You should read the following management's discussion and analysis of financial condition and results of operations in conjunction with the historical unaudited condensed consolidated financial statements, and notes thereto, included elsewhere in this Report. Cautionary Statements Regarding Forward-Looking Statements This Report contains, and our other public filings and oral and written statements by us and our management may include, statements that constitute "forward-looking statements" within the meaning ofthe United States securities laws. Forward-looking statements include the information concerning our possible or assumed future results of operations, reserve estimates, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and may be identified by the use of forward-looking terminology such as the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "forecast," "project," "potential," "continue," "may," "will," "could," "should" or the negative of these terms or similar expressions. Examples of forward-looking statements include, but are not limited to, statements concerning cash available for distribution and future distributions, if any, and such distributions are subject to the approval of the board of directors of our general partner and will be based upon circumstances then existing. We have based our forward-looking statements on management's beliefs and assumptions and on information currently available to us. Forward-looking statements involve risks, uncertainties and assumptions. You are cautioned not to place undue reliance on any forward-looking statements. Actual results may vary materially. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements and, therefore, affect our ability to distribute cash to unitholders, include: •the market prices for soda ash in the markets in which we sell; •the volume of natural and synthetic soda ash produced worldwide; •domestic and international demand for soda ash in the flat glass, container glass, detergent, chemical and paper industries in which our customers operate or serve; •the freight costs we pay to transport our soda ash to customers or various delivery points and recent disruptions in the global supply chain and overall port congestion; •the cost of electricity and natural gas used to power our operations; •the amount of royalty payments we are required to pay to our lessors and licensor and the duration of our leases and license; •political disruptions in the markets we or our customers serve, including any changes in trade barriers; •our relationships with our customers and our sales agent's ability to renew contracts on favorable terms to us; •the creditworthiness of our customers; •a cybersecurity event; •the short and long term impact of the COVID-19 pandemic, including the impact of government orders on our employees, suppliers, customers and operations and the ultimate effectiveness of vaccines and related programs on new variants of the virus, including the Delta variant; •the impact of the ANSAC exit and our transition to the utilization ofCiner Group's global distribution network for some of our export operations beginning onJanuary 1, 2021 ; •regulatory action affecting the supply of, or demand for, soda ash, our ability to mine trona ore, our transportation logistics, our operating costs or our operating flexibility; •new or modified statutes, regulations, governmental policies and taxes or their interpretations; and •prevailingU.S. and international economic conditions and foreign exchange rates. In addition, the actual amount of cash we will have available for distribution will depend on other factors, some of which are beyond our control, including, among other things: •the level and timing of capital expenditures we make; 25 -------------------------------------------------------------------------------- •the level of our operating, maintenance and general and administrative expenses, including reimbursements to our general partner for services provided to us; •the cost of acquisitions, if any; •our debt service requirements and other liabilities; •fluctuations in our working capital needs; •our ability to borrow funds and access capital markets; •restrictions on distributions contained in debt agreements to which we, CinerWyoming or our affiliates are a party; •the amount of cash reserves established by our general partner; and our ability to reinstate distributions in the future; and •other business risks affecting our cash levels. These factors should not be construed as exhaustive and we urge you to carefully consider the risks described in this Report, our most recent Annual Report on Form 10-K, and subsequent reports filed with theUnited States Securities and Exchange Commission (the "SEC"). You may obtain these reports from theSEC's website at www.sec.gov. All forward-looking statements included in this Report are expressly qualified in their entirety by these cautionary statements. Unless required by law, we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. References References in this Quarterly Report on Form 10-Q ("Report") to the "Partnership," "CINR," "Ciner Resources ," "we," "our," "us," or like terms refer toCiner Resources LP and its consolidated subsidiary,Ciner Wyoming LLC , which is referred to herein as "Ciner Wyoming." References to "our general partner" or "Ciner GP" refer toCiner Resource Partners LLC , the general partner ofCiner Resources LP and a direct wholly-owned subsidiary ofCiner Wyoming Holding Co. ("Ciner Holdings "), which is a direct wholly-owned subsidiary ofCiner Resources Corporation ("Ciner Corp ").Ciner Corp is a direct wholly-owned subsidiary ofCiner Enterprises Inc. ("Ciner Enterprises "), which is a direct wholly-owned subsidiary ofWE Soda Ltd. , aU.K. corporation ("WE Soda"). WE Soda is a direct wholly-owned subsidiary ofKEW Soda Ltd. , aU.K. corporation ("KEW Soda"), which is a direct wholly-owned subsidiary of Akkan Enerji ve Madencilik Anonim ?irketi ("Akkan"). Akkan is directly and wholly owned byTurgay Ciner , the Chairman of theCiner Group ("Ciner Group "), a Turkish conglomerate of companies engaged in energy and mining (including soda ash mining), media and shipping markets. All of our soda ash processed is sold to various domestic and international customers, includingAmerican Natural Soda Ash Corporation ("ANSAC"), which was an affiliate for export sales in 2020. As a result of terminatingCiner Corp's membership in ANSAC, effective as of the end of day onDecember 31, 2020 , ANSAC is no longer an affiliate of the Partnership. Overview We are aDelaware limited partnership formed byCiner Holdings to own a 51.0% membership interest in, and to operate the trona ore mining and soda ash production business of Ciner Wyoming. Ciner Wyoming is currently one of the world's largest producers of soda ash, serving a global market from its facility in theGreen River Basin ofWyoming . Our facility has been in operation for more than 50 years.NRP Trona LLC , a wholly-owned subsidiary of Natural Resource Partners L.P. ("NRP") currently owns an indirect 49.0% membership interest in Ciner Wyoming. Recent Developments COVID-19 COVID-19 and its variants ("COVID-19), including the Delta variant, continue to cause certain disruptions to the economy throughout the world, includingthe United States and markets to which our products have historically been exported. There have been extraordinary actions taken by international, federal, state, and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 in regions throughout the world, including travel bans, many vaccine mandate policies, quarantines, "stay-at-home" orders, and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. Vaccines for COVID-19 became first available on a limited basis in lateDecember 2020 . They are becoming more widely available globally and the age limit in theU.S. continues to decline so that more individuals are eligible for the vaccine. Our Response to COVID-19 26 -------------------------------------------------------------------------------- We continue to closely monitor the impact of COVID-19 pandemic and all governmental actions in response thereto on all aspects of our business, including how it impacts our customers, employees, supply chain, distribution network and cash flows. As COVID-19 vaccines become more broadly available, we have encouraged employees to get vaccinated. We continue to use guidance from local health organizations, including theCenters for Disease Control and Prevention , to make decisions about our return to the workplace policies. Our focus has been the safety of our teams and this will continue to be our priority as we use data to progressively return back to normal operations. We continue to actively monitor and adhere to applicable local, state, federal, and international governmental guideline actions to better ensure the safety of our employees. The Impact of COVID-19 In the first half of 2020 and primarily in the beginning of the second quarter of 2020, we saw a decline in demand due to the COVID-19 pandemic adversely impacting our sales and production volume, and price per ton; but, in the second half of 2020 and thereafter, we saw the signs of recovery on our operations domestically as well as internationally in the form of increased global demand, notwithstanding certain pricing pressure. We experienced fluctuations in quarter over quarter soda ash volume sold of 4.4% decline, 35.7% decline, 26.7% increase, and 9.5% increase in the first, second, third and fourth quarters of 2020, compared to the immediately preceding quarter respectively. During the nine months endedSeptember 30, 2021 , we saw continued recovery in both domestic and international business. The soda ash volume sold in the first, second, and third quarters for 2021 increased 21.7%, decreased 9.7%, and increased 7.8%, respectively, compared to the immediately preceding quarter. The decline in the soda ash volume sold in the second quarter of 2021 compared to the first quarter of 2021 is primarily due to the first quarter of 2021 including significant international sales volumes associated with the initial impact of selling directly to international customers as part of ourDecember 31, 2020 ANSAC exit. Sales volumes for the three months endedSeptember 30, 2021 are at pre-COVID-19 pandemic levels, which we consider to be sales levels prior to the second quarter 2020. Sales volumes for the three months endedSeptember 30, 2021 and 2020 were 0.7 million short tons and 0.5 million short tons, respectively. Sales volumes for the nine months endedSeptember 30, 2021 and 2020 were 2.1 million short tons and 1.6 million short tons, respectively.The COVID-19 Delta variant among other variants, is spreading rapidly in a number of countries including theU.S and new COVID-19 confirmed cases increased significantly during the summer. As the number of individuals who have been vaccinated has increased, a downward daily trend of new COVID-19 confirmed cases was observed recently. At this time, we still cannot predict the duration or the scope of the COVID-19 pandemic and its impact on our operations, and the potential negative financial impact to our results cannot be reasonably estimated but could be material. We are actively managing the business to maintain cash flow, and we believe we have enough liquidity to meet our anticipated liquidity requirements. For the nine months endedSeptember 30, 2021 , we have incurred$1.4 million in costs directly related to COVID-19 primarily in the form of costs related to employee safety and retention and additional inventory storage and logistics costs. For the three months endedSeptember 30, 2021 and 2020, we incurred$0.4 million and$0.7 million in costs directly related to COVID-19, respectively. Termination of Membership in ANSAC As previously disclosed as part of its strategic initiative to gain better direct access and control of international customers and logistics and the ability to leverage the expertise ofCiner Group , the world's largest natural soda ash producer, effective as of the end of day onDecember 31, 2020 ,Ciner Corp exited ANSAC. In connection with the settlement agreement with ANSAC, there are sales commitments to ANSAC in 2021 and 2022 whereCiner Corp will continue to sell, at substantially lower volumes, product to ANSAC for export sales purposes, with a fixed rate per ton selling, general and administrative expense, and will also purchase a limited amount of export logistics services in 2021. The Partnership has made the necessary arrangements to manage the sale of its export tons in 2022 through existing distribution channels. Although ANSAC has historically been our largest customer, the impact ofCiner Corp's exit from ANSAC on our net sales, net income and liquidity was limited. With a low-cost position combined with more direct access and better control of our international customers and logistics and the ability to leverageCiner Group's expertise in these areas, through a combination of ANSAC sales commitments for 2021 and 2022 as part of the transition from ANSAC and new customers, we have been able to adequately replace these net sales made under the former agreement with ANSAC. Reinstatement of Distributions Our general partner has considerable discretion in determining the amount of available cash, the amount of distributions and the decision to make any distribution. Although our partnership agreement requires that we distribute all of our available cash quarterly, there is no guarantee that we will make quarterly cash distributions to our unitholders, and we have no legal obligation to do so. In an effort to achieve greater financial and liquidity flexibility during the COVID-19 pandemic, onAugust 3, 2020 , each of the members of the board of managers of Ciner Wyoming approved a suspension of quarterly distributions to its members. In addition, effectiveAugust 3, 2020 , in connection with the quarterly distribution for the quarter endedJune 30, 2020 , each of the members of the board of directors of our general partner approved a suspension of quarterly distributions to our unitholders that continued for each of the quarters endedSeptember 30, 2020 ,December 31, 2020 ,March 31, 2021 , andJune 30, 2021 . 27 -------------------------------------------------------------------------------- InMarch 2021 , the board of managers of Ciner Wyoming approved a special$8.0 million distribution to, amongst other things, provide the Partnership with funds to retire the Ciner Resources Credit Facility. InOctober 2021 , the board of managers of Ciner Wyoming approved a$15.0 million distribution to the members of Ciner Wyoming. OnOctober 29, 2021 , the Partnership declared its third quarter 2021 quarterly cash distribution of$0.340 per unit. The quarterly cash distribution is payable onNovember 19, 2021 to unitholders of record onNovember 9, 2021 . Factors Affecting Our Results of Operations Soda Ash Supply and Demand Our net sales, earnings and cash flow from operations are primarily affected by the global supply of, and demand for, soda ash, which, in turn, directly impacts the prices that we and other producers charge for our products. Historically, long-term demand for soda ash inthe United States has been driven in large part by general economic growth and activity levels in the end-markets that the glass-making industry serves, such as the automotive and construction industries. Long-term soda ash demand in international markets has grown in conjunction with Gross Domestic Product. We expect that over the long-term, future global economic growth will positively influence global demand, which will likely result in increased exports, primarily fromthe United States ,Turkey and to a limited extent, fromChina , the largest suppliers of soda ash to international markets. Currently, and in the near- and mid-term, we expect that COVID-19 will continue to have an impact on the supply chain of our customers and customer segments which may have a negative impact on demand for our products. Our international demand was impacted the most as different countries continue to deal with different levels of the outbreak and shutdowns, but showed signs of recovery internationally during the second half of 2020. The soda ash volume sold to both domestic and international customers increased in the third and fourth quarters of 2020 sequentially over the prior quarter. The soda ash volume sold to international customers increased 23.8%, decreased 20.7% and increased 13.5% in the first, second, and third quarters of 2021 compared to the immediately preceding quarter, respectively. The soda ash volume sold to domestic customers increased 19.2%, 4.5%, and 2.2% in the first, second, and third quarters of 2021 compared to the immediately preceding quarter, respectively. The increase in the soda ash volume sold in the first quarter of 2021 compared to the fourth quarter of 2020 is primarily due to the first quarter of 2021 including significant international sales volumes associated with the initial impact of selling directly to international customers as part of ourDecember 31, 2020 ANSAC exit. During the second quarter of 2021, the soda ash volume sold to domestic customers and international customers was 68.7% higher and 38.7% higher, respectively, than that of the second quarter of 2020. During the third quarter of 2021, the soda ash volume sold to domestic customers and international customers was 38.3% higher and 22.6% higher, respectively, than that of the third quarter of 2020, as a further sign of recovery from the COVID-19 pandemic. Sales Mix We will adjust our sales mix based upon what is the best margin opportunity for the business between domestic and international. Our operations have been and continue to be sensitive to fluctuations in freight and shipping costs and changes in international prices, which have historically been more volatile than domestic prices. Our gross profit will be impacted by the mix of domestic and international sales as a result of changes in logistics costs and our average selling prices. International Export Capabilities As previously disclosed,Ciner Corp exited ANSAC, effective as of the end of day onDecember 31, 2020 as part of its strategic initiative to gain more direct access to and better control of international customers and logistics, and to leverage the expertise ofCiner Group , the world's largest natural soda ash producer. In connection with the settlement agreement with ANSAC,Ciner Corp will continue to sell in 2021 and 2022, at substantially lower volumes, product to ANSAC for export sales purposes, with a fixed rate per ton selling, general and administrative expense, and will also purchase a limited amount of export logistics services in 2021. The Partnership has made the necessary arrangements to manage the sale of its export tons in 2022 through existing distribution channels. Although ANSAC has historically been our largest customer, the impact ofCiner Corp's exit from ANSAC on our net sales, net income and liquidity was limited. We made this determination primarily based upon the belief that we will continue to be one of the lowest cost producers of soda ash in the global market. With a low-cost position combined with more direct access and better control of our international customers and logistics and the ability to leverageCiner Group's expertise in these areas, through a combination of ANSAC sales commitments for 2021 and 2022 as part of the transition from ANSAC and new customers, we have been able to adequately replace these net sales made under the former agreement with ANSAC. SinceJanuary 1, 2021 ,Ciner Corp has managed the Partnership's sales and marketing activities for exports with the ANSAC exit being complete.Ciner Corp has leveraged the distributor network established byCiner Group and independent third-party distribution partners to optimize our reach into each market. 28 -------------------------------------------------------------------------------- Energy Costs One of the primary impacts to our profitability is our energy costs. Because we depend upon natural gas and electricity to power our trona ore mining and soda ash processing operations, our net sales, earnings and cash flow from operations are sensitive to changes in the prices we pay for these energy sources. Our cost of energy had been relatively low in recent years, primarily as a result of low natural gas prices but those have been rising in 2021. The average monthly Northwest Pipeline Rocky Mountain Index natural gas settlement prices for the three months endedSeptember 30, 2021 and 2020 were$3.97 and$1.74 MMBtu, respectively; and for the nine months endedSeptember 30, 2021 and 2020 were$3.23 and$1.54 per MMBtu, respectively. Due to historic volatility of natural gas prices, we expect to continue to hedge a portion of our forecasted natural gas purchases to mitigate volatility. 29 -------------------------------------------------------------------------------- How We Evaluate Our Business Productivity of Operations Our soda ash production volume is primarily dependent on the following three factors: (1) operating rate, (2) quality of our mined trona ore and (3) recovery rates. Operating rate is a measure of utilization of the effective production capacity of our facility and is determined in large part by productivity rates and mechanical on-stream times, which is the percentage of actual run times over the total time scheduled. We implement two planned outages of our mining and surface operations each year, typically in the second and third quarters. During these outages, which are scheduled to last approximately one week each, we repair and replace equipment and parts. Periodically, we may experience minor unplanned outages or unplanned extensions to planned outages caused by various factors, including equipment failures, power outages or service interruptions. The quality of our mine ore is determined by measuring the trona ore recovered as a percentage of the deposit, which includes both trona ore and insolubles. Plant recovery rates are generally determined by calculating the soda ash produced divided by the sum of the soda ash produced plus soda ash that is not recovered from the process. All of these factors determine the amount of trona ore we require to produce one short ton of soda ash and liquor, which we refer to as our "ore to ash ratio." Our ore to ash ratio was 1.55: 1.0 and 1.57: 1.0 for the three and nine months endedSeptember 30, 2021 , respectively, and 1.67: 1.0 and 1.62: 1.0 for the three and nine months endedSeptember 30, 2020 , respectively. Freight and Logistics The soda ash industry is logistics intensive and involves careful management of freight and logistics costs. These freight costs make up a large portion of the total delivered cost to the customer. Delivery costs to most domestic customers and ANSAC primarily relate to rail freight services. Some domestic customers may elect to arrange their own freight and logistic services. Delivered costs to non-ANSAC international customers primarily consists of both rail freight services to the port of embarkation and the additional ocean freight to the port of disembarkation.Ciner Corp enters into contracts with one railroad company for the majority of the domestic rail freight services that the Partnership receives and the related freight and logistics costs are allocated to the Partnership. For the nine months endedSeptember 30, 2021 , the Partnership shipped over 90% of our soda ash to our customers initially via a single rail line owned and controlled by the railroad company. The Partnership's plant receives rail service exclusively from the railroad company and shipments by rail accounted for over 60% and over 80% of our total freight costs for the three months endedSeptember 30, 2021 and 2020, respectively, and over 60% and over 80% of our total freight costs for the nine months endedSeptember 30, 2021 and 2020, respectively. The decrease in the percentage of freight that is related to the railroad company is due primarily to the increased ocean freight in the nine months endedSeptember 30, 2021 of direct international sales and their respective delivery locations. IfCiner Corp does not ship at least a significant portion of our soda ash production on the railroad company's rail line during a twelve-month period, it must pay the railroad company a shortfall payment under the terms of our transportation agreement. The Partnership assists the majority of its domestic customers in arranging their freight services. During 2020 and the nine months endedSeptember 30, 2021 ,Ciner Corp had no shortfall payments and does not expect to make any such payments in the future.Ciner Corp renewed its agreement with the railroad company inOctober 2021 , which now expires onDecember 31, 2025 .Net Sales Net sales include the amounts we earn on sales of soda ash. We recognize revenue from our sales when we satisfy the performance obligation defined in the contract with the customer. The performance obligation for domestic sales is typically met when goods are delivered to the carrier for shipment, which is the point at which the customer has the ability to direct the use of and obtain substantially all remaining benefits from the asset. The time at which delivery and transfer of title occurs, for the majority of our contracts with customers, is the point when the product leaves our facilities, thereby rendering our performance obligation fulfilled. SinceJanuary 1, 2021 , sales to ANSAC have been fulfilled when delivered to ANSAC facilities. The performance obligation for international sales is typically satisfied when goods are loaded onto the vessel for shipment at the port of loading. Substantially all of our sales are derived from sales of soda ash, which we sell through our exclusive sales agent,Ciner Corp. A small amount of our sales is derived from sales of production purge, which is a by-product liquor solution containing soda ash that is produced during the processing of trona ore. For the purposes of our discussion below, we include these transactions in domestic sales of soda ash and in the volume of domestic soda ash sold. Sales prices for sales through ANSAC include the cost of freight to the ports of embarkation for overseas export or toLaredo, Texas for sales toMexico . Sales prices for other international sales may include the cost of rail freight to the port of embarkation, the cost of ocean freight to the port of disembarkation for import by the customer and the cost of inland freight required for delivery to the customer. Cost of Products Sold Expenses relating to employee compensation, energy, including natural gas and electricity, royalties and maintenance materials constitute the greatest components of cost of products sold. These costs generally increase in line with increases in sales volume. 30 -------------------------------------------------------------------------------- Energy. A major item in our cost of products sold is energy, comprised primarily of natural gas and electricity. We primarily use natural gas to fuel our above-ground processing operations, including the heating of calciners, and we use electricity to power our underground mining operations, including our continuous mining machines, or continuous miners, and shuttle cars. The monthly Northwest Pipeline Rocky Mountain Index natural gas settlement prices, over the past five years, have ranged between$1.29 and$5.70 . The average monthly Northwest Pipeline Rocky Mountain Index natural gas settlement prices for the three months endedSeptember 30, 2021 and 2020 were$3.97 and$1.74 MMBtu, respectively; and for the nine months endedSeptember 30, 2021 and 2020 were$3.23 and$1.54 per MMBtu, respectively. However, we expect to continue to hedge a portion of our forecasted natural gas purchases to mitigate volatility. In order to mitigate the risk of gas price fluctuations, we hedge a portion of our forecasted natural gas purchases by entering into physical or financial gas hedges generally ranging between 20% and 80% of our expected monthly gas requirements, on a sliding scale, for approximately the next three years. Employee Compensation. See Part I, Item 1. Financial Statements - Note 6, "Employee Compensation" for information on the various benefit plans offered and administered byCiner Corp. Royalties. During the three and nine months endedSeptember 30, 2021 , we paid royalties to theState of Wyoming , theU.S. Bureau of Land Management andSweetwater Royalties LLC . The royalties are calculated based upon a percentage of the value of soda ash and related products sold at a certain stage in the mining process. These royalty payments may be subject to a minimum domestic production volume from ourGreen River Basin facility. We are also obligated to pay annual rentals to our lessors and licensor regardless of actual sales. In addition, we pay a production tax toSweetwater County , and trona severance tax to theState of Wyoming that is calculated based on a formula that utilizes the volume of trona ore mined and the value of the soda ash produced. The royalty rates we pay to our lessors and licensor may change upon our renewal or renegotiation of such leases and license. OnJune 28, 2018 , Ciner Wyoming amended its License Agreement, datedJuly 18, 1961 (the "License Agreement"), with a predecessor in interest toSweetwater Royalties LLC , to, among other things, (i) extend the term of the License Agreement toJuly 18, 2061 and for so long thereafter as Ciner Wyoming continuously conducts operations to mine and remove sodium minerals from the licensed premises in commercial quantities; and (ii) set the production royalty rate for each sale of sodium mineral products produced from ore extracted from the licensed premises at eight percent (8%) of the net sales of such sodium mineral products. Any increase in the royalty rates we are required to pay to our lessors and licensor, or any failure by us to renew any of our leases and license, could have a material adverse impact on our results of operations, financial condition or liquidity, and, therefore, may affect our ability to distribute cash to unitholders. OnDecember 11, 2020 , the Secretary of the Interior authorized an industry-wide royalty reduction from currently set rates by establishing a 2% federal royalty rate for a period of ten years for all existing and future federal soda ash or sodium bicarbonate leases. This change by the Secretary of the Interior reduces the rates on our mineral leases with theU.S. Government from 6% to 2% as ofJanuary 1, 2021 and for the following ten years. Our estimated proven and probable trona reserve includes a significant amount from leases with theU.S. Government . See Item 1. Business, Trona Reserve in our 2020 Annual Report for additional information on leases. Selling, General and Administrative Expenses Selling, general and administrative expenses incurred by our affiliates on our behalf are allocated to us based on the time the employees of those companies spend on our business and the actual direct costs they incur on our behalf. UntilDecember 31, 2020 , selling, general and administrative expenses incurred by ANSAC on our behalf were allocated to us based on the proportion of ANSAC's total volumes sold for a given period attributable to the soda ash sold by us to ANSAC and were included in selling, general and administrative expense - affiliates in the condensed consolidated statement of operations. Pursuant to the ANSAC Exit agreement, beginning in 2021, we incur a fixed rate of selling, general, and administrative expense for each ton we sell to ANSAC, which is included in selling, general and administrative expense in the condensed consolidated statement of operations. The Partnership has a Services Agreement (the "Services Agreement"), with our general partner andCiner Corp. Pursuant to the Services Agreement,Ciner Corp provides the Partnership with certain corporate, selling, marketing, and general and administrative services. In return the Partnership paysCiner Corp an annual management fee, subject to quarterly adjustments, and reimbursesCiner Corp for certain third-party costs incurred in connection with providing such services. In addition, under the joint venture agreement governing Ciner Wyoming, CinerWyoming reimburses us for employees who operate our assets and for support provided to Ciner Wyoming.Ciner Group also owns and operates port facilities inTurkey , and, since 2017, one of its other North American subsidiaries has an arrangement to exclusively import soda ash into a port on theU.S east coast.Ciner Corp , which is the exclusive sales agent for the Partnership, also serves as the exclusive sales agent of that material and receives a commission on those sales. We believe by having access to that material,Ciner Corp is able to offer its customers an improved level of service, greater certainty of supply to the Partnership's end customers, and, as a result, lower its overall costs to serve, which are subsequently charged to the Partnership. 31 --------------------------------------------------------------------------------
Third Quarter 2021 Financial Highlights:
•Net sales of$135.6 million increased 38.1% from the prior-year third quarter; year-to-date of$384.1 million increased 33.0% over the prior year. During the third quarter of 2020, the Partnership experienced a slight increase in sales volumes, production and pricing after the significant decline in the previous quarter during the COVID-19 pandemic. During the third quarter of 2021, the sales volume level has returned back to a more normalized level. •Soda ash volume produced increased 56.3% from the prior-year third quarter, and soda ash volume sold increased 29.7% from the prior-year third quarter; year-to-date soda ash volume produced increased 27.0% from the prior-year, and soda ash volume sold increased 27.0% from the prior-year. During the third quarter of 2020, the Partnership experienced a slight increase in sales volumes, production and pricing after the significant decline in the previous quarter during the COVID-19. During the third quarter of 2021, the sales volume level has returned back to a more normalized level. •Net income of$15.4 million increased$10.0 million from the prior-year third quarter; year-to-date net income of$27.8 million increased$13.6 million over the prior year. This increase is primarily attributable to the operating income increase resulting from overall sales and production volume recovery to pre-COVID-19 levels with relatively consistent selling, general and administrative expenses in the quarter endedSeptember 30, 2021 compared to the quarter endedSeptember 30, 2020 . •Adjusted EBITDA of$24.1 million increased 65.1% from the prior-year third quarter; year-to-date adjusted EBITDA of$56.1 million increased 41.0% over the prior year. This increase is primarily attributable to the operating income increase. •Basic earnings per unit of$0.36 for the quarter increased 227.3% over the prior-year third quarter of$0.11 ; year-to-date basic earnings per unit of$0.63 increased 125.0% over the prior-year. •Net cash provided by operating activities of$9.9 million decreased 53.3% over prior-year third quarter; year-to-date net cash provided by operating activities of$28.3 million decreased 46.0% over the prior year. •Distributable cash flow of$8.2 million increased 115.8% compared to the prior-year third quarter; year-to-date distributable cash flow of$15.8 million increased 38.6% over the prior year. 32
-------------------------------------------------------------------------------- Results of Operations A discussion and analysis of the factors contributing to our results of operations is presented below for the periods and as of the dates indicated. The financial statements, together with the following information, are intended to provide investors with a reasonable basis for assessing our historical operations, but should not serve as the only criteria for predicting our future performance. The following table sets forth our results of operations for the three and nine months endedSeptember 30, 2021 and 2020: Three Months
Ended
2020 2021 2020 Net sales: Sales-others$ 135.6 $ 54.0 $ 384.1 $ 158.6 Sales-affiliates - 44.2 - 130.2 Net sales$ 135.6
104.8 78.8 310.5 233.1 Depreciation, depletion and amortization expense 7.4 7.8 23.8 20.8 Selling, general and administrative expenses-affiliates 5.2 4.5 13.0 13.0 Selling, general and administrative expenses-others 1.5 0.2 4.9 3.5 Total operating costs and expenses 118.9 91.3 352.2 270.4 Operating income 16.7 6.9 31.9 18.4 Interest income - - - 0.1 Interest expense (1.3) (1.2) (4.1) (4.0) Other, net - (0.3) - (0.3) Total other expense, net (1.3) (1.5) (4.1) (4.2) Net income 15.4 5.4 27.8 14.2 Net income attributable to noncontrolling interest 8.0 3.1 15.1 8.5 Net income attributable to Ciner Resources LP$ 7.4
Operating and Other Data: Trona ore consumed (thousands of short tons) 1,115.0 770.5 3,180.4 2,584.9 Ore to ash ratio(1) 1.55: 1.0 1.67: 1.0 1.57: 1.0 1.62: 1.0 Ore grade(2) 87.3% 86.9% 86.0% 86.8% Soda ash volume produced (thousands of short tons) 719.2 460.1 2,023.9 1,593.4 Soda ash volume sold (thousands of short tons) 700.5 540.3 2,070.6 1,630.4 Adjusted EBITDA(3)$ 24.1 $ 14.6 $ 56.1 $ 39.8 (1)Ore to ash ratio expresses the number of short tons of trona ore needed to produce one short ton of soda ash and liquor and includes our deca rehydration recovery process. In general, a lower ore to ash ratio results in lower costs and improved efficiency. (2)Ore grade is the percentage of raw trona ore that is recoverable as soda ash free of impurities. A higher ore grade will produce more soda ash than a lower ore grade. (3)For a discussion of the non-GAAP financial measure Adjusted EBITDA, please read "Non-GAAP Financial Measures" of this Management's Discussion and Analysis. 33 -------------------------------------------------------------------------------- Analysis of Results of Operations The following table sets forth a summary of net sales, sales volumes and average sales price, and the percentage change between the periods. Three Months Ended
Nine Months Ended
September 30, September 30, Percent Increase/(Decrease) (Dollars in millions, except for average sales price data) 2021 2020 2021 2020 QTD YTD Net sales: Domestic$ 71.1 $ 53.7 $ 207.9 $ 153.1 32.4% 35.8% International 64.5 44.5 176.2 135.7 44.9% 29.8% Total net sales$ 135.6 $ 98.2 $ 384.1 $ 288.8 38.1% 33.0% Sales volumes (thousands of short tons): Domestic 336.7 243.5 981.6 676.2 38.3% 45.2% International 363.8 296.8 1,089.0 954.2 22.6% 14.1% Total soda ash volume sold 700.5 540.3 2,070.6 1,630.4 29.7% 27.0% Average sales price (per short ton) (1) Domestic$ 211.17 $ 220.53 $ 211.80 $ 226.41 (4.2)% (6.5)% International$ 177.30 $ 149.93 $ 161.80 $ 142.21 18.3% 13.8% Average$ 193.58 $ 181.75 $ 185.50 $ 177.13 6.5% 4.7% Percent of net sales: Domestic net sales 52.4 % 54.7 % 54.1 % 53.0 % (4.2)% 2.1% International net sales 47.6 % 45.3 % 45.9 % 47.0 % 5.1% (2.3)% Total percent of net sales 100.0 % 100.0 % 100.0 % 100.0 % Percent of sales volumes: Domestic volume 48.1 % 45.1 % 47.4 % 41.5 % 6.7% 14.2% International volume 51.9 % 54.9 % 52.6 % 58.5 % (5.5)% (10.1)% Total percent of volume sold 100.0 % 100.0 % 100.0 % 100.0 %
(1) Average sales price per short ton is computed as net sales divided by volumes sold.
Three Months EndedSeptember 30, 2021 compared to Three Months EndedSeptember 30, 2020 Consolidated Results Net sales. Net sales increased by 38.1% to$135.6 million for the three months endedSeptember 30, 2021 from$98.2 million for the three months endedSeptember 30, 2020 , primarily driven by an increase in soda ash volumes sold of 29.7% due to continuing recovery of domestic and international demand from the significant negative impact from the COVID-19 pandemic. We operated a normal production capacity in the three months endedSeptember 30, 2021 compared to levels that were suppressed due to COVID-19 pandemic during the three months endedSeptember 30, 2020 . Domestic average price was lower than the prior year same period due to customer mix, factoring in the overall volume growth as well as lower annual market prices which were impacted by the slow economy in late 2020 affected by the COVID-19 pandemic. International average price was higher than the prior year same period because the prices are set on a quarterly basis with improving supply and demand fundamentals recognized for soda ash in the global market and particularly inAsia . Increases in net sales, average international sales prices and cost of product sold from 2020 to 2021 are also attributable to an increase in non-ANSAC international sales which include ocean freight in both net sales and cost of product sold. See "How We Evaluate Our Business -Net Sales " section for further information. Cost of products sold. Cost of products sold, including depreciation, depletion and amortization expense and freight costs, increased by 29.6% to$112.2 million for the three months endedSeptember 30, 2021 from$86.6 million for the three months endedSeptember 30, 2020 , which were primarily due to significant increases in overall soda ash sales volumes. The increase in cost of products sold is also due to significant ocean freight cost primarily from a volatile vessel market impacted by recent global supply chain constraints as well as price increases in natural gas. Selling, general and administrative expenses. Our selling, general and administrative expenses increased 42.6% to$6.7 million for the three months endedSeptember 30, 2021 , compared to$4.7 million for the three months endedSeptember 30, 2020 . The increase was primarily due to more administrative work for export business for the three months endedSeptember 30, 2021 than for the three months endedSeptember 30, 2020 as we continue our transition from related support from ANSAC. 34 -------------------------------------------------------------------------------- Operating income. As a result of the foregoing, operating income increased by 142.0% to$16.7 million for the three months endedSeptember 30, 2021 from$6.9 million operating loss for the three months endedSeptember 30, 2020 . The increase was due to a continuing recovery from the COVID-19 pandemic negative impact. In addition, a significant amount of fixed plant costs were proportionally higher than sales and production volume which lowered margins for the three months endedSeptember 30, 2020 . Net income. As a result of the foregoing, net income increased by 185.2% to$15.4 million for the three months endedSeptember 30, 2021 , from$5.4 million for the three months endedSeptember 30, 2020 . During the three months endedSeptember 30, 2021 , production and sales increased significantly due to a continuing recovery from the COVID-19 pandemic. In addition, a significant amount of fixed plant costs were proportionally higher than sales and production volume which lowered margins for the three months endedSeptember 30, 2020 . Nine Months EndedSeptember 30, 2021 compared to Nine Months EndedSeptember 30, 2020 Consolidated Results Net sales. Net sales increased by 33.0% to$384.1 million for the nine months endedSeptember 30, 2021 from$288.8 million for the nine months endedSeptember 30, 2020 , primarily driven by an increase in soda ash volumes sold of 27.0% due to the continuing recovery of domestic and international demand from the significant negative impact from the COVID-19 pandemic. We operated close to normal production capacity in the nine months endedSeptember 30, 2021 . Sales prices in the nine months endedSeptember 30, 2021 had not fully recovered to pre-COVID-19 pandemic levels. Increase in net sales and cost of product sold from 2020 to 2021 is also impacted by an increase in non-ANSAC international sales which include ocean freight in both net sales and cost of product sold. See How "We Evaluate Our Business -Net Sales " section for further information. Cost of products sold. Cost of products sold, including depreciation, depletion and amortization expense and freight costs, increased by 31.7% to$334.3 million for the nine months endedSeptember 30, 2021 from$253.9 million for the nine months endedSeptember 30, 2020 , which was primarily due to significant increases in overall soda ash sales volumes. The increase in cost of products sold is also due to significant increases in ocean freight rates primarily from a volatile vessel market impacted by recent global supply chain constraints as well as price increases in natural gas. Selling, general and administrative expenses. Our selling, general and administrative expenses increased 8.5% to$17.9 million for the nine months endedSeptember 30, 2021 , compared to$16.5 million for the nine months endedSeptember 30, 2020 . The increase was primarily due to more administrative work for the export business. Operating income. As a result of the foregoing, operating income increased by 73.4% to$31.9 million for the nine months endedSeptember 30, 2021 from$18.4 million for the nine months endedSeptember 30, 2020 . During the nine months endedSeptember 30, 2021 , production and sales increased significantly due to recovery from the COVID-19 pandemic. In addition, a significant amount of fixed plant costs were proportionally higher than sales and production volume which lowered margins for the nine months endedSeptember 30, 2020 . Net income. As a result of the foregoing, net income increased by 95.8% to$27.8 million for the nine months endedSeptember 30, 2021 , from$14.2 million for the nine months endedSeptember 30, 2020 . During the nine months endedSeptember 30, 2021 , production and sales increased significantly due to recovery from the COVID-19 pandemic. In addition, a significant amount of fixed plant costs were proportionally higher than sales and production volume which lowered margins for the nine months endedSeptember 30, 2020 . Liquidity and Capital Resources Sources of liquidity include cash generated from operations and borrowings under credit facilities and capital calls from partners. We use cash and require liquidity primarily to finance and maintain our operations, fund capital expenditures for our property, plant and equipment, make cash distributions to holders of our partnership interests, pay the expenses of our general partner and satisfy obligations arising from our indebtedness. Our ability to meet these liquidity requirements will depend primarily on our ability to generate cash flow from operations. Our sources of liquidity include: •cash generated from our operations of which we had cash on hand of$3.0 million atSeptember 30, 2021 ; and •approximately$120.0 million ($225.0 million , less$105.0 million outstanding), was available for borrowing and undrawn under the Prior Ciner Wyoming Credit Facility (as defined herein) as ofSeptember 30, 2021 (during the nine months endedSeptember 30, 2021 , we made repayments on the Prior Ciner Wyoming Credit Facility of$65.0 million , offset by borrowings of$67.5 million ). The Prior Ciner Wyoming Credit Facility was terminated and replaced by the Ciner Wyoming Credit Facility onOctober 28, 2021 , which had similar amounts drawn and available for borrowing at closing 35 -------------------------------------------------------------------------------- onOctober 28, 2021 compared to the Prior Ciner Wyoming Credit Facility atSeptember 30, 2021 . Please read Part I, Item 1, Financial Statements - Note 4, "Debt," for details. We continue to analyze all aspects of our spending in order to maintain liquidity at levels we believe are necessary. The Prior Ciner Wyoming Credit Facility's outstanding balance was classified as a current liability as the facilities term was set to expire inAugust 2022 . After replacement and termination of the Prior Ciner Wyoming Credit Facility, and entering into the Ciner Wyoming Credit Facility onOctober 28, 2021 , the Partnership reclassified the Prior Ciner Wyoming Credit Facility outstanding balance as a non-current liability. We are closely reviewing maintenance capital expenditures at ourWyoming facility to adequately maintain the physical assets at theWyoming facility. In addition, we are subject to business and operational risks that could adversely affect our cash flow, access to borrowings under the Ciner Wyoming Credit Facility, and ability to make monthly installment payments under the Ciner Wyoming Equipment Financing Arrangement. Our ability to satisfy debt service obligations, to fund planned capital expenditures, to make acquisitions and to make distributions will depend upon our future operating performance, which, in turn, will be affected by prevailing economic conditions, our business and other factors, some of which are beyond our control. We expect our ongoing working capital and capital expenditures to be funded by cash generated from operations and borrowings under the Ciner Wyoming Credit Facility. The amount, timing and classification of any such capital expenditures could affect the amount of cash that is available to be distributed to our unitholders. In addition, we are subject to business and operational risks that could adversely affect our cash flow and access to borrowings under the Ciner Wyoming Credit Facility and the Ciner Wyoming Equipment Financing Arrangement. We intend to pay a quarterly distribution to unitholders of record, to the extent we have sufficient cash from our operations after establishment of cash reserves, funding of any acquisitions and expansion capital expenditures, paying debt obligations and payment of fees and expenses, including payments to our general partner and its affiliates. See Part I, Item 2, Overview, "Recent Developments," for more information. Working Capital Requirements Working capital is the amount by which current assets exceed current liabilities. Our working capital requirements have been, and will continue to be, primarily driven by changes in accounts receivable and accounts payable, which generally fluctuate with changes in volumes, contract terms and market prices of soda ash in the normal course of our business. Other factors impacting changes in accounts receivable and accounts payable could include the timing of collections from customers and payments to suppliers, as well as the level of spending for maintenance and growth capital expenditures. A material adverse change in operations or available financing under the Ciner Wyoming Credit Facility could impact our ability to fund our requirements for liquidity and capital resources. Historically, we have not made working capital borrowings to finance our operations. As ofSeptember 30, 2021 , we had a working capital balance of$146.0 million as compared to a working capital balance of$109.3 million as ofDecember 31, 2020 . The primary driver for the increase in our working capital balance was due to a higher accounts receivable balance as ofSeptember 30, 2021 thanDecember 31, 2020 primarily as a result of 31.1% more sales in the three months endedSeptember 30, 2021 compared to the three months endedDecember 31, 2020 . Financial Assurance Regulatory Updates by theWyoming Department of Environmental Quality We have historically been subject to a self-bond agreement (the "Self-Bond Agreement") with theWyoming Department of Environmental Quality ("WDEQ") under which we committed to pay directly for reclamation costs. InMay 2019 , theState of Wyoming enacted legislation that limits our and other mine operators' ability to self-bond and required us to seek other acceptable financial instruments to provide alternate assurances for our reclamation obligations byNovember 2020 . We provided such alternate assurances by timely securing a third-party surety bond effectiveOctober 15, 2020 (the "Surety Bond") for the then-applicable full self-bond amount$36.2 million , which was also the amount of our obligation as ofDecember 31, 2020 . After we secured the Surety Bond, the previous Self-Bond Agreement was terminated. As of the date of this Report, the impact on our net income and liquidity due to securing the Surety Bond has been immaterial and we anticipate that to continue to be the case. The amount of such assurances that we are required to provide is subject to change upon periodic re-evaluation by the WDEQ's Land Quality Division. As a result of the most recent such periodic re-evaluation, the Surety Bond amount was increased to$41.8 million effectiveMarch 1, 2021 . For a discussion of risks in connection with future legislation relating to such financial assurances that could affect our business, financial condition and liquidity, please read Item IA, "Risk Factors-Risks Inherent in our Business and Industry-Our inability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property could have a material adverse effect on our business, financial condition and results of operations," in our Annual Report on Form 10-K for the year endedDecember 31, 2020 , filed with theSEC onMarch 16, 2021 . 36 -------------------------------------------------------------------------------- Capital Expenditures Our operations require investments to expand, upgrade or enhance existing operations and to meet evolving environmental and safety regulations. We distinguish between maintenance and expansion capital expenditures. Maintenance capital expenditures (including expenditures for the construction or development of new capital assets or the replacement, improvement or expansion of existing capital assets) are made to maintain, over the long-term, our operating income or operating capacity. Examples of maintenance capital expenditures are expenditures to upgrade and replace mining equipment and to address equipment integrity, safety and environmental laws and regulations. Our maintenance capital expenditures do not include actual or estimated capital expenditures for replacement of our trona reserves. Expansion capital expenditures are incurred for acquisitions or capital improvements made to increase, over the long-term, our operating income or operating capacity. Examples of expansion capital expenditures include the acquisition and/or construction of complementary assets to grow our business and to expand existing facilities, such as projects that increase production from existing facilities or reduce costs, to the extent such capital expenditures are expected to increase our long-term operating capacity or operating income. The table below summarizes our capital expenditures, on an accrual basis: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2021 2020 2021 2020 Capital Expenditures: Maintenance$ 4.8 $ 6.5 $ 20.8 $ 16.7 Expansion 0.1 3.1 0.6 14.3 Total$ 4.9 $ 9.6 $ 21.4 $ 31.0 During the three and nine months endedSeptember 30, 2021 , capital expenditures decreased$4.7 million and$9.6 million as compared to the three and nine months endedSeptember 30, 2020 , respectively. The decrease was primarily driven by decreases in expansion capital expenditures because of the completion of our new co-generation facility, which became operational inMarch 2020 .Green River Expansion Project We continue to develop plans and execute the early phases for a potential newGreen River Expansion Project that we believe will increase production levels up to approximately 3.5 million short tons of soda ash per year or up to approximately 135% of the last five-year average of soda ash produced per year. We have conducted the initial basic design and are currently evaluating and pursuing the related permits and detailed cost and market analysis pursuant to the basic design. This project will require capital expenditures materially higher than have been recently incurred by Ciner Wyoming. To maintain a disciplined financial policy and what we consider a conservative financial structure, we intend to pay for the investment in part through cash generated by the business and in part through debt. The timing of the newGreen River Expansion Project as well as any other expansion capital expenditures may be impacted by the Partnership's financial results including further negative volatility caused by the COVID-19 or subsequent variants as well as by certain performance ratios requirements of the Ciner Obligors' Facilities Agreement. See Part I, Item 1, Financial Statements - Note 4, "Debt," for details. Cash Flows Discussion The following is a summary of cash provided by or used in each of the indicated types of activities: Nine Months Ended September 30, (In millions) 2021 2020 Percent Increase/(Decrease)
Cash provided by (used in): Operating activities $ 28.3$ 52.4 (46.0) % Investing activities $ (20.7)$ (28.4) (27.1) % Financing activities $ (5.1)$ (37.2) 86.3 % Operating Activities Our operating activities during the nine months endedSeptember 30, 2021 provided cash of$28.3 million , a decrease of 46.0% from the$52.4 million cash provided during the nine months endedSeptember 30, 2020 , primarily as a result of the following: •an increase of 95.8% in net income of$27.8 million during the nine months endedSeptember 30, 2021 , compared to$14.2 million for the prior-year period; and •$24.4 million of working capital used in operating activities during the nine months endedSeptember 30, 2021 , compared to$16.2 million of working capital provided by operating activities during the nine months endedSeptember 30, 2020 . The 37 --------------------------------------------------------------------------------$40.4 million decrease in working capital relating to operating activities year over year was primarily due to a higher accounts receivable balance atSeptember 30, 2021 primarily due to higher net sales for the nine months endedSeptember 30, 2021 compared to the same period endedSeptember 30, 2020 . It is partly offset by the higher balances of accounts payable and accrued expenses as ofSeptember 30, 2021 . Investing Activities We used cash flows of$20.7 million in investing activities during the nine months endedSeptember 30, 2021 , compared to$28.4 million used during the nine months endedSeptember 30, 2020 , for capital projects as described in "Capital Expenditures" above. Financing Activities Cash used in financing activities of$5.1 million during the nine months endedSeptember 30, 2021 decreased by 86.3% over the prior-year cash used in financing activities, largely due to larger distributions to noncontrolling interest during the nine months endedSeptember 30, 2021 compared to the nine months endedSeptember 30, 2020 . Borrowings under the Prior Ciner Wyoming Credit Facility were at variable interest rates. As of and for the quarter ended September 30, (Dollars in millions) 2021 Short-term borrowings from banks: Outstanding amount at period end $ 105.0 Weighted average interest rate at period end(1) 3.09 % Average daily amount outstanding for the period $ 111.3 Weighted average daily interest rate for the period(1) 3.15 %
Maximum month-end amount outstanding during the period $
115.0 (1) Weighted average interest rates set forth in the table above include the impacts of our interest rate swap contracts designated as cash flow hedges. As ofSeptember 30, 2021 , the interest rate swap contracts had an aggregate notional value of$37.5 million . 38 --------------------------------------------------------------------------------
Debt
See Part I, Item 1, Financial Statements - Note 4, "Debt" for more information regarding the Partnership's debt obligations and related disclosures. Contractual Obligations During the nine months endedSeptember 30, 2021 , there were no material changes with respect to the contractual obligations disclosed in our Annual Report on Form 10-K for the year endedDecember 31, 2020 , filed with theSEC onMarch 16, 2021 (the "2020 Annual Report") other than as described in the bullets immediately below. •As discussed in Part I, Item 1, Financial Statements - Note 4, "Debt," onMarch 8, 2021 , we terminated the Ciner Resources Credit Facility and fully repaid the outstanding borrowing amount. •During the three months endedSeptember 30, 2021 , we entered into certain logistic services commitments with various third parties that expire during 2022 and have a minimum contractual obligation for purchases by Ciner Wyoming of approximately$19.1 million for such logistic services. In addition, onOctober 28, 2021 , Ciner Wyoming entered into the Ciner Wyoming Credit Facility and terminated the Prior Ciner Wyoming Credit Facility. Please read Part I, Item 1, Financial Statements - Note 4, "Debt." Critical Accounting Policies There have been no material changes in critical accounting policies followed by us during the nine months endedSeptember 30, 2021 from those disclosed in the 2020 Annual Report. Recently Issued Accounting Standards Accounting standards recently issued are discussed in Item 1. Financial Statements - Note 1, "Corporate Structure and Summary of Significant Accounting Policies," in the notes to unaudited condensed consolidated financial statements. Non-GAAP Financial Measures We report our financial results in accordance with generally accepted accounting principles inthe United States ("GAAP"). We also present the non-GAAP financial measures of: •Adjusted EBITDA; •distributable cash flow; and •distribution coverage ratio. We define Adjusted EBITDA as net income (loss) plus net interest expense, income tax, depreciation, depletion and amortization, equity-based compensation expense and certain other expenses that are non-cash charges or that we consider not to be indicative of ongoing operations. Distributable cash flow is defined as Adjusted EBITDA less net cash paid for interest, maintenance capital expenditures and income taxes, each as attributable toCiner Resources LP . The Partnership may fund expansion-related capital expenditures with borrowings under existing credit facilities such that expansion-related capital expenditures will have no impact on cash on hand or the calculation of cash available for distribution. In certain instances, the timing of the Partnership's borrowings and/or its cash management practices will result in a mismatch between the period of the borrowing and the period of the capital expenditure. In those instances, the Partnership adjusts designated reserves (as provided in our partnership agreement) to take account of the timing difference. Accordingly, expansion-related capital expenditures have been excluded from the presentation of cash available for distribution. Distributable cash flow will not reflect changes in working capital balances. We define distribution coverage ratio as the ratio of distributable cash flow as of the end of the period to cash distributions payable with respect to such period. Adjusted EBITDA, distributable cash flow and distribution coverage ratio are non-GAAP supplemental financial measures that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess: •our operating performance as compared to other publicly traded partnerships in our industry, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods; •the ability of our assets to generate sufficient cash flow to make distributions to our unitholders; •our ability to incur and service debt and fund capital expenditures; and •the viability of capital expenditure projects and the returns on investment of various investment opportunities. 39 -------------------------------------------------------------------------------- We believe that the presentation of Adjusted EBITDA, distributable cash flow and distribution coverage ratio provide useful information to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA and distributable cash flow are net income and net cash provided by operating activities. Our non-GAAP financial measures of Adjusted EBITDA, distributable cash flow and distribution coverage ratio should not be considered as alternatives to GAAP net income, operating income, net cash provided by operating activities, or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA and distributable cash flow have important limitations as analytical tools because they exclude some, but not all items that affect net income and net cash provided by operating activities. Investors should not consider Adjusted EBITDA, distributable cash flow and distribution coverage ratio in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA, distributable cash flow and distribution coverage ratio may be defined differently by other companies, including those in our industry, our definition of Adjusted EBITDA, distributable cash flow and distribution coverage ratio may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The table below presents a reconciliation of the non-GAAP financial measures of Adjusted EBITDA and distributable cash flow to the GAAP financial measures of net income and net cash provided by operating activities: Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per unit data) 2021 2020 2021 2020 Reconciliation of Adjusted EBITDA to net income: Net income$ 15.4 $ 5.4 $ 27.8 $ 14.2 Add backs: Depreciation, depletion and amortization expense 7.4 7.8 23.8 20.8 Interest expense, net 1.3 1.2 4.1 3.9 Equity-based compensation expense, net of forfeitures - 0.2 0.4 0.9 Adjusted EBITDA$ 24.1 $ 14.6 $ 56.1 $ 39.8 Less: Adjusted EBITDA attributable to noncontrolling interest 12.1 7.4 28.4 20.3 Adjusted EBITDA attributable to Ciner Resources LP$ 12.0 $
7.2
Reconciliation of distributable cash flow to Adjusted EBITDA attributable toCiner Resources LP : Adjusted EBITDA attributable to Ciner Resources LP$ 12.0 $ 7.2 $ 27.7 $ 19.5 Less: Cash interest expense, net attributable to Ciner Resources LP 0.6 0.6 1.8 0.7 Less: Maintenance capital expenditures attributable to Ciner Resources LP 3.2 2.8 10.1 7.4 Distributable cash flow attributable to Ciner Resources LP$ 8.2 $
3.8
Cash distribution declared per unit$ 0.340 $ -$ 0.340 $ 0.340 Total distributions to unitholders and general partner$ 6.9 $ -$ 6.9 $ 6.8 Distribution coverage ratio 1.19 N/A 2.29 1.68 Reconciliation of Adjusted EBITDA to net cash from operating activities: Net cash provided by operating activities$ 9.9 $ 21.2 $ 28.3 $ 52.4 Add/(less): Amortization of long-term loan financing (0.1) (0.1) (0.4) (0.1) Net change in working capital 13.1 (7.7) 24.4 (16.2) Interest expense, net 1.3 1.2 4.1 3.9 Other non-cash items (0.1) - (0.3) (0.2) Adjusted EBITDA$ 24.1 $ 14.6 $ 56.1 $ 39.8 Less: Adjusted EBITDA attributable to noncontrolling interest 12.1 7.4 28.4 20.3 Adjusted EBITDA attributable to Ciner Resources LP$ 12.0 $ 7.2 $ 27.7 $ 19.5 Less: Cash interest expense, net attributable to Ciner Resources LP 0.6 0.6 1.8 0.7 Less: Maintenance capital expenditures attributable to Ciner Resources LP 3.2 2.8 10.1 7.4 Distributable cash flow attributable to Ciner Resources LP$ 8.2 $ 3.8 $ 15.8 $ 11.4 40
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