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, 2019 or

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		Commission file number: 001-31465

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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units representing limited partner interests	NRP	New York Stock Exchange

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes  ¨    No  ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

NATURAL RESOURCE PARTNERS, L.P.

TABLE OF CONTENTS

		Page
Part I. Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Statements of Partners’ Capital	3
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
Part II. Other Information
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
	Signatures	47

i

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
(In thousands, except unit data)	2019			2018
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	99,636		$	101,839
Restricted cash	12,527			104,191
Accounts receivable, net	27,447			32,058
Prepaid expenses and other	3,111			3,462
Current assets of discontinued operations	988			993
Total current assets	$	143,709		$	242,543
Land	24,008			24,008
Plant and equipment, net	762			984
Mineral rights, net	733,154			743,112
Intangible assets, net	40,461			42,513
Equity in unconsolidated investment	258,063			247,051
Long-term contract receivable	37,473			38,945
Other assets	6,274			2,491
Total assets	$	1,243,904		$	1,341,647
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable	$	1,591		$	2,414
Accrued liabilities	7,290			12,347
Accrued interest	14,364			14,345
Current portion of deferred revenue	5,047			3,509
Current portion of long-term debt, net	45,789			115,184
Current liabilities of discontinued operations	174			947
Total current liabilities	$	74,255		$	148,746
Deferred revenue	43,587			49,044
Long-term debt, net	490,378			557,574
Other non-current liabilities	4,843			1,150
Total liabilities	$	613,063		$	756,514
Commitments and contingencies (see Note 14)
Class A Convertible Preferred Units (250,000 units issued and outstanding at $1,000 par value per unit; liquidation preference of $1,500 per unit)	$	164,587		$	164,587
Partners’ capital
Common unitholders’ interest (12,261,199 and 12,249,469 units issued and outstanding at September 30, 2019 and December 31, 2018, respectively)	$	400,266		$	355,113
General partner’s interest	5,909			5,014
Warrant holders’ interest	66,816			66,816
Accumulated other comprehensive loss	(3,802		)	(3,462		)
Total partners’ capital	$	469,189		$	423,481
Non-controlling interest	(2,935		)	(2,935		)
Total capital	$	466,254		$	420,546
Total liabilities and capital	$	1,243,904		$	1,341,647

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

1

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per unit data)	2019			2018			2019			2018
Revenues and other income
Coal royalty and other	$	39,919		$	42,518		$	154,037		$	134,912
Transportation and processing services	3,865			6,853			14,740			17,238
Equity in earnings of Ciner Wyoming	13,818			8,836			36,833			34,986
Gain on asset sales and disposals	6,107			—			6,609			819
Total revenues and other income	$	63,709		$	58,207		$	212,219		$	187,955
Operating expenses
Operating and maintenance expenses	$	5,994		$	6,790		$	26,813		$	21,122
Depreciation, depletion and amortization	3,384			4,888			11,746			15,364
General and administrative expenses	4,253			3,183			12,799			10,782
Asset impairments	484			—			484			242
Total operating expenses	$	14,115		$	14,861		$	51,842		$	47,510
Income from operations	$	49,594		$	43,346		$	160,377		$	140,445
Other expenses, net
Interest expense, net	$	(10,431	)	$	(17,493	)	$	(37,061	)	$	(53,177	)
Loss on extinguishment of debt	—			—			(29,282		)	—
Total other expenses, net	$	(10,431	)	$	(17,493	)	$	(66,343	)	$	(53,177	)
Net income from continuing operations	$	39,163		$	25,853		$	94,034		$	87,268
Income from discontinued operations	7			2,688			206			3,721
Net income	$	39,170		$	28,541		$	94,240		$	90,989
Net loss (income) attributable to non-controlling interest	—			359			—			(510		)
Net income attributable to NRP	$	39,170		$	28,900		$	94,240		$	90,479
Less: income attributable to preferred unitholders	(7,500		)	(7,500		)	(22,500		)	(22,500		)
Net income attributable to common unitholders and general partner	$	31,670		$	21,400		$	71,740		$	67,979
Net income attributable to common unitholders	$	31,036		$	20,972		$	70,305		$	66,619
Net income attributable to the general partner	634			428			1,435			1,360
Income from continuing operations per common unit (see Note 5)
Basic	$	2.53		$	1.50		$	5.72		$	5.14
Diluted	1.66			1.18			3.91			3.89
Net income per common unit (see Note 5)
Basic	$	2.53		$	1.71		$	5.73		$	5.44
Diluted	1.66			1.30			3.92			4.06
Net income	$	39,170		$	28,541		$	94,240		$	90,989
Comprehensive income (loss) from unconsolidated investment and other	(520		)	791			(340		)	(768		)
Comprehensive income	$	38,650		$	29,332		$	93,900		$	90,221
Comprehensive loss (income) attributable to non-controlling interest	—			359			—			(510		)
Comprehensive income attributable to NRP	$	38,650		$	29,691		$	93,900		$	89,711

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

2

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)

	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, 2018	12,249	$	355,113		$	5,014		$	66,816	$	(3,462	)	$	423,481		$	(2,935	)	$	420,546
Net income (1)	—	35,005			714			—		—			35,719			—			35,719
Distributions to common unitholders and general partner	—	(5,513		)	(112		)	—		—			(5,625		)	—			(5,625		)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)
Issuance of unit-based awards	12	486			—			—		—			486			—			486
Unit-based awards amortization and vesting	—	399			—			—		—			399			—			399
Comprehensive income from unconsolidated investment and other	—	—			10			—		1,005			1,015			—			1,015
Balance at March 31, 2019	12,261	$	378,140		$	5,476		$	66,816	$	(2,457	)	$	447,975		$	(2,935	)	$	445,040
Net income (1)	—	18,964			387			—		—			19,351			—			19,351
Distributions to common unitholders and general partner	—	(15,939		)	(326		)	—		—			(16,265		)	—			(16,265		)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)
Unit-based awards amortization and vesting	—	460			—			—		—			460			—			460
Comprehensive loss from unconsolidated investment and other	—	—			—			—		(825		)	(825		)	—			(825		)
Balance at June 30, 2019	12,261	$	374,275		$	5,387		$	66,816	$	(3,282	)	$	443,196		$	(2,935	)	$	440,261
Net income (1)	—	38,386			784			—		—			39,170			—			39,170
Distributions to common unitholders and general partner	—	(5,518		)	(112		)	—		—			(5,630		)	—			(5,630		)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)
Unit-based awards amortization and vesting	—	473			—			—		—			473			—			473
Comprehensive loss from unconsolidated investment and other	—	—			—			—		(520		)	(520		)	—			(520		)
Balance at September 30, 2019	12,261	$	400,266		$	5,909		$	66,816	$	(3,802	)	$	469,189		$	(2,935	)	$	466,254

(1) Net income includes $7.5 million 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.

3

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(Unaudited)

	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, 2017	12,232	$	199,851		$	1,857		$	66,816	$	(3,313	)	$	265,211		$	(3,394	)	$	261,817
Cumulative effect of adoption of accounting standard	—	69,057			1,409			—		—			70,466			—			70,466
Net income (1)	—	23,851			487			—		—			24,338			—			24,338
Distributions to common unitholders and general partner	—	(5,505		)	(112		)	—		—			(5,617		)	—			(5,617		)
Distributions to preferred unitholders	—	(7,610		)	(155		)	—		—			(7,765		)	—			(7,765		)
Issuance of unit-based awards	14	410			—			—		—			410			—			410
Unit-based awards amortization and vesting	—	197			—			—		—			197			—			197
Comprehensive income (loss) from unconsolidated investment and other	—	—			8			—		(1,125		)	(1,117		)	—			(1,117		)
Balance at March 31, 2018	12,246	$	280,251		$	3,494		$	66,816	$	(4,438	)	$	346,123		$	(3,394	)	$	342,729
Net income (1)	—	36,496			745			—		—			37,241			869			38,110
Distributions to common unitholders and general partner	—	(5,510		)	(113		)	—		—			(5,623		)	—			(5,623		)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)
Unit-based awards amortization and vesting	—	136			—			—		—			136			—			136
Comprehensive income (loss) from unconsolidated investment and other	—	50			1			—		(434		)	(383		)	(51		)	(434		)
Balance at June 30, 2018	12,246	$	304,073		$	3,977		$	66,816	$	(4,872	)	$	369,994		$	(2,576	)	$	367,418
Net income (loss) (1)	—	28,322			578			—		—			28,900			(359		)	28,541
Distributions to common unitholders and general partner	—	(5,511		)	(112		)	—		—			(5,623		)	—			(5,623		)
Distributions to preferred unitholders	—	(7,350		)	(150		)	—		—			(7,500		)	—			(7,500		)
Unit-based awards amortization and vesting	—	139			—			—		—			139			—			139
Comprehensive income from unconsolidated investment and other	—	—			—			—		791			791			—			791
Balance at September 30, 2018	12,246	319,673			4,293			66,816		(4,081		)	386,701			(2,935		)	383,766

(1) Net income includes $7.5 million 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.

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

4

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
(In thousands)	2019			2018
Cash flows from operating activities
Net income	$	94,240		$	90,989
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Depreciation, depletion and amortization	11,746			15,364
Distributions from unconsolidated investment	25,480			34,653
Equity earnings from unconsolidated investment	(36,833		)	(34,986		)
Gain on asset sales and disposals	(6,609		)	(819		)
Loss on extinguishment of debt	29,282			—
Income from discontinued operations	(206		)	(3,721		)
Asset impairments	484			242
Unit-based compensation expense	1,842			1,144
Amortization of debt issuance costs and other	3,223			4,021
Change in operating assets and liabilities:
Accounts receivable	4,731			(6,283		)
Accounts payable	(822		)	90
Accrued liabilities	(5,083		)	(3,193		)
Accrued interest	19			(9,944		)
Deferred revenue	(3,920		)	9,200
Other items, net	351			1,036
Net cash provided by operating activities of continuing operations	$	117,925		$	97,793
Net cash provided by (used in) operating activities of discontinued operations	(4		)	9,755
Net cash provided by operating activities	$	117,921		$	107,548
Cash flows from investing activities
Distributions from unconsolidated investment in excess of cumulative earnings	$	—		$	2,097
Proceeds from asset sales and disposals	6,611			826
Return of long-term contract receivable	1,351			2,606
Net cash provided by investing activities of continuing operations	$	7,962		$	5,529
Net cash used in investing activities of discontinued operations	(556		)	(9,343		)
Net cash provided by (used in) investing activities	$	7,406		$	(3,814	)
Cash flows from financing activities
Debt borrowings	$	300,000		$	35,000
Debt repayments	(442,747		)	(55,720		)
Redemption of preferred units paid-in-kind	—			(8,844		)
Distributions to common unitholders and general partner	(27,520		)	(16,863		)
Distributions to preferred unitholders	(22,500		)	(22,765		)
Contributions to discontinued operations	(560		)	(2,275		)
Debt issuance costs and other	(26,427		)	(228		)
Net cash used in financing activities of continuing operations	$	(219,754	)	$	(71,695	)
Net cash provided by financing activities of discontinued operations	560			1,521
Net cash used in financing activities	$	(219,194	)	$	(70,174	)

5

NATURAL RESOURCE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
(In thousands)	2019			2018
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(93,867	)	$	33,560
Cash, cash equivalents and restricted cash of continuing operations at beginning of period	$	206,030		$	26,980
Cash and cash equivalents of discontinued operations at beginning of period	—			2,847
Cash, cash equivalents and restricted cash at beginning of period	$	206,030		$	29,827
Cash, cash equivalents and restricted cash at end of period	$	112,163		$	63,387
Less: cash and cash equivalents of discontinued operations at end of period	—			(4,780		)
Cash, cash equivalents and restricted cash of continuing operations at end of period	$	112,163		$	58,607
Supplemental cash flow information:
Cash paid during the period for interest of continuing operations	$	36,270		$	58,153

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

6

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, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and owns a non-controlling 49% interest in Ciner Wyoming LLC ("Ciner Wyoming"), a trona ore mining and soda ash production business. The Partnership is organized into two operating segments further described in Note 6. Segment Information. 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. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2018 and notes thereto included in the Partnership's Annual Report on Form 10-K, which was filed with the SEC on March 7, 2019. 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 on the Consolidated Balance Sheets, Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows to conform with current period presentation. These reclassifications had no impact on previously reported total assets, total liabilities, partners' capital, net income or cash flows from operating, investing or financing activities.

Recasting of Certain Prior Period Information

As described in Note 3. Discontinued Operations, the Partnership reclassified prior period information for the assets and liabilities, operating results and cash flows of its construction aggregates business as discontinued operations in its consolidated financial statements for all periods presented.

Restricted Cash

Restricted cash at September 30, 2019 and December 31, 2018 represents the remaining net proceeds from the sale of the Partnership's construction aggregates business and other asset sales and disposals that is required to be used to repay debt, make acquisitions or make capital expenditures per the terms of the Partnership's and Opco's debt agreements. In the first nine months of 2019, the Partnership used $97.1 million of restricted cash to repay principal amounts on Opco's private placement senior notes (the "Opco Senior Notes") and it intends to use the remaining $12.5 million of restricted cash to repay a portion of the remaining principal payments on the Opco Senior Notes in 2019.

Recently Adopted Accounting Standards

Leases

On January 1, 2019, NRP adopted Accounting Standards Codification (ASC) 842, Leases, and all the related amendments (the “new lease standard” and "ASC 842") and recognized assets and liabilities on its Consolidated Balance Sheet for the present value of the rights and obligations created by all leases with terms of more than 12 months. This standard does not apply to leases that explore for or use minerals, oil, natural gas and similar non-regenerative resources, including the intangible right to explore for those natural resources and rights to use the land in which those natural resources are contained. The guidance also required disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows arising from leases. The guidance was adopted by NRP on January 1, 2019 using a modified retrospective approach.

The Partnership is a lessee in one lease that is accounted for as an operating lease under the new lease standard, and the adoption of the new lease standard did not have a material impact to the Partnership's consolidated financial statements. For lease

7

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

agreements entered into or reassessed after the adoption of ASC 842, the Partnership elected to not combine lease and non-lease components. See Note 17. Leases for more information.

Recently Issued Accounting Standards

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326). The new standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new standard replaces today's "incurred loss" model with an "expected credit loss" model that requires entities to estimate an expected lifetime credit loss on financial assets, including trade accounts receivable. The guidance is effective for annual and interim periods beginning after December 15, 2019 and is to be adopted using a modified retrospective approach. The Partnership is continuing to evaluate the provisions of this guidance on its consolidated financial statements, but based on its analysis to date, the Partnership does not expect this standard to have a material effect on its consolidated financial statements.

2.    Revenues from Contracts with Customers

The following table represents the Partnership's Coal Royalty and Other segment revenues by major source:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Coal royalty revenues	$	24,727	$	30,709	$	87,561	$	96,473
Production lease minimum revenues	2,752		1,769		21,331		6,310
Minimum lease straight-line revenues	3,982		567		11,152		1,739
Property tax revenues	1,606		1,263		4,416		3,968
Wheelage revenues	1,675		1,572		5,035		5,155
Coal overriding royalty revenues	2,189		3,918		10,163		10,492
Lease amendment revenues	1,535		—		6,720		—
Aggregates royalty revenues	954		888		3,655		3,551
Oil and gas royalty revenues	374		1,427		2,575		5,679
Other revenues	125		405		1,429		1,545
Coal royalty and other revenues (1)	$	39,919	$	42,518	$	154,037	$	134,912
Transportation and processing services revenues (2)	3,865		6,853		14,740		17,238
Total Coal Royalty and Other segment revenues	$	43,784	$	49,371	$	168,777	$	152,150

(1) Coal royalty and other revenues from contracts with customers as defined under ASC 606.

(2) Transportation and processing services revenues from contracts with customers as defined under ASC 606 was $1.7 million and $3.6 million for the three months ended September 30, 2019 and 2018, respectively, and $7.3 million and $9.6 million for the nine months ended September 30, 2019 and 2018, respectively. The remaining transportation and processing services revenues of $2.2 million and $3.3 million for the three months ended September 30, 2019, and 2018, respectively, and $7.5 million and $7.6 million for the nine months ended September 30, 2019 and 2018, respectively, related to other NRP-owned infrastructure leased to and operated by third party operators accounted for under other guidance. See Note 16. Financing Transaction and Note 17. Leases for more information.

8

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

The following table details the Partnership's Coal Royalty and Other segment receivables and liabilities resulting from contracts with customers:

	September 30,		December 31,
(In thousands)	2019		2018
Receivables
Accounts receivable, net	$	24,758	$	29,001
Prepaid expenses and other (1)	2,852		2,483
Contract liabilities
Current portion of deferred revenue	$	5,047	$	3,509
Deferred revenue	43,587		49,044

(1) Prepaid expenses and other includes notes receivable from contracts with customers.

The following table shows the activity related to the Partnership's Coal Royalty and Other segment deferred revenue:

	Nine Months Ended September 30,
(In thousands)	2019			2018
Balance at end of prior period (current and non-current)	$	52,553		$	100,605
Cumulative adjustment for change in accounting principle	—			(65,591		)
Balance at beginning of period (current and non-current)	$	52,553		$	35,014
Increase due to minimums and lease amendment fees	37,315			23,534
Recognition of previously deferred revenue	(41,234		)	(16,260		)
Balance at end of period (current and non-current)	$	48,634		$	42,288

The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty and overriding royalty leases are as follows (in thousands):

Lease Term (1)	Weighted Average Remaining Years as of September 30, 2019	Annual Minimum Payments (2)
0 - 5 years	2.2	$	12,439
5 - 10 years	6.4	9,426
10+ years	12.1	46,737
Total	9.6	$	68,602

(1) Lease term does not include renewal periods.

(2) Annual minimum payments do not include $5.0 million from a coal infrastructure lease that is accounted for as a financing transaction. See Note 16. Financing Transaction for additional information.

9

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

3.    Discontinued Operations

In December 2018, the Partnership sold VantaCore Partners LLC, its construction aggregates business, and in July 2016, the Partnership sold its non-operated oil and gas working interest assets. The Partnership's exit from both its construction aggregates business and non-operated oil and gas working interest business represented strategic shifts to reduce debt and focus on its Coal Royalty and Other and Soda Ash business segments. As a result, the Partnership classified the assets and liabilities, operating results and cash flows of these businesses as discontinued operations in its Consolidated Balance Sheets, Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows for all periods presented.

The following table presents the carrying amounts of the Partnership's assets and liabilities of discontinued operations in the Consolidated Balance Sheets:

	September 30, 2019						December 31, 2018
(In thousands)	Construction Aggregates		NRP Oil and Gas		Total		Construction Aggregates		NRP Oil and Gas		Total
ASSETS
Current assets
Accounts receivable, net	$	—	$	988	$	988	$	5	$	988	$	993
Total assets of discontinued operations	$	—	$	988	$	988	$	5	$	988	$	993
LIABILITIES
Current liabilities
Accounts payable	$	42	$	—	$	42	$	181	$	—	$	181
Accrued liabilities	132		—		132		766		—		766
Total liabilities of discontinued operations	$	174	$	—	$	174	$	947	$	—	$	947

The following tables present summarized financial results of the Partnership's discontinued operations in the Consolidated Statements of Comprehensive Income:

	Three Months Ended September 30,
	2019						2018
(In thousands)	Construction Aggregates		NRP Oil and Gas		Total		Construction Aggregates			NRP Oil and Gas			Total
Revenues and other income
Construction aggregates	$	—	$	—	$	—	$	30,398		$	—		$	30,398
Road construction and asphalt paving services	—		—		—		6,250			—			6,250
Oil and gas	—		2		2		—			(1		)	(1		)
Gain on asset sales and disposals	5		—		5		163			—			163
Total revenues and other income	$	5	$	2	$	7	$	36,811		$	(1	)	$	36,810
Operating expenses
Operating and maintenance expenses	$	—	$	—	$	—	$	30,758		$	23		$	30,781
Depreciation, depletion and amortization	—		—		—		3,333			—			3,333
Total operating expenses	$	—	$	—	$	—	$	34,091		$	23		$	34,114
Interest expense	—		—		—		(8		)	—			(8		)
Income (loss) from discontinued operations	$	5	$	2	$	7	$	2,712		$	(24	)	$	2,688

10

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

	Nine Months Ended September 30,
	2019							2018
(In thousands)	Construction Aggregates		NRP Oil and Gas			Total		Construction Aggregates			NRP Oil and Gas			Total
Revenues and other income
Construction aggregates	$	—	$	—		$	—	$	91,055		$	—		$	91,055
Road construction and asphalt paving services	—		—			—		13,154			—			13,154
Oil and gas	—		2			2		—			(3		)	(3		)
Gain on asset sales and disposals	243		—			243		214			—			214
Total revenues and other income	$	243	$	2		$	245	$	104,423		$	(3	)	$	104,420
Operating expenses
Operating and maintenance expenses	$	27	$	12		$	39	$	91,225		$	69		$	91,294
Depreciation, depletion and amortization	—		—			—		9,377			—			9,377
Total operating expenses	$	27	$	12		$	39	$	100,602		$	69		$	100,671
Interest expense	—		—			—		(28		)	—			(28		)
Income (loss) from discontinued operations	$	216	$	(10	)	$	206	$	3,793		$	(72	)	$	3,721

Capital expenditures related to the Partnership's discontinued operations were $9.7 million during the nine months ended September 30, 2018.

4.    Common and Preferred Unit Distributions

The Partnership makes cash distributions to common and preferred unitholders on a quarterly basis, subject to approval by the Board of Directors of GP Natural Resource Partners LLC (the "Board of Directors"). NRP recognizes both common unit and preferred unit distributions on the date the distribution is declared.

Distributions made on the common units and the general partner's general partner ("GP") interest are made on a pro-rata basis in accordance with their relative percentage interests in the Partnership. The general partner is entitled to receive 2% of such distributions.

Income available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income attributable to common unitholders and the general partner by $7.5 million during the three months ended September 30, 2019 and 2018 and $22.5 million during the nine months ended September 30, 2019 and 2018 as a result of accumulated preferred unit distributions earned during the period. During the three months ended March 31, 2018, the Partnership redeemed all of the outstanding PIK Units, which resulted in an $8.8 million cash payment during the period. This $8.8 million cash payment is not included in the table below.

11

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

The following table shows the distributions declared and paid to common and preferred unitholders during the nine months ended September 30, 2019 and 2018, respectively:

		Common Units				Preferred Units
Date Paid	Period Covered by Distribution	Distribution per Unit		Total Distribution (1) (In thousands)		Distribution per Unit		Total Distribution (In thousands)
2019
February 2019	October 1 - December 31, 2018	$	0.45	$	5,625	$	30.00	$	7,500
May 2019	January 1 - March 31, 2019	0.45		5,630		30.00		7,500
May 2019 (2)	Special Distribution	0.85		10,635		—		—
August 2019	April 1 - June 30, 2019	0.45		5,630		30.00		7,500
2018
February 2018	October 1 - December 31, 2017	$	0.45	$	5,617	$	30.00	$	7,765
May 2018	January 1 - March 31, 2018	0.45		5,623		30.00		7,500
August 2018	April 1 - June 30, 2018	0.45		5,623		30.00		7,500

(1) Totals include the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest.

(2) The special distribution of $0.85 per common unit was made to cover the common unitholders’ tax liability resulting from the sale of NRP’s construction aggregates business in December 2018.

5.    Net Income Per Common Unit

Basic net income per common unit is computed by dividing net income, after considering income attributable to non-controlling interest, preferred unitholders and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income per common unit includes the effect of NRP's preferred units, warrants, and unvested unit-based awards if the inclusion of these items is 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. 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.

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 months ended September 30, 2019 and 2018 and the nine months ended September 30, 2018 includes the net settlement of warrants to purchase 1.75 million common units with a strike price of $22.81 but 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 calculation of diluted net income per common unit for the nine months ended September 30, 2019 includes both the net settlement of warrants to purchase 1.75 million common units at a strike price of $22.81 and the net settlement of warrants to purchase 2.25 million common units with a strike price of $34.00.

12

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

The following table reconciles the numerator and denominator of the basic and diluted net income per common unit computations and calculates basic and diluted net income per common unit:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per unit data)	2019			2018			2019			2018
Allocation of net income
Net income from continuing operations	$	39,163		$	25,853		$	94,034		$	87,268
Add (less): net loss (income) attributable to non-controlling interest	—			359			—			(510		)
Less: income attributable to preferred unitholders	(7,500		)	(7,500		)	(22,500		)	(22,500		)
Net income from continuing operations attributable to common unitholders and general partner	$	31,663		$	18,712		$	71,534		$	64,258
Less: net income from continuing operations attributable to the general partner	(634		)	(374		)	(1,431		)	(1,285		)
Net income from continuing operations attributable to common unitholders	$	31,029		$	18,338		$	70,103		$	62,973
Net income from discontinued operations	$	7		$	2,688		$	206		$	3,721
Less: net income from discontinued operations attributable to the general partner	0			(54		)	(4		)	(75		)
Net income from discontinued operations attributable to common unitholders	$	7		$	2,634		$	202		$	3,646
Net income	$	39,170		$	28,541		$	94,240		$	90,989
Add (less): net loss (income) attributable to non-controlling interest	—			359			—			(510		)
Less: income attributable to preferred unitholders	(7,500		)	(7,500		)	(22,500		)	(22,500		)
Net income attributable to common unitholders and general partner	$	31,670		$	21,400		$	71,740		$	67,979
Less: net income attributable to the general partner	(634		)	(428		)	(1,435		)	(1,360		)
Net income attributable to common unitholders	$	31,036		$	20,972		$	70,305		$	66,619
Basic net income per common unit
Weighted average common units—basic	12,261			12,246			12,259			12,243
Basic net income from continuing operations per common unit	$	2.53		$	1.50		$	5.72		$	5.14
Basic net income from discontinued operations per common unit	$	0.00		$	0.22		$	0.02		$	0.30
Basic net income per common unit	$	2.53		$	1.71		$	5.73		$	5.44

13

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per unit data)	2019			2018			2019			2018
Diluted income per common unit
Weighted average common units—basic	12,261			12,246			12,259			12,243
Plus: dilutive effect of Preferred Units	10,494			9,124			10,494			9,124
Plus: dilutive effect of Warrants	389			470			800			474
Plus: dilutive effect of unvested unit-based awards	13			—			31			—
Weighted average common units—diluted	23,157			21,840			23,584			21,841
Net income from continuing operations	$	39,163		$	25,853		$	94,034		$	87,268
Add (less): net loss (income) attributable to non-controlling interest	—			359			—			(510		)
Diluted net income from continuing operations attributable to common unitholders and general partner	$	39,163		$	26,212		$	94,034		$	86,758
Less: diluted net income from continuing operations attributable to the general partner	(784		)	(524		)	(1,881		)	(1,735		)
Diluted net income from continuing operations attributable to common unitholders	$	38,379		$	25,688		$	92,153		$	85,023
Diluted net income from discontinued operations attributable to common unitholders	$	7		$	2,634		$	202		$	3,646
Net income	$	39,170		$	28,541		$	94,240		$	90,989
Add (less): net loss (income) attributable to non-controlling interest	—			359			—			(510		)
Diluted net income attributable to common unitholders and general partner	$	39,170		$	28,900		$	94,240		$	90,479
Less: diluted net income attributable to the general partner	(784		)	(578		)	(1,885		)	(1,810		)
Diluted net income attributable to common unitholders	$	38,386		$	28,322		$	92,355		$	88,669
Diluted net income from continuing operations per common unit	$	1.66		$	1.18		$	3.91		$	3.89
Diluted net income from discontinued operations per common unit	$	0.00		$	0.12		$	0.01		$	0.17
Diluted net income per common unit	$	1.66		$	1.30		$	3.92		$	4.06

6.    Segment Information

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

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

Soda Ash—consists of the Partnership's 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining and soda ash production business located in the Green River Basin of 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 to the glass and chemicals industries.

In December 2018, the Partnership sold its construction aggregates business which enabled it to further reduce debt and focus on its Coal Royalty and Other and Soda Ash business segments. See Note 3. Discontinued Operations for more information.

14

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

Direct segment costs and certain other costs incurred at the corporate level that are identifiable and that benefit the Partnership's segments are allocated to the operating segments accordingly. These allocated costs generally include salaries and benefits, insurance, property taxes, legal, royalty, information technology and shared facilities services and are included in operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income.

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 and are included in general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income.

The following table summarizes certain financial information for each of the Partnership's business segments:

	Operating Segments
(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing			Total
Three Months Ended September 30, 2019
Revenues	$	43,784	$	13,818	$	—		$	57,602
Gain on asset sales and disposals	6,107		—		—			6,107
Operating and maintenance expenses	5,771		223		—			5,994
Depreciation, depletion and amortization	3,384		—		—			3,384
General and administrative expenses	—		—		4,253			4,253
Asset impairments	484		—		—			484
Other expenses, net	—		—		10,431			10,431
Net income (loss) from continuing operations	40,252		13,595		(14,684		)	39,163
Income from discontinued operations	—		—		—			7
Three Months Ended September 30, 2018
Revenues	$	49,371	$	8,836	$	—		$	58,207
Operating and maintenance expenses	6,790		—		—			6,790
Depreciation, depletion and amortization	4,888		—		—			4,888
General and administrative expenses	—		—		3,183			3,183
Other expenses, net	—		—		17,493			17,493
Net income (loss) from continuing operations	37,693		8,836		(20,676		)	25,853
Income from discontinued operations	—		—		—			2,688
Nine Months Ended September 30, 2019
Revenues	$	168,777	$	36,833	$	—		$	205,610
Gain on asset sales and disposals	6,609		—		—			6,609
Operating and maintenance expenses	26,590		223		—			26,813
Depreciation, depletion and amortization	11,746		—		—			11,746
General and administrative expenses	—		—		12,799			12,799
Asset impairments	484		—		—			484
Other expenses, net	—		—		66,343			66,343
Net income (loss) from continuing operations	136,566		36,610		(79,142		)	94,034
Income from discontinued operations	—		—		—			206

15

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

	Operating Segments
(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing			Total
Nine Months Ended September 30, 2018
Revenues	$	152,150	$	34,986	$	—		$	187,136
Gain on asset sales and disposals	819		—		—			819
Operating and maintenance expenses	21,122		—		—			21,122
Depreciation, depletion and amortization	15,364		—		—			15,364
General and administrative expenses	—		—		10,782			10,782
Asset impairments	242		—		—			242
Other expenses, net	—		—		53,177			53,177
Net income (loss) from continuing operations	116,241		34,986		(63,959		)	87,268
Income from discontinued operations	—		—		—			3,721
As of September 30, 2019
Total assets of continuing operations	$	969,425	$	258,063	$	15,428		$	1,242,916
Total assets of discontinued operations	—		—		—			988
As of December 31, 2018
Total assets of continuing operations	$	986,680	$	247,051	$	106,923		$	1,340,654
Total assets of discontinued operations	—		—		—			993

7.    Equity Investment

The Partnership accounts for its 49% investment in Ciner Wyoming using the equity method of accounting. Activity related to this investment is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2019			2018			2019			2018
Balance at beginning of period	$	251,135		$	245,524		$	247,051		$	245,433
Income allocation to NRP’s equity interests	15,068			10,036			40,511			38,525
Amortization of basis difference	(1,250		)	(1,200		)	(3,678		)	(3,539		)
Comprehensive income (loss) from unconsolidated investment	(520		)	791			(341		)	(768		)
Distribution	(6,370		)	(12,250		)	(25,480		)	(36,750		)
Balance at end of period	$	258,063		$	242,901		$	258,063		$	242,901

The following table represents summarized financial information for Ciner Wyoming as derived from their unaudited financial statements:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Sales	$	137,148	$	123,366	$	397,378	$	354,467
Gross profit	36,747		26,253		103,382		68,497
Net income	30,750		20,481		82,675		78,623

16

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

8.    Mineral Rights, Net

The Partnership’s mineral rights consist of the following:

	September 30, 2019							December 31, 2018
(In thousands)	Cost		Accumulated Depletion			Net Book Value		Cost		Accumulated Depletion			Net Book Value
Coal properties	$	1,147,692	$	(459,122	)	$	688,570	$	1,164,845	$	(451,210	)	$	713,635
Aggregates properties	41,589		(13,132		)	28,457		24,920		(11,814		)	13,106
Oil and gas royalty properties	12,395		(7,823		)	4,572		12,395		(7,632		)	4,763
Other	13,156		(1,601		)	11,555		13,158		(1,550		)	11,608
Total mineral rights, net	$	1,214,832	$	(481,678	)	$	733,154	$	1,215,318	$	(472,206	)	$	743,112

Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income and totaled $2.8 million and $3.9 million for the three months ended September 30, 2019 and 2018, respectively, and $9.5 million and $12.8 million for the nine months ended September 30, 2019 and 2018, respectively.

During the three and nine months ended September 30, 2019, the Partnership recorded a gain of $6.1 million and $6.6 million, respectively, included in gain on asset sales and disposals on the Consolidated Statements of Comprehensive Income primarily related to the disposal of certain coal mineral rights with a $0 net book value.

9.    Intangible Assets, Net

The Partnership's intangible assets consist of above-market coal royalty and related transportation contracts with subsidiaries of Foresight Energy LP ("Foresight Energy") pursuant to which the Partnership receives royalty payments for coal sales and throughput fees for the transportation and processing of coal. The Partnership's intangible assets included on its Consolidated Balance Sheets are as follows:

	September 30,			December 31,
(In thousands)	2019			2018
Intangible assets at cost	$	81,109		$	81,109
Less: accumulated amortization	(40,648		)	(38,596		)
Total intangible assets, net	$	40,461		$	42,513

Amortization expense included in depreciation, depletion and amortization on the Partnership's Consolidated Statements of Comprehensive Income was $0.5 million and $0.9 million for the three months ended September 30, 2019 and 2018, respectively and $2.1 million and $2.3 million for the nine months ended September 30, 2019 and 2018, respectively.

17

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

10.    Debt, Net

The Partnership's debt consists of the following:

	September 30,			December 31,
(In thousands)	2019			2018
NRP LP debt:
9.125% senior notes, with semi-annual interest payments in June and December, due June 2025 issued at par ("2025 Senior Notes")	$	300,000		$	—
10.500% senior notes, with semi-annual interest payments in March and September, due March 2022, $241 million issued at par and $105 million issued at 98.75% ("2022 Senior Notes")	—			345,638
Opco debt:
Revolving credit facility	$	—		$	—
Senior Notes
8.38% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2019	$	—		$	21,319
5.05% with semi-annual interest payments in January and July, with annual principal payments in July, due July 2020	6,780			15,290
5.55% with semi-annual interest payments in June and December, with annual principal payments in June, due June 2023	9,458			13,414
4.73% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2023	30,019			37,195
5.82% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	63,423			89,529
8.92% with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024	20,059			27,185
5.03% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	91,365			107,013
5.18% with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026	23,286			30,555
Total Opco Senior Notes	$	244,390		$	341,500
Total debt at face value	$	544,390		$	687,138
Net unamortized debt discount	—			(1,266		)
Net unamortized debt issuance costs	(8,223		)	(13,114		)
Total debt, net	$	536,167		$	672,758
Less: current portion of long-term debt	(45,789		)	(115,184		)
Total long-term debt, net	$	490,378		$	557,574

NRP LP Debt

2025 Senior Notes

In April 2019, NRP and NRP Finance issued the 2025 Senior Notes and used the $300 million proceeds and $76 million of cash on hand to fund the redemption of the 2022 Senior Notes. The 2025 Senior Notes were issued under an Indenture dated as of April 29, 2019 (the "2025 Indenture"), bear interest at 9.125% per year and mature on June 30, 2025. Interest is payable semi-annually on June 30 and December 30 beginning December 30, 2019.

18

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

NRP and NRP Finance have the option to redeem the 2025 Senior Notes, in whole or in part, at any time on or after October 30, 2021, at the redemption prices (expressed as percentages of principal amount) of 104.563% for the 12-month period beginning October 30, 2021, 102.281% for the 12-month period beginning October 30, 2022, and thereafter at 100.000%, together, in each case, with any accrued and unpaid interest to the date of redemption. Furthermore, before October 30, 2021, NRP may on any one or more occasions redeem up to 35% of the aggregate principal amount of the 2025 Senior Notes with the net proceeds of certain public or private equity offerings at a redemption price of 109.125% of the principal amount of 2025 Senior Notes, plus any accrued and unpaid interest, if any, to the date of redemption, if at least 65% of the aggregate principal amount of the 2025 Senior Notes issued under the 2025 Indenture remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering. In the event of a change of control, as defined in the 2025 Indenture, the holders of the 2025 Senior Notes may require us to purchase their 2025 Senior Notes at a purchase price equal to 101% of the principal amount of the 2025 Senior Notes, plus accrued and unpaid interest, if any. The 2025 Senior Notes were issued at par.

The 2025 Senior Notes are the senior unsecured obligations of NRP and NRP Finance. The 2025 Senior Notes rank equal in right of payment to all existing and future senior unsecured debt of NRP and NRP Finance and senior in right of payment to any of NRP's subordinated debt. The 2025 Senior Notes are effectively subordinated in right of payment to all future secured debt of NRP and NRP Finance to the extent of the value of the collateral securing such indebtedness and are structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries, including the Opco Credit Facility and each series of Opco’s existing senior notes. None of NRP's subsidiaries guarantee the 2025 Senior Notes. As of September 30, 2019, NRP and NRP Finance were in compliance with the terms of the Indenture relating to their 2025 Senior Notes.

2022 Senior Notes

During the second quarter of 2019, the Partnership redeemed the 2022 Senior Notes at a redemption price equal to 105.250% of the principal amount of the 2022 Senior Notes, plus accrued and unpaid interest. In connection with the early redemption, the Partnership paid an $18.1 million call premium and also wrote off $10.4 million of unamortized debt issuance costs and debt discount. These expenses are included in loss on extinguishment of debt on the Partnership's Consolidated Statements of Comprehensive Income.

Opco Debt

All of Opco’s debt is guaranteed by its wholly owned subsidiaries and is secured by certain of the assets of Opco and its wholly owned subsidiaries other than NRP Trona LLC. As of September 30, 2019 and December 31, 2018, Opco was in compliance with the terms of the financial covenants contained in its debt agreements.

Opco Credit Facility

In April 2019, the Partnership entered into the Fourth Amendment (the “Fourth Amendment”) to the Opco Credit Facility (the "Opco Credit Facility"). The Fourth Amendment extends the term of the Opco Credit Facility until April 2023. Lender commitments under the Opco Credit Facility remain at $100.0 million. The Opco Credit Facility contains financial covenants requiring Opco to maintain:

• A leverage ratio of consolidated indebtedness to EBITDDA (as defined in the Opco Credit Facility) not to exceed 4.0x; provided, however, that if the Partnership increases its quarterly distribution to its common unitholders above $0.45 per common unit, the maximum leverage ratio under the Opco Credit Facility will permanently decrease from 4.0x to 3.0x; and

• a fixed charge coverage ratio of consolidated EBITDDA to consolidated fixed charges (consisting of consolidated interest expense and consolidated lease expense) of not less than 3.5 to 1.0.

As of September 30, 2019, the Partnership did not have any borrowings outstanding under the Opco Credit Facility and had $100 million in available borrowing capacity.

The weighted average interest rates for the borrowings outstanding under the Opco Credit Facility during the three and nine months ended September 30, 2018 were 6.34% and 6.18%, respectively. There were no borrowings outstanding under the Opco Credit Facility during the three and nine months ended September 30, 2019.

19

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values of $541.5 million and $548.9 million classified as mineral rights, net and plant and equipment, net on the Partnership’s Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018, respectively.

Opco Senior Notes   

As of September 30, 2019 and December 31, 2018, the Opco Senior Notes had cumulative principal balances of $244.4 million and $341.5 million, respectively. Opco made mandatory principal payments of $97.1 million, which included a $49.3 million pre-payment as a result of the sale of the Partnership's construction aggregates business, during the nine months ended September 30, 2019, and $55.7 million during the nine months ended September 30, 2018.

The 8.92% Opco Senior Notes also provides that in the event that Opco’s leverage ratio of consolidated indebtedness to consolidated EBITDDA (as defined in the Note Purchase Agreements) exceeds 3.75 to 1.00 at the end of any fiscal quarter, then in addition to all other interest accruing on these notes, additional interest in the amount of 2.00% per annum shall accrue on the notes for the two succeeding quarters and for as long thereafter as the leverage ratio remains above 3.75 to 1.00. Opco has not exceeded the 3.75 to 1.00 ratio at the end of any fiscal quarter through September 30, 2019.

11.    Fair Value Measurements

Fair Value of Financial Assets and Liabilities

The Partnership’s financial assets and liabilities consist of cash and cash equivalents, restricted cash, contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents and restricted cash approximate fair value due to their short-term nature. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three and nine months ended September 30, 2019 or 2018. The Partnership uses available market data and valuation methodologies to estimate the fair value of its debt and contract receivable.

The following table shows the carrying amount and estimated fair value of the Partnership's debt and contract receivable:

		September 30, 2019				December 31, 2018
(In thousands)	Fair Value Hierarchy Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Debt:
NRP 2025 Senior Notes	1	$	293,824	$	287,250	$	—	$	—
NRP 2022 Senior Notes	1	—		—		334,024		356,871
Opco Senior Notes	3	242,343		234,003		338,734		352,599
Opco Credit Facility	3	—		—		—		—
Assets:
Contract receivable (current and long-term)	3	$	39,416	$	33,784	$	40,776	$	34,704

NRP has embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that are accounted for separately from the preferred units as assets and liabilities at fair value on the Partnership's Consolidated Balance Sheets. Level 3 valuation of the embedded derivatives are based on numerous factors including the likelihood of the event occurring. The embedded derivatives are revalued quarterly and changes in their fair value would be recorded in other expense, net on the Partnership's Consolidated Statements of Comprehensive Income. The embedded derivatives had zero value as of September 30, 2019 and December 31, 2018.

20

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

12.    Related Party Transactions

Affiliates of our General Partner

The Partnership’s general partner does not receive any management fee or other compensation for its management of NRP. However, in accordance with the partnership agreement, the general partner and its affiliates are reimbursed for services provided to the Partnership and for expenses incurred on the Partnership’s behalf. Employees of Quintana Minerals Corporation ("QMC") and Western Pocahontas Properties Limited Partnership ("WPPLP"), affiliates of the Partnership, provide their services to manage the Partnership's business. QMC and WPPLP charge the Partnership the portion of their employee salary and benefits costs related to their employee services provided to NRP. These QMC and WPPLP employee management service costs are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income. NRP also reimburses overhead costs incurred by its affiliates to manage the Partnership's business. These overhead costs include certain rent, information technology, administration of employee benefits and other corporate services incurred by or on behalf of the Partnership’s general partner and its affiliates and are presented as operating and maintenance expenses and general and administrative on the Partnership's Consolidated Statements of Comprehensive Income.

Direct general and administrative expenses charged to the Partnership by QMC and WPPLP are included in the Partnership's Consolidated Statement of Comprehensive Income as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Operating and maintenance expenses	$	1,598	$	1,560	$	4,806	$	4,694
General and administrative expenses	855		934		2,704		2,714

The Partnership had accounts payable to QMC of $0.4 million and $0.5 million on its Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018, respectively.

During the three months ended September 30, 2019 and 2018, the Partnership recognized $0.3 million and $0.6 million in operating and maintenance expenses, respectively, on its Consolidated Statements of Comprehensive Income related to an overriding royalty agreement with WPPLP. These amounts were $3.8 million and $3.5 million during the nine months ended September 30, 2019 and 2018, respectively. At September 30, 2019, the Partnership had $0.1 million of other assets on its Consolidated Balance Sheets related to a prepaid royalty for this agreement and at December 31, 2018 the Partnership had $1.4 million of accounts payable to WPPLP for this agreement.

Quintana Capital Group GP, Ltd.

Corbin J. Robertson, Jr. is a principal in Quintana Capital Group GP, Ltd. ("Quintana Capital"), which controls several private equity funds focused on investments in the energy business. In connection with the formation of Quintana Capital, the Partnership adopted a formal conflicts policy that establishes the opportunities that will be pursued by the Partnership and those that will be pursued by Quintana Capital. The governance documents of Quintana Capital’s affiliated investment funds reflect the guidelines set forth in the Partnership's conflicts policy. At September 30, 2019, a fund controlled by Quintana Capital owned a substantial interest in Corsa Coal Corp. ("Corsa"), a coal mining company traded on the TSX Venture Exchange that was one of the Partnership’s lessees in Tennessee. During the second quarter of 2018, Corsa assigned its lease with NRP to a third party and is no longer deemed a related party as of such date. Coal related revenues from Corsa totaled $0.4 million for the nine months ended September 30, 2018.

Industrial Minerals Group LLC

Corbin J. Robertson, III, a Director of GP Natural Resource Partners LLC, owns a minority ownership interest in Industrial Minerals Group LLC (“Industrial Minerals”), which, through its subsidiaries, leases two of NRP's coal royalty properties in Central Appalachia. Coal royalty related revenues from Industrial Minerals totaled $0.4 million and $0.2 million for the three months ended September 30, 2019 and 2018, respectively and $0.9 million and $0.6 million for the nine months ended September 30, 2019 and 2018, respectively. The Partnership had accounts receivable from Industrial Minerals of $0.2 million and $0.1 million on its Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018, respectively.

21

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

13.    Major Customers

Revenues from customers that exceeded 10 percent of total revenues for any of the periods presented below are as follows:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
(In thousands)	Revenues		Percent		Revenues		Percent		Revenues		Percent		Revenues		Percent
Foresight Energy (1)	$	12,375	21	%	$	15,035	26	%	$	44,604	22	%	$	40,456	22	%
Contura Energy (1) (2)	9,190		16	%	4,709		8	%	32,915		16	%	16,091		9	%

(1) Revenues from Foresight Energy and Contura Energy are included within the Partnership's Coal Royalty and Other segment.

(2) In the fourth quarter of 2018, Contura Energy and Alpha Natural Resources merged. Revenues during the three and nine months ended September 30, 2019 relate to the combined company, while revenues during the three and nine months ended September 30, 2018 do not include revenues from Alpha Natural Resources.

14.    Commitments and Contingencies

Legal

NRP is involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, Partnership management believes these ordinary course matters will not have a material effect on the Partnership’s financial position, liquidity or operations. During the third quarter, NRP was also involved in the matters described below.

Anadarko Contingent Consideration Payment Dispute

In January 2013, NRP acquired a non-controlling 48.51% general partner interest in OCI Wyoming, L.P. ("OCI LP") and all of the preferred stock and a portion of the common stock of OCI Wyoming Co. ("OCI Co") (which in turn owned a 1% limited partner interest in OCI LP) from Anadarko Holding Company and its subsidiary, Big Island Trona Company (together, "Anadarko").  The remaining general partner interest in OCI LP and common stock of OCI Co were owned by subsidiaries of OCI Chemical Corporation.

The acquisition agreement provided for additional contingent consideration of up to $50 million to be paid by NRP if certain performance criteria were met at OCI LP as defined in the purchase and sale agreement in any of the years 2013, 2014 or 2015. For those years, NRP paid an aggregate of $11.5 million to Anadarko in full satisfaction of these contingent consideration payment obligations.

  In July 2013, pursuant to a series of transactions in connection with an initial public offering by a subsidiary of OCI Chemical Corporation, the ownership structure in OCI LP was simplified. In connection with such reorganization, NRP exchanged the stock of OCI Co for a limited partner interest in OCI LP. Following the reorganization, NRP's interest in OCI LP remained at 49%, consisting of both limited and general partner interests. The restructuring did not have any impact on the operations, revenues, management or control of OCI LP.

In July 2017, Anadarko filed a lawsuit against Opco and NRP Trona LLC in the District Court of Harris County, Texas, 157th judicial district. The complaint alleged that the transactions conducted in 2013 triggered an acceleration of NRP's obligation under the purchase agreement with Anadarko to pay additional contingent consideration in full and demanded immediate payment of such amount, together with interest, court costs and attorneys’ fees. NRP does not believe the reorganization transactions triggered an obligation to pay any additional contingent consideration and is vigorously defending this lawsuit. However, the ultimate outcome cannot be predicted with certainty and the Partnership estimates a possible range of loss between $0, if it prevails, and approximately $40 million plus interest, court costs and attorneys’ fees if Anadarko prevails and is awarded the full damages it seeks. A trial in this matter was held in October 2019. The parties are currently awaiting a ruling by the trial court.

22

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

15.    Unit-Based Compensation

The Partnership's unit-based awards granted in 2019 and 2018 were valued using the closing price of NRP's units as of the grant date. The grant date fair value of these awards granted during the nine months ended September 30, 2019 and 2018 were $5.4 million and $2.2 million, respectively. Total unit-based compensation expense associated with these awards was $0.5 million and $0.2 million for the three months ended September 30, 2019 and 2018, respectively, and $1.8 million and $0.9 million for the nine months ended September 30, 2019 and 2018, respectively and is included in general and administrative expenses and operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income. The unamortized cost associated with unvested outstanding awards as of September 30, 2019 is $4.0 million, which is to be recognized over a weighted average period of 2.2 years. The unamortized cost associated with unvested outstanding awards as of December 31, 2018 was $1.2 million.

A summary of the unit activity in the outstanding grants during 2019 is as follows:

(In thousands)	Common Units		Weighted Average Exercise Price
Outstanding at January 1, 2019	55		$	29.10
Granted	129		$	41.41
Fully vested and issued	(12	)	$	41.47
Forfeitures	(15	)	$	37.33
Outstanding at September 30, 2019	157		$	37.48

16.    Financing Transaction

The Partnership owns rail loadout and associated infrastructure at the Sugar Camp mine in the Illinois Basin operated by a subsidiary of Foresight Energy. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight Energy and is accounted for as a financing transaction (the "Sugar Camp lease"). The Sugar Camp lease expires in 2032 with renewal options for up to 80 additional years. Minimum payments are $5.0 million per year through the end of the lease term. The Partnership is also entitled to variable payments in the form of throughput fees determined based on the amount of coal transported and processed utilizing the Partnership's assets. In the event the Sugar Camp lease is renewed beyond 2032, payments become a fixed $10 thousand per year for the remainder of the renewed term.

The following table shows certain amounts related to the Partnership's Sugar Camp lease:

(In thousands)	September 30, 2019		December 31, 2018
Accounts receivable	$	347	$	661
Contract receivable (current and long-term)	39,416		40,776
Unearned income	22,667		25,058
Projected remaining payments	$	62,430	$	66,495

17.    Leases

Lessee Accounting

As of September 30, 2019, the Partnership had one operating lease for an office building that is owned by WPPLP. On January 1, 2019, the Partnership entered into a new lease of the building with a five-year base term and five additional five-year renewal options. Upon lease commencement and as of September 30, 2019, the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance Sheet using the present value of the future lease payments over 30 years. The Partnership's right-of-use asset and lease liability included within other assets and other non-current liabilities, respectively, on its Consolidated Balance Sheet totaled $3.5 million at both January 1, 2019 and September 30, 2019. During the three and nine months ended September 30, 2019, the Partnership incurred total operating lease expenses of $0.1 million and $0.4 million, respectively, included in both operating and maintenance expenses and general and administrative expenses on its Consolidated Statement of Comprehensive Income.

23

NATURAL RESOURCE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(Unaudited)

The following table details the maturity analysis of the Partnership's operating lease liability and reconciles the undiscounted cash flows to the operating lease liability included on its Consolidated Balance Sheet:

Remaining Annual Lease Payments (In thousands)	As of September 30, 2019
2019	$	121
2020	483
2021	483
2022	483
2023	483
After 2023	12,079
Total lease payments (1)	$	14,132
Less: present value adjustment (2)	(10,623		)
Total operating lease liability	$	3,509

(1) The remaining lease term of the Partnership's operating lease is 29.25 years.

(2) The present value of the operating lease liability on the Partnership's Consolidated Balance Sheet was calculated using a 13.5% discount rate which represents the Partnership's estimated incremental borrowing rate under the lease. As the Partnership's lease does not provide an implicit rate, the Partnership estimated the incremental borrowing rate at the time the lease was entered into by utilizing the rate of the Partnership's secured debt and adjusting it for factors that reflect the profile of borrowing over the 30-year expected lease term.

Lessor Accounting

ThePartnership owns loadout and other transportation assets at the Partnership's Macoupin property in the Illinois Basin which is operated by Foresight Energy. The infrastructure at the Macoupin property is leased to a subsidiary of Foresight Energy and is accounted for as an operating lease under ASC 842. The lease with Macoupin expires in January 2108. From the inception of this lease in 2009 through January 2039, the lease provides that the Partnership is entitled to variable lease payments in the form of throughput fees determined based on the amount of coal transported and processed utilizing the Partnership's assets. These fees are included in transportation and processing services revenues on the Partnership's Consolidated Statements of Comprehensive Income and were $1.1 million and $1.4 million in the three months ended September 30, 2019 and 2018, respectively, and $3.6 million and $3.5 million in the nine months ended September 30, 2019 and 2018, respectively. After January 2039, the lease provides that the Partnership is entitled to an annual rent of $10 thousand per year in place of the variable lease payments.

18.    Subsequent Events

The following represents material events that have occurred subsequent to September 30, 2019 through the time of the Partnership’s filing of its Quarterly Report on Form 10-Q with the SEC:

Distributions Declared

In October 2019, the Board of Directors declared a distribution of $0.45 per common unit with respect to the third quarter of 2019. The Board of Directors also declared a cash distribution on NRP's Preferred Units with respect to the third quarter of 2019 totaling $7.5 million.

24

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following review of operations for the three and nine month periods ended September 30, 2019 and 2018 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, 2018.

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: 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; Ciner Wyoming LLC’s ("Ciner 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, 2018 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) from continuing operations less equity earnings from unconsolidated investment, plus (minus) net loss (income) attributable to non-controlling interest; plus gain on reserve swap, 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 (loss), 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 10. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data—Note 13. Debt, Net" in our Annual Report on Form 10-K for the year ended December 31, 2018. 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.

25

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 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, 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 receivable; less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as financing activities and distributions to non-controlling interest. 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 the Partnership's 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

26

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 own a non-controlling 49% interest in Ciner Wyoming, a producer of natural soda ash. Our common units trade on the New York Stock Exchange under the symbol "NRP". Our business is organized into two operating segments:

Coal Royalty and Other—consists primarily of coal royalty properties and coal-related transportation and processing assets. Other assets include industrial mineral royalty properties, aggregates royalty properties, oil and gas royalty properties and timber. Our coal reserves are primarily located in Appalachia, the Illinois Basin and the Northern Powder River Basin in the United States. Our industrial minerals and aggregates properties are located in a number of states across the United States. Our oil and gas royalty assets are primarily located in Louisiana.

Soda Ash—consists of our 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining and soda ash production business located in the Green River Basin of Wyoming. Ciner Resources LP, our 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.

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.

We remain focused on strengthening our balance sheet and maintaining sufficient liquidity to manage our business through periods of volatility in commodity prices. We devote significant amounts of cash each year to make mandatory amortization payments on the Opco Senior Notes as well as to make distributions on our preferred units and common units. Accordingly, preserving the financial flexibility to respond to changes in market conditions while continuing to service our debt and make distributions to unitholders is one of our key objectives.

Our financial results by segment for the nine months ended September 30, 2019 are as follows:

	Operating Segments
(In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing			Total
Revenues and other income	$	175,386	$	36,833	$	—		$	212,219
Net income (loss) from continuing operations	$	136,566	$	36,610	$	(79,142	)	$	94,034
Adjusted EBITDA (1)	$	148,796	$	25,257	$	(12,799	)	$	161,254
Cash flow provided by (used in) continuing operations
Operating activities	$	139,821	$	25,257	$	(47,153	)	$	117,925
Investing activities	$	7,962	$	—	$	—		$	7,962
Financing activities	$	—	$	—	$	(219,754	)	$	(219,754	)
Distributable cash flow (1)	$	147,783	$	25,257	$	(47,153	)	$	125,331
Free cash flow (1)	$	141,172	$	25,257	$	(47,153	)	$	119,276

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

27

Current Results/Market Commentary

Coal Royalty and Other Business Segment

Our results in the first nine months of 2019 were driven by stability in both metallurgical and thermal coal realizations from our lessees during the first half of the year but reduced realizations during the third quarter driven by weakened market demand and lower activity at certain of our properties. We derived approximately 65% of our coal royalty revenues and approximately 55% of our coal royalty sales volumes from metallurgical coal during the nine months ended September 30, 2019. Despite solid performance through the first nine months of 2019, declining coal prices and lessee bankruptcies are expected to put downward pressure on our performance in the coming months.

The market for metallurgical coal weakened primarily due to a decline in global economic growth. As a result, prices for metallurgical coal sold from our properties declined in the third quarter of 2019. Metallurgical coal sales volumes from our properties also declined in the third quarter of 2019 as a result of certain lessees moving off our coal reserves in the normal course of their mine plans and lower activity at certain other mines.

The domestic market for thermal coal remains challenged by continued low natural gas prices and growing stockpiles at domestic utilities. In addition, the export market for thermal coal has weakened due to a combination of lower demand from European utilities, competition from international producers and oversupply of LNG.

We remain cautious about the financial position of U.S. coal producers with over-leveraged capital structures and the state of the domestic and global coal markets generally. The current price environment along with limited access to capital has taken a toll on a number of producers. Four of our lessees have filed for protection under the U.S. Bankruptcy Code in the last six months, and other lessees continue to face challenges. Foresight Energy, which is our largest lessee, has agreed to a forbearance period with its lenders to evaluate their restructuring options. To the extent Foresight determines to idle operations on our properties for a prolonged period or to shut any of its mines on our properties down permanently, our business could be adversely affected. Accordingly, we remain focused on further strengthening our liquidity and balance sheet.

Soda Ash Business Segment

Ciner Wyoming's results are primarily affected by the global supply of and demand for soda ash, which in turn directly impacts the prices Ciner Wyoming and other producers charge for its products. Demand for soda ash in the United States is driven in a large part by economic growth and activity levels in the end markets that the glass-making industry serve, such as the automotive and construction industries. Because the United States is a well-developed market for soda ash, we expect that domestic supply of and demand for soda ash will remain stable for the near future. Soda ash demand in international markets has continued to grow in conjunction with GDP. We expect that future global economic growth will positively influence global demand and pricing, which will likely result in increased exports, primarily from the United States, Turkey and to a limited extent, from China, the largest suppliers of soda ash to international markets.

While the performance of the underlying business remains stable, Ciner Wyoming has announced that it will commence a significant capacity expansion capital project soon that it intends to fund in part by reinvesting cash that would otherwise be distributed to its partners. As a result, we expect for the cash distributions we receive from Ciner Wyoming to decrease to approximately $25 million to $28 million per year and be held at such levels for the next two to three years. We believe that we will benefit over the long-term from increased productivity and cash distributions from Ciner Wyoming’s operations following completion of this capital project.

Business Outlook

Despite solid performance in the first nine months of the year, we expect the challenges described above to have an overall adverse impact on our future results as compared to recent results. However, we believe the progress made to strengthen our financial profile in recent years positions us well to navigate a sustained downturn.

28

Results of Operations

Third Quarter of 2019 and 2018 Compared

Revenues and Other Income

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

	For the Three Months Ended September 30,				Increase (Decrease)		Percentage Change
Operating Segment (In thousands)	2019		2018
Coal Royalty and Other	$	49,891	$	49,371	$	520	1	%
Soda Ash	13,818		8,836		4,982		56	%
Total	$	63,709	$	58,207	$	5,502	9	%

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

29

Coal Royalty and Other

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 September 30,						Increase (Decrease)			Percentage Change
(In thousands, except per ton data)	2019			2018
Coal sales volumes (tons)
Appalachia
Northern	290			349			(59		)	(17	)%
Central	3,222			3,873			(651		)	(17	)%
Southern	438			346			92			27	%
Total Appalachia	3,950			4,568			(618		)	(14	)%
Illinois Basin	551			609			(58		)	(10	)%
Northern Powder River Basin	532			855			(323		)	(38	)%
Total coal sales volumes	5,033			6,032			(999		)	(17	)%
Coal royalty revenue per ton
Appalachia
Northern	$	2.54		$	4.01		$	(1.47	)	(37	)%
Central	5.25			5.37			(0.12		)	(2	)%
Southern	5.99			6.82			(0.83		)	(12	)%
Illinois Basin	4.82			4.89			(0.07		)	(1	)%
Northern Powder River Basin	4.69			3.79			0.90			24	%
Combined average coal royalty revenue per ton	5.05			5.10			(0.05		)	(1	)%
Coal royalty revenues
Appalachia
Northern	$	735		$	1,402		$	(667	)	(48	)%
Central	16,929			20,786			(3,857		)	(19	)%
Southern	2,626			2,359			267			11	%
Total Appalachia	20,290			24,547			(4,257		)	(17	)%
Illinois Basin	2,658			2,973			(315		)	(11	)%
Northern Powder River Basin	2,492			3,237			(745		)	(23	)%
Unadjusted coal royalty revenues	25,440			30,757			(5,317		)	(17	)%
Coal royalty adjustment for minimum leases	(713		)	(48		)	(665		)	(1,385	)%
Total coal royalty revenues	$	24,727		$	30,709		$	(5,982	)	(19	)%
Other revenues
Production lease minimum revenues	$	2,752		$	1,769		$	983		56	%
Minimum lease straight-line revenues	3,982			567			3,415			602	%
Property tax revenues	1,606			1,263			343			27	%
Wheelage revenues	1,675			1,572			103			7	%
Coal overriding royalty revenues	2,189			3,918			(1,729		)	(44	)%
Lease amendment revenues	1,535			—			1,535			100	%
Aggregates royalty revenues	954			888			66			7	%
Oil and gas royalty revenues	374			1,427			(1,053		)	(74	)%
Other revenues	125			405			(280		)	(69	)%
Total other revenues	$	15,192		$	11,809		$	3,383		29	%
Coal royalty and other	$	39,919		$	42,518		$	(2,599	)	(6	)%
Transportation and processing services revenues	3,865			6,853			(2,988		)	(44	)%
Gain on asset sales and disposals	6,107			—			6,107			100	%
Total Coal Royalty and Other segment revenues and other income	$	49,891		$	49,371		$	520		1	%

30

Coal Royalty Revenues

Coal royalty revenues decreased$6.0 million period-over-period driven by lower coal sales volumes. The discussion of these decreases by region is as follows:

• Appalachia: Sales volumes decreased 14% and coal royalty revenues decreased$4.3 million primarily as a result of weakened coal markets, the temporary idling of certain properties due to lessee bankruptcies and the idling of the Pinnacle mine since the fourth quarter of 2018.

• Illinois Basin: Sales volumes decreased 10% and coal royalty revenues decreased $0.3 million primarily due to reduced demand for Illinois Basin coal.

• Northern Powder River Basin: Sales volumes decreased 38% and coal royalty revenues decreased $0.7 million primarily due to our lessee mining off of our property in accordance with its mine plan in 2019.

Other Revenues

Total other revenues increased$3.4 million primarily due to $3.4 million of increased minimum lease straight-line revenues primarily related to our Hillsboro property that we began to recognize in 2019 after the completion of the Hillsboro litigation settlement with Foresight and $1.5 million of increased lease amendment revenues during the third quarter of 2019. These increases were partially offset by lower coal overriding royalty revenues due to reduced sales volumes and lower oil and gas royalty revenues driven by lower natural gas prices during the third quarter of 2019 compared to the prior year quarter.

Transportation and Processing Services Revenues

Transportation and processing services revenues decreased $3.0 million primarily due to weakened demand for Illinois Basin coal that resulted in fewer tons being transported out of our Illinois Basin transportation and processing assets during the third quarter of 2019.

Gain on Asset Sales and Disposals

Gain on asset sales and disposals increased $6.1 million primarily due to the disposal of certain mineral right assets during the third quarter of 2019.

Soda Ash

Revenues and other income related to our Soda Ash segment increased$5.0 million primarily due to an increase in production and sales volumes and increased domestic and international sales prices compared to the third quarter of 2018.

Operating Expenses

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

	For the Three Months Ended September 30,				Increase (Decrease)			Percentage Change
(In thousands)	2019		2018
Operating expenses
Operating and maintenance expenses	$	5,994	$	6,790	$	(796	)	(12	)%
Depreciation, depletion and amortization	3,384		4,888		(1,504		)	(31	)%
General and administrative expenses	4,253		3,183		1,070			34	%
Asset impairments	484		—		484			100	%
Total operating expenses	$	14,115	$	14,861	$	(746	)	(5	)%

31

Total operating expenses decreased$0.7 million primarily due to the following:

• Operating and maintenance expenses include costs to manage the Coal Royalty and Other and Soda Ash segments and primarily consist of royalty, tax, employee-related and legal costs and bad debt expense. These costs decreased$0.8 million compared to the prior year quarter primarily due to lower legal costs.

• Depreciation, depletion and amortization expense decreased$1.5 million due to lower coal sales volumes at certain properties.

• General and administrative expenses increased$1.1 million primarily due to higher legal costs.

Interest Expense, Net

Interest expense, net decreased$7.1 million primarily due to lower debt balances during the third quarter of 2019 as a result of debt repayments.

Income from Discontinued Operations

Income from discontinued operationsdecreased$2.7 million primarily as a result of the sale of our construction aggregates business in the fourth quarter of 2018. This business generated $2.7 million of net income in the third quarter of 2018.

Adjusted EBITDA (Non-GAAP Financial Measure)

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

	Operating Segments
For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash			Corporate and Financing			Total
September 30, 2019
Net income (loss) from continuing operations	$	40,252	$	13,595		$	(14,684	)	$	39,163
Less: equity earnings from unconsolidated investment	—		(13,818		)	—			(13,818		)
Add: total distributions from unconsolidated investment	—		6,370			—			6,370
Add: interest expense, net	—		—			10,431			10,431
Add: loss on extinguishment of debt	—		—			—			—
Add: depreciation, depletion and amortization	3,384		—			—			3,384
Add: asset impairments	484		—			—			484
Adjusted EBITDA	$	44,120	$	6,147		$	(4,253	)	$	46,014
September 30, 2018
Net income (loss) from continuing operations	$	37,693	$	8,836		$	(20,676	)	$	25,853
Less: equity earnings from unconsolidated investment	—		(8,836		)	—			(8,836		)
Add: net loss attributable to non-controlling interest	359		—			—			359
Add: total distributions from unconsolidated investment	—		12,250			—			12,250
Add: interest expense, net	—		—			17,493			17,493
Add: depreciation, depletion and amortization	4,888		—			—			4,888
Adjusted EBITDA	$	42,940	$	12,250		$	(3,183	)	$	52,007

Adjusted EBITDA decreased$6.0 million primarily due to lower cash distributions received from Ciner Wyoming in the third quarter of 2019.

32

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
For the Three Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing			Total
September 30, 2019
Cash flow provided by (used in) continuing operations
Operating activities	$	41,094	$	6,147	$	(5,507	)	$	41,734
Investing activities	6,567		—		—			6,567
Financing activities	—		—		(21,913		)	(21,913		)
September 30, 2018
Cash flow provided by (used in) continuing operations
Operating activities	$	41,604	$	12,250	$	(27,368	)	$	26,486
Investing activities	1,590		—		—			1,590
Financing activities	—		—		(20,798		)	(20,798		)

33

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
For the Three Months Ended (In thousands)	Coal Royalty and Other			Soda Ash		Corporate and Financing			Total
September 30, 2019
Net cash provided by (used in) operating activities of continuing operations	$	41,094		$	6,147	$	(5,507	)	$	41,734
Add: proceeds from asset sales and disposals	6,108			—		—			6,108
Add: proceeds from sale of discontinued operations	—			—		—			(122		)
Add: return of long-term contract receivable	459			—		—			459
Distributable cash flow	$	47,661		$	6,147	$	(5,507	)	$	48,179
Less: proceeds from asset sales and disposals	(6,108		)	—		—			(6,108		)
Less: proceeds from sale of discontinued operations	—			—		—			122
Free cash flow	$	41,553		$	6,147	$	(5,507	)	$	42,193
September 30, 2018
Net cash provided by (used in) operating activities of continuing operations	$	41,604		$	12,250	$	(27,368	)	$	26,486
Add: return of long-term contract receivable	1,590			—		—			1,590
Distributable cash flow and Free cash flow	$	43,194		$	12,250	$	(27,368	)	$	28,076

DCF and FCF increased$20.1 million and $14.1 million, respectively, primarily due to the following:

• Coal Royalty and Other Segment

◦ DCF increased$4.5 million primarily as a result of the proceeds received for the disposal of certain assets and the collection of the Hillsboro minimum payment in the third quarter of 2019, partially offset by lower coal royalty revenues as described above.

◦ FCF decreased$1.6 million primarily due to lower coal royalty revenues in the third quarter of 2019 as compared to the same period in 2018, partially offset by collection of the Hillsboro minimum payment in the third quarter of 2019.

• Soda Ash Segment

◦ DCF and FCF decreased$6.1 million as a result of lower cash distributions received from Ciner Wyoming in the third quarter of 2019.

• Corporate and Financing Segment

◦ DCF and FCF increased$21.9 million primarily due to lower cash paid for interest as a result of the timing of interest payments on our 2022 Senior Notes in 2018 as compared to the timing of interest payments on our 2025 Senior Notes in 2019 and due to lower interest payments on our Opco Senior Notes as a result of lower principal balances during the third quarter of 2019.

34

Results of Operations

First Nine Months of 2019 and 2018 Compared

Revenues and Other Income

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

	For the Nine Months Ended September 30,				Increase (Decrease)		Percentage Change
Operating Segment (In thousands)	2019		2018
Coal Royalty and Other	$	175,386	$	152,969	$	22,417	15	%
Soda Ash	36,833		34,986		1,847		5	%
Total	$	212,219	$	187,955	$	24,264	13	%

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

35

Coal Royalty and Other

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 Nine Months Ended September 30,						Increase (Decrease)			Percentage Change
(In thousands, except per ton data)	2019			2018
Coal sales volumes (tons)
Appalachia
Northern	2,774			1,490			1,284			86	%
Central	10,469			11,582			(1,113		)	(10	)%
Southern	1,172			1,288			(116		)	(9	)%
Total Appalachia	14,415			14,360			55			0.4	%
Illinois Basin	1,646			2,091			(445		)	(21	)%
Northern Powder River Basin	1,979			2,896			(917		)	(32	)%
Total coal sales volumes	18,040			19,347			(1,307		)	(7	)%
Coal royalty revenue per ton
Appalachia
Northern	$	2.23		$	3.82		$	(1.59	)	(42	)%
Central	5.79			5.57			0.22			4	%
Southern	7.00			6.98			0.02			0.3	%
Illinois Basin	4.70			4.56			0.14			3	%
Northern Powder River Basin	3.21			2.70			0.51			19	%
Combined average coal royalty revenue per ton	4.94			4.99			(0.05		)	(1	)%
Coal royalty revenues
Appalachia
Northern	$	6,173		$	5,698		$	475		8	%
Central	60,628			64,538			(3,910		)	(6	)%
Southern	8,204			8,985			(781		)	(9	)%
Total Appalachia	75,005			79,221			(4,216		)	(5	)%
Illinois Basin	7,739			9,533			(1,794		)	(19	)%
Northern Powder River Basin	6,347			7,817			(1,470		)	(19	)%
Unadjusted coal royalty revenues	89,091			96,571			(7,480		)	(8	)%
Coal royalty adjustment for minimum leases	(1,530		)	(98		)	(1,432		)	(1,461	)%
Total coal royalty revenues	$	87,561		$	96,473		$	(8,912	)	(9	)%
Other revenues
Production lease minimum revenues	$	21,331		$	6,310		$	15,021		238	%
Minimum lease straight-line revenues	11,152			1,739			9,413			541	%
Property tax revenues	4,416			3,968			448			11	%
Wheelage revenues	5,035			5,155			(120		)	(2	)%
Coal overriding royalty revenues	10,163			10,492			(329		)	(3	)%
Lease amendment revenues	6,720			—			6,720			100	%
Aggregates royalty revenues	3,655			3,551			104			3	%
Oil and gas royalty revenues	2,575			5,679			(3,104		)	(55	)%
Other	1,429			1,545			(116		)	(8	)%
Total other revenues	$	66,476		$	38,439		$	28,037		73	%
Coal royalty and other	$	154,037		$	134,912		$	19,125		14	%
Transportation and processing services	14,740			17,238			(2,498		)	(14	)%
Gain on asset sales and disposals	6,609			819			5,790			707	%
Total Coal Royalty and Other segment revenues and other income	$	175,386		$	152,969		$	22,417		15	%

36

Coal Royalty Revenues

Coal royalty revenues decreased$8.9 million year-over-year. The discussion of these decreases by region is as follows:

• Appalachia: Sales volumes were flat year-over year while revenues decreased $4.2 million, or 5%. Northern Appalachia includes our Hibbs Run property that has significant sales volumes but a low fixed royalty rate per ton and as a result has a minimal impact on our revenues. Excluding Hibbs Run, sales volumes from our Appalachia properties decreased approximately 8% primarily as a result of weakened coal markets, the temporary idling of certain properties due to lessee bankruptcies and the idling of the Pinnacle mine since the fourth quarter of 2018.

• Illinois Basin: Sales volumes decreased 21% and coal royalty revenues decreased $1.8 million primarily due to flooding and high water throughout the river systems that affected transportation logistics during the first half of 2019, including at the Convent Marine Terminal on the Gulf of Mexico, in addition to a weakening of the thermal export market and lower domestic thermal coal demand in 2019.

• Northern Powder River Basin: Sales volumes decreased 32% and coal royalty revenues decreased $1.5 million primarily due to our lessee mining off of our property in accordance with its mine plan in 2019.

Other Revenues

Total other revenues increased$28.0 million primarily due to:

• $15.0 million increased production lease minimum revenues primarily as a result of increased lessee forfeitures of recoupable balances from minimums paid in prior periods.

• $9.4 million increased minimum lease straight-line revenues primarily related to our Hillsboro property that we began to recognize in 2019 after the completion of the Hillsboro litigation settlement with Foresight.

• $6.7 million of lease amendment revenues during the nine months ended September 30, 2019.

These increases in other revenues were partially offset by $3.1 million of lower oil and gas royalty revenues during the nine months ended September 30, 2019 primarily as a result of lower natural gas prices year-over-year.

Transportation and Processing Services Revenues

Transportation and processing services revenues decreased $2.5 million primarily due to weakened demand for Illinois Basin coal that resulted in fewer tons being transported out of our Illinois Basin transportation and processing assets during the nine months ended September 30, 2019.

Gain on Asset Sales and Disposals

Gain on asset sales and disposals increased $5.8 million primarily due to the disposal of certain mineral right assets during the third quarter of 2019.

Soda Ash

Revenues and other income related to our Soda Ash segment increased$1.8 million primarily due to an increase in production and sales volumes and increased domestic and international sales prices in the nine months ended September 30, 2019 compared to the prior year period, partially offset by Ciner Wyoming's settlement of a royalty dispute in the second quarter of 2018 that resulted in $12.7 million of income in the prior year period.

37

Operating and Other Expenses

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

	For the Nine Months Ended September 30,				Increase (Decrease)			Percentage Change
(In thousands)	2019		2018
Operating expenses
Operating and maintenance expenses	$	26,813	$	21,122	$	5,691		27	%
Depreciation, depletion and amortization	11,746		15,364		(3,618		)	(24	)%
General and administrative expenses	12,799		10,782		2,017			19	%
Asset impairments	484		242		242			100	%
Total operating expenses	$	51,842	$	47,510	$	4,332		9	%
Other expenses, net
Interest expense, net	$	37,061	$	53,177	$	(16,116	)	(30	)%
Loss on extinguishment of debt	29,282		—		29,282			100	%
Total other expenses, net	$	66,343	$	53,177	$	13,166		25	%

Total operating expenses increased$4.3 million primarily due to the following:

• Operating and maintenance expenses increased$5.7 million primarily due to bad debt expense recognized in the second quarter of 2019 related to certain of our Coal Royalty and Other receivables, partially offset by lower legal costs.

• Depreciation, depletion and amortization expense decreased$3.6 million due to lower coal sales volumes at certain properties.

• General and administrative expenses increased$2.0 million primarily due to increased legal and consulting costs.

Total other expenses, net increased$13.2 million primarily due to the following:

• Interest expense, net decreased$16.1 million primarily due to lower debt balances during the first nine months of 2019 as a result of debt repayments.

• Loss on extinguishment of debt was $29.3 million for the nine months ended September 30, 2019 and related to the 105.25% premium paid to redeem the 2022 Senior Notes in the second quarter of 2019 as well as the write-off of unamortized debt issuance costs and debt discount related to the 2022 Senior Notes.

Income from Discontinued Operations

Income from discontinued operationsdecreased$3.5 million primarily as a result of the sale of our construction aggregates business in the fourth quarter of 2018. This business generated $3.8 million of net income in the first nine months of 2018.

38

Adjusted EBITDA (Non-GAAP Financial Measure)

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

	Operating Segments
For the Nine Months Ended (In thousands)	Coal Royalty and Other			Soda Ash			Corporate and Financing			Total
September 30, 2019
Net income (loss) from continuing operations	$	136,566		$	36,610		$	(79,142	)	$	94,034
Less: equity earnings from unconsolidated investment	—			(36,833		)	—			(36,833		)
Add: total distributions from unconsolidated investment	—			25,480			—			25,480
Add: interest expense, net	—			—			37,061			37,061
Add: loss on extinguishment of debt	—			—			29,282			29,282
Add: depreciation, depletion and amortization	11,746			—			—			11,746
Add: asset impairments	484			—			—			484
Adjusted EBITDA	$	148,796		$	25,257		$	(12,799	)	$	161,254
September 30, 2018
Net income (loss) from continuing operations	$	116,241		$	34,986		$	(63,959	)	$	87,268
Less: equity earnings from unconsolidated investment	—			(34,986		)	—			(34,986		)
Less: net income attributable to non-controlling interest	(510		)	—			—			(510		)
Add: total distributions from unconsolidated investment	—			36,750			—			36,750
Add: interest expense, net	—			—			53,177			53,177
Add: depreciation, depletion and amortization	15,364			—			—			15,364
Add: asset impairments	242			—			—			242
Adjusted EBITDA	$	131,337		$	36,750		$	(10,782	)	$	157,305

Adjusted EBITDA increased$3.9 million primarily due to the following:

• Coal Royalty and Other Segment

◦ Adjusted EBITDA increased$17.5 million primarily as a result of the increase in revenues and other income, partially offset by increased operating and maintenance expenses, both discussed above.

• Soda Ash Segment

◦ Adjusted EBITDA decreased$11.5 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2019.

39

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
For the Nine Months Ended (In thousands)	Coal Royalty and Other		Soda Ash		Corporate and Financing			Total
September 30, 2019
Cash flow provided by (used in) continuing operations
Operating activities	$	139,821	$	25,257	$	(47,153	)	$	117,925
Investing activities	7,962		—		—			7,962
Financing activities	—		—		(219,754		)	(219,754		)
September 30, 2018
Cash flow provided by (used in) continuing operations
Operating activities	$	132,122	$	34,653	$	(68,982	)	$	97,793
Investing activities	3,432		2,097		—			5,529
Financing activities	—		—		(71,695		)	(71,695		)

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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
For the Nine Months Ended (In thousands)	Coal Royalty and Other			Soda Ash		Corporate and Financing			Total
September 30, 2019
Net cash provided by (used in) operating activities of continuing operations	$	139,821		$	25,257	$	(47,153	)	$	117,925
Add: proceeds from asset sales and disposals	6,611			—		—			6,611
Add: proceeds from sale of discontinued operations	—			—		—			(556		)
Add: return of long-term contract receivable	1,351			—		—			1,351
Distributable cash flow	$	147,783		$	25,257	$	(47,153	)	$	125,331
Less: proceeds from asset sales and disposals	(6,611		)	—		—			(6,611		)
Less: proceeds from sale of discontinued operations	—			—		—			556
Free cash flow	$	141,172		$	25,257	$	(47,153	)	$	119,276
September 30, 2018
Net cash provided by (used in) operating activities of continuing operations	$	132,122		$	34,653	$	(68,982	)	$	97,793
Add: distributions from unconsolidated investment in excess of cumulative earnings	—			2,097		—			2,097
Add: proceeds from asset sales and disposals	826			—		—			826
Add: return of long-term contract receivable	2,606			—		—			2,606
Distributable cash flow	$	135,554		$	36,750	$	(68,982	)	$	103,322
Less: proceeds from asset sales and disposals	(826		)	—		—			(826		)
Free cash flow	$	134,728		$	36,750	$	(68,982	)	$	102,496

DCF and FCF increased$22.0 million and $16.8 million, respectively, primarily due to the following:

• Coal Royalty and Other Segment

◦ DCF and FCF increased$12.2 million and $6.4 million, respectively, as a result of the collection of lease amendment fees and the Hillsboro minimum payments in the first nine months of 2019, partially offset by lower coal royalty revenues as described above. DCF also increased as a result of the proceeds received in the third quarter of 2019 related to the sale and disposal of certain assets.

• Soda Ash Segment

◦ DCF and FCF decreased$11.5 million as a result of lower cash distributions received from Ciner Wyoming in the first nine months of 2019.

• Corporate and Financing Segment

◦ DCF and FCF increased$21.8 million primarily due to lower cash paid for interest as a result of the timing of interest payments on our 2022 Senior Notes in 2018 as compared to the timing of interest payments on our 2025 Senior Notes in 2019 and lower interest paid on our Opco Senior Notes as a result of lower principal balances during the first nine months of 2019.

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Liquidity and Capital Resources

Current Liquidity

As of September 30, 2019, we had total liquidity of $212.2 million, consisting of $99.6 million of cash and cash equivalents, $12.5 million of restricted cash and $100.0 million of borrowing capacity under the Opco Credit Facility. The $12.5 million of restricted cash is required to be used to repay debt, make acquisitions or make capital expenditures per the terms of our debt agreements. We intend to use our restricted cash to repay a portion of the remaining principal payments on our Opco Senior Notes in 2019.

Cash Flows

Cash flows provided by operating activities increased$10.4 million, from $107.5 million in the nine months ended September 30, 2018 to $117.9 million in the nine months ended September 30, 2019 primarily related to the timing of interest payments on our 2022 Senior Notes in 2018 as compared to the timing of interest payments on our 2025 Senior Notes in 2019, lower cash paid for interest on our Opco Senior Notes as a result of lower debt balances during the first nine months of 2019, and the collection of lease amendment fees and the Hillsboro minimum payment within our Coal Royalty and Other segment. These increases were partially offset by lower cash distributions received from Ciner Wyoming, lower coal royalty revenues driven by weakened coal markets, the temporary idling of certain properties due to lessee bankruptcies and the idling of the Pinnacle mine since the fourth quarter of 2018, and lower cash provided by operating activities of discontinued operations as a result of the sale of our construction aggregates business in the fourth quarter of 2018.

Cash flows provided by investing activities increased$11.2 million, from $3.8 million used in the nine months ended September 30, 2018 to $7.4 million provided in the nine months ended September 30, 2019 primarily due to $9.7 million of capital expenditures made by our discontinued operation in the first nine months of 2018 and a $5.8 million increase in proceeds from asset sales and disposals year-over-year. These increases were partially offset by a portion of our distribution from Ciner Wyoming being classified as an investing activity in the nine months ended September 30, 2018.

Cash flows used in financing activities increased$149.0 million, from $70.2 million in the nine months ended September 30, 2018 to $219.2 million in the nine months ended September 30, 2019. In the second quarter of 2019, we extended the maturity date of the $100.0 million Opco Credit Facility to April 2023 and issued $300 million of a new series of 9.125% senior notes due 2025. We used the net proceeds from this offering, together with $76 million of cash on hand to redeem all of our 2022 Senior Notes. As a result of these transactions, our outstanding debt was reduced, our annual interest expense has decreased, and our debt maturities were extended. Significant increases in cash flow used in financing activities included the following:

• $345.6 million used for the redemption of our 2022 Senior Notes in the second quarter of 2019;

• $41.4 million increase in payments on the Opco Senior Notes primarily as a result of the prepayment made using proceeds from the sale of our construction aggregates business;

• $35.0 million less borrowings on our Opco Credit Facility in the first nine months of 2019 compared to the prior year period;

• $26.2 million increase in debt issuance costs and other primarily related to the 2019 debt refinancings; and

• $10.7 million increase in common unit distributions made in 2019 primarily as a result of a one-time special distribution of $0.85 per common unit.

These increases in cash flows used in financing activities were partially offset by the following:

• $300 million provided by the issuance of the 2025 Senior Notes in the second quarter of 2019; and

• $8.8 million less cash used in the first nine months of 2019 compared to the prior year period as a result of the redemption of preferred units paid-in-kind in the first quarter of 2018.

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Capital Resources and Obligations

Debt, Net

We had the following debt outstanding as of September 30, 2019 and December 31, 2018:

(In thousands)	September 30, 2019		December 31, 2018
Current portion of long-term debt, net	$	45,789	$	115,184
Long-term debt, net	490,378		557,574
Total debt, net	$	536,167	$	672,758

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 10. 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 12. 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, 2018.

Recent Accounting Standards

The information set forth under Note 1. Basis of Presentation to the consolidated financial statements is incorporated herein by reference.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk, which includes adverse changes in commodity prices and interest rates as discussed below:

Commodity Price Risk

Our revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prevailing commodity prices. Historically, coal prices have been volatile, with prices fluctuating widely, and they are likely to continue to be volatile. Depressed prices in the future would have a negative impact on our future financial results. In particular, substantially lower prices would significantly reduce revenues and could potentially trigger an impairment of our coal properties or a violation of certain financial debt covenants. Because substantially all of our reserves are coal, changes in coal prices have a more significant impact on our financial results.

We are dependent upon the effective marketing of the coal mined by our lessees. Our lessees sell the coal under various long-term and short-term contracts as well as on the spot market. Current conditions in the coal industry may make it difficult for our lessees to extend existing contracts or enter into supply contracts with terms of one year or more. Our lessees’ failure to negotiate long-term contracts could adversely affect the stability and profitability of our lessees’ operations and adversely affect our future financial results. If more coal is sold on the spot market, coal royalty revenues may become more volatile due to fluctuations in spot coal prices.

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The market price of soda ash and energy costs directly affects the profitability of Ciner Wyoming’s operations. If the market price for soda ash declines, Ciner Wyoming’s sales revenues will decrease. Historically, the global market and, to a lesser extent, the domestic market for soda ash have been volatile and are likely to remain volatile in the future.

Interest Rate Risk

Our exposure to changes in interest rates results from our borrowings under the Opco Credit Facility, which is subject to variable interest rates based upon LIBOR. At September 30, 2019, we did not have any borrowings outstanding under the Opco Credit Facility.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

NRP carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of NRP management, including the Chief Executive Officer and Chief Financial Officer of the general partner of the general partner of NRP. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective in providing reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (b) such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in the Partnership’s Internal Control Over Financial Reporting

There were no material changes in the Partnership’s internal control over financial reporting during the first nine months of 2019 that materially affected, or were reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, we believe these ordinary course matters will not have a material effect on our financial position, liquidity or operations.

For more information regarding certain other legal proceedings involving the Partnership, including the lawsuit involving Anadarko, see Note 14. Commitments and Contingencies to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, Item 3. “Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2018, and Item 1A. “Risk Factors—Risks Related to Our Business—An adverse outcome in our contingent consideration payment dispute with Anadarko could have an adverse effect on our business and liquidity,” in our Annual Report on Form 10-K for the year ended December 31, 2018 which are incorporated herein by reference.

ITEM 1A. RISK FACTORS

During the period covered by this report, except as provided below, there were no material changes from the risk factors previously disclosed in Natural Resource Partners L.P.’s Annual Report on Form 10-K for the year ended December 31, 2018 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None. 

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number	Description
2.1	Purchase Agreement, dated as of January 23, 2013, by and among Anadarko Holding Company, Big Island Trona Company, NRP Trona LLC and NRP (Operating) LLC (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on January 25, 2013).
2.2	Purchase and Sale Agreement dated as of November 16, 2018, by and between NRP (Operating) LLC and VantaCore Intermediate Holdings LLC (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on November 20, 2018).
3.1	Fifth Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated as of March 2, 2017 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on March 6, 2017).
3.2	Fifth Amended and Restated Agreement of Limited Partnership of NRP (GP) LP, dated as of December 16, 2011 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 16, 2011).
3.3	Fifth Amended and Restated Limited Liability Company Agreement of GP Natural Resource Partners LLC, dated as of October 31, 2013 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on October 31, 2013).
3.4	Certificate of Limited Partnership of Natural Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed April 19, 2002, File No. 333-86582).
4.1	Indenture, dated April 29, 2019, by and among Natural Resource Partners L.P. and NRP Finance Corporation, as issuers, and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on May 2, 2019).
4.2	Form of 9.125% Senior Notes due 2025 (contained in Exhibit 1 to Exhibit 4.1).
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley.
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350.
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
*	Filed herewith
**	Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned and thereunto duly authorized.

	NATURAL RESOURCE PARTNERS L.P.
	By:	NRP (GP) LP, its general partner
	By:	GP NATURAL RESOURCE
		PARTNERS LLC, its general partner
Date: November 6, 2019
	By:	/s/     CORBIN J. ROBERTSON, JR.
		Corbin J. Robertson, Jr.
		Chairman of the Board and
		Chief Executive Officer
		(Principal Executive Officer)

Date: November 6, 2019
	By:	/s/     CHRISTOPHER J. ZOLAS
		Christopher J. Zolas
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

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