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Natural Resource Partners L.P. Reports First Quarter 2021 Results and Declares First Quarter 2021 Distributions

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Natural Resource Partners L.P. (NYSE:NRP) today reported first quarter 2021 results as follows:

For the Three Months Ended

Last Twelve Months

March 31,

March 31,

(In thousands) (Unaudited)

2021

2020

2021

Net income (loss)

$

8,381

$

18,779

$

(95,217

)

Asset impairments

4,043

139,928

Net income excluding asset impairments (1)

$

12,424

$

18,779

$

44,711

Adjusted EBITDA (1)

29,436

31,932

102,218

Cash flow provided by (used in) continuing operations:

Operating activities

23,200

30,155

80,613

Investing activities

600

272

2,073

Financing activities

(26,823

)

(28,186

)

(86,425

)

Distributable cash flow (1) (2)

23,800

30,361

83,687

Free cash flow (1)

23,741

30,427

82,004

Cash flow cushion (last twelve months) (1)

(3,731

)

____________________

(1)

See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

(2)

Includes net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations.

"Growing demand for steel, glass and electricity continues to drive the rebound in our business segments from the negative impact of the COVID-19 pandemic. The Partnership’s demonstrated ability to generate free cash flow, reduce debt and maintain strong liquidity throughout the crisis has been noteworthy, and we expect these trends to continue," stated Craig Nunez, NRP's President and Chief Operating Officer.

NRP's liquidity was $196.8 million at March 31, 2021, consisting of $96.8 million of cash and $100.0 million of borrowing capacity available under its revolving credit facility.

NRP announced today that the Board of Directors of its general partner declared a first quarter 2021 cash distribution of $0.45 per common unit of NRP to be paid on May 24, 2021 to unitholders of record on May 17, 2021. In addition, the Board declared a $7.7 million distribution on the preferred units, which will be paid one-half in cash and one-half in kind through the issuance of additional preferred units. The preferred unit distribution includes interest on previously paid-in-kind units and will be paid one-half in cash and one-half in kind through the issuance of additional preferred units.

Segment Performance

Coal Royalty and Other

In the first quarter of 2021 net income decreased $6.3 million as compared to the prior year period primarily due to a $4.0 million non-cash asset impairment in the first quarter of 2021 related to an idled thermal coal property, as well as a $3.1 million increase in depletion expense due to increased coal production at certain properties. Free cash flow was $4.3 million lower in the first quarter of 2021 as compared to the prior year period primarily as a result of lease amendment fee payments received in the first quarter of 2020. Approximately 50% of coal royalty revenues and approximately 40% of coal royalty sales volumes were derived from metallurgical coal in the first quarter of 2021.

Metallurgical coal markets remain challenged by the uncertainties around the COVID-19 pandemic, however prices have rebounded from the lows seen in the second quarter of 2020 and the outlook continues to strengthen. Domestic and export thermal coal markets continue to stabilize, but still face ongoing negative effects of the COVID-19 pandemic and the long-term challenges of lower utility demand, low natural gas prices, and the secular shift to renewable energy. However, NRP does not have significant sensitivity to thermal coal price movements this year since the substantial majority of NRP's thermal cash flows are fixed pursuant to a contract with Foresight Energy that went into effect as they emerged from bankruptcy last year.

Soda Ash

Net income in the first quarter of 2021 was lower by $4.3 million as compared to the prior year period primarily as a result of lower sales prices due to demand disruptions caused by the COVID-19 pandemic. NRP received $3.9 million in cash distributions from Ciner Wyoming in the first quarter of 2021 as compared to $7.1 million in cash distributions in the prior year period. As previously stated, in August of 2020, Ciner Wyoming decided to suspend its quarterly distributions in an effort to achieve greater financial and liquidity flexibility as a result of COVID-19. While NRP did receive a special $3.9 million distribution from Ciner Wyoming during the quarter, NRP does not expect Ciner Wyoming to resume regular cash distributions until they have greater visibility and confidence in the sustainability of the continuing improvement in global soda ash demand. Ciner Wyoming’s ability to pay future quarterly distributions will be dependent in part on its cash reserves, liquidity, total debt levels and anticipated capital expenditures.

NRP believes Ciner Wyoming's facility is competitively positioned as one of the lowest cost producers of soda ash in the world, however, NRP expects the market to remain volatile as a result of ongoing uncertainties with COVID-19.

Corporate and Financing

Corporate and financing costs in the first quarter of 2021 were relatively flat as compared to the prior year period as increases in certain costs, such as insurance, were offset by a reduction in controllable costs as a result of NRP's cost saving initiatives. Free cash flow improved $0.8 million in the first quarter of 2021 as compared to the prior year period primarily due to lower cash paid for interest as a result of less debt outstanding in 2021.

As noted earlier, NRP declared a first quarter 2021 preferred unit distribution of $7.7 million which will be paid one-half in cash and one-half in kind. The indenture governing the 2025 parent company notes restricts NRP from paying more than one-half of the quarterly distribution on the preferred units in cash if NRP's consolidated leverage ratio exceeds 3.75x, and as of March 31, 2021, NRP's leverage ratio was 4.5x. NRP expects its leverage ratio to continue to rise through the second quarter of 2021 and then begin a sustained long-term decline as NRP continues to pay down debt. Under the terms of the partnership agreement, if NRP’s consolidated leverage ratio remains above 3.75x into 2022 and NRP remains unable to redeem any outstanding paid-in-kind preferred units, NRP would be required to temporarily suspend distributions on its common units until the leverage ratio drops below 3.75x and the outstanding paid-in-kind preferred units are redeemed. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs.

Conference Call

A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link https://www.incommglobalevents.com/registration/client/7437/natural-resource-partners-lp-first-quarter-2021-earnings-call/. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website.

Withholding Information for Foreign Investors

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of NRP's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, NRP's distributions to foreign investors are subject to federal income tax withholding at the highest applicable rate.

Company Profile

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of mineral properties in the United States including interests in coal, industrial minerals and other natural resources. In addition, NRP owns an equity investment in Ciner Wyoming LLC, a trona ore mining and soda ash production business.

For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the Partnership’s website at http://www.nrplp.com.

Forward-Looking Statements

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees, including Foresight Energy; Ciner Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

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

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

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

"Cash flow cushion" is a non-GAAP financial measure that we define as free cash flow less one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions and common unit distributions. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess the Partnership's ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units.

"Return on capital employed" or "ROCE" is a non-GAAP financial measure that we define as net income (loss) operations plus financing costs (interest expense plus loss on extinguishment of debt) divided by the sum of equity excluding equity of discontinued operations, and debt. Return on capital employed should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. Return on capital employed is a supplemental performance measure used by our management team that measures our profitability and efficiency with which our capital is employed. The measure provides an indication of operating performance before the impact of leverage in the capital structure.

-Financial Tables and Reconciliation of Non-GAAP Measures Follow-

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Comprehensive Income

For the Three Months Ended

March 31,

December 31,

(In thousands, except per unit data)

2021

2020

2020

Revenues and other income

Coal royalty and other

$

32,927

$

31,433

$

31,327

Transportation and processing services

2,192

2,509

2,194

Equity in earnings of Ciner Wyoming

1,973

6,272

5,528

Gain on asset sales and disposals

59

116

Total revenues and other income

$

37,151

$

40,214

$

39,165

Operating expenses

Operating and maintenance expenses

$

5,552

$

5,202

$

5,595

Depreciation, depletion and amortization

5,092

2,012

3,013

General and administrative expenses

4,110

3,913

3,125

Asset impairments

4,043

2,668

Total operating expenses

$

18,797

$

11,127

$

14,401

Income from operations

$

18,354

$

29,087

$

24,764

Interest expense, net

$

(9,973

)

$

(10,308

)

$

(10,077

)

Net income

$

8,381

$

18,779

$

14,687

Less: income attributable to preferred unitholders

(7,727

)

(7,500

)

(7,612

)

Net income attributable to common unitholders and the general partner

$

654

$

11,279

$

7,075

Net income attributable to common unitholders

$

641

$

11,053

$

6,934

Net income attributable to the general partner

13

226

141

Net income per common unit

Basic

$

0.05

$

0.90

$

0.57

Diluted

0.05

0.52

0.56

Net income

$

8,381

$

18,779

$

14,687

Comprehensive income (loss) from unconsolidated investment and other

732

(1,023

)

152

Comprehensive income

$

9,113

$

17,756

14,839

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Cash Flows

For the Three Months Ended

March 31,

December 31,

(In thousands)

2021

2020

2020

Cash flows from operating activities

Net income

$

8,381

$

18,779

$

14,687

Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:

Depreciation, depletion and amortization

5,092

2,012

3,013

Distributions from unconsolidated investment

3,920

7,105

Equity earnings from unconsolidated investment

(1,973

)

(6,272

)

(5,528

)

Gain on asset sales and disposals

(59

)

(116

)

Asset impairments

4,043

2,668

Bad debt expense

383

(190

)

86

Unit-based compensation expense

1,126

729

1,004

Amortization of debt issuance costs and other

269

448

832

Change in operating assets and liabilities:

Accounts receivable

(3,331

)

(5,073

)

4,859

Accounts payable

(10

)

93

14

Accrued liabilities

(3,034

)

(2,861

)

780

Accrued interest

7,133

7,060

(7,559

)

Deferred revenue

(146

)

8,265

(461

)

Other items, net

1,406

60

(1,124

)

Net cash provided by operating activities of continuing operations

$

23,200

$

30,155

$

13,155

Net cash provided by operating activities of discontinued operations

1,706

Net cash provided by operating activities

$

23,200

$

31,861

$

13,155

Cash flows from investing activities

Proceeds from asset sales and disposals

$

59

$

$

116

Return of long-term contract receivable

541

272

660

Net cash provided by investing activities of continuing operations

$

600

$

272

$

776

Net cash provided by (used in) investing activities of discontinued operations

(66

)

1

Net cash provided by investing activities

$

600

$

206

$

777

Cash flows from financing activities

Debt repayments

$

(16,696

)

$

(16,696

)

$

(20,335

)

Distributions to common unitholders and general partner

(5,630

)

(5,630

)

(5,630

)

Distributions to preferred unitholders

(3,806

)

(7,500

)

(3,750

)

Contributions from discontinued operations

1,640

1

Debt issuance costs and other

(691

)

Net cash used in financing activities of continuing operations

$

(26,823

)

$

(28,186

)

$

(29,714

)

Net cash used in financing activities of discontinued operations

(1,640

)

(1

)

Net cash used in financing activities

$

(26,823

)

$

(29,826

)

$

(29,715

)

Net increase (decrease) in cash and cash equivalents

$

(3,023

)

$

2,241

$

(15,783

)

Cash and cash equivalents at beginning of period

99,790

98,265

115,573

Cash and cash equivalents at end of period

$

96,767

$

100,506

$

99,790

Supplemental cash flow information:

Cash paid for interest

$

2,320

$

3,039

$

17,118

Non-cash investing and financing activities:

Plant, equipment, mineral rights and other funded with accounts payable or accrued liabilities

$

992

$

$

Preferred unit distributions paid-in-kind

3,806

3,750

Natural Resource Partners L.P.

Financial Tables

Consolidated Balance Sheets

March 31,

December 31,

(In thousands, except unit data)

2021

2020

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

96,767

$

99,790

Accounts receivable, net

15,920

12,322

Other current assets, net

3,021

5,080

Total current assets

$

115,708

$

117,192

Land

24,008

24,008

Mineral rights, net

451,610

460,373

Intangible assets, net

17,131

17,459

Equity in unconsolidated investment

261,299

262,514

Long-term contract receivable, net

32,726

Other long-term assets, net

6,678

7,067

Total assets

$

909,160

$

921,877

LIABILITIES AND CAPITAL

Current liabilities

Accounts payable

$

1,375

$

1,385

Accrued liabilities

...

4,853

7,733

Accrued interest

8,847

1,714

Current portion of deferred revenue

10,555

11,485

Current portion of long-term debt, net

39,042

39,055

Total current liabilities

$

64,672

$

61,372

Deferred revenue

50,853

50,069

Long-term debt, net

416,121

432,444

Other non-current liabilities

4,730

5,131

Total liabilities

$

536,376

$

549,016

Commitments and contingencies

Class A Convertible Preferred Units (257,556 and 253,750 units issued and outstanding at March 31, 2021 and December 31, 2020, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at March 31, 2021 and $1,700 per unit at December 31, 2020)

$

172,143

$

168,337

Partners’ capital:

Common unitholders’ interest (12,351,306 and 12,261,199 units issued and outstanding at March 31, 2021 and December 31, 2020, respectively)

$

132,377

$

136,927

General partner’s interest

394

459

Warrant holders' interest

66,816

66,816

Accumulated other comprehensive income

1,054

322

Total partners’ capital

$

200,641

$

204,524

Total liabilities and capital

$

909,160

$

921,877

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Partners' Capital

Common Unitholders

General
Partner

Warrant
Holders

Accumulated
Other
Comprehensive
Income

Partners'
Capital
Excluding
Non-
Controlling
Interest

Non-
Controlling
Interest

Total
Capital

(In thousands)

Units

Amounts

Balance at December 31, 2020

12,261

$

136,927

$

459

$

66,816

$

322

$

204,524

$

$

204,524

Net loss (1)

8,213

168

8,381

8,381

Distributions to common
unitholders and the general
partner

(5,517

)

(113

)

(5,630

)

(5,630

)

Distributions to preferred
unitholders

(7,461

)

(152

)

(7,613

)

(7,613

)

Issuance of unit-based awards

90

Unit-based awards
amortization and vesting, net

215

215

215

Capital contribution

32

32

32

Comprehensive income from
unconsolidated investment and
other

732

732

732

Balance at March 31, 2021

12,351

$

132,377

$

394

$

66,816

$

1,054

$

200,641

$

$

200,641

____________________

(1)

Net income includes $7.727 million of income attributable to preferred unitholders that accumulated during the period, of which $7.572 million is allocated to the common unitholders and $0.155 million is allocated to the general partner.

Common Unitholders

General
Partner

Warrant
Holders

Accumulated
Other
Comprehensive
Loss

Partners'
Capital
Excluding
Non-
Controlling
Interest

Non-
Controlling
Interest

Total
Capital

(In thousands)

Units

Amounts

Balance at December 31, 2019

12,261

$

271,471

$

3,270

$

66,816

$

(2,594

)

$

338,963

$

(2,935

)

$

336,028

Cumulative effect of adoption
of accounting standard

(3,833

)

(78

)

(3,911

)

(3,911

)

Net income (1)

18,403

376

18,779

18,779

Distributions to common
unitholders and the general
partner

(5,517

)

(113

)

(5,630

)

(5,630

)

Distributions to preferred
unitholders

(7,350

)

(150

)

(7,500

)

(7,500

)

Unit-based awards
amortization and vesting

673

673

673

Comprehensive loss from
unconsolidated investment and
other

(1,023

)

(1,023

)

(1,023

)

Balance at March 31, 2020

12,261

$

273,847

$

3,305

$

66,816

$

(3,617

)

$

340,351

$

(2,935

)

$

337,416

____________________

(1)

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

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

The following tables present NRP's unaudited business results by segment for the three months ended March 31, 2021 and 2020 and December 31, 2020:

Operating Business Segments

Coal Royalty
and Other

Corporate and
Financing

(In thousands)

Soda Ash

Total

For the Three Months Ended March 31, 2021

Revenues

$

35,119

$

1,973

$

$

37,092

Gain on asset sales and disposals

59

59

Total revenues and other income

$

35,178

$

1,973

$

$

37,151

Asset impairments

$

4,043

$

$

$

4,043

Net income (loss)

$

20,488

$

1,953

$

(14,060

)

$

8,381

Adjusted EBITDA (1)

$

29,646

$

3,900

$

(4,110

)

$

29,436

Cash flow provided by (used in) continuing operations:

Operating activities

$

25,962

$

3,888

$

(6,650

)

$

23,200

Investing activities

$

600

$

$

$

600

Financing activities

$

(132

)

$

$

(26,691

)

$

(26,823

)

Distributable cash flow (1) (2)

$

26,562

$

3,888

$

(6,650

)

$

23,800

Free cash flow (1)

$

26,503

$

3,888

$

(6,650

)

$

23,741

For the Three Months Ended March 31, 2020

Revenues

$

33,942

$

6,272

$

$

40,214

Gain on asset sales and disposals

Total revenues and other income

$

33,942

$

6,272

$

$

40,214

Asset impairments

$

$

$

$

Net income (loss)

$

26,744

$

6,256

$

(14,221

)

$

18,779

Adjusted EBITDA (1)

$

28,756

$

7,089

$

(3,913

)

$

31,932

Cash flow provided by (used in) continuing operations:

Operating activities

$

30,556

$

7,089

$

(7,490

)

$

30,155

Investing activities

$

272

$

$

$

272

Financing activities

$

$

$

(28,186

)

$

(28,186

)

Distributable cash flow (1) (2)

$

30,828

$

7,089

$

(7,490

)

$

30,361

Free cash flow (1)

$

30,828

$

7,089

$

(7,490

)

$

30,427

For the Three Months Ended December 31, 2020

Revenues

$

33,521

$

5,528

$

$

39,049

Gain on asset sales and disposals

116

116

Total revenues and other income

$

33,637

$

5,528

$

$

39,165

Asset impairments

$

2,668

$

$

$

2,668

Net income (loss)

$

22,382

$

5,484

$

(13,179

)

$

14,687

Adjusted EBITDA (1)

$

28,086

$

(44

)

$

(3,125

)

$

24,917

Cash flow provided by (used in) continuing operations:

Operating activities

$

33,655

$

(54

)

$

(20,446

)

$

13,155

Investing activities

$

776

$

$

$

776

Financing activities

$

$

$

(29,714

)

$

(29,714

)

Distributable cash flow (1) (2)

$

34,431

$

(54

)

$

(20,446

)

$

13,932

Free cash flow (1)

$

34,315

$

(54

)

$

(20,446

)

$

13,815

____________________

(1)

See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

(2)

Includes net proceeds from the sale of the construction aggregates business which are classified as investing cash flow from discontinued operations.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Operating Statistics - Coal Royalty and Other

For the Three Months Ended

March 31,

December 31,

(In thousands, except per ton data)

2021

2020

2020

Coal sales volumes (tons)

Appalachia

Northern (1)

120

327

131

Central

2,650

2,933

2,468

Southern

100

222

69

Total Appalachia

2,870

3,482

2,668

Illinois Basin

2,658

505

1,540

Northern Powder River Basin

1,059

527

506

Total coal sales volumes

6,587

4,514

4,714

Coal royalty revenue per ton

Appalachia

Northern (1)

$

3.64

$

1.81

$

2.92

Central

4.22

4.83

3.84

Southern

5.28

4.16

5.28

Illinois Basin

2.06

4.35

2.21

Northern Powder River Basin

3.37

4.13

3.11

Combined average coal royalty revenue per ton

3.22

4.44

3.23

Coal royalty revenues

Appalachia

Northern (1)

$

437

$

593

$

383

Central

11,195

14,173

9,481

Southern

528

923

364

Total Appalachia

12,160

15,689

10,228

Illinois Basin

5,483

2,199

3,403

Northern Powder River Basin

3,573

2,177

1,576

Unadjusted coal royalty revenues

21,216

20,065

$

15,207

Coal royalty adjustment for minimum leases (2)

(5,851

)

(963

)

(3,898

)

Total coal royalty revenues

$

15,365

$

19,102

$

11,309

Other revenues

Production lease minimum revenues (2)

$

3,450

$

802

$

8,195

Minimum lease straight-line revenues (2)

6,096

3,809

4,447

Property tax revenues

1,469

1,599

1,530

Wheelage revenues

1,781

2,204

1,557

Coal overriding royalty revenues

1,859

1,322

1,658

Lease amendment revenues

868

843

859

Aggregates royalty revenues

454

576

649

Oil and gas royalty revenues

1,366

1,103

893

Other revenues

219

73

230

Total other revenues

$

17,562

$

12,331

$

20,018

Coal royalty and other

$

32,927

$

31,433

$

31,327

Transportation and processing services revenues

2,192

2,509

2,194

Gain on asset sales and disposals

59

116

Total Coal Royalty and Other segment revenues and other income

$

35,178

$

33,942

$

33,637

____________________

(1)

Northern Appalachia includes NRP's Hibbs Run property that has significant sales volumes, but a low fixed rate per ton.

(2)

Beginning April 1, 2020 and effective January 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight Energy Resources LLC that fixed consideration paid to us over a two-year period.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Adjusted EBITDA

Coal Royalty
and Other

Corporate and
Financing

(In thousands)

Soda Ash

Total

For the Three Months Ended March 31, 2021

Net income (loss)

$

20,488

$

1,953

$

(14,060

)

$

8,381

Less: equity earnings from unconsolidated investment

(1,973

)

(1,973

)

Add: total distributions from unconsolidated investment

3,920

3,920

Add: interest expense, net

23

9,950

9,973

Add: depreciation, depletion and amortization

5,092

5,092

Add: asset impairments

4,043

4,043

Adjusted EBITDA

$

29,646

$

3,900

$

(4,110

)

$

29,436

For the Three Months Ended March 31, 2020

Net income (loss)

$

26,744

$

6,256

$

(14,221

)

$

18,779

Less: equity earnings from unconsolidated investment

(6,272

)

(6,272

)

Add: total distributions from unconsolidated investment

7,105

7,105

Add: interest expense, net

10,308

10,308

Add: depreciation, depletion and amortization

2,012

2,012

Add: asset impairments

Adjusted EBITDA

$

28,756

$

7,089

$

(3,913

)

$

31,932

For the Three Months Ended December 31, 2020

Net income (loss)

$

22,382

$

5,484

$

(13,179

)

$

14,687

Less: equity earnings from unconsolidated investment

(5,528

)

(5,528

)

Add: total distributions from unconsolidated investment

Add: interest expense, net

23

10,054

10,077

Add: depreciation, depletion and amortization

3,013

3,013

Add: asset impairments

2,668

2,668

Adjusted EBITDA

$

28,086

$

(44

)

$

(3,125

)

$

24,917

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

Distributable Cash Flow and Free Cash Flow

Coal Royalty
and Other

Corporate and
Financing

(In thousands)

Soda Ash

Total

For the Three Months Ended March 31, 2021

Net cash provided by (used in) operating activities of continuing operations

$

25,962

$

3,888

$

(6,650

)

$

23,200

Add: proceeds from asset sales and disposals

59

59

Add: proceeds from sale of discontinued operations

Add: return of long-term contract receivable

541

541

Distributable cash flow

$

26,562

$

3,888

$

(6,650

)

$

23,800

Less: proceeds from asset sales and disposals

(59

)

(59

)

Less: proceeds from sale of discontinued operations

Free cash flow

$

26,503

$

3,888

$

(6,650

)

$

23,741

For the Three Months Ended March 31, 2020

Net cash provided by (used in) operating activities of continuing operations

$

30,556

$

7,089

$

(7,490

)

$

30,155

Add: proceeds from asset sales and disposals

Add: proceeds from sale of discontinued operations

(66

)

Add: return of long-term contract receivable

272

272

Distributable cash flow

$

30,828

$

7,089

$

(7,490

)

$

30,361

Less: proceeds from asset sales and disposals

Less: proceeds from sale of discontinued operations

66

Free cash flow

$

30,828

$

7,089

$

(7,490

)

$

30,427

For the Three Months Ended December 31, 2020

Net cash provided by (used in) operating activities of continuing operations

$

33,655

$

(54

)

$

(20,446

)

$

13,155

Add: proceeds from asset sales and disposals

116

116

Add: proceeds from sale of discontinued operations

1

Add: return of long-term contract receivables

660

660

Distributable cash flow

$

34,431

$

(54

)

$

(20,446

)

$

13,932

Less: proceeds from sale of assets

(116

)

(116

)

Less: proceeds from sale of discontinued operations

(1

)

Free cash flow

$

34,315

$

(54

)

$

(20,446

)

$

13,815

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

LTM Free Cash Flow and Cash Flow Cushion

For the Three Months Ended

(In thousands)

June 30,
2020

September 30,
2020

December 31,
2020

March 31,
2021

Last 12
Months

Net cash provided by operating activities of continuing operations

$

19,935

$

24,323

$

13,155

$

23,200

$

80,613

Add: proceeds from asset sales and disposals

507

116

59

682

Add: proceeds from sale of discontinued operations

1

1

Add: return of long-term contract receivable

858

332

660

541

2,391

Distributable cash flow

$

21,300

$

24,655

$

13,932

$

23,800

$

83,687

Less: proceeds from asset sales and disposals

(507

)

(116

)

(59

)

(682

)

Less: proceeds from sale of discontinued operations

(1

)

(1

)

Less: acquisition costs

(1,000

)

(1,000

)

Free cash flow

$

19,793

$

24,655

$

13,815

$

23,741

$

82,004

Less: mandatory Opco debt repayments

(2,365

)

(6,780

)

(20,335

)

(16,696

)

(46,176

)

Less: preferred unit distributions

(7,613

)

(7,500

)

(3,750

)

(3,806

)

(22,669

)

Less: common unit distributions

(5,630

)

(5,630

)

(5,630

)

(16,890

)

Cash flow cushion

$

9,815

$

4,745

$

(15,900

)

$

(2,391

)

$

(3,731

)

Leverage Ratio

For the Three Months Ended

(In thousands)

June 30,
2020

September 30,
2020

December 31,
2020

March 31,
2021

Last 12
Months

Net income (loss)

$

(125,501

)

$

7,216

$

14,687

$

8,381

$

(95,217

)

Less: equity earnings from unconsolidated investment

3,058

(1,986

)

(5,528

)

(1,973

)

(6,429

)

Add: total distributions from unconsolidated investment

7,105

3,920

11,025

Add: interest expense, net

10,329

10,254

10,077

9,973

40,633

Add: depreciation, depletion and amortization

2,062

2,111

3,013

5,092

12,278

Add: asset impairments

132,283

934

2,668

4,043

139,928

Adjusted EBITDA

$

29,336

$

18,529

$

24,917

$

29,436

$

102,218

Debt—at March 31, 2021

$

461,183

Leverage Ratio (1)

4.5

x

____________________

(1)

Leverage Ratio is calculated as the outstanding principal of NRP's debt as of March 31, 2021 divided by the last twelve months' Adjusted EBITDA. Note that Adjusted EBITDA under the indenture governing NRP's 2025 parent company notes may be different than the amount shown above. However, NRP's last twelve months Leverage ratio as of March 31, 2021, was 4.5x as calculated under the indenture governing NRP's 2025 parent company notes.

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

Return on Capital Employed ("ROCE")

Coal Royalty
and Other

Corporate and
Financing

(In thousands)

Soda Ash

Total

LTM Ended March 31, 2021

Net income (loss)

$

(46,436

)

$

6,240

$

(55,021

)

$

(95,217

)

Financing costs

102

40,615

40,717

Return

$

(46,334

)

$

6,240

$

(14,406

)

$

(54,500

)

As of March 31, 2020

Total assets of continuing operations

$

817,463

$

261,224

$

4,735

$

1,083,422

Less: total current liabilities of continuing operations excluding current debt

(11,935

)

(10,738

)

(22,673

)

Less: total long-term liabilities of continuing operations excluding long-term debt

(58,460

)

(409

)

(58,869

)

Capital employed excluding discontinued operations

$

747,068

$

261,224

$

(6,412

)

$

1,001,880

Partners' capital

$

750,003

$

261,224

$

(670,876

)

$

340,351

Less: non-controlling interest

(2,935

)

(2,935

)

Total partners' capital

$

747,068

$

261,224

$

(670,876

)

$

337,416

Class A convertible preferred units

164,587

164,587

Debt

499,877

499,877

Capital employed

$

747,068

$

261,224

$

(6,412

)

$

1,001,880

ROCE

(6.2

)%

2.4

%

N/A

(5.4

)%

Excluding asset impairments:

Return

$

(46,334

)

$

6,240

$

(14,406

)

$

(54,500

)

Add: asset impairments

139,928

139,928

Return excluding asset impairments

$

93,594

$

6,240

$

(14,406

)

$

85,428

ROCE excluding asset impairments

12.5

%

2.4

%

N/A

8.5

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210506005269/en/

Contacts

Tiffany Sammis
713-751-7515
tsammis@nrplp.com