,625 ) $ (3,492 ) $ (10,182 ) $ (29,168 ) Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Less: income attributable to preferred unitholders (2,936 ) (7,500 ) (4,971 ) (14,568 ) (22,500 ) Less: redemption of preferred units (17,083 ) — (27,618 ) (60,929 ) — Net income attributable to common unitholders and the general partner $ 43,827 $ 67,055 $ 37,745 $ 137,958 $ 182,774 Net income attributable to common unitholders $ 42,951 $ 65,714 $ 36,990 $ 135,199 $ 179,119 Net income attributable to the general partner 876 1,341 755 2,759 3,655 Net income per common unit Basic $ 3.40 $ 5.25 $ 2.93 $ 10.72 $ 14.36 Diluted 2.91 3.71 2.49 8.88 10.24 Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Comprehensive income (loss) from unconsolidated investment and other 2,200 289 911 (16,472 ) (1,179 ) Comprehensive income $ 66,046 $ 74,844 $ 71,245 $ 196,983 $ 204,095 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Cash Flows For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands) 2023 2022 2023 2023 2022 Cash flows from operating activities Net income $ 63,846 $ 74,555 $ 70,334 $ 213,455 $ 205,274 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 4,594 6,850 3,792 12,469 16,565 Distributions from unconsolidated investment 23,010 10,339 32,350 66,140 34,055 Equity earnings from unconsolidated investment (12,401 ) (14,556 ) (26,978 ) (58,633 ) (44,036 ) Gain on asset sales and disposals (854 ) (354 ) (5 ) (955 ) (699 ) Loss on extinguishment of debt — 2,484 — — 6,532 Asset impairments 63 812 69 132 874 Bad debt expense 1,621 1 (198 ) 813 641 Unit-based compensation expense 2,766 1,429 2,646 7,903 4,216 Amortization of debt issuance costs and other 477 215 541 1,043 1,887 Change in operating assets and liabilities: Accounts receivable (2,610 ) 2,494 (361 ) 4,090 (10,118 ) Accounts payable (381 ) 210 72 (850 ) 223 Accrued liabilities 498 278 2,019 (6,288 ) (4,831 ) Accrued interest 599 3,177 (627 ) 235 3,014 Deferred revenue (2,163 ) (7,519 ) (2,646 ) (4,963 ) (17,094 ) Other items, net (123 ) 2,081 342 (1,399 ) 1,447 Net cash provided by operating activities $ 78,942 $ 82,496 $ 81,350 $ 233,192 $ 197,950 Cash flows from investing activities Proceeds from asset sales and disposals $ 855 $ 353 $ 5 $ 961 $ 699 Return of long-term contract receivable 622 575 610 1,830 1,138 Capital expenditures — (59 ) (8 ) (10 ) (59 ) Net cash provided by investing activities $ 1,477 $ 869 $ 607 $ 2,781 $ 1,778 Cash flows from financing activities Debt borrowings $ 50,000 $ — $ 70,834 $ 215,034 $ — Debt repayments (25,000 ) (60,494 ) (61,365 ) (176,061 ) (197,665 ) Distributions to common unitholders and the general partner (9,669 ) (9,571 ) (9,669 ) (60,238 ) (24,813 ) Distributions to preferred unitholders (4,437 ) (7,500 ) (7,396 ) (19,919 ) (22,758 ) Redemption of preferred units (50,001 ) — (80,834 ) (178,334 ) — Redemption of preferred units paid-in-kind — — — — (19,321 ) Warrant settlement (33,608 ) — — (33,608 ) — Other items, net (23 ) (4,219 ) (452 ) (3,527 ) (9,754 ) Net cash used in financing activities $ (72,738 ) $ (81,784 ) $ (88,882 ) $ (256,653 ) $ (274,311 ) Net increase (decrease) in cash and cash equivalents $ 7,681 $ 1,581 $ (6,925 ) $ (20,680 ) $ (74,583 ) Cash and cash equivalents at beginning of period 10,730 59,356 17,655 39,091 135,520 Cash and cash equivalents at end of period $ 18,411 $ 60,937 $ 10,730 $ 18,411 $ 60,937 Supplemental cash flow information: Cash paid for interest $ 3,050 $ 1,729 $ 3,960 $ 9,484 $ 18,501 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Balance Sheets September 30, December 31, 2023 2022 (In thousands, except unit data) (Unaudited) ASSETS Current assets Cash and cash equivalents $ 18,411 $ 39,091 Accounts receivable, net 38,569 42,701 Other current assets, net 2,570 1,822 Total current assets $ 59,550 $ 83,614 Land 24,008 24,008 Mineral rights, net 400,548 412,312 Intangible assets, net 14,014 14,713 Equity in unconsolidated investment 282,491 306,470 Long-term contract receivable, net 26,997 28,946 Other long-term assets, net 7,601 7,068 Total assets $ 815,209 $ 877,131 LIABILITIES AND CAPITAL Current liabilities Accounts payable $ 1,143 $ 1,992 Accrued liabilities 6,511 11,916 Accrued interest 1,224 989 Current portion of deferred revenue 6,399 6,256 Current portion of long-term debt, net 36,780 39,076 Total current liabilities $ 52,057 $ 60,229 Deferred revenue 35,076 40,181 Long-term debt, net 170,735 129,205 Other non-current liabilities 6,833 5,472 Total liabilities $ 264,701 $ 235,087 Commitments and contingencies Class A Convertible Preferred Units (71,666 and 250,000 units issued and outstanding at September 30, 2023 and December 31, 2022, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at September 30, 2023 and December 31, 2022) $ 47,181 $ 164,587 Partners’ capital Common unitholders’ interest (12,634,642 and 12,505,996 units issued and outstanding at September 30, 2023 and December 31, 2022, respectively) $ 461,043 $ 404,799 General partner’s interest 7,196 5,977 Warrant holders’ interest 32,843 47,964 Accumulated other comprehensive income 2,245 18,717 Total partners’ capital $ 503,327 $ 477,457 Total liabilities and partners' capital $ 815,209 $ 877,131 Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Partners' Capital Accumulated Other Total Common Unitholders General Warrant Comprehensive Partners' (In thousands) Units Amounts Partner Holders Income (Loss) Capital Balance at December 31, 2022 12,506 $ 404,799 $ 5,977 $ 47,964 $ 18,717 $ 477,457 Net income (1) — 77,690 1,585 — — 79,275 Redemption of preferred units — (15,904 ) (324 ) — — (16,228 ) Distributions to common unitholders and the general partner — (40,082 ) (818 ) — — (40,900 ) Distributions to preferred unitholders — (7,924 ) (162 ) — — (8,086 ) Issuance of unit-based awards 129 — — — — — Unit-based awards amortization and vesting, net — (1,178 ) — — — (1,178 ) Capital contribution — — 142 — — 142 Comprehensive loss from unconsolidated investment and other — — — — (19,583 ) (19,583 ) Balance at March 31, 2023 12,635 $ 417,401 $ 6,400 $ 47,964 $ (866 ) $ 470,899 Net income (2) — 68,927 1,407 — — 70,334 Redemption of preferred units — (27,065 ) (553 ) — — (27,618 ) Distributions to common unitholders and the general partner — (9,476 ) (193 ) — — (9,669 ) Distributions to preferred unitholders — (7,248 ) (148 ) — — (7,396 ) Unit-based awards amortization and vesting — 2,299 — — — 2,299 Comprehensive income from unconsolidated investment and other — — — — 911 911 Balance at June 30, 2023 12,635 $ 444,838 $ 6,913 $ 47,964 $ 45 $ 499,760 Net income (3) — 62,569 1,277 — — 63,846 Redemption of preferred units — (16,741 ) (342 ) — — (17,083 ) Distributions to common unitholders and the general partner — (9,475 ) (194 ) — — (9,669 ) Distributions to preferred unitholders — (4,349 ) (88 ) — — (4,437 ) Unit-based awards amortization and vesting — 2,318 — — — 2,318 Warrant settlement — (18,117 ) (370 ) (15,121 ) — (33,608 ) Comprehensive income from unconsolidated investment and other — — — — 2,200 2,200 Balance at September 30, 2023 12,635 $ 461,043 $ 7,196 $ 32,843 $ 2,245 $ 503,327 (1) Net income includes $6.7 million of income attributable to preferred unitholders that accumulated during the period, of which $6.5 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. (2) Net income includes $5.0 million of income attributable to preferred unitholders that accumulated during the period, of which $4.9 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. (3) Net income includes $2.9 million of income attributable to preferred unitholders that accumulated during the period, of which $2.9 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. Natural Resource Partners L.P. Financial Tables (Unaudited) Consolidated Statements of Partners' Capital Accumulated Other Total Common Unitholders General Warrant Comprehensive Partners' (In thousands) Units Amounts Partner Holders Income Capital Balance at December 31, 2021 12,351 $ 203,062 $ 1,787 $ 47,964 $ 3,211 $ 256,024 Net income (1) — 62,621 1,278 — — 63,899 Distributions to common unitholders and the general partner — (5,559 ) (113 ) — — (5,672 ) Distributions to preferred unitholders — (7,603 ) (155 ) — — (7,758 ) Issuance of unit-based awards 155 — — — — — Unit-based awards amortization and vesting, net — (1,754 ) — — — (1,754 ) Capital contribution — — 112 — — 112 Comprehensive income from unconsolidated investment and other — — — — 2,545 2,545 Balance at March 31, 2022 12,506 $ 250,767 $ 2,909 $ 47,964 $ 5,756 $ 307,396 Net income (1) — 65,484 1,336 — — 66,820 Distributions to common unitholders and the general partner — (9,379 ) (191 ) — — (9,570 ) Distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) Unit-based awards amortization and vesting — 1,231 — — — 1,231 Comprehensive loss from unconsolidated investment and other — — — — (4,013 ) (4,013 ) Balance at June 30, 2022 12,506 $ 300,753 $ 3,904 $ 47,964 $ 1,743 $ 354,364 Net income (1) — 73,064 1,491 — — 74,555 Distributions to common unitholders and the general partner — (9,380 ) (191 ) — — (9,571 ) Distributions to preferred unitholders — (7,350 ) (150 ) — — (7,500 ) Unit-based awards amortization and vesting — 1,245 — — — 1,245 Comprehensive income from unconsolidated investment and other — — — — 289 289 Balance at September 30, 2022 12,506 $ 358,332 $ 5,054 $ 47,964 $ 2,032 $ 413,382 (1) Net income includes $7.5 million of income attributable to preferred unitholders that accumulated during the period, of which $7.4 million is allocated to the common unitholders and $0.2 million is allocated to the general partner. Natural Resource Partners L.P. Financial Tables (Unaudited) The following table presents NRP's unaudited business results by segment for the three months ended September 30, 2023 and 2022 and June 30, 2023: Operating Segments Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Revenues $ 73,112 $ 12,401 $ — $ 85,513 Gain on asset sales and disposals 854 — — 854 Total revenues and other income $ 73,966 $ 12,401 $ — $ 86,367 Asset impairments $ 63 $ — $ — $ 63 Net income (loss) $ 61,009 $ 12,348 $ (9,511 ) $ 63,846 Adjusted EBITDA (1) $ 65,661 $ 22,957 $ (5,669 ) $ 82,949 Cash flow provided by (used in) continuing operations: Operating activities $ 60,938 $ 22,958 $ (4,954 ) $ 78,942 Investing activities $ 1,477 $ — $ — $ 1,477 Financing activities $ — $ — $ (72,738 ) $ (72,738 ) Distributable cash flow (1) $ 62,415 $ 22,958 $ (4,954 ) $ 80,419 Free cash flow (1) $ 61,560 $ 22,958 $ (4,954 ) $ 79,564 For the Three Months Ended September 30, 2022 Revenues $ 87,348 $ 14,556 $ — $ 101,904 Gain on asset sales and disposals 354 — — 354 Total revenues and other income $ 87,702 $ 14,556 $ — $ 102,258 Asset impairments $ 812 $ — $ — $ 812 Net income (loss) $ 72,173 $ 14,525 $ (12,143 ) $ 74,555 Adjusted EBITDA (1) $ 79,835 $ 10,308 $ (4,518 ) $ 85,625 Cash flow provided by (used in) continuing operations: Operating activities $ 75,948 $ 10,309 $ (3,761 ) $ 82,496 Investing activities $ 928 $ — $ (59 ) $ 869 Financing activities $ — $ — $ (81,784 ) $ (81,784 ) Distributable cash flow (1) $ 76,876 $ 10,309 $ (3,820 ) $ 83,365 Free cash flow (1) $ 76,523 $ 10,309 $ (3,820 ) $ 83,012 For the Three Months Ended June 30, 2023 Revenues $ 64,277 $ 26,978 $ — $ 91,255 Gain on asset sales and disposals 5 — — 5 Total revenues and other income $ 64,282 $ 26,978 $ — $ 91,260 Asset impairments $ 69 $ — $ — $ 69 Net income (loss) $ 52,510 $ 26,964 $ (9,140 ) $ 70,334 Adjusted EBITDA (1) $ 56,366 $ 32,336 $ (5,643 ) $ 83,059 Cash flow provided by (used in) continuing operations: Operating activities $ 55,040 $ 32,326 $ (6,016 ) $ 81,350 Investing activities $ 615 $ — $ (8 ) $ 607 Financing activities $ — $ — $ (88,882 ) $ (88,882 ) Distributable cash flow (1) $ 55,655 $ 32,326 $ (6,024 ) $ 81,957 Free cash flow (1) $ 55,650 $ 32,326 $ (6,024 ) $ 81,952 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Natural Resource Partners L.P. Financial Tables (Unaudited) The following table presents NRP's unaudited business results by segment for the nine months ended September 30, 2023 and 2022: Operating Segments Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Revenues $ 217,258 $ 58,633 $ — $ 275,891 Gain on asset sales and disposals 955 — — 955 Total revenues and other income $ 218,213 $ 58,633 $ — $ 276,846 Asset impairments $ 132 $ — $ — $ 132 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 For the Nine Months Ended September 30, 2022 Revenues $ 247,172 $ 44,036 $ — $ 291,208 Gain on asset sales and disposals 699 — — 699 Total revenues and other income $ 247,871 $ 44,036 $ — $ 291,907 Asset impairments $ 874 $ — $ — $ 874 Net income (loss) $ 204,548 $ 43,931 $ (43,205 ) $ 205,274 Adjusted EBITDA (1) $ 221,987 $ 33,950 $ (14,037 ) $ 241,900 Cash flow provided by (used in) continuing operations: Operating activities $ 194,475 $ 33,934 $ (30,459 ) $ 197,950 Investing activities $ 1,837 $ — $ (59 ) $ 1,778 Financing activities $ (614 ) $ — $ (273,697 ) $ (274,311 ) Distributable cash flow (1) $ 196,312 $ 33,934 $ (30,518 ) $ 199,728 Free cash flow (1) $ 195,613 $ 33,934 $ (30,518 ) $ 199,029 (1) See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release. Natural Resource Partners L.P. Financial Tables (Unaudited) Operating Statistics - Mineral Rights For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, (In thousands, except per ton data) 2023 2022 2023 2023 2022 Coal sales volumes (tons) Appalachia Northern 284 440 390 1,053 1,260 Central 3,429 3,503 3,352 10,390 10,238 Southern 741 498 693 2,016 1,171 Total Appalachia 4,454 4,441 4,435 13,459 12,669 Illinois Basin 2,541 3,490 1,631 5,482 8,395 Northern Powder River Basin 1,364 835 881 3,330 2,772 Gulf Coast 479 188 139 676 324 Total coal sales volumes 8,838 8,954 7,086 22,947 24,160 Coal royalty revenue per ton Appalachia Northern $ 5.54 $ 6.74 $ 6.87 $ 7.59 $ 9.48 Central 8.20 9.04 8.49 8.89 10.85 Southern 11.88 9.78 10.85 12.41 14.28 Illinois Basin 3.98 2.57 3.15 3.63 2.30 Northern Powder River Basin 4.86 4.56 4.62 4.74 4.24 Gulf Coast 0.69 0.59 0.71 0.68 0.58 Combined average coal royalty revenue per ton 6.29 5.85 6.77 7.04 7.08 Coal royalty revenues Appalachia Northern $ 1,573 $ 2,965 $ 2,681 $ 7,991 $ 11,946 Central 28,111 31,680 28,445 92,362 111,121 Southern 8,806 4,872 7,521 25,024 16,725 Total Appalachia 38,490 39,517 38,647 125,377 139,792 Illinois Basin 10,108 8,967 5,141 19,924 19,331 Northern Powder River Basin 6,627 3,805 4,066 15,768 11,751 Gulf Coast 330 111 98 461 187 Unadjusted coal royalty revenues 55,555 52,400 47,952 161,530 171,061 Coal royalty adjustment for minimum leases (11 ) (19 ) 8 (3 ) (286 ) Total coal royalty revenues $ 55,544 $ 52,381 $ 47,960 $ 161,527 $ 170,775 Other revenues Production lease minimum revenues $ 850 $ 1,885 $ 562 $ 2,025 $ 3,542 Minimum lease straight-line revenues 4,464 4,778 4,447 13,414 14,235 Carbon neutral initiative revenues 681 8,600 115 2,914 8,600 Wheelage revenues 2,385 2,977 3,284 9,538 11,073 Property tax revenues 1,770 1,360 1,470 4,710 4,527 Coal overriding royalty revenues 827 1,367 150 1,165 2,307 Lease amendment revenues 623 759 848 2,322 2,450 Aggregates royalty revenues 736 884 686 2,175 2,691 Oil and gas royalty revenues 324 6,170 1,214 5,126 10,890 Other revenues 329 218 271 895 705 Total other revenues $ 12,989 $ 28,998 $ 13,047 $ 44,284 $ 61,020 Royalty and other mineral rights $ 68,533 $ 81,379 $ 61,007 $ 205,811 $ 231,795 Transportation and processing services revenues 4,579 5,969 3,270 11,447 15,377 Gain on asset sales and disposals 854 354 5 955 699 Total Mineral Rights segment revenues and other income $ 73,966 $ 87,702 $ 64,282 $ 218,213 $ 247,871 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Adjusted EBITDA Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Net income (loss) $ 61,009 $ 12,348 $ (9,511 ) $ 63,846 Less: equity earnings from unconsolidated investment — (12,401 ) — (12,401 ) Add: total distributions from unconsolidated investment — 23,010 — 23,010 Add: interest expense, net — — 3,837 3,837 Add: loss on extinguishment of debt — — — — 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 For the Three Months Ended 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 For the Three Months Ended June 30, 2023 Net income (loss) $ 52,510 $ 26,964 $ (9,140 ) $ 70,334 Less: equity earnings from unconsolidated investment — (26,978 ) — (26,978 ) Add: total distributions from unconsolidated investment — 32,350 — 32,350 Add: interest expense, net — — 3,492 3,492 Add: loss on extinguishment of debt — — — — Add: depreciation, depletion and amortization 3,787 — 5 3,792 Add: asset impairments 69 — — 69 Adjusted EBITDA $ 56,366 $ 32,336 $ (5,643 ) $ 83,059 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Adjusted EBITDA Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Net income (loss) $ 182,400 $ 58,408 $ (27,353 ) $ 213,455 Less: equity earnings from unconsolidated investment — (58,633 ) — (58,633 ) Add: total distributions from unconsolidated investment — 66,140 — 66,140 Add: interest expense, net — — 10,182 10,182 Add: loss on extinguishment of debt — — — — 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 For the Nine Months Ended 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 Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Distributable Cash Flow and Free Cash Flow Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Three Months Ended September 30, 2023 Net cash provided by (used in) operating activities $ 60,938 $ 22,958 $ (4,954 ) $ 78,942 Add: proceeds from asset sales and disposals 855 — — 855 Add: return of long-term contract receivable 622 — — 622 Less: maintenance capital expenditures — — — — Distributable cash flow $ 62,415 $ 22,958 $ (4,954 ) $ 80,419 Less: proceeds from asset sales and disposals (855 ) — — (855 ) Free cash flow $ 61,560 $ 22,958 $ (4,954 ) $ 79,564 Net cash provided by investing activities $ 1,477 $ — $ — $ 1,477 Net cash used in financing activities — — (72,738 ) (72,738 ) For the Three Months Ended 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 Net cash provided by (used in) investing activities $ 928 $ — $ (59 ) $ 869 Net cash used in financing activities — — (81,784 ) (81,784 ) For the Three Months Ended June 30, 2023 Net cash provided by (used in) operating activities $ 55,040 $ 32,326 $ (6,016 ) $ 81,350 Add: proceeds from asset sales and disposals 5 — — 5 Add: return of long-term contract receivable 610 — — 610 Less: maintenance capital expenditures — — (8 ) (8 ) Distributable cash flow $ 55,655 $ 32,326 $ (6,024 ) $ 81,957 Less: proceeds from asset sales and disposals (5 ) — — (5 ) Free cash flow $ 55,650 $ 32,326 $ (6,024 ) $ 81,952 Net cash provided by (used in) investing activities $ 615 $ — $ (8 ) $ 607 Net cash used in financing activities — — (88,882 ) (88,882 ) Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Distributable Cash Flow and Free Cash Flow Mineral Corporate and (In thousands) Rights Soda Ash Financing Total For the Nine Months Ended September 30, 2023 Net cash provided by (used in) operating activities $ 189,836 $ 65,901 $ (22,545 ) $ 233,192 Add: proceeds from asset sales and disposals 961 — — 961 Add: return of long-term contract receivable 1,830 — — 1,830 Less: maintenance capital expenditures — — (10 ) (10 ) Distributable cash flow $ 192,627 $ 65,901 $ (22,555 ) $ 235,973 Less: proceeds from asset sales and disposals (961 ) — — (961 ) Free cash flow $ 191,666 $ 65,901 $ (22,555 ) $ 235,012 Net cash provided by (used in) investing activities $ 2,791 $ — $ (10 ) $ 2,781 Net cash used in financing activities (583 ) — (256,070 ) (256,653 ) For the Nine Months Ended 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 Net cash provided by (used in) investing activities $ 1,837 $ — $ (59 ) $ 1,778 Net cash used in financing activities (614 ) — (273,697 ) (274,311 ) Natural Resource Partners L.P. Reconciliation of Non-GAAP Measures (Unaudited) Last Twelve Months (LTM) Free Cash Flow For the Three Months Ended (In thousands) December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Last 12 Months Net cash provided by operating activities $ 68,888 $ 72,900 $ 81,350 $ 78,942 $ 302,080 Add: proceeds from asset sales and disposals 384 101 5 855 1,345 Add: return of long-term contract receivable 585 598 610 622 2,415 Less: maintenance capital expenditures (59 ) (2 ) (8 ) — (69 ) Distributable cash flow $ 69,798 $ 73,597 $ 81,957 $ 80,419 $ 305,771 Less: proceeds from asset sales and disposals (384 ) (101 ) (5 ) (855 ) (1,345 ) Free cash flow $ 69,414 $ 73,496 $ 81,952 $ 79,564 $ 304,426 Leverage Ratio For the Three Months Ended (In thousands) 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 For the Three Months Ended (In thousands) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 Last 12 Months Net income $ 55,641 $ 63,899 $ 66,820 $ 74,555 $ 260,915 Less: equity earnings from unconsolidated investment (10,625 ) (14,837 ) (14,643 ) (14,556 ) (54,661 ) Add: total distributions from unconsolidated investment 7,350 13,230 10,486 10,339 41,405 Add: interest expense, net 9,568 9,387 8,108 5,141 32,204 Add: loss on extinguishment of debt — — 4,048 2,484 6,532 Add: depreciation, depletion and amortization 3,930 3,868 5,847 6,850 20,495 Add: asset impairments 986 19 43 812 1,860 Adjusted EBITDA $ 66,850 $ 75,566 $ 80,709 $ 85,625 $ 308,750 Debt—at September 30, 2022 $ 240,819 Leverage Ratio 0.8 x View source version on businesswire.com: https://www.businesswire.com/news/home/20231103376145/en/