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EX-95.1 - EXHIBIT 95.1 - NATURAL RESOURCE PARTNERS LPexhibit95193017.htm
EX-32.2 - EXHIBIT 32.2 - NATURAL RESOURCE PARTNERS LPexhibit32293017.htm
EX-32.1 - EXHIBIT 32.1 - NATURAL RESOURCE PARTNERS LPexhibit32193017.htm
EX-31.2 - EXHIBIT 31.2 - NATURAL RESOURCE PARTNERS LPexhibit31293017.htm
EX-31.1 - EXHIBIT 31.1 - NATURAL RESOURCE PARTNERS LPexhibit31193017.htm
EX-10.1 - EXHIBIT 10.1 - NATURAL RESOURCE PARTNERS LPexhibit10193017.htm

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________________________________
FORM 10-Q
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-31465
  ______________________________________________________
image0a03.gif
NATURAL RESOURCE PARTNERS L.P.
(Exact name of registrant as specified in its charter)
  ______________________________________________________
Delaware
 
35-2164875
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
1201 Louisiana Street, Suite 3400
Houston, Texas 77002
(Address of principal executive offices)
(Zip Code)
(713) 751-7507
(Registrant’s telephone number, including area code) 
  ______________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of "accelerated filer", "large accelerated filer", "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
¨
Accelerated Filer
 
ý
Non-accelerated Filer
¨  (Do not check if a smaller reporting company)
Smaller Reporting Company
 
¨
 
 
Emerging Growth Company
 
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
At November 1, 2017 there were 12,232,006 Common Units outstanding.
 







NATURAL RESOURCE PARTNERS, L.P.
TABLE OF CONTENTS





i






PART I. FINANCIAL INFORMATION 
 
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data) 
(Unaudited)
 
September 30,
 
December 31,
 
2017
 
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
121,244

 
$
40,371

Accounts receivable, net
48,788

 
43,202

Accounts receivable—affiliates, net
243

 
6,658

Inventory
7,671

 
6,893

Prepaid expenses and other
7,525

 
7,271

Current assets of discontinued operations (see Note 7)
991

 
991

Total current assets
186,462

 
105,386

Land
25,261

 
25,252

Plant and equipment, net
47,584

 
49,443

Mineral rights, net
890,610

 
908,192

Intangible assets, net
50,370

 
3,236

Intangible assets, net—affiliate

 
49,811

Equity in unconsolidated investment
245,382

 
255,901

Long-term contracts receivable
41,211

 

Long-term contracts receivable—affiliate

 
43,785

Other assets
7,741

 
6,625

Other assets—affiliate
892

 
1,018

Total assets
$
1,495,513

 
$
1,448,649

LIABILITIES AND CAPITAL
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
5,812

 
$
6,234

Accounts payable—affiliates
670

 
940

Accrued liabilities
28,659

 
41,587

Current portion of long-term debt, net
174,138

 
140,037

Current liabilities of discontinued operations (see Note 7)
458

 
353

Total current liabilities
209,737

 
189,151

Deferred revenue
106,391

 
44,931

Deferred revenueaffiliates

 
71,632

Long-term debt, net
762,441

 
990,234

Other non-current liabilities
2,727

 
4,565

Total liabilities
1,081,296

 
1,300,513

Commitments and contingencies (see Note 15)
 
 
 
Convertible Preferred Units (255,019 units issued and outstanding at $1,000 par value per unit; liquidation preference of $1,500 per unit)
169,606

 

Partners’ capital:
 
 
 
Common unitholders’ interest (12,232,006 units issued and outstanding)
182,760

 
152,309

General partner’s interest
1,508

 
887

Warrant holders interest
66,816

 

Accumulated other comprehensive loss
(3,079
)
 
(1,666
)
Total partners’ capital
248,005

 
151,530

Non-controlling interest
(3,394
)
 
(3,394
)
Total capital
244,611

 
148,136

Total liabilities and capital
$
1,495,513


$
1,448,649

The accompanying notes are an integral part of these consolidated financial statements.

1


NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except per unit data) 
(Unaudited)


 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
Revenues and other income:
 
 
 
 
 
 
 
Coal royalty and other
$
49,078

 
$
27,504

 
$
120,986

 
$
116,336

Coal royalty and other—affiliates
335

 
21,434

 
29,191

 
49,508

Construction aggregates
34,710

 
31,757

 
95,486

 
88,081

Equity in earnings of Ciner Wyoming
8,993

 
10,753

 
27,676

 
30,742

Gain (loss) on asset sales, net
171

 
6,426

 
3,576

 
27,280

Total revenues and other income
$
93,287

 
$
97,874

 
$
276,915


$
311,947

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Operating and maintenance expenses
$
32,441

 
$
31,242

 
$
93,089

 
$
87,824

Operating and maintenance expenses—affiliates, net
2,154

 
4,062

 
6,928

 
9,948

Depreciation, depletion and amortization
8,306

 
11,929

 
26,195

 
32,181

Amortization expense—affiliate

 
902

 
1,008

 
2,328

General and administrative
2,648

 
4,268

 
10,757

 
10,676

General and administrative—affiliates
1,207

 
867

 
3,183

 
2,670

Asset impairments

 
5,697

 
1,778

 
7,681

Total operating expenses
$
46,756


$
58,967


$
142,938

 
$
153,308

 
 
 
 
 
 
 
 
Income from operations
$
46,531


$
38,907


$
133,977

 
$
158,639

 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
Interest expense
$
(20,080
)
 
$
(22,491
)
 
$
(63,598
)
 
$
(66,742
)
Interest expense—affiliate

 

 

 
(523
)
Debt modification expense

 

 
(7,939
)
 

Loss on extinguishment of debt

 

 
(4,107
)
 

Interest income
48

 
3

 
134

 
29

Other expense, net
$
(20,032
)

$
(22,488
)

$
(75,510
)
 
$
(67,236
)
 
 
 
 
 
 
 
 
Net income from continuing operations
$
26,499


$
16,419


$
58,467

 
$
91,403

Income (loss) from discontinued operations (see Note 7)
(433
)
 
7,112

 
(507
)
 
2,001

Net income
$
26,066


$
23,531


$
57,960

 
$
93,404

Less: income attributable to preferred unitholders
(7,650
)
 

 
(17,688
)
 

Net income attributable to common unitholders and general partner
$
18,416


$
23,531


$
40,272

 
$
93,404

 
 
 
 
 
 
 
 
Income from continuing operations per common unit
(see Note 5)
 
 
 
 
 
 
 
Basic
$
1.51

 
$
1.32

 
$
3.27

 
$
7.34

Diluted
$
1.08

 
$
1.32

 
$
2.67

 
$
7.34

 
 
 
 
 
 
 
 
Net income per common unit (see Note 5)
 
 
 
 
 
 
 
Basic
$
1.48

 
$
1.89

 
$
3.23

 
$
7.50

Diluted
$
1.07

 
$
1.89

 
$
2.65

 
$
7.50

 
 
 
 
 
 
 
 
Net income
$
26,066


$
23,531


$
57,960

 
$
93,404

Add: comprehensive income (loss) from unconsolidated investment and other
(268
)
 
(609
)
 
(1,413
)
 
(692
)
Comprehensive income
$
25,798


$
22,922


$
56,547

 
$
92,712

The accompanying notes are an integral part of these consolidated financial statements.

2


NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(In thousands) 
(Unaudited)


 
Common Unitholders
 
General Partner
 
Warrant Holders
 
Accumulated
Other
Comprehensive
Loss
 
Partners' Capital Excluding Non-Controlling Interest
 
Non-Controlling Interest
 
Total Capital
 
 
Units
 
Amounts
 
Balance at December 31, 2016
12,232

 
$
152,309

 
$
887

 
$

 
$
(1,666
)
 
$
151,530

 
$
(3,394
)
 
$
148,136

Net income (1)

 
56,801

 
1,159

 

 

 
57,960

 

 
57,960

Distributions to common unitholders and general partner

 
(16,513
)
 
(337
)
 

 

 
(16,850
)
 

 
(16,850
)
Distributions to preferred unitholders

 
(9,837
)
 
(201
)
 

 

 
(10,038
)
 

 
(10,038
)
Issuance of Warrants

 

 

 
66,816

 

 
66,816

 

 
66,816

Comprehensive loss from unconsolidated investment and other

 

 

 

 
(1,413
)
 
(1,413
)
 

 
(1,413
)
Balance at September 30, 2017
12,232

 
$
182,760

 
$
1,508

 
$
66,816

 
$
(3,079
)
 
$
248,005

 
$
(3,394
)
 
$
244,611

 
 
 
 
 
(1)
Net income includes $17.7 million attributable to Preferred Unitholders that accumulated during the period.

The accompanying notes are an integral part of these consolidated financial statements.

3


NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)



 
Nine Months Ended
September 30,
 
2017
 
2016
Cash flows from operating activities:
 
 
 
Net income
$
57,960

 
$
93,404

Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
 
 
 
Depreciation, depletion and amortization
26,195

 
32,181

Amortization expense—affiliates
1,008

 
2,328

Return on earnings from unconsolidated investment
31,104

 
34,300

Equity earnings from unconsolidated investment
(27,676
)
 
(30,742
)
Gain on asset sales, net
(3,576
)
 
(27,280
)
Debt modification expense
7,939

 

Loss on extinguishment of debt
4,107

 

Gain (loss) from discontinued operations
507

 
(2,001
)
Asset impairments
1,778

 
7,681

Amortization of debt issuance costs and other
5,459

 
6,694

Other, net—affiliates
88

 
848

Change in operating assets and liabilities:
 
 
 
Accounts receivable
1,607

 
(341
)
Accounts receivable—affiliates
(777
)
 
(712
)
Accounts payable
730

 
635

Accounts payable—affiliates
(270
)
 
29

Accrued liabilities
(12,452
)
 
7,287

Accrued liabilities—affiliates

 
(456
)
Deferred revenue
(5
)
 
(40,762
)
Deferred revenue—affiliates
(10,166
)
 
(8,190
)
Other items, net
(2,166
)
 
(356
)
Net cash provided by operating activities of continuing operations
$
81,394

 
$
74,547

Net cash provided by (used in) operating activities of discontinued operations
(607
)
 
8,173

Net cash provided by operating activities
$
80,787

 
$
82,720

 
 
 
 
Cash flows from investing activities:
 
 
 
Return of equity from unconsolidated investment
$
5,646

 
$

Proceeds from sale of assets
1,419

 
55,364

Return of long-term contract receivables
1,807

 

Return of long-term contract receivables—affiliate
804

 
2,577

Acquisition of plant and equipment and other
(6,236
)
 
(4,431
)
Net cash provided by investing activities of continuing operations
$
3,440

 
$
53,510

Net cash provided by investing activities of discontinued operations
206

 
106,821

Net cash provided by investing activities
$
3,646

 
$
160,331

 
 
 
 

4


NATURAL RESOURCE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)



Cash flows from financing activities:
 
 
 
Proceeds from issuance of Convertible Preferred Units and Warrants, net
$
242,100

 
$

Proceeds from issuance of 2022 Senior Notes, net
103,688

 

Proceeds from loans
69,000

 
20,000

Repayments of loans
(356,292
)
 
(106,174
)
Distributions to common unitholders and general partner
(16,850
)
 
(16,849
)
Distributions to preferred unitholders
(5,019
)
 

Proceeds from (contributions to) discontinued operations
(401
)
 
40,226

Debt issue costs and other
(40,187
)
 
(14,072
)
Net cash used in financing activities of continuing operations
$
(3,961
)
 
$
(76,869
)
Net cash provided by (used in) financing activities of discontinued operations
401

 
(125,564
)
Net cash used in financing activities
$
(3,560
)
 
$
(202,433
)
 
 
 
 
Net increase in cash and cash equivalents
$
80,873

 
$
40,618

 
 
 
 
Cash and cash equivalents of continuing operations at beginning of period
$
40,371

 
$
41,204

Cash and cash equivalents of discontinued operations at beginning of period

 
10,569

Cash and cash equivalents at beginning of period
$
40,371

 
$
51,773

 
 
 
 
Cash and cash equivalents at end of period
$
121,244

 
$
92,391

Less: cash and cash equivalents of discontinued operations at end of period

 

Cash and cash equivalents of continuing operations at end of period
$
121,244

 
$
92,391

 
 
 
 
Supplemental cash flow information:
 
 
 
Cash paid during the period for interest from continuing operations
$
61,857

 
$
54,749

Cash paid during the period for interest from discontinued operations
$

 
$
1,906

Non-cash financing activities:
 
 
 
Issuance of 2022 Senior Notes in exchange for 2018 Senior Notes
$
240,638

 
$


The accompanying notes are an integral part of these consolidated financial statements.

5


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



1.    Basis of Presentation

Nature of Business

Natural Resource Partners L.P. (the "Partnership") engages principally in the business of owning, operating, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal, trona and soda ash, construction aggregates and other natural resources. As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context.

Principles of Consolidation and Reporting

The accompanying unaudited Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management's opinion, all necessary adjustments to fairly present the Partnership's results of operations, financial position and cash flows for the periods presented have been made and all such adjustments were of a normal and recurring nature. Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation.

Recently Adopted Accounting Standards

The FASB issued authoritative guidance that eliminates the requirement to consider "down-round" features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock. The guidance requires entities that present earnings per share ("EPS") under ASC 260 to recognize the effect of a down-round feature in a freestanding equity-classified financial instrument only when it is triggered. The effect of triggering such a feature will be recognized as a dividend and a reduction to income available to common shareholders in basic EPS. Entities will also have to make new disclosures for financial instruments with down-round features and other terms that change conversion or exercise prices. The guidance is effective for annual and interim periods ending after December 31, 2018 and early adoption is permitted. The Partnership early adopted this guidance in the third quarter of 2017. Refer to Note 2. Change in Method of Accounting for NRP's Warrants for disclosure of the effects of adoption on its consolidated financial statements.

Recently Issued Accounting Standards

The FASB issued authoritative guidance on revenue recognition. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance will also require enhanced disclosures, provide more comprehensive guidance for transactions such as service revenue and contract modifications, and enhance guidance for multiple-element arrangements. The Partnership is required to adopt this guidance in the first quarter of 2018 using one of two retrospective application methods. The Partnership has performed revenue scoping procedures to identify the contracts for all of its revenue streams and utilized the practical expedient of grouping contracts or performance obligations with similar characteristics as prescribed by the new standard. The Partnership is in the process of completing its revenue contract analysis for its various segments. The Partnership anticipates utilizing the modified retrospective adoption method.

The FASB issued authoritative lease guidance that requires lessees to recognize assets and liabilities on the balance sheet for the present value of the rights and obligations created by all leases with terms of more than 12 months. The guidance also requires disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual and interim periods ending after December 31, 2018. The Partnership is currently evaluating the impact of the provisions of this guidance on its consolidated financial statements.

The FASB issued authoritative guidance that replaces the incurred loss impairment methodology in the current standard with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for annual and interim periods ending after December 31, 2019. The Partnership does not expect the impact of the provisions of this guidance to have a material effect on its consolidated financial statements.


6


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



The FASB issued authoritative guidance to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows in order to reduce current and potential future diversity in practice. The guidance is effective for annual and interim periods ending after December 31, 2017. The Partnership adopted this guidance in the second quarter of 2017 and its adoption did not have a material effect on its consolidated financial statements.

2.    Change in Method of Accounting for NRP's Warrants

On March 2, 2017, NRP issued 4.0 million warrants (the "Warrants") to purchase common units as described in further detail in Note 3. Convertible Preferred Units and Warrants. As of March 31, 2017 and June 30, 2017, the Warrants were accounted for on the Partnership's consolidated balance sheet as a liability because of a down-round anti-dilution price protection provision that would reduce the Warrant holders' strike price if the Partnership were to sell common units at a price less than the current strike price (subject to certain exceptions). Upon issuance, the Warrants were initially recognized at a fair value of $78.0 million. As a result of the liability classification, the Warrants were remeasured at March 31, 2017 and June 30, 2017, and the change in the estimated fair value of the Warrants resulted in the recognition of $16.6 million other income during the three months ended March 31, 2017 and $24.0 million and $40.5 million other income during the three and six months ended June 30, 2017, respectively. In addition, Warrant transaction costs of $5.7 million were expensed during the three months ended March 31, 2017.

As referenced in Note 1. Basis of Presentation, the Partnership adopted the FASB's new accounting standard for financial instruments with down-round features because the accounting more appropriately reflects the economics of the down-round feature and to remove unnecessary income statement volatility resulting from the period end remeasurement associated with changes in value of NRP's unit price. As a result of the adoption of this guidance, the Warrants are now accounted for on the Partnership's consolidated balance sheet as equity because they are indexed to NRP's common units and they meet all other equity classification requirements. As of September 30, 2017, the Warrants and the associated issuance costs have been reclassified and are presented within the Partners' Capital section of the Partnership's Consolidated Balance Sheet at their initial fair value, net of issuance costs. The Partnership will recognize the value of the effect of the down-round feature in the Warrants each time it is triggered. When triggered, the effect of the down-round feature will be treated as a deemed dividend and would reduce the income available to common unitholders for computing basic earnings per unit.

The Partnership applied the guidance retrospectively to the Warrants for each prior reporting period presented. As a result, first and second quarter 2017 financial statements have been adjusted to apply the new method retrospectively.


7


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



The following table (in thousands) shows the effect of the change in method of accounting for the Warrants on the Partnership's originally reported Consolidated Balance Sheet at March 31, 2017:
 
March 31, 2017
 
As Originally Reported
 
As Adjusted
 
Effect of Change
Total assets
$
1,509,250

 
$
1,509,250

 
$

 
 
 
 
 
 
Total current liabilities
$
305,049

 
$
305,049

 
$

Deferred revenue
46,008

 
46,008

 

Deferred revenue—affiliates
68,735

 
68,735

 

Long-term debt, net
707,424

 
707,424

 

Warrant liabilities
61,417

 

 
(61,417
)
Other non-current liabilities
3,102

 
3,102

 

Total liabilities
1,191,735

 
1,130,318

 
(61,417
)
 
 
 
 
 
 
Convertible Preferred Units
159,292

 
164,753

 
5,461

 
 
 
 
 
 
Partners' capital:
 
 
 
 
 
Common unitholders' interest
163,304

 
152,661

 
(10,643
)
General partner's interest
1,111

 
894

 
(217
)
Warrant holders interest

 
66,816

 
66,816

Accumulated other comprehensive loss
(2,798
)
 
(2,798
)
 

Total partners' capital
161,617

 
217,573

 
55,956

Non-controlling interest
(3,394
)
 
(3,394
)
 

Total capital
158,223

 
214,179

 
55,956

Total liabilities and capital
$
1,509,250

 
$
1,509,250

 
$


The following table (in thousands) shows the effect of the change in method of accounting for the Warrants on the Partnership's originally reported Consolidated Balance Sheet at June 30, 2017:
 
June 30, 2017
 
As Originally Reported
 
As Adjusted
 
Effect of Change
Total assets
$
1,429,052

 
$
1,429,052

 
$

 
 
 
 
 
 
Total current liabilities
$
217,411

 
$
217,411

 
$

Deferred revenue
110,885

 
110,885

 

Long-term debt, net
700,252

 
700,252

 

Warrant liabilities
37,457

 

 
(37,457
)
Other non-current liabilities
2,699

 
2,699

 

Total liabilities
1,068,704

 
1,031,247

 
(37,457
)
 
 
 
 
 
 
Convertible Preferred Units
160,377

 
165,838

 
5,461

 
 
 
 
 
 
Partners' capital:
 
 
 
 
 
Common unitholders' interest
204,230

 
170,106

 
(34,124
)
General partner's interest
1,946

 
1,250

 
(696
)
Warrant holders interest

 
66,816

 
66,816

Accumulated other comprehensive loss
(2,811
)
 
(2,811
)
 

Total partners' capital
203,365

 
235,361

 
31,996

Non-controlling interest
(3,394
)
 
(3,394
)
 

Total capital
199,971

 
231,967

 
31,996

Total liabilities and capital
$
1,429,052

 
$
1,429,052

 
$



8


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



The following table (in thousands, except per unit data) shows the effect of the change in method of accounting for the Warrants on the Partnership's originally reported Consolidated Statement of Comprehensive Income for the three months ended March 31, 2017:
 
Three Months Ended March 31, 2017
 
As Originally Reported
 
As Adjusted
 
Effect of Change
Other income (expense)
 
 
 
 
 
Interest expense
$
(23,141
)
 
$
(23,141
)
 
$

Debt modification expense
(7,807
)
 
(7,807
)
 

Warrant issuance expense
(5,709
)
 

 
5,709

Fair value adjustments for warrant liabilities
16,569

 

 
(16,569
)
Interest income
17

 
17

 

Other expense, net
$
(20,071
)
 
$
(30,931
)
 
$
(10,860
)
 
 
 
 
 
 
Net income from continuing operations
$
16,971

 
$
6,111

 
$
(10,860
)
Net income
16,764

 
5,904

 
(10,860
)
Net income attributable to common unitholders and general partner
14,264

 
3,404

 
(10,860
)
 
 
 
 
 
 
Income from continuing operations per common unit
 
 
 
 
 
Basic
$
1.17

 
$
0.30

 
$
(0.87
)
Diluted
0.03

 
0.30

 
0.27

 
 
 
 
 
 
Net income per common unit
 
 
 
 
 
Basic
$
1.15

 
$
0.28

 
$
(0.87
)
Diluted
0.02

 
0.28

 
0.26

 
 
 
 
 
 
Comprehensive income
$
15,632

 
$
4,772

 
$
(10,860
)

The following table (in thousands, except per unit data) shows the effect of the change in method of accounting for the Warrants on the Partnership's originally reported Consolidated Statement of Comprehensive Income for the three months ended June 30, 2017:
 
Three Months Ended June 30, 2017
 
As Originally Reported
 
As Adjusted
 
Effect of Change
Other income (expense)
 
 
 
 
 
Interest expense
$
(20,377
)
 
$
(20,377
)
 
$

Debt modification expense
(132
)
 
(132
)
 

Loss on extinguishment of debt
(4,107
)
 
(4,107
)
 

Fair value adjustments for warrant liabilities
23,960

 

 
(23,960
)
Interest income
69

 
69

 

Other expense, net
$
(587
)
 
$
(24,547
)
 
$
(23,960
)
 
 
 
 
 
 
Net income from continuing operations
$
49,817

 
$
25,857

 
$
(23,960
)
Net income
49,950

 
25,990

 
(23,960
)
Net income attributable to common unitholders and general partner
42,412

 
18,452

 
(23,960
)
 
 
 
 
 
 
Income from continuing operations per common unit
 
 
 
 
 
Basic
$
3.38

 
$
1.46

 
$
(1.92
)
Diluted
1.13

 
1.13

 

 
 
 
 
 
 
Net income per common unit
 
 
 
 
 
Basic
$
3.39

 
$
1.47

 
$
(1.92
)
Diluted
1.13

 
1.13

 

 
 
 
 
 
 
Comprehensive income
$
49,937

 
$
25,977

 
$
(23,960
)


9


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



The following table (in thousands, except per unit data) shows the effect of the change in method of accounting for the Warrants on the Partnership's originally reported Consolidated Statement of Comprehensive Income for the six months ended June 30, 2017:
 
Six Months Ended June 30, 2017
 
As Originally Reported
 
As Adjusted
 
Effect of Change
Other income (expense)
 
 
 
 
 
Interest expense
$
(43,518
)
 
$
(43,518
)
 
$

Debt modification expense
(7,939
)
 
(7,939
)
 

Loss on extinguishment of debt
(4,107
)
 
(4,107
)
 

Warrant issuance expense
(5,709
)
 

 
5,709

Fair value adjustments for warrant liabilities
40,529

 

 
(40,529
)
Interest income
86

 
86

 

Other expense, net
$
(20,658
)
 
$
(55,478
)
 
$
(34,820
)
 
 
 
 
 
 
Net income from continuing operations
$
66,788

 
$
31,968

 
$
(34,820
)
Net income
66,714

 
31,894

 
(34,820
)
Net income attributable to common unitholders and general partner
56,676

 
21,856

 
(34,820
)
 
 
 
 
 
 
Income from continuing operations per common unit
 
 
 
 
 
Basic
$
4.55

 
$
1.76

 
$
(2.79
)
Diluted
1.35

 
1.64

 
0.29

 
 
 
 
 
 
Net income per common unit
 
 
 
 
 
Basic
$
4.54

 
$
1.75

 
$
(2.79
)
Diluted
1.34

 
1.64

 
0.30

 
 
 
 
 
 
Comprehensive income
$
65,569

 
$
30,749

 
$
(34,820
)

3.    Convertible Preferred Units and Warrants

On March 2, 2017, NRP issued $250 million of Class A Convertible Preferred Units representing limited partner interests in NRP (the "Preferred Units") to certain entities controlled by funds affiliated with The Blackstone Group, L.P. (collectively referred to as "Blackstone") and certain affiliates of GoldenTree Asset Management LP (collectively referred to as "GoldenTree") (together the "Preferred Purchasers") pursuant to a Preferred Unit and Warrant Purchase Agreement. NRP issued 250,000 Preferred Units to the Preferred Purchasers at a price of $1,000 per Preferred Unit (the "Per Unit Purchase Price"), less a 2.5% structuring and origination fee. The Preferred Units entitle the Preferred Purchasers to receive cumulative distributions at a rate of 12% per year, up to one half of which NRP may pay in additional Preferred Units (such additional Preferred Units, the "PIK Units").

NRP also issued two tranches of warrants (the "Warrants") to purchase common units to the Preferred Purchasers (Warrants to purchase 1.75 million common units with a strike price of $22.81 and Warrants to purchase 2.25 million common units with a strike price of $34.00). The Warrants may be exercised by the holders thereof at any time before the eighth anniversary of the closing date. Upon exercise of the Warrants, NRP may, at its option, elect to settle the Warrants in common units or cash, each on a net basis.

The Preferred Units have a perpetual term, unless converted or redeemed as described below. The Preferred Units (including any PIK Units) are convertible into common units at a price of $1,000 per Preferred Unit plus the value of any accrued and unpaid distributions at the election of the holders (1) after the fifth anniversary and prior to the eighth anniversary of the issue date at a 7.5% discount to the volume weighted average trading price of our common units (the "VWAP") for the 30 trading days immediately prior to the notice of conversion if the 30-day VWAP immediately prior to such notice is greater than $51.00 (subject to a maximum of 33% of the Preferred Units per year) and (2) after the eighth anniversary of the issue date at a 10% discount to the VWAP for the 30 trading days immediately prior to the notice of conversion. Instead of issuing common units pursuant to clause (1) of the preceding sentence, NRP has the option to redeem the Preferred Units proposed to be converted for cash at a price equal to the $1,000 per Preferred Unit plus the value of any accrued and unpaid distributions. To the extent the holders of the Preferred Units have not elected to convert their Preferred Units by the twelfth anniversary of the issue date, NRP has the right to force conversion

10


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



of the Preferred Units at a price equal to the $1,000 per Preferred Unit plus the value of any accrued and unpaid distributions into common units at a 10% discount to the VWAP for the 30 trading days immediately prior to the notice of conversion.

In addition, NRP has the ability to redeem at any time (subject to compliance with its debt agreements) all or any portion of the Preferred Units (including PIK Units) for cash at the agreed upon per unit amount, which is calculated as the Per Unit Purchase Price multiplied by (i) prior to the third anniversary of the closing date, 1.50, (ii) on or after the third anniversary of the closing date and prior to the fourth anniversary of the closing date, 1.70 and (iii) on or after the fourth anniversary of the closing date, 1.85; less all Preferred Unit distributions made by NRP at the time of redemption; plus the value of all accrued and unpaid Preferred Unit distributions. The Preferred Units are redeemable at the option of the Preferred Unit Purchasers only upon a change in control.

The terms of the Preferred Units contain certain restrictions on NRP's ability to pay distributions on its common units. To the extent that either (i) NRP's consolidated Leverage Ratio, as defined in the Partnership's Fifth Amended and Restated Partnership Agreement dated March 2, 2017 (the "Restated Partnership Agreement"), is greater than 3.25x, or (ii) the ratio of NRP's Distributable Cash Flow (as defined in the Restated Partnership Agreement) to cash distributions made or proposed to be made is less than 1.2x (in each case, with respect to the most recently completed four-quarter period), NRP may not increase the quarterly distribution above $0.45 per quarter without the approval of the holders of a majority of the outstanding Preferred Units. In addition, if at any time after January 1, 2022, any PIK Units are outstanding, NRP may not make distributions on its common units until it has redeemed all PIK Units for cash.

The holders of the Preferred Units have the right to vote with holders of NRP’s common units on an as-converted basis and have other customary approval rights with respect to changes of the terms of the Preferred Units. In addition, Blackstone has certain approval rights over certain matters as identified in the Restated Partnership Agreement. GoldenTree also has more limited approval rights that will expand once Blackstone's ownership goes below the Minimum Preferred Unit Threshold (as defined below). These approval rights are not transferrable without NRP's consent. In addition, the approval rights held by Blackstone and GoldenTree will terminate at such time that Blackstone (together with their affiliates) or GoldenTree (together with their affiliates), as applicable, no longer own at least 20% of the total number of Preferred Units issued on the closing date, together with all PIK Units that have been issued but not redeemed (the "Minimum Preferred Unit Threshold").

At the closing, pursuant to a Board Representation and Observation Rights Agreement, the Preferred Purchasers received certain board appointment and observation rights, and Blackstone appointed one director and one observer to the Board of Directors of GP Natural Resource Partners LLC.

NRP also entered into a registration rights agreement (the "Preferred Unit and Warrant Registration Rights Agreement") with the Preferred Purchasers, pursuant to which NRP is required to file (i) a shelf registration statement to register the common units issuable upon exercise of the Warrants and to cause such registration statement to become effective not later than 90 days following the closing date and (ii) a shelf registration statement to register the common units issuable upon conversion of the Preferred Units and to cause such registration statement to become effective not later than the earlier of the fifth anniversary of the closing date or 90 days following the first issuance of any common units upon conversion of Preferred Units (the "Registration Deadlines"). In addition, the Preferred Unit and Warrant Registration Rights Agreement gives the Preferred Purchasers piggyback registration and demand underwritten offering rights under certain circumstances. The shelf registration statement to register the common units issuable upon exercise of the Warrants became effective on April 20, 2017. If the shelf registration statement to register the common units issuable upon conversion of the Preferred Units is not effective by the applicable Registration Deadline, NRP will be required to pay the Preferred Purchasers liquidated damages in the amounts and upon the term set forth in the Preferred Unit and Warrant Registration Rights Agreement.

Accounting for the Preferred Units and Warrants

Classification

The Preferred Units are accounted for on NRP's consolidated balance sheet as temporary equity due to certain contingent redemption rights that may be exercised at the election of Preferred Purchasers. The Warrants are accounted for on NRP's consolidated balance sheet as equity. Prior to July 1, 2017, the Warrants were previously classified as a liability because of a "down-round" anti-dilution price protection provision that would reduce the Warrant holders' exercise price if NRP were to sell common units at a price less than the current strike price (subject to certain exceptions). Refer to Note 2. Change in Method of Accounting for NRP's Warrants for further discussion of the reclassification of the Warrants in the Consolidated Balance sheet.


11


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



Initial Measurement

The net transaction price as shown below was allocated to the Preferred Units and Warrants based on their relative fair values at inception date. NRP allocated the transaction issuance costs to the Preferred Units and Warrants primarily on a pro-rata basis based on their relative inception date allocated values. The Preferred Units and Warrants were initially recognized as follows (in thousands):
 
 
March 2, 2017
Transaction price, gross
 
$
250,000

Structuring, origination and other fees to Preferred Purchasers
 
(7,900
)
Transaction costs to other third parties
 
(10,697
)
Transaction price, net
 
$
231,403

Allocation of net transaction price
 
 
Preferred Units, net
 
$
164,587

Warrant holders interest, net
 
66,816

Transaction price, net
 
$
231,403


Subsequent Measurement

Subsequent adjustment of the Preferred Units will not occur until NRP has determined that the conversion or redemption of all or a portion of the Preferred Units is probable of occurring. Once conversion or redemption becomes probable of occurring, the carrying amount of the Preferred Units will be accreted to their redemption value over the period from the date the feature is probable of occurring to the date the Preferred Units can first be converted or redeemed.

Subsequent adjustment of the Warrants will not occur until the Warrants are exercised, at which time, NRP may, at its option, elect to settle the Warrants in common units or cash, each on a net basis. The net basis will be equal to the difference between the Partnership's common unit price and the strike price of the Warrant. Once Warrant exercise occurs, the difference between the carrying amount of the Warrants and the net settlement amount will be allocated on a pro-rata basis to the common unitholders and general partner.

Certain embedded features within the Preferred Unit and Warrant purchase agreement are accounted for at fair value and are remeasured each quarter. See Note 13. Fair Value Measurements for further information regarding valuation of these embedded derivatives.

4.    Common and Preferred Unit Distributions

The Partnership makes cash distributions to common unit holders on a quarterly basis, subject to approval by the Board of Directors. The Partnership also makes distributions to the preferred unitholders at a rate of 12% per year, up to one half of which NRP may pay in additional Preferred Units (such additional Preferred Units, the "PIK Units"), subject to approval by the Board of Directors. NRP recognizes both Common and Preferred Unit distributions on the date the distribution is declared.


12


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



Common Unit Distributions

The following table shows the cash distributions paid to common unitholders and the general partner by the Partnership during the nine months ended September 30, 2017 and 2016 (in thousands except unit unit data):
 
 
 
 
 
 
Total Distributions
Date Paid
 
Period Covered by Distribution
 
Distribution per Common Unit
 
Common Units
 
GP Interest
 
Total
2017
 
 
 
 
 
 
 
 
 
 
February 14, 2017
 
October 1 - December 31, 2016
 
$
0.45

 
$
5,503

 
$
112

 
$
5,615

May 12, 2017
 
January 1 - March 31, 2017
 
$
0.45

 
$
5,506

 
$
113

 
$
5,619

August 14, 2017
 
April 1 - June 30, 2017
 
$
0.45

 
$
5,504

 
$
112

 
$
5,616

 
 
 
 
 
 
 
 
 
 
 
2016
 
 
 
 
 
 
 
 
 
 
February 12, 2016
 
October 1 - December 31, 2015
 
$
0.45

 
$
5,503

 
$
113

 
$
5,616

May 13, 2016
 
January 1 - March 31, 2016
 
$
0.45

 
$
5,503

 
$
113

 
$
5,616

August 12, 2016
 
April 1 - June 30, 2016
 
$
0.45

 
$
5,505

 
$
112

 
$
5,617


Preferred Unit Distributions

The following table shows the cash and paid-in-kind distributions declared and paid to Preferred Unitholders by the Partnership during the nine months ended September 30, 2017 (in thousands except per unit data):
Date Paid
 
Period Covered by Distribution
 
Distribution per Preferred Unit
 
Paid-in-Kind
Preferred Units
 
Cash Distributions
 
Total Distribution Declared
May 30, 2017
 
March 2 - March 31, 2017
 
$
5.00

 
1,250

 
$
1,250

 
$
2,500

August 29, 2017
 
April 1 - June 30, 2017
 
$
15.00

 
3,769

 
3,769

 
7,538

 
 
 
 
 
 
5,019

 
$
5,019

 
$
10,038


The following table shows the financial position of the Preferred Units from initial measurement at March 2, 2017 to September 30, 2017 (in thousands):
Balance at December 31, 2016
 
$

Issuance of Preferred Units, net
 
164,587

Distribution paid-in-kind
 
5,019

Balance at September 30, 2017
 
$
169,606


Income available to common unitholders and the general partner is reduced by Preferred Unit distributions that accumulated during the period. During the three and nine months ended September 30, 2017, NRP reduced net income attributable to common unitholders and the general partner by $7.7 million and $17.7 million, respectively, as a result of accumulated Preferred Unit distributions.

5.    Net Income Per Common Unit

Basic net income per common unit is computed by dividing net income, after considering income attributable to preferred unitholders and the general partner’s interest, by the weighted average number of common units outstanding. Diluted net income per common unit includes the effect of NRP's Warrants and Preferred Units (see Note 3. Convertible Preferred Units and Warrants), if the inclusion of these items is dilutive.


13


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



The dilutive effect of the Warrants is calculated using the treasury stock method, which assumes that the proceeds from the exercise of these instruments are used to purchase common units at the average market price for the period. The calculation of the dilutive effect of the Warrants for the three and nine months ended September 30, 2017, did not include the net settlement of Warrants to purchase 2.25 million common units with a strike price of $34.00 because the impact would have been anti-dilutive.

The dilutive effect of the Preferred Units is calculated using the if-converted method. Under the if-converted method, the Preferred Units are assumed to be converted at the beginning of the period, and the resulting common units are included in the denominator of the diluted net income per unit calculation for the period being presented. Interest recognized during the period (including the effect of accretion of discounts and amortization of issuance costs, if any) and distributions declared in the period and undeclared distributions on the Preferred Units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation.


14


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



The following table reconciles net income and weighted average units used in computing basic and diluted net income per common unit is as follows (in thousands, except per unit data):
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
Allocation of net income:
 
 
 
 
 
 
 
Net income from continuing operations
$
26,499

 
$
16,419

 
$
58,467

 
$
91,403

Less: income attributable to preferred unitholders
7,650

 

 
17,688

 

Less: net income from continuing operations and income attributable to preferred unitholders allocated to the general partner
379

 
264

 
816

 
1,632

Net income from continuing operations attributable to common unitholders
$
18,470


$
16,155


$
39,963


$
89,771

 
 
 
 
 
 
 
 
Net income (loss) from discontinued operations
$
(433
)
 
$
7,112

 
$
(507
)
 
$
2,001

Less: net income (loss) from discontinued operations attributable to the general partner
(9
)
 
142

 
(10
)
 
40

Net income (loss) from discontinued operations attributable to common unitholders
$
(424
)

$
6,970


$
(497
)
 
$
1,961

 
 
 
 
 
 
 
 
Net income
$
26,066


$
23,531


$
57,960

 
$
93,404

Less: income attributable to preferred unitholders
7,650

 

 
17,688

 

Less: net income and income attributable to preferred unitholders allocated to the general partner
370


406


806

 
1,672

Net income attributable to common unitholders
$
18,046


$
23,125


$
39,466


$
91,732

 
 
 
 
 
 
 
 
Basic Income (Loss) per Unit:
 
 
 
 
 
 
 
Weighted average common units—basic
12,232

 
12,232

 
12,232

 
12,232

Basic net income from continuing operations per common unit
$
1.51


$
1.32


$
3.27

 
$
7.34

Basic net income (loss) from discontinued operations per common unit
(0.03
)

0.57


(0.04
)
 
0.16

Basic net income per common unit
$
1.48


$
1.89


$
3.23

 
$
7.50

 
 
 
 
 
 
 
 
Diluted Income (Loss) per Unit:
 
 
 
 
 
 
 
Weighted average common units—basic
12,232

 
12,232

 
12,232

 
12,232

Plus: dilutive effect of Warrants
225

 

 
330

 

Plus: dilutive effect of Preferred Units
11,523

 

 
8,909

 

Weighted average common units—diluted
23,980


12,232


21,471

 
12,232

 
 
 
 
 
 
 
 
Net income from continuing operations
$
26,499


$
16,419


$
58,467

 
$
91,403

Less: net income from continuing operations allocated to the general partner
530

 
264

 
1,169

 
1,632

Diluted net income from continuing operations attributable to common unitholders
$
25,969


$
16,155


$
57,298

 
$
89,771

 
 
 
 
 
 
 
 
Diluted net income (loss) from discontinued operations attributable to common unitholders
$
(424
)

$
6,970


$
(497
)
 
$
1,961

 
 
 
 
 
 
 
 
Net income
$
26,066


$
23,531


$
57,960

 
$
93,404

Less: net income allocated to the general partner
521

 
406

 
1,159

 
1,672

Diluted net income attributable to common unitholders
$
25,545


$
23,125


$
56,801

 
$
91,732

 
 
 
 
 
 
 
 
Diluted net income from continuing operations per common unit
$
1.08


$
1.32


$
2.67

 
$
7.34

Diluted net income (loss) from discontinued operations per common unit
(0.02
)

0.57


(0.02
)
 
0.16

Diluted net income per common unit
$
1.07


$
1.89


$
2.65

 
$
7.50


15


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



6.    Segment Information

The Partnership's operating segments are strategic business units that offer products and services to different customer segments in different geographies within the U.S. and that are managed accordingly. NRP has the following three operating segments:

Coal Royalty and Other—consists primarily of coal royalty and coal related transportation and processing assets. Other assets include aggregate royalty, industrial mineral royalty, oil and gas royalty and timber. The Partnership's coal reserves are primarily located in Appalachia, the Illinois Basin and the Western United States. The Partnership's aggregates and industrial minerals are located in a number of states across the United States. The Partnership's oil and gas royalty assets are located in Louisiana.

Soda Ash—consists of the Partnership's 49% non-controlling equity interest in a trona ore mining operation and soda ash refinery in the Green River Basin, Wyoming. Ciner Resources LP, the Partnership's operating partner, mines the trona, processes it into soda ash, and distributes the soda ash both domestically and internationally into the glass and chemicals industries. The Partnership receives regular quarterly distributions from this business.

Construction Aggregates—consists of the Partnership's construction materials business that operates hard rock quarries, an underground limestone mine, sand and gravel plants, asphalt plants and marine terminals. The Partnership's construction aggregates business operates in Pennsylvania, West Virginia, Tennessee, Kentucky and Louisiana.

Direct segment costs and certain costs incurred at a corporate level that are identifiable and that benefit the Partnership's segments are allocated to the operating segments. These allocated costs include costs of: taxes, legal, information technology and shared facilities services and are included in Operating and maintenance expenses and Operating and maintenance expenses—affiliates, net on the Consolidated Statements of Comprehensive Income. Intersegment sales are at prices that approximate market.

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

16


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



The following table summarizes certain financial information for each of the Partnership's operating segments (in thousands):
 
 
Operating Segments
 
 
 
 
For the Three Months Ended
 
Coal Royalty and Other
 
Soda Ash
 
Construction Aggregates
 
Corporate and Financing
 
Total
September 30, 2017
 
 
 
 
 
 
 
 
 
 
Revenues (including affiliates)
 
$
49,413

 
$
8,993

 
$
34,710

 
$

 
$
93,116

Intersegment revenues (expenses)
 
78

 

 
(78
)
 

 

Gain on asset sales
 
154

 

 
17

 

 
171

Operating and maintenance expenses
(including affiliates)
 
6,348

 

 
28,247

 

 
34,595

General and administrative (including affiliates)
 

 

 

 
3,855

 
3,855

Depreciation, depletion and amortization
(including affiliates)
 
5,305

 

 
3,001

 

 
8,306

Asset impairment
 

 

 

 

 

Other expense, net
 

 

 
59

 
19,973

 
20,032

Net income (loss) from continuing operations
 
37,992

 
8,993

 
3,342

 
(23,828
)
 
26,499

Net income from discontinued operations
 

 

 

 

 
(433
)
 
 
 
 
 
 
 
 
 
 
 
September 30, 2016
 
 
 
 
 
 
 
 
 
 
Revenues (including affiliates)
 
$
48,938

 
$
10,753

 
$
31,757

 
$

 
$
91,448

Intersegment revenues (expenses)
 
45

 

 
(45
)
 

 

Gain on asset sales
 
6,425

 

 
1

 

 
6,426

Operating and maintenance expenses
(including affiliates)
 
8,391

 

 
26,913

 

 
35,304

General and administrative (including affiliates)
 

 

 

 
5,135

 
5,135

Depreciation, depletion and amortization
(including affiliates)
 
9,070

 

 
3,761

 

 
12,831

Asset impairment
 
5,697

 

 

 

 
5,697

Other expense, net
 

 

 

 
22,488

 
22,488

Net income (loss) from continuing operations
 
32,250


10,753


1,039


(27,623
)
 
16,419

Net loss from discontinued operations
 

 

 

 

 
7,112


17


NATURAL RESOURCE PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(Unaudited)



 
 
Operating Segments
 
 
 
 
For the Nine Months Ended
 
Coal Royalty and Other
 
Soda Ash
 
Construction Aggregates
 
Corporate and Financing
 
Total
September 30, 2017
 
 
 
 
 
 
 
 
 
 
Revenues (including affiliates)
 
$
150,177

 
$
27,676

 
$
95,486

 
$

 
$
273,339

Intersegment revenues (expenses)
 
208

 

 
(208
)
 

 

Gain on asset sales
 
3,367

 

 
209

 

 
3,576

Operating and maintenance expenses
(including affiliates)
 
19,151

 

 
80,866

 

 
100,017

General and administrative (including affiliates)
 

 

 

 
13,940

 
13,940

Depreciation, depletion and amortization
(including affiliates)
 
17,653

 

 
9,550

 

 
27,203

Asset impairment
 
1,778

 

 

 

 
1,778

Other expense, net
 

 

 
632

 
74,878

 
75,510

Net income (loss) from continuing operations
 
115,170

 
27,676

 
4,439

 
(88,818
)
 
58,467

Net loss from discontinued operations
 

 

 

 

 
(507
)
 
 
 
 
 
 
 
 
 
 
 
September 30, 2016
 
 
 
 
 
 
 
 
 
 
Revenues (including affiliates)
 
$
165,844

 
$
30,742

 
$
88,081

 
$

 
$
284,667

Intersegment revenues (expenses)
 
97

 

 
(97
)
 

 

Gain on asset sales
 
27,270

 

 
10

 

 
27,280

Operating and maintenance expenses
(including affiliates)
 
24,232

 

 
73,540

 

 
97,772

General and administrative (including affiliates)
 

 

 

 
13,346

 
13,346

Depreciation, depletion and amortization
(including affiliates)
 
23,496

 

 
11,013

 

 
34,509

Asset impairment
 
7,681

 

 

 

 
7,681

Other expense, net
 

 

 

 
67,236

 
67,236

Net income (loss) from continuing operations
 
137,802


30,742


3,441


(80,582
)
 
91,403

Net loss from discontinued operations
 

 

 

 

 
2,001