NATURAL RESOURCE PARTNERS L.P.

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08/04NATURAL RESOURCE PARTNERS LP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)
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08/04TRANSCRIPT : Natural Resource Partners L.P., Q2 2022 Earnings Call, Aug 04, 2022
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08/04NATURAL RESOURCE PARTNERS L P : Reports Second Quarter 2022 Results and Declares Second Quarter 2022 Distribution of $0.75 per Unit - Form 8-K
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NATURAL RESOURCE PARTNERS LP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/04/2022 | 01:05pm EDT
The following review of operations for the three and six month periods
ended June 30, 2022 and 2021 should be read in conjunction with our Consolidated
Financial Statements and the Notes to Consolidated Financial Statements included
in this Form 10-Q and with the Consolidated Financial Statements, Notes to
Consolidated Financial Statements and Management's Discussion and Analysis
included in the Natural Resource Partners L.P. Annual Report on Form 10-K for
the year ended December 31, 2021.

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

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS


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

These forward-looking statements speak only as of the date hereof and are made
based upon our current plans, expectations, estimates, assumptions and beliefs
concerning future events impacting us and involve a number of risks and
uncertainties. We caution that forward-looking statements are not guarantees and
that actual results could differ materially from those expressed or implied in
the forward-looking statements. You should not put undue reliance on any
forward-looking statements. See "  Item 1A. Risk Factors  " included in this
Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31,
2021 for important factors that could cause our actual results of operations or
our actual financial condition to differ.

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA


Adjusted EBITDA is a non-GAAP financial measure that we define as net income
(loss) less equity earnings from unconsolidated investment; plus total
distributions from unconsolidated investment, interest expense, net, debt
modification expense, loss on extinguishment of debt, depreciation, depletion
and amortization and asset impairments. Adjusted EBITDA should not be considered
an alternative to, or more meaningful than, net income or loss, net income or
loss attributable to partners, operating income, cash flows from operating
activities or any other measure of financial performance presented in accordance
with GAAP as measures of operating performance, liquidity or ability to service
debt obligations. There are significant limitations to using Adjusted EBITDA as
a measure of performance, including the inability to analyze the effect of
certain recurring items that materially affect our net income, the lack of
comparability of results of operations of different companies and the different
methods of calculating Adjusted EBITDA reported by different companies. In
addition, Adjusted EBITDA presented below is not calculated or presented on the
same basis as Consolidated EBITDA as defined in our partnership agreement or
Consolidated EBITDDA as defined in Opco's debt agreements. For a description of
Opco's debt agreements, see   Note 8. Debt, Net   in the Notes to Consolidated
Financial Statements included herein as well as in "Item 8. Financial Statements
and Supplementary Data-Note 11. Debt, Net" in our Annual Report on Form 10-K for
the year ended December 31, 2021. 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.


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Distributable Cash Flow

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

Free Cash Flow


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

Introduction

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

•Executive Overview

•Results of Operations

•Liquidity and Capital Resources

•Off-Balance Sheet Transactions

•Related Party Transactions

•Summary of Critical Accounting Estimates

•Recent Accounting Standards

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Executive Overview

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

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

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

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

Our financial results by segment for the six months ended June 30, 2022 are as
follows:

                                                                Operating Segments
                                                                                                Corporate and
(In thousands)                                        Mineral Rights          Soda Ash            Financing              Total
Revenues and other income                           $       160,169          $ 29,480          $          -          $  189,649
Net income (loss)                                   $       132,375          $ 29,406          $    (31,062)         $  130,719
Adjusted EBITDA (1)                                 $       142,152          $ 23,642          $     (9,519)         $  156,275

Cash flow provided by (used in) continuing
operations
Operating activities                                $       118,527         

$ 23,625 $ (26,698) $ 115,454 Investing activities

                                $           909         

$ - $ - $ 909 Financing activities

                                $          (614)        

$ - $ (191,913) $ (192,527) Distributable cash flow (1)

                         $       119,436          $ 23,625          $    (26,698)         $  116,363
Free cash flow (1)                                  $       119,090          $ 23,625          $    (26,698)         $  116,017



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

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Current Results/Market Commentary

Business Outlook and Quarterly Distributions


We generated $116.0 million of free cash flow during the six months ended June
30, 2022 and ended the quarter with $159.4 million of liquidity consisting of
$59.4 million of cash and cash equivalents and $100.0 million of borrowing
capacity under our Opco Credit Facility. During the second quarter we
permanently retired $118.1 million of debt, dropping our leverage ratio to 1.2x
as of June 30, 2022. These debt repurchases will save approximately $10.8
million annually in interest costs. These notes were purchased on the open
market at a weighted average price of 102.275%, a discount to the current
redemption price of 104.563%. In July, we were able to retire an additional
$38.8 million of our 2025 Senior Notes, which will save an additional $3.5
million annually in interest costs. The current outstanding amount of 9.125%
Senior Notes due 2025 is $143.1 million.

We declared a second quarter 2022 cash distribution of $0.75 per common unit of
NRP and a $7.5 million cash distribution on the preferred units. Future
distributions on our common and preferred units will be determined on a
quarterly basis by the Board of Directors. The Board of Directors considers
numerous factors each quarter in determining cash distributions, including
profitability, cash flow, debt service obligations, market conditions and
outlook, estimated unitholder income tax liability and the level of cash
reserves that the Board determines is necessary for future operating and capital
needs.

Mineral Rights Business Segment


Metallurgical coal prices have declined from their record highs during the first
quarter of 2022, but remain supported by the ongoing tightness in the
supply-demand balance for metallurgical coal. Metallurgical coal production
continues to face ongoing labor shortages and global supply chain interruptions
which limits the ability of operators to increase metallurgical coal production
and should provide continued support for domestic and international prices in
the near term despite slowing global economic growth and softening demand for
steel. Our lessees sold 15.2 million tons of coal from our properties in the
first six months of 2022, and we derived approximately 75% of our coal royalty
revenues and approximately 45% of our coal royalty sales volumes from
metallurgical coal during the same period.

Thermal coal demand and pricing remains strong due to the increased demand for
electricity, high natural gas prices and constrained growth in thermal coal
production. Boycotts on Russian coal caused by the war in Ukraine are amplifying
the tightness in thermal coal markets caused by labor shortages, global supply
chain interruptions, and environmental and political pressures limiting the
ability of operators to increase thermal coal production to meet domestic and
international demand. We continue to believe the near-term outlook for thermal
coal prices is positive.

We continue to identify alternative revenue sources across our large portfolio
of land and mineral assets, specifically within the transitional energy economy.
mkWe own the rights to sequester carbon dioxide ("CO2") on approximately 3.5
million mineral acres of pore space in the southern United States. As announced
previously, in the first quarter of 2022 we executed on our first CO2
sequestration transaction by granting Denbury the right to develop a world-class
subsurface CO2 sequestration project on 75,000 acres of underground pore space
we own in southwest Alabama with the potential to store over 300 million metric
tons of CO2. While the timing and likelihood of additional cash flows being
realized from further activities is uncertain, we believe our large ownership
footprint throughout the United States will provide additional opportunities to
create value in this regard and position us to benefit from the transitional
energy economy with minimal capital investment.

Soda Ash

Soda Ash Business Segment


Revenues and other income in the first six months of 2022 were higher by $24.9
million compared to the prior year period as a result of increased sales prices
as compared to the prior year period. Free cash flow in the first six of 2022
increased $19.8 million as compared to the prior year period due to Sisecam
Wyoming reinstating its regular quarterly cash distributions beginning in the
fourth quarter of 2021.

Strong demand growth for soda ash, driven by global secular trends including the
investments in renewable energy, the electrification of the global auto fleet
and urbanization, coupled with constrained soda ash supply due in part due to
COVID-19 flash lockdowns in China and a partial closure of a Green River
competitor due to a force majeure event allowed Sisecam Wyoming to deliver
improved financial results in the first six months of 2022.

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Results of Operations

Second Quarter of 2022 and 2021 Compared

Revenues and Other Income


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

                                                   For the Three Months Ended June
                                                                 30,                                           Percentage
Operating Segment (In thousands)                       2022               2021            Increase               Change
Mineral Rights                                     $   85,290          $ 35,909          $ 49,381                       138  %
Soda Ash                                               14,643             2,601            12,042                       463  %
Total                                              $   99,933          $ 38,510          $ 61,423                       159  %


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

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Mineral Rights

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


                                                     For the Three Months 

Ended June

                                                                   30,                        Increase              Percentage
(In thousands, except per ton data)                      2022               2021             (Decrease)               Change
Coal sales volumes (tons)
Appalachia
Northern                                                    392               405                  (13)                       (3) %
Central                                                   3,484             2,975                  509                        17  %
Southern                                                    312               316                   (4)                       (1) %
Total Appalachia                                          4,188             3,696                  492                        13  %
Illinois Basin                                            3,403             2,640                  763                        29  %
Northern Powder River Basin                                 699               185                  514                       278  %
Gulf Coast                                                   67                 -                   67                       100  %
Total coal sales volumes                                  8,357             6,521                1,836                        28  %

Coal royalty revenue per ton
Appalachia
Northern                                             $    11.84          $   4.45          $      7.39                       166  %
Central                                                   12.19              4.62                 7.57                       164  %
Southern                                                  17.67              7.63                10.04                       132  %

Illinois Basin                                             2.07              2.01                 0.06                         3  %
Northern Powder River Basin                                4.74              4.15                 0.59                        14  %
Gulf Coast                                                 0.57                 -                 0.57                       100  %
Combined average coal royalty revenue per ton              7.54              3.69                 3.85                       104  %

Coal royalty revenues
Appalachia
Northern                                             $    4,640          $  1,804          $     2,836                       157  %
Central                                                  42,461            13,756               28,705                       209  %
Southern                                                  5,513             2,410                3,103                       129  %
Total Appalachia                                         52,614            17,970               34,644                       193  %
Illinois Basin                                            7,061             5,300                1,761                        33  %
Northern Powder River Basin                               3,314               768                2,546                       332  %
Gulf Coast                                                   38                 -                   38                       100  %
Unadjusted coal royalty revenues                         63,027            24,038               38,989                       162  %
Coal royalty adjustment for minimum leases                  (82)           (5,740)               5,658                        99  %
Total coal royalty revenues                          $   62,945          $ 18,298          $    44,647                       244  %

Other revenues
Production lease minimum revenues                    $       65          $  3,556          $    (3,491)                      (98) %
Minimum lease straight-line revenues                      4,674             4,869                 (195)                       (4) %
Property tax revenues                                     1,695             1,587                  108                         7  %
Wheelage revenues                                         4,379             1,844                2,535                       137  %
Coal overriding royalty revenues                            682               976                 (294)                      (30) %
Lease amendment revenues                                    811               772                   39                         5  %

Aggregates royalty revenues                               1,037               456                  581                       127  %
Oil and gas royalty revenues                              2,906               900                2,006                       223  %
Other revenues                                              139               353                 (214)                      (61) %
Total other revenues                                 $   16,388          $ 15,313          $     1,075                         7  %
Royalty and other mineral rights                     $   79,333          $ 33,611          $    45,722                       136  %
Transportation and processing services revenues           5,612             2,182                3,430                       157  %
Gain on asset sales and disposals                           345               116                  229                       197  %
Total Mineral Rights segment revenues and other                                                                              138  %
income                                               $   85,290          $ 35,909          $    49,381


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Coal Royalty Revenues

Approximately 75% of coal royalty revenues and approximately 45% of coal royalty
sales volumes were derived from metallurgical coal during the three months ended
June 30, 2022. Total coal royalty revenues increased $44.6 million as compared
to the prior year quarter. The discussion by region is as follows:

•Appalachia: Coal royalty revenues increased $34.6 million primarily due to
increased coal sales prices and volumes during the three months ended June 30,
2022 as compared to the prior year quarter.

•Illinois Basin: Coal royalty revenues increased $1.8 million primarily due to
increased sales volumes and prices during the three months ended June 30, 2022
as compared to the prior year quarter. Revenues recognized from Foresight in
2021 were fixed as a result of the lease amendment the Partnership entered into
with Foresight pursuant to which Foresight agreed to pay NRP fixed cash payments
to satisfy all obligations arising out of the existing various coal mining
leases and transportation infrastructure fee agreements between the Partnership
and Foresight. Revenues from Foresight in 2022 represent traditional royalty and
minimum payments.

•Northern Powder River Basin: Coal royalty revenues increased $2.5 million
primarily due to increased sales volumes as our lessee mined on our property
more during the second quarter of 2022 as compared to the prior year quarter in
accordance with its mine plan in addition to increased sales prices as compared
to the prior year quarter.

Total Other Revenues

Total other revenues increased $1.1 million during the three months ended June
30, 2022 as compared to the prior year quarter primarily due to $2.5 million
increase in wheelage revenues and a $2.0 million increase in oil and gas royalty
revenues, partially offset by a $3.5 million decrease in production lease
minimum revenues. The increase in wheelage revenues is result of higher
production from the properties that pay us a wheelage fee and the increase in
oil and gas royalty revenues is primarily related to new wells and increased gas
prices as compared to the prior year period. The decrease in production lease
minimum revenues was primarily as a result of breakage revenue recognized in the
second quarter of 2021.

Transportation and Processing Services Revenues


Transportation and processing services revenues increased $3.4 million during
the three months ended June 30, 2022 as compared to the prior year period
primarily due to the lease amendment with Foresight whereas transportation and
processing revenues were based on the recognition of a fixed amount in 2021.
Revenues from Foresight in 2022 represent traditional royalty and minimum
payments and were greater than the fixed revenue from 2021.

Soda Ash

Revenues and other income related to our Soda Ash segment increased $12.0 million compared to the prior year quarter as a result of increased international sales prices as compared to the prior year period.

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Operating and Other Expenses

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

                                                     For the Three Months Ended June
                                                                   30,                        Increase              Percentage
(In thousands)                                           2022               2021             (Decrease)               Change
Operating expenses
Operating and maintenance expenses                   $   10,015          $  5,170          $     4,845                        94  %
Depreciation, depletion and amortization                  5,847             4,871                  976                        20  %
General and administrative expenses                       5,052             3,388                1,664                        49  %
Asset impairments                                            43                16                   27                       169  %
Total operating expenses                             $   20,957          $ 13,445          $     7,512                        56  %

Other expenses, net
Interest expense, net                                $    8,108          $  9,683          $    (1,575)                      (16) %

Loss on extinguishment of debt                            4,048                 -                4,048                       100  %
Total other expenses, net                            $   12,156          $  9,683          $     2,473                        26  %


Total operating expenses increased $7.5 million primarily due to a $4.8 million
increase in operating and maintenance expenses primarily as a result of higher
costs related to an overriding royalty agreement with Western Pocahontas
Properties Limited Partnership ("WPPLP"). The coal royalty expense NRP pays to
WPPLP is fully offset by the coal royalty revenue NRP receives from this
property. Total operating expenses also increased as a result of a $1.7 million
increase in general and administrative expenses primarily due to increased
long-term incentive expense and consulting expense.

Total other expenses, net increased $2.5 million primarily due to a $4.0 million
loss on extinguishment of debt related to the premiums and fees incurred and
write-off of debt issuance costs associated with the retirement of the 2025
Senior Notes during the three months ended June 30, 2022. This increase was
partially offset by a $1.6 million decrease in interest expense, net as a result
of less debt outstanding.


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Adjusted EBITDA (Non-GAAP Financial Measure)

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


                                                                Operating 

Segments

                                                                                               Corporate and
For the Three Months Ended (In thousands)             Mineral Rights          Soda Ash           Financing             Total
June 30, 2022
Net income (loss)                                   $        69,408          $ 14,620          $   (17,208)         $ 66,820
Less: equity earnings from unconsolidated
investment                                                        -           (14,643)                   -           (14,643)

Add: total distributions from unconsolidated
investment                                                        -            10,486                    -            10,486
Add: interest expense, net                                        -                 -                8,108             8,108

Add: loss on extinguishment of debt                               -                 -                4,048             4,048
Add: depreciation, depletion and amortization                 5,847                 -                    -             5,847
Add: asset impairments                                           43                 -                    -                43
Adjusted EBITDA                                     $        75,298          $ 10,463          $    (5,052)         $ 80,709

June 30, 2021
Net loss                                            $        25,886          $  2,566          $   (13,070)         $ 15,382
Less: equity earnings from unconsolidated
investment                                                        -            (2,601)                   -            (2,601)

Add: interest expense, net                                        1                 -                9,682             9,683

Add: depreciation, depletion and amortization                 4,871                 -                    -             4,871
Add: asset impairments                                           16                 -                    -                16
Adjusted EBITDA                                     $        30,774          $    (35)         $    (3,388)         $ 27,351



Adjusted EBITDA increased $53.4 million primarily due to a $44.5 million
increase in Adjusted EBITDA within our Mineral Rights segment as a result of
higher revenues and other income as discussed above, in addition to a $10.5
million increase in Adjusted EBITDA within our Soda Ash segment due to Sisecam
Wyoming reinstating its regular quarterly cash distributions beginning in the
fourth quarter of 2021.

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


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

                                                               Operating Segments
                                                                                              Corporate and
For the Three Months Ended (In thousands)            Mineral Rights          Soda Ash           Financing             Total
June 30, 2022
Cash flow provided by (used in) continuing
operations
Operating activities                               $        70,351          $ 10,430          $   (17,658)         $  63,123
Investing activities                                           909                 -                    -                909
Financing activities                                             -                 -             (140,266)          (140,266)

June 30, 2021
Cash flow provided by (used in) continuing
operations
Operating activities                               $        32,028          $    (35)         $   (18,609)         $  13,384
Investing activities                                           657                 -                    -                657
Financing activities                                        (1,000)                -              (11,900)           (12,900)


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


                                                                Operating 

Segments

                                                                                               Corporate and
For the Three Months Ended (In thousands)             Mineral Rights          Soda Ash           Financing             Total
June 30, 2022
Net cash provided by (used in) operating
activities of continuing operations                 $        70,351         

$ 10,430 $ (17,658) $ 63,123


Add: proceeds from asset sales and disposals                    346                 -                    -               346

Add: return of long-term contract receivable                    563                 -                    -               563

Distributable cash flow                             $        71,260          $ 10,430          $   (17,658)         $ 64,032
Less: proceeds from asset sales and disposals                  (346)                -                    -              (346)

Free cash flow                                      $        70,914          $ 10,430          $   (17,658)         $ 63,686

June 30, 2021
Net cash provided by (used in) operating
activities of continuing operations                 $        32,028         

$ (35) $ (18,609) $ 13,384


Add: proceeds from asset sales and disposals                    116                 -                    -               116

Add: return of long-term contract receivable                    541                 -                    -               541

Distributable cash flow                             $        32,685          $    (35)         $   (18,609)         $ 14,041
Less: proceeds from asset sales and disposals                  (116)                -                    -              (116)
Less: acquisition costs                                      (1,000)                -                    -            (1,000)

Free cash flow                                      $        31,569          $    (35)         $   (18,609)         $ 12,925



DCF and FCF increased $50.0 million and $50.8 million, respectively, primarily due to the following:


•Mineral Rights Segment

•DCF and FCF increased $38.6 million and $39.3 million, respectively, primarily due to the segment's increase in revenues and other income as discussed above.

•Soda Ash Segment

•DCF and FCF increased $10.5 million as a result of Sisecam Wyoming reinstating its regular quarterly cash distributions beginning in the fourth quarter of 2021.

Results of Operations

First Six Months of 2022 and 2021 Compared

Revenues and Other Income


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

                                                    For the Six Months Ended June
                                                                 30,                                            Percentage
Operating Segment (In thousands)                       2022               2021             Increase               Change
Mineral Rights                                     $  160,169          $ 71,087          $  89,082                       125  %
Soda Ash                                               29,480             4,574             24,906                       545  %
Total                                              $  189,649          $ 75,661          $ 113,988                       151  %


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

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Mineral Rights

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


                                                      For the Six Months 

Ended June

                                                                   30,                        Increase              Percentage
(In thousands, except per ton data)                      2022               2021             (Decrease)               Change
Coal sales volumes (tons)
Appalachia
Northern                                                    820               525                  295                        56  %
Central                                                   6,735             5,625                1,110                        20  %
Southern                                                    673               416                  257                        62  %
Total Appalachia                                          8,228             6,566                1,662                        25  %
Illinois Basin                                            4,905             5,298                 (393)                       (7) %
Northern Powder River Basin                               1,937             1,244                  693                        56  %
Gulf Coast                                                  136                 -                  136                       100  %
Total coal sales volumes                                 15,206            13,108                2,098                        16  %

Coal royalty revenue per ton
Appalachia
Northern                                             $    10.95          $   4.27          $      6.68                       156  %
Central                                                   11.80              4.44                 7.36                       166  %
Southern                                                  17.61              7.06                10.55                       149  %

Illinois Basin                                             2.11              2.04                 0.07                         3  %
Northern Powder River Basin                                4.10              3.49                 0.61                        17  %
Gulf Coast                                                 0.56                 -                 0.56                       100  %
Combined average coal royalty revenue per ton              7.80              3.45                 4.35                       126  %

Coal royalty revenues
Appalachia
Northern                                             $    8,981          $  2,241          $     6,740                       301  %
Central                                                  79,441            24,951               54,490                       218  %
Southern                                                 11,853             2,938                8,915                       303  %
Total Appalachia                                        100,275            30,130               70,145                       233  %
Illinois Basin                                           10,364            10,783                 (419)                       (4) %
Northern Powder River Basin                               7,946             4,341                3,605                        83  %
Gulf Coast                                                   76                 -                   76                       100  %
Unadjusted coal royalty revenues                        118,661            45,254               73,407                       162  %
Coal royalty adjustment for minimum leases                 (267)          (11,591)              11,324                        98  %
Total coal royalty revenues                          $  118,394          $ 33,663          $    84,731                       252  %

Other revenues
Production lease minimum revenues                    $    1,657          $  7,006          $    (5,349)                      (76) %
Minimum lease straight-line revenues                      9,457            10,965               (1,508)                      (14) %

Wheelage revenues                                         8,096             3,625                4,471                       123  %
Property tax revenues                                     3,167             3,056                  111                         4  %
Coal overriding royalty revenues                            940             2,835               (1,895)                      (67) %
Lease amendment revenues                                  1,691             1,640                   51                         3  %

Aggregates royalty revenues                               1,807               910                  897                        99  %
Oil and gas royalty revenues                              4,720             2,266                2,454                       108  %
Other revenues                                              487               572                  (85)                      (15) %
Total other revenues                                 $   32,022          $ 32,875          $      (853)                       (3) %
Royalty and other mineral rights                     $  150,416          $ 66,538          $    83,878                       126  %
Transportation and processing services revenues           9,408             4,374                5,034                       115  %
Gain on asset sales and disposals                           345               175                  170                        97  %
Total Mineral Rights segment revenues and other
income                                               $  160,169          $ 71,087          $    89,082                       125  %



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Coal Royalty Revenues

Total coal royalty revenues increased $84.7 million during the six months ended
June 30, 2022 as compared to the prior year period. The discussion by region is
as follows:

•Appalachia: Coal royalty revenues increased $70.1 million primarily due to
increased coal sales prices and volumes during the six months ended June 30,
2022 as compared to the prior year period.

•Illinois Basin: Coal royalty revenues decreased $0.4 million primarily due to
lower sales volumes, partially offset by increased sales prices during the six
months ended June 30, 2022 as compared to the prior year period. Revenues
recognized from Foresight in 2021 were fixed as a result of the lease amendment
the Partnership entered into with Foresight pursuant to which Foresight agreed
to pay NRP fixed cash payments to satisfy all obligations arising out of the
existing various coal mining leases and transportation infrastructure fee
agreements between the Partnership and Foresight. Revenues from Foresight in
2022 represent traditional royalty and minimum payments.

•Northern Powder River Basin: Coal royalty revenues increased $3.6 million
primarily due to increased sales volumes as our lessee mined on our property
more during the six months ended June 30, 2022 as compared to the prior year
period in accordance with its mine plan in addition to increased sales prices as
compared to the prior year period.

Other Revenues


Other revenues decreased $0.9 million during the six months ended June 30, 2022
as compared to the prior year period primarily due to a $5.3 million decrease in
production lease minimum revenues, partially offset by a $4.5 million increase
in wheelage revenues. The decrease in production lease minimum revenues was
primarily as a result of breakage revenues recognized in the first six months of
2021. The increase in wheelage revenues is result of higher production in 2022
from the properties that pay us a wheelage fee as compared to the prior year
period.

Transportation and Processing Services Revenues


Transportation and processing services revenues increased $5.0 million during
the six months ended June 30, 2022 as compared to the prior year period
primarily due to the lease amendment with Foresight whereas transportation and
processing revenues were based on the recognition of a fixed amount in 2021.
Revenues from Foresight in 2022 represent traditional royalty and minimum
payments and were greater than the fixed revenue from 2021.

Soda Ash

Revenues and other income related to our Soda Ash segment increased $24.9 million primarily as a result of increased international sales prices.

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Operating and Other Expenses

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

                                                      For the Six Months Ended June
                                                                   30,                        Increase               Percentage
(In thousands)                                           2022               2021             (Decrease)                Change
Operating expenses
Operating and maintenance expenses                   $   18,091          $ 10,722          $      7,369                        69  %
Depreciation, depletion and amortization                  9,715             9,963                  (248)                       (2) %
General and administrative expenses                       9,519             7,498                 2,021                        27  %
Asset impairments                                            62             4,059                (3,997)                      (98) %
Total operating expenses                             $   37,387          $ 32,242          $      5,145                        16  %

Other expenses, net
Interest expense, net                                $   17,495          $ 19,656          $     (2,161)                      (11) %

Loss on extinguishment of debt                            4,048                 -                 4,048                       100  %

Total other expenses, net                            $   21,543          $ 19,656          $      1,887                        10  %



Total operating expenses increased $5.1 million primarily due to a $7.4 million
increase in operating and maintenance expenses as a result of an increase in bad
debt expense in addition to higher costs related to an overriding royalty
agreement with WPPLP. The coal royalty expense NRP pays to WPPLP is fully offset
by the coal royalty revenue NRP receives from this property. Total operating
expenses also increased as a result of a $2.0 million increase in general and
administrative expenses primarily due to increased long-term incentive expense
and consulting expense. This increase was partially offset by the a $4.0 million
decrease in asset impairments as compared to the prior year period. Asset
impairments in 2021 primarily related to a lease termination that resulted in
the full impairment of a coal property.

Total other expenses, net increased $1.9 million primarily due to a $4.0 million
loss on extinguishment of debt related to the premiums and fees incurred and
write-off of debt issuance costs associated with the retirement of the 2025
Senior Notes during the six months ended June 30, 2022. This increase was
partially offset by a $2.2 million decrease in interest expense, net as a result
of less debt outstanding.


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Adjusted EBITDA (Non-GAAP Financial Measure)

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


                                                             Operating 

Segments

                                                                                               Corporate and
For the Six Months Ended (In thousands)               Mineral Rights          Soda Ash           Financing             Total
June 30, 2022
Net income (loss)                                   $       132,375          $ 29,406          $   (31,062)         $ 130,719
Less: equity earnings from unconsolidated
investment                                                        -           (29,480)                   -            (29,480)

Add: total distributions from unconsolidated
investment                                                        -            23,716                    -             23,716
Add: interest expense, net                                        -                 -               17,495             17,495

Add: loss on extinguishment of debt                               -                 -                4,048              4,048
Add: depreciation, depletion and amortization                 9,715                 -                    -              9,715
Add: asset impairments                                           62                 -                    -                 62
Adjusted EBITDA                                     $       142,152          $ 23,642          $    (9,519)         $ 156,275

June 30, 2021
Net income (loss)                                   $        46,374          $  4,519          $   (27,130)         $  23,763
Less: equity earnings from unconsolidated
investment                                                        -            (4,574)                   -             (4,574)

Add: total distributions from unconsolidated
investment                                                        -             3,920                    -              3,920
Add: interest expense, net                                       24                 -               19,632             19,656

Add: depreciation, depletion and amortization                 9,963                 -                    -              9,963
Add: asset impairments                                        4,059                 -                    -              4,059
Adjusted EBITDA                                     $        60,420          $  3,865          $    (7,498)         $  56,787



Adjusted EBITDA increased $99.5 million primarily due to a $81.7 million
increase in Adjusted EBITDA within our Mineral Rights segment as a result of
higher revenues and other income as discussed above, in addition to a $19.8
million increase in Adjusted EBITDA within our Soda Ash segment as a result of
higher cash distributions received from Sisecam Wyoming in the first six months
of 2022 as compared to the prior year period.

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


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

                                                            Operating Segments
                                                                                              Corporate and
For the Six Months Ended (In thousands)              Mineral Rights          Soda Ash           Financing             Total
June 30, 2022
Cash flow provided by (used in) continuing
operations
Operating activities                               $       118,527          $ 23,625          $   (26,698)         $ 115,454
Investing activities                                           909                 -                    -                909
Financing activities                                          (614)                -             (191,913)          (192,527)

June 30, 2021
Cash flow provided by (used in) continuing
operations
Operating activities                               $        57,990          $  3,853          $   (25,259)         $  36,584
Investing activities                                         1,257                 -                    -              1,257
Financing activities                                        (1,132)                -              (38,591)           (39,723)



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


                                                             Operating 

Segments

                                                                                               Corporate and
For the Six Months Ended (In thousands)               Mineral Rights          Soda Ash           Financing             Total
June 30, 2022
Net cash provided by (used in) operating
activities of continuing operations                 $       118,527         

$ 23,625 $ (26,698) $ 115,454


Add: proceeds from asset sales and disposals                    346                 -                    -                346

Add: return of long-term contract receivable                    563                 -                    -                563

Distributable cash flow                             $       119,436          $ 23,625          $   (26,698)         $ 116,363
Less: proceeds from asset sales and disposals                  (346)                -                    -               (346)

Free cash flow                                      $       119,090          $ 23,625          $   (26,698)         $ 116,017

June 30, 2021
Net cash provided by (used in) operating
activities of continuing operations                 $        57,990          $  3,853          $   (25,259)         $  36,584
Add: proceeds from asset sales and disposals                    175                 -                    -                175

Add: return of long-term contract receivable                  1,082                 -                    -              1,082
Distributable cash flow                             $        59,247          $  3,853          $   (25,259)         $  37,841
Less: proceeds from asset sales and disposals                  (175)                -                    -               (175)

Less: acquisition costs                                      (1,000)                -                    -             (1,000)
Free cash flow                                      $        58,072          $  3,853          $   (25,259)         $  36,666



DCF and FCF increased $78.5 million and $79.4 million, respectively, primarily due to the following:


•Mineral Rights Segment

•DCF and FCF increased $60.2 million and $61.0 million, respectively, primarily due to the segment's increase in revenues and other income as discussed above.

•Soda Ash Segment


•DCF and FCF increased $19.8 million as a result of higher cash distributions
received from Sisecam Wyoming in the first six months of 2022 as compared to the
prior year period.

Liquidity and Capital Resources

Current Liquidity


As of June 30, 2022, we had total liquidity of $159.4 million, consisting of
$59.4 million of cash and cash equivalents and $100.0 million of borrowing
capacity under our Opco Credit Facility. We have significant debt service
obligations, including approximately $20 million of principal repayments on
Opco's senior notes throughout the remainder of 2022. As discussed previously,
through the date of this report, we have permanently retired $156.9 million in
debt, leaving our outstanding balance of 9.125% Notes due 2025 at $143.1
million. We believe our liquidity position provides us with the flexibility to
continue paying down debt and manage our business through the current market
environment.

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Cash Flows

Cash flows provided by operating activities increased $78.9 million, from $36.6
million in the six months ended June 30, 2021 to $115.5 million in the six
months ended June 30, 2022, primarily related to increased revenues and other
income within our Mineral Rights segment and $19.8 million of a higher cash
distributions received from Sisecam Wyoming in the first six months of 2022 as
compared to the prior year period.

Cash flows used in financing activities increased $152.8 million from $39.7
million used in the six months ended June 30, 2021 to $192.5 million used in the
six months ended June 30, 2022, primarily due to the $118.1 million cash used to
retire a portion of our 2025 Senior Notes in the second quarter of 2022 in
addition to $19.6 million cash used to redeem the preferred units paid-in-kind
during the first quarter of 2022, $7.3 million of increased cash used for
preferred unit distributions as a result of paying all of our preferred unit
distributions in cash in 2022 as compared to half in kind during the six months
ended June 30, 2021 and $3.9 million of increased cash used for distributions to
common unitholders and the general partner as a result of increasing our common
unit distribution to $0.75/unit in the second quarter of 2022.

Capital Resources and Obligations

Debt, Net


We had the following debt outstanding as of June 30, 2022 and December 31, 2021:

                                                    June 30,       December 31,
         (In thousands)                               2022             2021
         Current portion of long-term debt, net    $  39,070      $      39,102
         Long-term debt, net                         259,296            394,443
         Total debt, net                           $ 298,366      $     433,545


We have been and continue to be in compliance with the terms of the financial
covenants contained in our debt agreements. For additional information regarding
our debt and the agreements governing our debt, including the covenants
contained therein, see   Note 8. Debt, Net   to the Consolidated Financial
Statements included elsewhere in this Quarterly Report on Form 10-Q.

Off-Balance Sheet Transactions


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

Related Party Transactions

The information required set forth under Note 10. Related Party Transactions to the Consolidated Financial Statements is incorporated herein by reference.

Summary of Critical Accounting Estimates


The preparation of Consolidated Financial Statements in conformity with
generally accepted accounting principles in the United States of America
requires management to make certain estimates and assumptions that affect the
amounts reported in the Consolidated Financial Statements and the accompanying
notes. There have been no significant changes to our critical accounting
estimates from those disclosed in our Annual Report on Form 10-K for the year
ended December 31, 2021.

Recent Accounting Standards

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

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