Note 6 - Net Income (Loss) Per Common Unit

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

6. Net Income (Loss) Per Common Unit

Basic net income (loss) per common unit is computed by dividing net income (loss), after considering income attributable to preferred unitholders and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income (loss) 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 (loss) 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 calculation of diluted net income per common unit for the year ended December 31, 2022 and 2021 includes the assumed conversion of the preferred units. The calculation of diluted net loss per common unit for the years ended December 31, 2020 does not include the assumed conversion of the preferred units because the impact would have been anti-dilutive.

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 diluted net income per common unit for the year ended December 31, 2022 includes the net settlement of warrants to purchase 0.75 million common units with 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.The calculation of diluted net income per common unit for the year ended December 31, 2021 includes the net settlement of warrants to purchase 0.75 million common units with a strike price of $22.81 but does 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 loss per common unit for the year ended December 31, 2020 does not include the net settlement of warrants to purchase 1.75 million common units with a strike price of $22.81 or 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 following table reconciles the numerators and denominators of the basic and diluted net income (loss) per common unit computations and calculates basic and diluted net income (loss) per common unit:

	For the Year Ended December 31,
(In thousands, except per unit data)	2022			2021			2020
Allocation of net income (loss)
Net income (loss)	$	268,492		$	108,902		$	(84,819	)
Less: income attributable to preferred unitholders		(30,000	)		(31,609	)		(30,225	)
Net income (loss) attributable to common unitholders and the general partner	$	238,492		$	77,293		$	(115,044	)
Add (less): net loss (income) attributable to the general partner		(4,770	)		(1,546	)		2,301
Net income (loss) attributable to common unitholders	$	233,722		$	75,747		$	(112,743	)
Basic net income (loss) per common unit
Weighted average common units—basic		12,484			12,337			12,261
Basic net income (loss) per common unit	$	18.72		$	6.14		$	(9.20	)
Diluted net income (loss) per common unit
Weighted average common units—basic		12,484			12,337			12,261
Plus: dilutive effect of preferred units		6,176			9,604			—
Plus: dilutive effect of warrants		783			74			—
Plus: dilutive effect of unvested unit-based awards		210			178			—
Weighted average common units—diluted		19,653			22,193			12,261
Net income (loss)	$	268,492		$	108,902		$	(84,819	)
Less: income attributable to preferred unitholders		—			—			(30,225	)
Diluted net income (loss) attributable to common unitholders and the general partner	$	268,492		$	108,902		$	(115,044	)
Add (less): diluted net loss (income) attributable to the general partner		(5,370	)		(2,178	)		2,301
Diluted net income (loss) attributable to common unitholders	$	263,122		$	106,724		$	(112,743	)
Diluted net income (loss) per common unit	$	13.39		$	4.81		$	(9.20	)