Natural Resource Partners LP Files 10-Q for Q1 2024

TL;DR

<b>Natural Resource Partners LP reported Q1 2024 results, with revenues of $71.7 million and net income attributable to common unitholders of $6.53 million.</b>

AI Summary

NATURAL RESOURCE PARTNERS LP (NRP) filed a Quarterly Report (10-Q) with the SEC on May 7, 2024. Total revenues for Q1 2024 were $71,666,000. Net income attributable to common unitholders was $6.53 million for Q1 2024. Other current assets, net include short-term notes receivables from contracts with customers. Revenues from Alpha Metallurgical Resources, Inc. and Foresight are included within the Mineral Rights segment. The fair value of the Partnership's contract receivable is determined at a discount rate of 15%.

Why It Matters

For investors and stakeholders tracking NATURAL RESOURCE PARTNERS LP, this filing contains several important signals. The filing details Q1 2024 financial performance, including revenue and net income figures, providing insight into the company's operational and financial health. Specific segment revenues and the inclusion of key customer revenues (Alpha Metallurgical Resources, Foresight) offer a granular view of business drivers.

Risk Assessment

Risk Level: — NATURAL RESOURCE PARTNERS LP shows moderate risk based on this filing. The company's reliance on specific customers like Alpha Metallurgical Resources, Inc. and Foresight, whose revenues are consolidated, presents a concentration risk.

Analyst Insight

Monitor the performance of the Mineral Rights segment and the impact of key customer revenues on overall financial results.

Financial Highlights

debt To Equity

N/A

revenue

71,666,000

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• 71,666,000 — Total Revenues (Q1 2024)
• 6,530,000 — Net Income Attributable to Common Unitholders (Q1 2024)
• 15% — Discount Rate (Fair value of contract receivable at March 31, 2024)

Key Players & Entities

• NATURAL RESOURCE PARTNERS LP (company) — Filer
• Alpha Metallurgical Resources, Inc. (company) — Customer included in Mineral Rights segment
• Foresight (company) — Customer included in Mineral Rights segment
• 15% (dollar_amount) — Discount rate for contract receivable valuation

FAQ

Risk Factors

• Valuation of Contract Receivable [medium — financial]: The fair value of the Partnership's contract receivable is determined based on the present value of future cash flow projections at a discount rate of 15%.

Industry Context

Natural Resource Partners LP operates in the energy and transportation sector, primarily focused on mineral rights and related services.

Regulatory Implications

The filing adheres to SEC regulations for quarterly reporting (Form 10-Q) under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the revenue breakdown by segment for future trends.
2. Assess the impact of the 15% discount rate on the valuation of contract receivables.
3. Monitor the relationship with key customers like Alpha Metallurgical Resources, Inc.

Key Dates

• 2024-03-31: End of Q1 2024 — Reporting period for the 10-Q filing.

Glossary

Other Assets Noncurrent

Assets that are not expected to be converted to cash or consumed within one year. (Indicates long-term asset composition.)

Other Liabilities Noncurrent

Obligations that are not expected to be settled within one year. (Indicates long-term liability composition.)

Year-Over-Year Comparison

This is the Q1 2024 filing, following the 2023 fiscal year-end report.

Key Financial Figures

• $2.15 million — $ 484,343 (1) Net income includes $2.15 million of income attributable to preferred uni
• $2.11 million — accumulated during the period, of which $2.11 million is allocated to the common unitholders
• $0.04 million — allocated to the common unitholders and $0.04 million is allocated to the general partner. A
• $6.66 million — $ 470,899 (1) Net income includes $6.66 million of income attributable to preferred uni
• $6.53 million — accumulated during the period, of which $6.53 million is allocated to the common unitholders
• $0.13 million — allocated to the common unitholders and $0.13 million is allocated to the general partner. T

Filing Documents

• nrp20240331_10q.htm (10-Q) — 1265KB
• ex_616241.htm (EX-31.1) — 13KB
• ex_616242.htm (EX-31.2) — 12KB
• ex_616243.htm (EX-32.1) — 5KB
• ex_616244.htm (EX-32.2) — 5KB
• nrp20220630_10qimg001.jpg (GRAPHIC) — 4KB
• 0001437749-24-014986.txt (&nbsp;) — 6517KB
• nrp-20240331.xsd (EX-101.SCH) — 68KB
• nrp-20240331_cal.xml (EX-101.CAL) — 37KB
• nrp-20240331_def.xml (EX-101.DEF) — 451KB
• nrp-20240331_lab.xml (EX-101.LAB) — 353KB
• nrp-20240331_pre.xml (EX-101.PRE) — 482KB
• nrp20240331_10q_htm.xml (XML) — 942KB

Financial Information

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 4

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 5 Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 26 Item 4.

Controls and Procedures

Controls and Procedures 26

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 27 Item 1A.

Risk Factors

Risk Factors 27 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27 Item 3. Defaults Upon Senior Securities 27 Item 4. Mine Safety Disclosures 27 Item 5. Other Information 27 Item 6. Exhibits 27

Signatures

Signatures 28 i Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED BALANCE SHEETS March 31, December 31, 2024 2023 (In thousands, except unit data) (Unaudited) ASSETS Current assets Cash and cash equivalents $ 10,990 $ 11,989 Accounts receivable, net 33,874 41,086 Other current assets, net 3,494 2,218 Total current assets $ 48,358 $ 55,293 Land 24,008 24,008 Mineral rights, net 390,176 394,483 Intangible assets, net 13,340 13,682 Equity in unconsolidated investment 268,634 276,549 Long-term contract receivable, net 25,632 26,321 Other long-term assets, net 8,034 7,540 Total assets $ 778,182 $ 797,876 LIABILITIES AND CAPITAL Current liabilities Accounts payable $ 1,514 $ 885 Accrued liabilities 5,064 12,987 Accrued interest 995 584 Current portion of deferred revenue 5,635 4,599 Current portion of long-term debt, net 14,202 30,785 Total current liabilities $ 27,410 $ 49,840 Deferred revenue 38,348 38,356 Long-term debt, net 174,595 124,273 Other non-current liabilities 6,305 7,172 Total liabilities $ 246,658 $ 219,641 Commitments and contingencies (see Note 13) Class A Convertible Preferred Units ( 71,666 issued and outstanding at March 31, 2024 and December 31, 2023 at $ 1,000 par value per unit; liquidation preference of $ 1,850 per unit at March 31, 2024 and December 31, 2023) (See Note 3) $ 47,181 $ 47,181 Partners' capital Common unitholders' interest ( 12,960,064 and 12,634,642 units issued and outstanding at March 31, 2024 and December 31, 2023, respectively) $ 474,095 $ 503,076 General partner's interest 7,721 8,005 Warrant holders' interest 4,804 23,095 Accumulated other comprehensive loss ( 2,277 ) ( 3,122 ) Total partners' capital $ 484,343 $ 531,054 Total liabilities and partners' capital $ 778,182 $ 797,876 The accompanying notes are an integral part of these consolidated financial statements. 1 Table of Contents NATURAL RESOUR

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 Sisecam Wyoming LLC ("Sisecam 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 . The Partnership's operations are conducted through, and its operating assets are owned by, its subsidiaries. The Partnership owns its subsidiaries through one wholly owned operating company, NRP (Operating) LLC ("Opco"). 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, 2023 and notes thereto included in the Partnership's Annual Report on Form 10 -K, which was filed with the SEC on March 7, 2024. Reclassifications have been made to prior year amounts in the Consolidated Financial Statements to conform with current year presentation. These reclassifications had no impact on previously reported total assets, total liabilities, partners' capital, net income, or cash flows from

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited) 2. Revenues from Contracts with Customers The following table presents the Partnership's Mineral Rights segment revenues from contracts with customers by major source: For the Three Months Ended March 31, (In thousands) 2024 2023 Coal royalty revenues $ 46,818 $ 58,023 Production lease minimum revenues 924 613 Minimum lease straight-line revenues 4,171 4,503 Carbon neutral initiative revenues 2,161 2,118 Property tax revenues 1,892 1,470 Wheelage revenues 2,672 3,869 Coal overriding royalty revenues 1,169 188 Lease amendment revenues 702 851 Aggregates royalty revenues 772 753 Oil and gas royalty revenues 3,640 3,588 Other revenues 653 295 Royalty and other mineral rights revenues $ 65,574 $ 76,271 Transportation and processing services revenues 2,836 2,933 Total Mineral Rights segment revenues from contracts with customers $ 68,410 $ 79,204 The following table details the Partnership's Mineral Rights segment receivables and liabilities resulting from contracts with customers: March 31, December 31, (In thousands) 2024 2023 Receivables Accounts receivable, net $ 29,978 $ 37,206 Other current assets, net (1) 2,221 429 Contract liabilities Current portion of deferred revenue $ 5,635 $ 4,599 Deferred revenue 38,348 38,356 ( 1 ) Other current assets, net includes short-term notes receivables from contracts with customers. The following table shows the activity related to the Partnership's Mineral Rights segment deferred revenue: For the Three Months Ended March 31, (In thousands) 2024 2023 Balance at beginning of period (current and non-current) $ 42,955 $ 46,437 Increase due to minimums and lease amendment fees 6,979 7,770 Recognition of previously deferred revenue ( 5,951 ) ( 7,924 ) Balance at end of period (current and non-current) $ 43,983 $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited) 3. Class A Convertible Preferred Units and Warrants On March 2, 2017, NRP issued $ 250 million of Class A Convertible Preferred Units representing limited partner interests in NRP (the "preferred units") to certain entities controlled by funds affiliated with The Blackstone Group Inc. (collectively referred to as "Blackstone") and certain affiliates of GoldenTree Asset Management LP (collectively referred to as "GoldenTree") (together the "preferred purchasers") pursuant to a Preferred Unit and Warrant Purchase Agreement. NRP issued 250,000 preferred units to the preferred purchasers at a price of $ 1,000 per preferred unit (the "per unit purchase price"), less a 2.5 % structuring and origination fee. The preferred units entitle the preferred purchasers to receive cumulative distributions at a rate of 12 % of the purchase price per year, up to one half of which NRP may pay in additional preferred units (such additional preferred units, the "PIK units"). The preferred units have a perpetual term, unless converted or redeemed as described below. NRP also issued two tranches of warrants (the "warrants") to purchase common units to the preferred purchasers (warrants to purchase 1.75 million common units with a strike price of $ 22.81 and warrants to purchase 2.25 million common units with a strike price of $ 34.00 ). The warrants may be exercised by the holders thereof at any time before the eighth anniversary of the closing date. Upon exercise of the warrants, NRP may, at its option, elect to settle the warrants in common units or cash, each on a net basis. However, in the first quarter of 2024 the remaining warrants were settled and none of the Partnership's warrants remain outstanding as of April 18, 2024. After March 2, 2022 and prior to March 2, 2025, the holders of the preferred units may elect to convert up to 33 % of the outstanding preferred units in any 12 -month period into common units i

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED (Unaudited) Accounting for the Preferred Units and Warrants Classification The preferred units are accounted for as temporary equity on NRP's Consolidated Balance Sheets due to certain contingent redemption rights that may be exercised at the election of preferred purchasers. The warrants are accounted for as equity on NRP's Consolidated Balance Sheets. Initial Measurement The net transaction price was allocated to the preferred units and warrants based on their relative fair values at inception date. NRP allocated the transaction issuance costs to the preferred units and warrants primarily on a pro-rata basis based on their relative inception date allocated values. Subsequent Measurement Preferred Units Subsequent adjustment of the preferred units will not occur until NRP has determined that the conversion or redemption of all or a portion of the preferred units is probable of occurring. Once conversion or redemption becomes probable of occurring, the carrying amount of the preferred units will be accreted to their redemption value over the period from the date the feature is probable of occurring to the date the preferred units can first be converted or redeemed. During the three months ended March 31, 2023, the Partnership received a notice from holders of the Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 47,499 Class A Preferred Units. The Partnership chose to redeem the preferred units for $ 47.5 million in cash rather than issuing common units. Of the originally issued 250,000 Class A Preferred Units, 71,666 Class A Preferred Units remained outstanding as of March 31, 2024 and December 31, 2023. These preferred units had a $ 47.2 million carrying value included in class A convertible preferred on the Partnership's Consolidated Balance Sheets at March 31, 2024 and December 31, 2023. Warrants Subsequent adjustment of the

View Full Filing

View this 10-Q filing on SEC EDGAR