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    2020 Annual Report FF: Natural Resource Partners L.P. ta


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    2020 Accomplishments Zero safety incidents Generated $89 million of Free Cash Flow Reduced outstanding debt Ended the year with by $46 million $200 million of liquidity, consisting of $100 million of cash and $100 million of available borrowing capacity Reached a favorable Paid $16.6 million of agreement with Foresight distributions to common Energy, our largest lessee, unitholders which allowed them to emerge from bankruptcy and resulted in $49 million of cash to NRP in 2020 and will result in $42 million in 2021


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    Natural Resource Partners L.P. 2020 Annual Report To Our Unitholders The unprecedented public health and economic challenges of 2020 demonstrated that we have the right strategy in place to create unitholder value. While COVID-19 ravaged the world, our partnership continued to operate safely, generate free cash flow, pay down debt, and build liquidity. All of this was accomplished while working remotely as part of our plan to prioritize the health and safety of our people. Business Highlights Our Coal Royalty & Other segment generated $126 million of Free Cash Flow in 2020. Our metallurgical properties, which are a source of coal used to manufacture steel, generated approximately 70% of our coal royalty revenues. Our Soda Ash segment consists of a 49% equity investment in Ciner Wyoming, one of the lowest cost producers of natural soda ash in the world. Global demand for soda ash, which is a key commodity used in the production of glass, was negatively impacted by the COVID-19 pandemic, causing Ciner to suspend cash distributions early in the year. As a result, we received only $14 million of Free Cash Flow from Soda Ash in 2020. While we do not know when regular distributions will recommence, the rebound in global economic activity and resulting increase in soda ash demand allowed Ciner Wyoming to resume pre-pandemic levels of production by year end. 1


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    Looking Ahead In addition to actively managing our legacy business segments, we have also been working to identify alternative revenue sources across our large portfolio of land, mineral and timber assets. The types of opportunities we are exploring include the sequestration of CO2 underground and in standing timber, and the generation of electricity using geothermal, wind and solar energy. While we do not expect these activities to generate significant cash flow in the immediate future, we believe our large ownership footprint throughout the United States will provide opportunities to create value in this regard with minimal capital investment by NRP. NRP’s demonstrated ability to continue generating free cash flow, permanently reducing our outstanding debt, and paying unitholder distributions during the COVID-19 downturn is a testament to the transformative actions taken in recent years to right-size the business. Over the last five years, NRP has paid down over $900 million of debt, paid $115 million of common unitholder distributions, and worked to solidify our capital structure and ensure strong liquidity. We remain steadfast in our commitment to focus on maximizing unitholder value by continuing these efforts. Thank you to our stakeholders who supported our team through the years and thank you for your continued support of NRP. Corbin J. Robertson, Jr. Craig Nunez Chairman and Chief Executive Officer President and Chief Operating Officer 2


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    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 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 (I.R.S. Employer incorporation or organization) 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 Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ 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 ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ 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 ☒ Non-accelerated Filer ☐ 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒ The aggregate market value of the common units held by non-affiliates of the registrant on June 30, 2020, was $109 million based on a closing price on that date of $12.19 per unit as reported on the New York Stock Exchange. Documents incorporated by reference: None.


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    Table of Contents TABLE OF CONTENTS Cautionary Statement Regarding Forward-Looking Statements ii Risk Factors Summary ii PART I Items 1. and 2. Business and Properties 1 Item 1A. Risk Factors 16 Item 1B. Unresolved Staff Comments 32 Item 3. Legal Proceedings 32 Item 4. Mine Safety Disclosures 32 PART II Item 5. Market for Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity 33 Securities Item 6. Selected Financial Data 33 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 34 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50 Item 8. Financial Statements and Supplementary Data 51 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure 90 Item 9A. Controls and Procedures 90 Item 9B. Other Information 92 PART III Item 10. Directors and Executive Officers of the Managing General Partner and Corporate Governance 93 Item 11. Executive Compensation 99 Item 12. Security Ownership of Certain Beneficial Owners and Management 102 Item 13. Certain Relationships and Related Transactions, and Director Independence 104 Item 14. Principal Accountant Fees and Services 111 PART IV Item 15. Exhibits, Financial Statement Schedules 114 Signatures 118 i


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    Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Statements included in this 10-K 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: the effects of the global COVID-19 pandemic; 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" in this Annual Report on Form 10-K for important factors that could cause our actual results of operations or our actual financial condition to differ. RISK FACTORS SUMMARY We are subject to a variety of risks and uncertainties, including risks related to our business, risks related to our indebtedness, risks related to our common stock and certain general risks, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Risks that we deem material are described under “Risk Factors” in Item 1A of this report. These risks include, but are not limited to, the following: Risks Related to Our Business • Cash distributions are not guaranteed and may fluctuate with our performance and the establishment of financial reserves. In addition, our debt agreements and our partnership agreement place restrictions on our ability to pay, and in some cases raise, the quarterly distribution under certain circumstances. • Our leverage and debt service obligations may adversely affect our financial condition, results of operations and business prospects. • The ongoing COVID-19 pandemic has adversely affected our business, and the ultimate effect on our financial condition, results of operations, and ability to make cash distributions to unitholders will depend on future developments, which are highly uncertain and cannot be predicted. • Prices for both metallurgical and thermal coal are volatile and depend on a number of factors beyond our control. Declines in prices could have a material adverse effect on our business and results of operations. • Prices for soda ash are volatile. Any substantial or extended decline in soda ash prices could have an adverse effect on Ciner Wyoming’s ability to resume distributions to us. • We derive a large percentage of our revenues and other income from a small number of coal lessees. • Bankruptcies in the coal industry, and/or the idling or closure of mines on our properties could have a material adverse effect on our business and results of operations. • Mining operations are subject to operating risks that could result in lower revenues to us. • The adoption of climate change legislation and regulations restricting emissions of greenhouse gases and other hazardous air pollutants have resulted in changes in fuel consumption patterns by electric power generators and a corresponding decrease in coal production by our lessees and reduced coal-related revenues. • Concerns about the environmental impacts of coal combustion, including perceived impacts on global climate issues, are also resulting in unfavorable lending and investment policies by institutions and insurance companies which could significantly affect our ability to raise capital or maintain current insurance levels. ii


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    Table of Contents • In addition to climate change and other Clean Air Act legislation, our businesses are subject to numerous other federal, state and local laws and regulations that may limit production from our properties and our profitability. • If our lessees do not manage their operations well, their production volumes and our royalty revenues could decrease. • We have limited approval rights with respect to the management of our Ciner Wyoming soda ash joint venture, including with respect to cash distributions and capital expenditures. In addition, we are exposed to operating risks that we do not experience in the royalty business through our soda ash joint venture and through our ownership of certain coal transportation assets. • A significant portion of Ciner Wyoming’s historical international sales of soda ash have been to ANSAC, and the termination of the ANSAC membership could adversely affect Ciner Wyoming’s ability to compete in certain international markets and increase Ciner Wyoming’s international sales costs. • Ciner Wyoming’s deca stockpiles will substantially deplete by 2024, and its production rates will decline approximately 200,000 short tons per year if further investments are not made. • Significant delays and/or higher than expected costs associated with Ciner Wyoming’s capacity expansion project could adversely affect Ciner Wyoming’s profitability and ability to resume distributions to us. • Fluctuations in transportation costs and the availability or reliability of transportation could reduce the production of coal, soda ash and other minerals from our properties. • Our reserve estimates depend on many assumptions that may be inaccurate, which could materially adversely affect the quantities and value of our reserves. In addition, we expect to cease reporting coal and hard mineral reserves pursuant to new SEC rules that will be effective for us beginning with the year ending December 31, 2021. • Our lessees could satisfy obligations to their customers with minerals from properties other than ours, depriving us of the ability to receive amounts in excess of minimum royalty payments. • A lessee may incorrectly report royalty revenues, which might not be identified by our lessee audit process or our mine inspection process or, if identified, might be identified in a subsequent period. Risks Related to Our Structure • Unitholders may not be able to remove our general partner even if they wish to do so. • The preferred units are senior in right of distributions and liquidation and upon conversion, would result in the issuance of additional common units in the future, which could result in substantial dilution of our common unitholders’ ownership interests. • We may issue additional common units or preferred units without common unitholder approval, which would dilute a unitholder’s existing ownership interests. • Our general partner has a limited call right that may require unitholders to sell their units at an undesirable time or price. • Cost reimbursements due to our general partner may be substantial and will reduce our cash available for distribution to unitholders. • Conflicts of interest could arise among our general partner and us or the unitholders. • The control of our general partner may be transferred to a third party without unitholder consent. A change of control may result in defaults under certain of our debt instruments and the triggering of payment obligations under compensation arrangements. • Unitholders may not have limited liability if a court finds that unitholder actions constitute control of our business. Tax Risks to Common Unitholders • Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes as well as our not being subject to a material amount of entity-level taxation by individual states. If the Internal Revenue Service ("IRS") were to treat us as a corporation for federal income tax purposes or we were to become subject to material additional amounts of entity-level taxation for state tax purposes, then our cash available for distribution to unitholders would be substantially reduced. iii


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    Table of Contents • The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis. • Certain federal income tax preferences currently available with respect to coal exploration and development may be eliminated as a result of future legislation. • Our unitholders are required to pay taxes on their share of our income even if they do not receive any cash distributions from us. Our unitholders' share of our portfolio income may be taxable to them even though they receive other losses from our activities. • We may engage in transactions to reduce our indebtedness and manage our liquidity that generate taxable income (including income and gain from the sale of properties and cancellation of indebtedness income) allocable to our unitholders, and income tax liabilities arising therefrom may exceed any distributions made with respect to their units. • If the IRS contests the federal income tax positions we take, the market for our units may be adversely impacted and the cost of any IRS contest will reduce our cash available for distribution to our unitholders. • If the IRS makes audit adjustments to our income tax returns for tax years beginning after December 31, 2017, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced. • Tax gain or loss on the disposition of our common units could be more or less than expected. • Our unitholders may be subject to limitation on their ability to deduct interest expense incurred by us. • Tax-exempt entities face unique tax issues from owning our units that may result in adverse tax consequences to them. • Non-U.S. Unitholders will be subject to U.S. taxes and withholding with respect to their income and gain from owning our units. • We will treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units. • We have adopted certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss and deduction. The IRS may challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of our common units. • We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our common units each month based upon the ownership of our common units on the first day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders. • A unitholder whose units are the subject of a securities loan (e.g., a loan to a "short seller" to cover a short sale of units) may be considered as having disposed of those units. If so, he would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the disposition. • As a result of investing in our units, our unitholders are likely subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire property. General Risks • Our business is subject to cybersecurity risks. • The ongoing COVID-19 pandemic has adversely affected our business and may continue to do so. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may have an adverse effect on our business, financial condition, results of operations, and cash flows. iv


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    Table of Contents PART I As used in this Part I, 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"). ITEMS 1. AND 2. BUSINESS AND PROPERTIES Partnership Structure and Management We are a publicly traded Delaware limited partnership formed in 2002. We own, manage and lease a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and own a non-controlling 49% interest in Ciner Wyoming LLC ("Ciner Wyoming"), a trona ore mining and soda ash production business. 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 various states across the United States, our oil and gas royalty assets are primarily located in Louisiana and our timber assets are primarily located in West Virginia. 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 Wyoming mines trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries. We expect royalties generated from coal mining operations on our properties and our interest in the Ciner Wyoming soda ash business to generate the substantial majority of our cash flow over the next years. However, over the past year, we have been evaluating our existing portfolio of assets for opportunities to generate alternative sources of revenues without significant capital investment by us. For example, our surface and mineral acreage owned across the United States may contain geologic formations that are suitable for the long-term sequestration and storage of carbon. To the extent a viable carbon sequestration project is developed on or near our property, we may be able to lease that property as storage in exchange for rent payments. We are also exploring opportunities to lease our surface acreage for renewable energy projects, such as solar arrays and wind farms. In addition, we are assessing our forest timber assets for carbon sequestration project potential whereby we would obtain and sell carbon offset credits in exchange for agreements for long-term forest preservation. There can be no assurance, however, that any of these potential projects will succeed or generate substantial cash flow to NRP. Our operations are conducted through Opco and our operating assets are owned by our subsidiaries. NRP (GP) LP, our general partner, has sole responsibility for conducting our business and for managing our operations. Because our general partner is a limited partnership, its general partner, GP Natural Resource Partners LLC, conducts its business and operations and the Board of Directors and officers of GP Natural Resource Partners LLC make decisions on our behalf. Robertson Coal Management LLC, a limited liability company wholly owned by Corbin J. Robertson, Jr., owns all of the membership interest in GP Natural Resource Partners LLC. Subject to the Board Representation and Observation Rights Agreement with certain entities controlled by funds affiliated with The Blackstone Group Inc. (collectively referred to as "Blackstone") and affiliates of GoldenTree Asset Management LP (collectively referred to as "GoldenTree"), Mr. Robertson, Jr. is entitled to appoint the members of the Board of Directors of GP Natural Resource Partners LLC and has delegated the right to appoint one director to Blackstone. The senior executives and other officers who manage NRP are employees of Western Pocahontas Properties Limited Partnership or Quintana Minerals Corporation, which are companies controlled by Mr. Robertson, Jr. These officers allocate varying percentages of their time to managing our operations. Neither our general partner, GP Natural Resource Partners LLC, nor any of their affiliates receive any management fee or other compensation in connection with the management of our business, but they are entitled to be reimbursed for all direct and indirect expenses incurred on our behalf. 1


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    Table of Contents We have regional offices through which we conduct our operations, the largest of which is located at 5260 Irwin Road, Huntington, West Virginia 25705 and the telephone number is (304) 522-5757. Our principal executive office is located at 1201 Louisiana Street, Suite 3400, Houston, Texas 77002 and our telephone number is (713) 751-7507. Segment and Geographic Information The amount of 2020 revenues and other income from our two operating segments is shown below. For additional business segment information, please see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" and "Item 8. Financial Statements and Supplementary Data—Item 8. Financial Statements and Supplementary Data—Note 7. Segment Information" in this Annual Report on Form 10-K, which are both incorporated herein by reference. (In thousands) Amount % of Total Coal Royalty and Other $ 129,592 92% Soda Ash 10,728 8% Total $ 140,320 100% Coal Royalty and Other Segment Our coal reserves are primarily located in the Appalachia Basin, the Illinois Basin and the Northern Powder River Basin in the United States. We lease our reserves to experienced mine operators under long-term leases. Approximately two-thirds of our royalty-based leases have initial terms of five to 40 years, with substantially all lessees having the option to extend the lease for additional terms. Leases include the right to renegotiate royalties and minimum payments for the additional terms. We also own and manage coal-related transportation and processing assets in the Illinois Basin that generate additional revenues generally based on throughput or rents. As described in the "—Other Coal Royalty and Other Segment Assets" section below, we also own oil and gas, industrial minerals and aggregates reserves that generate a portion of the Coal Royalty and Other segment revenues. Under our standard royalty lease, we grant the operators the right to mine and sell our reserves in exchange for royalty payments based on the greater of a percentage of the sale price or fixed royalty per ton of minerals mined and sold. Lessees calculate royalty payments due to us and are required to report tons of minerals mined and sold as well as the sales prices of the extracted minerals. Therefore, to a great extent, amounts reported as royalty revenues are based upon the reports of our lessees. We periodically audit this information by examining certain records and internal reports of our lessees and we perform periodic mine inspections to verify that the information that our lessees have submitted to us is accurate. Our audit and inspection processes are designed to identify material variances from lease terms as well as differences between the information reported to us and the actual results from each property. In addition to their royalty obligations, our lessees are often subject to minimum payments, which reflect amounts we are entitled to receive even if no mining activity occurs during the period. Minimum payments are usually credited against future royalties that are earned as minerals are produced. In certain leases, the lessee is time limited on the period available for recouping minimum payments and such time is unlimited on other leases. Because we do not operate any coal mines, our coal royalty business does not bear ordinary operating costs and has limited direct exposure to environmental, permitting and labor risks. Our lessees, as operators, are subject to environmental laws, permitting requirements and other regulations adopted by various governmental authorities. In addition, the lessees generally bear all labor-related risks, including retiree health care costs, black lung benefits and workers’ compensation costs associated with operating the mines on our coal and aggregates properties. We pay property taxes on our properties, which are largely reimbursed by our lessees pursuant to the terms of the various lease agreements. 2


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    Table of Contents Coal Reserves and Production Information The following table presents coal reserves information as of December 31, 2020 for the properties that we own by major coal region: Proven and Probable Reserves (1) (Tons in thousands) Underground Surface Total Appalachia Basin Northern 206,097 3,018 209,115 Central 699,977 242,821 942,798 Southern 40,699 17,993 58,692 Total Appalachia Basin 946,773 263,832 1,210,605 Illinois Basin 209,981 5,074 215,055 Northern Powder River Basin — 161,817 161,817 Gulf Coast — 1,000 1,000 Total 1,156,754 431,723 1,588,477 (1) In excess of 80% of the reserves presented in this table are currently leased to third parties. The following table presents the type of our coal reserves by major coal region as of December 31, 2020: Type of Coal (Tons in thousands) Thermal Metallurgical (1) Total Appalachia Basin Northern 148,661 60,454 209,115 Central 536,142 406,656 942,798 Southern 40,318 18,374 58,692 Total Appalachia Basin 725,121 485,484 1,210,605 Illinois Basin 215,055 — 215,055 Northern Powder River Basin 161,817 — 161,817 Gulf Coast 1,000 — 1,000 Total 1,102,993 485,484 1,588,477 (1) For purposes of this table, we have defined metallurgical coal reserves as reserves located in seams that historically have been of sufficient quality and characteristics to be able to be used in the steel making process. Some of the reserves in the metallurgical category can also be used as thermal coal. 3


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    Table of Contents The following table presents the sulfur content and the typical quality of our coal reserves by major coal region as of December 31, 2020: Sulfur Content Typical Quality (1) Medium Heat (1.0% Content Compliance Low to High (Btu per Sulfur (Tons in thousands) Coal (2) (<1.0%) 1.5%) (>1.5%) Total pound) (%) Appalachia Basin Northern 46,116 46,316 1,001 161,798 209,115 12,902 2.24 Central 430,097 658,448 238,721 45,629 942,798 13,227 0.91 Southern 30,386 32,511 23,591 2,590 58,692 13,394 1.00 Total Appalachia Basin 506,599 737,275 263,313 210,017 1,210,605 13,179 1.14 Illinois Basin — — 2,152 212,903 215,055 11,534 3.17 Northern Powder River Basin — 161,817 — — 161,817 8,800 0.65 Gulf Coast — 1,000 — — 1,000 6,678 0.69 Total 506,599 900,092 265,465 422,920 1,588,477 (1) Unless otherwise indicated, the coal quality information in this Annual Report and on the Form 10-K is reported on an as- received basis with an assumed moisture of 6% for Appalachia Basin reserves, and site specific moisture values for Illinois (typically 12% moisture) and Northern Powder River Basin (typically 25% moisture). (2) Compliance coal, when burned, emits less than 1.2 pounds of sulfur dioxide per million Btu and meets the sulfur dioxide emission standards imposed by Phase II of the Clean Air Act without blending with other coals or using sulfur dioxide reduction technologies. Compliance coal is a subset of low sulfur coal and is, therefore, also reported within the amounts for low sulfur coal. The following table presents the type of coal sales volumes by major coal region for the year ended December 31, 2020: Type of Coal (Tons in thousands) Thermal Metallurgical Total Appalachia Basin Northern 267 380 647 Central 1,157 8,954 10,111 Southern 143 746 889 Total Appalachia Basin 1,567 10,080 11,647 Illinois Basin 3,381 — 3,381 Northern Powder River Basin 1,738 — 1,738 Total 6,686 10,080 16,766 Methodologies Used in Mineral Reserve Estimation All of the reserves reported above are recoverable proven or probable reserves as determined in accordance with the SEC’s Industry Guide 7 and are estimated by our internal geologists or independent third-party consultants. Significant internally generated reserve studies are reviewed by independent third-party consultants. The technologies and economic data used in the estimation of our proven or probable reserves include, but are not limited to, drill logs, geophysical logs, geologic maps including isopach, mine and coal quality, cross sections, statistical analysis and available public production data. There are numerous uncertainties inherent in estimating the quantities and qualities of recoverable reserves, including many factors beyond our control. Estimates of economically recoverable coal reserves depend upon a number of variable factors and assumptions, any one of which may, if incorrect, result in an estimate that varies considerably from actual results. 4


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    Table of Contents In addition, the SEC has adopted new rules to modernize the property disclosure requirements for registrants with significant mining activities, which we will be required to begin to comply with for the fiscal year beginning on January 1, 2021 (reported in the Annual Report on Form 10-K for the year ending December 31, 2021). The new rules require that reserve estimates that are reported be based on technical reports prepared using extensive mine-specific geological and engineering data, as well as market and cost assumptions. The new rules contain exceptions that allow royalty companies, such as NRP, to omit information that they lack access to and cannot obtain without incurring an unreasonable burden or expense. As a royalty company, we do not have access to a substantial amount of information that will be required to prepare the technical reports used to determine reserves under the new rules, and we will not be able to obtain such information without unreasonable burden or expense. Accordingly, we expect that we will rely on the royalty company exceptions and will therefore cease to report coal and other hard mineral reserves beginning with the year ending December 31, 2021. See "Item 1A. Risk Factors—Risks Related to Our Business—Our reserve estimates depend on many assumptions that may be inaccurate, which could materially adversely affect the quantities and value of our reserves. In addition, we expect to cease reporting coal and hard mineral reserves pursuant to new SEC rules that will be effective for us beginning with the year ending December 31, 2021." Major Coal Producing Properties The following table provides a summary of our significant coal royalty properties by sales volumes for 2020 and is followed by additional information for each property: 2020 Sales Volumes Region Property/Lease Name Operator(s) Coal Type (Millions of Tons) Appalachia Basin Central Contura-CAPP (VA) Alpha Metallurgical Resources Inc. Met 3.7 Central Coal Mountain CM Energy Properties, LP Met 0.7 Central Aracoma Alpha Metallurgical Resources Inc. Met 1.1 Central Elk Creek Ramaco Resources, Inc. Met 0.9 Southern Oak Grove Crimson Oak Grove Resources LLC Met 0.7 Illinois Basin Macoupin Foresight Energy Resources LLC Thermal 0.4 Illinois Basin Williamson Foresight Energy Resources LLC Thermal 1.0 Illinois Basin Hillsboro Foresight Energy Resources LLC Thermal 2.0 Northern Powder Western Energy Rosebud Mining, LLC Thermal 1.7 River Basin Appalachia Basin—Central Appalachia Contura-CAPP (VA). The Contura-CAPP (VA) property is located in Wise, Dickenson, Russell and Buchanan Counties, Virginia. In 2020, approximately 3.7 million tons were sold from this property, substantially all of which was metallurgical coal. We lease this property to subsidiaries of Alpha Metallurgical Resources Inc. ("Alpha Metallurgical Resources") (formerly Contura Energy, Inc.). Production comes from underground room and pillar and surface mines and is trucked to one of two preparation plants. Coal is shipped via the CSX and Norfolk Southern railroads to utility and metallurgical customers. Coal Mountain. The Coal Mountain property is located in Wyoming County, West Virginia. In 2020, approximately 0.7 million tons of metallurgical coal were sold from this property. We lease this property to CM Energy Properties, LP. Metallurgical coal is produced from a multi-seam surface mine and coal is transported by truck to a preparation plant on the property. Coal is shipped via the Norfolk Southern railroad to both domestic and export metallurgical customers. Aracoma. The Aracoma property is located in Logan County, West Virginia. Approximately 1.1 million tons of coal, substantially all of which is metallurgical coal, were sold in 2020 from this property. We lease this property to a subsidiary of Alpha Metallurgical Resources. Coal is produced from underground mines and transported by belt or truck to the preparation plant on the property. Coal is shipped via the CSX railroad to export metallurgical customers. 5


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    Table of Contents Elk Creek. The Elk Creek property is located in Logan and Wyoming Counties, West Virginia. In 2020, approximately 0.9 million tons were sold from this property. We lease this property to Ramaco Resources, Inc. Metallurgical coal is produced from surface and underground mines and is transported by belt and truck to a preparation plant on the property. Coal is shipped via the CSX railroad to both domestic and export metallurgical customers. Appalachia Basin—Southern Appalachia Oak Grove. The Oak Grove property is located in Jefferson County, Alabama. In 2020, approximately 0.7 million tons of metallurgical coal were sold from this property. We lease this property to Crimson Oak Grove Resources LLC (formerly Murray Metallurgical Coal Holdings, LLC). Production comes from a longwall mine and is transported by beltline to a preparation plant. Metallurgical products are then shipped via railroad and barge to both domestic and export customers. Illinois Basin Macoupin. The Macoupin property is located in Macoupin County, Illinois. This property is under lease to Macoupin Energy, a subsidiary of Foresight Energy Resources LLC ("Foresight"). In 2020, approximately 0.4 million tons of thermal coal were sold from this property. Production is from an underground room and pillar mine. Coal is shipped by the Norfolk Southern or Union Pacific railroads or by barge to domestic utility customers. Production at the Macoupin mine was temporarily ceased in March 2020. Williamson. The Williamson property is located in Franklin and Williamson Counties, Illinois. This property is under lease to Williamson Energy, a subsidiary of Foresight. In 2020, approximately 1.0 million tons of thermal coal were sold from this property. Production comes from a longwall mine. Coal is shipped primarily via the Canadian National railroad to export customers. In 2020, we also received overriding royalties from approximately 0.2 million tons of coal sold from non-NRP property. Hillsboro. The Hillsboro property is located in Montgomery and Bond Counties, Illinois. This property is under lease to Hillsboro Energy, a subsidiary of Foresight. This property had been idled from March 2015 until production resumed in January 2019. In 2020, approximately 2.0 million tons of thermal coal were sold from this property. Production comes from a longwall mine. Coal is shipped by rail via either the Union Pacific, Norfolk Southern or Canadian National railroads, or by barges to domestic utilities customers. In addition to these properties, we own loadout and other transportation assets at the Williamson and Macoupin mines and at the Sugar Camp mine, which are also operated by Foresight. See "—Coal Transportation and Processing Assets" below for additional information on these assets. Master Agreement. On June 30, 2020, we and Foresight entered into the Master Amendment and Supplement to Coal Mining and Transportation Lease Agreements and Parent Guaranty (the “Master Agreement”) in connection with Foresight’s emergence from bankruptcy. All contracts and agreements existing prior to the bankruptcy filing were assumed by Foresight in the bankruptcy and continue post-bankruptcy pursuant to their terms, except as amended by the Master Agreement. Pursuant to the Master Agreement, Foresight made fixed cash payments of $48.75 million to NRP in 2020 and will make $42.0 million in cash payments to NRP in 2021 to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between NRP and Foresight for calendar years 2020 and 2021. Beginning in January 2022, Foresight’s payment obligations will be calculated in accordance with the provisions of the various existing agreements, except as described below with respect to Foresight’s Macoupin mine. Production at the Macoupin mine was temporarily ceased in March 2020. Pursuant to the Master Agreement, Foresight is no longer obligated to make royalty, transportation fee, or quarterly minimum payments to us under the Macoupin coal mining lease and transportation agreements. Foresight will pay an annual Macoupin fee of $2.0 million to NRP each year through 2023. The amounts paid for 2020 and payable for 2021 are included in the fixed amounts discussed in the paragraph above. Foresight also forfeited its right to recoup all previously paid but unrecouped minimum payments with respect to the Macoupin mine. At all times that the Macoupin mine remains in temporary cessation of production, Foresight will take reasonable actions to preserve, protect, and store the equipment, infrastructure, and property located at the mine. 6


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    Table of Contents Beginning January 1, 2024, we may at any time elect to cause Foresight to transfer the Macoupin mine and all associated equipment and permits to us for no consideration. If we make this election, we will assume all liabilities associated with the Macoupin mine. Also beginning January 1, 2024, Foresight may at any time elect to offer to sell the Macoupin assets to us for $1.00. If we accept Foresight’s offer, we will assume all liabilities associated with the Macoupin mine. If we do not accept Foresight’s offer, Foresight may proceed to permanently seal the Macoupin mine and conduct all reclamation activities. To the extent the elections described above are not made, Foresight will continue to pay the annual $2.0 million fee to NRP each year that the mine remains in temporary cessation of production. In addition, Foresight may determine at any time to recommence operations at the Macoupin mine, at which time we and Foresight will negotiate in good faith to enter into new coal mining lease and transportation agreements. Northern Powder River Basin Western Energy. The Western Energy property is located in Rosebud and Treasure Counties, Montana. In 2020, approximately 1.7 million tons were sold from this property by a subsidiary of Rosebud Mining, LLC. Coal is produced by surface dragline mining methods. Coal is transported by either truck or beltline to the Colstrip generation station located at the mine mouth. Coal Transportation and Processing Assets We own transportation and processing infrastructure related to certain of our coal properties, including loadout and other transportation assets at Foresight's Williamson and Macoupin mines in the Illinois Basin, for which we collect throughput fees or rents. We lease our Macoupin and Williamson transportation and processing infrastructure to subsidiaries of Foresight and are responsible for operating and maintaining the transportation and processing assets at the Williamson mine that we subcontract to a subsidiary of Foresight. In addition, we own rail loadout and associated infrastructure at the Sugar Camp mine, an Illinois Basin mine also operated by a subsidiary of Foresight. While we own coal reserves at the Williamson and Macoupin mines, we do not own coal reserves at the Sugar Camp mine. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight and we collect minimums and throughput fees. We recorded $8.8 million in revenue related to our coal transportation and processing assets during the year ended December 31, 2020. Other Coal Royalty and Other Segment Assets Until mid-2020, we owned a 51% interest in BRP LLC, a joint venture with International Paper. In 2020, we bought International Paper’s 49% interest in BRP LLC and now own 100%. Through BRP LLC, we own approximately 10 million mineral acres in over 30 states in the U.S. We own various mineral rights for lease encompassing oil and gas prospects, coal and coal bed methane rights, copper and other metals, aggregates, water, and geothermal. While the vast majority of the approximately 10 million acres remain largely undeveloped, we have an ongoing program to identify additional opportunities to lease these minerals to operating parties or otherwise monetize these assets. As of December 31, 2020, we also owned aggregates mineral rights primarily located in Kentucky and Indiana. We lease a portion of these reserves to third parties in exchange for royalty payments. The structure of these leases is similar to our coal leases, and these leases typically require minimum rental payments in addition to royalties. In addition, we hold overriding royalty interests in frac sand at operations in Wisconsin and Texas and sand and gravel reserves in Washington. During 2020, we received $1.7 million in aggregates royalty revenues, including overriding royalty revenues. 7


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    Table of Contents Soda Ash Segment We own a 49% non-controlling equity interest in Ciner Wyoming. Ciner Resources LP, our operating partner ("Ciner Resources"), controls and operates Ciner Wyoming. Ciner Wyoming mines trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries. Ciner Resources is a publicly traded master limited partnership that depends on distributions from Ciner Wyoming in order to make distributions to its public unitholders. As a minority interest owner in Ciner Wyoming, we do not operate and are not involved in the day-to-day operation of the trona ore mine or soda ash production plant. We appoint three of the seven members of the Board of Managers of Ciner Wyoming and have certain limited negative controls relating to the company. We have limited approval rights with respect to Ciner Wyoming, and our partner controls most business decisions, including decisions with respect to distributions and capital expenditures. During 2020, Ciner Wyoming suspended cash distributions to its members due to adverse developments in the soda ash market resulting from the COVID-19 pandemic. Distributions remain suspended and may continue to be suspended until the soda ash markets improve. Ciner Wyoming is one of the largest and lowest cost producers of soda ash in the world, serving a global market from its facility located in the Green River Basin of Wyoming. The Green River Basin geological formation holds the largest, and one of the highest purity, known deposits of trona ore in the world. Trona, a naturally occurring soft mineral, is also known as sodium sesquicarbonate and consists primarily of sodium carbonate, or soda ash, sodium bicarbonate and water. Ciner Wyoming processes trona ore into soda ash, which is an essential raw material in flat glass, container glass, detergents, chemicals, paper and other consumer and industrial products. The vast majority of the world’s accessible trona reserves are located in the Green River Basin. According to historical production statistics, approximately one-quarter of global soda ash is produced by processing trona, with the remainder being produced synthetically through chemical processes. The costs associated with procuring the materials needed for synthetic production are greater than the costs associated with mining trona for trona-based production. In addition, trona-based production consumes less energy and produces fewer undesirable by- products than synthetic production. Ciner Wyoming’s Green River Basin surface operations are situated on approximately 2,300 acres in Wyoming, and its mining operations consist of approximately 23,500 acres of leased and licensed subsurface mining area. The facility is accessible by both road and rail. Ciner Wyoming uses seven large continuous mining machines and 14 underground shuttle cars in its mining operations. Its processing assets consist of material sizing units, conveyors, calciners, dissolver circuits, thickener tanks, drum filters, evaporators and rotary dryers. In trona ore processing, insoluble materials and other impurities are removed by thickening and filtering liquor, a solution consisting of sodium carbonate dissolved in water. Ciner Wyoming then adds activated carbon to filters to remove organic impurities, which can cause color contamination in the final product. The resulting clear liquid is then crystallized in evaporators, producing sodium carbonate monohydrate. The crystals are then drawn off and passed through a centrifuge to remove excess water. The resulting material is dried in a product dryer to form anhydrous sodium carbonate, or soda ash. The resulting processed soda ash is then stored in on-site storage silos to await shipment by bulk rail or truck to distributors and end customers. Ciner Wyoming’s storage silos can hold over 58,000 short tons of processed soda ash at any given time. The facility is in good working condition and has been in service for more than 50 years. Deca Rehydration. The evaporation stage of trona ore processing produces a precipitate and natural by-product called deca. "Deca," short for sodium carbonate decahydrate, is one part soda ash and ten parts water. Solar evaporation causes deca to crystallize and precipitate to the bottom of the four main surface ponds at the Green River Basin facility. The deca rehydration process enables Ciner Wyoming to recover soda ash from the deca-rich purged liquor as a by-product of the refining process. The soda ash contained in deca is captured by allowing the deca crystals to evaporate in the sun and separating the dehydrated crystals from the soda ash. The separated deca crystals are then blended with partially processed trona ore in the dissolving stage of the production process. This process enables Ciner Wyoming to reduce waste storage needs and convert what is typically a waste product into a usable raw material. Ciner Wyoming anticipates that its current deca stockpiles will be exhausted by 2024 and that production rates will decline approximately 200,000 short tons per year if that production capacity is not replaced. 8


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    Table of Contents Shipping and Logistics. All of the soda ash produced is shipped by rail or truck from the Green River Basin facility. For the year ended December 31, 2020, Ciner Wyoming shipped approximately 97% of its soda ash to its customers initially via a single rail line owned and controlled by Union Pacific Railroad Company. The Ciner Wyoming plant receives rail service exclusively from Union Pacific. The agreement with Union Pacific expires on December 31, 2021 and there can be no assurance that it will be renewed on terms favorable to Ciner Wyoming or at all. The rail freight rate charged under the agreement increases annually based on a published index tied to certain rail industry metrics. A leased fleet of more than 2,200 hopper cars serve as dedicated modes of shipment to Ciner Wyoming's domestic customers. For export, soda ash is shipped on unit trains consisting of approximately 100 cars to two primary ports located in Longview, Washington and Portland, Oregon. From these ports, the soda ash is loaded onto ships for delivery to ports all over the world. Until 2021, American Natural Soda Ash Corporation ("ANSAC") provided logistics and support services for all of Ciner Wyoming’s export sales. For domestic sales, Ciner Resources Corporation ("Ciner Corporation") provides similar services. Ciner Corporation is the parent company of Ciner Wyoming Holding Co. (“Ciner Holding”), which in turn is the sole member of the general partner of our operating partner, Ciner Resources. Customers. Ciner Wyoming’s customers, including end users to whom ANSAC makes sales overseas, consist primarily of glass manufacturing companies, which account for 50% or more of the consumption of soda ash around the world; and chemical and detergent manufacturing companies. Prior to 2021, Ciner Wyoming’s largest customer was ANSAC, which bought soda ash (through Ciner Corporation, which serves as Ciner Wyoming’s sales agent in its agreement with ANSAC) and other of its member companies for export to its customers. ANSAC accounted for approximately 45% of Ciner Wyoming’s net sales in 2020. ANSAC takes soda ash orders directly from its overseas customers and then purchases soda ash for resale from its member companies pro rata based on each member’s production volumes. ANSAC is the exclusive distributor for its members to the markets it serves. However, Ciner Corporation, on Ciner Wyoming’s behalf, negotiates directly with, and Ciner Wyoming exports to, customers in markets not served by ANSAC. As part of its strategic initiative to gain better direct access and control of international customers and logistics and the ability to leverage the expertise of the global Ciner Group, the world’s largest natural soda ash producer, Ciner Corporation delivered a notice to terminate its membership in ANSAC in 2019. The termination was expected to be effective as of the end of day on December 31, 2021. In July 2020, Ciner Corporation entered into an agreement with ANSAC and its other members that, among other things, terminated Ciner Corporation’s membership in ANSAC effective as of the end of the day on December 31, 2020, a year earlier than previously announced. For a limited period after December 31, 2020, Ciner Corporation will continue to sell, at substantially lower volumes, product to ANSAC for export sales purposes, with a fixed rate per ton selling, general and administrative expense, and will also purchase a limited amount of export logistics services. Effective January 1, 2021, Ciner Corporation is managing Ciner Wyoming’s export sales and marketing efforts and is leveraging the distributor network established by the global Ciner Group. Ciner Corporation is also independently reviewing current and potential distribution partners to optimize Ciner Wyoming’s global sales. Through Ciner Corporation, Ciner Wyoming has obtained its own international sales arrangements for 2021, obtained third-party export port services, and chartered and executed its own international voyages. The withdrawal from ANSAC is expected to enable Ciner Wyoming to combine volumes with Ciner Group’s soda ash exports from Turkey and therefore to leverage the larger, global Ciner Group’s soda ash operations. Ciner Wyoming believes this will eventually lower its cost position and improve its ability to optimize its market share both domestically and internationally. However, initial costs may be higher than costs incurred through ANSAC sales. For customers in North America, Ciner Corporation typically enters into contracts on Ciner Wyoming’s behalf with terms ranging from one to three years. Under these contracts, customers generally agree to purchase either minimum estimated volumes of soda ash or a certain percentage of their soda ash requirements at a fixed price for a given calendar year. Although Ciner Wyoming does not have “take or pay” arrangements with its customers, substantially all sales are made pursuant to written agreements and not through spot sales. In 2020, Ciner Wyoming had more than 70 domestic customers and has had long-term relationships with the majority of its customers. 9


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    Table of Contents Leases and License. Ciner Wyoming is party to several mining leases and one license for its subsurface mining rights. Some of the leases are renewable at Ciner Wyoming’s option upon expiration. Ciner Wyoming pays royalties to the State of Wyoming, the U.S. Bureau of Land Management and Rock Springs Royalty Company, an affiliate of Occidental Petroleum Corporation, which are calculated based upon a percentage of the value of soda ash and related products sold at a certain stage in the mining process. These royalty payments may be subject to a minimum domestic production volume from the Green River Basin facility. Ciner Wyoming is also obligated to pay annual rentals to its lessors and licensor regardless of actual sales. In addition, Ciner Wyoming pays a production tax to Sweetwater County, and trona severance tax to the State of Wyoming that is calculated based on a formula that utilizes the volume of trona ore mined and the value of the soda ash produced. Expansion Project. Ciner Wyoming has announced a significant capacity expansion capital project that would increase production levels to up to 3.5 million tons of soda ash per year. Ciner Wyoming has conducted the initial basic design and is pursuing the related permits and detailed cost analysis pursuant to the basic design. When considering the significant investment required by this expansion and the infrastructure improvements designed to increase overall efficiency, combined with the COVID-19 pandemic’s negative impact on Ciner Wyoming’s financial results, Ciner Wyoming has reprioritized the timing of the significant expenditure items in order to increase financial and liquidity flexibility until it has more clarity and visibility into the ongoing impact of the COVID-19 pandemic on its business. The costs of the expansion project could be higher than expected, or the execution of the project could be substantially delayed, which could materially impact Ciner Wyoming’s profitability and result in a further delay of Ciner Wyoming’s resumption of cash distributions to its members. As a minority interest owner in Ciner Wyoming, we do not operate and are not involved in the day-to-day operation of the trona ore mine or soda ash production plant. Our partner, Ciner Resources, manages the mining and plant operations. We appoint three of the seven members of the Board of Managers of Ciner Wyoming and have certain limited negative controls relating to the company. Significant Customers We have a significant concentration of revenues with Foresight and its subsidiaries, with total revenues of $35.7 million in 2020 from all of their mining operations, including transportation and processing services revenues, coal overriding royalty revenues and wheelage revenues. In June 2020, we entered into lease amendments with Foresight pursuant to which Foresight agreed to pay us fixed cash payments to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between us and Foresight for calendar years 2020 and 2021. We also have a significant concentration of revenues from Alpha Metallurgical Resources, with total revenues of $33.2 million in 2020 from several different mining operations, including wheelage revenues. For additional information on significant customers, refer to "Item 8. Financial Statements and Supplementary Data—Note 14. Major Customers." Competition We face competition from land companies, coal producers, international steel companies and private equity firms in purchasing coal reserves and royalty producing properties. Numerous producers in the coal industry make coal marketing intensely competitive. Our lessees compete among themselves and with coal producers in various regions of the United States for domestic sales. Lessees compete with both large and small producers nationwide on the basis of coal price at the mine, coal quality, transportation cost from the mine to the customer and the reliability of supply. Continued demand for our coal and the prices that our lessees obtain are also affected by demand for electricity and steel, as well as government regulations, technological developments and the availability and the cost of generating power from alternative fuel sources, including nuclear, natural gas, wind, solar and hydroelectric power. Ciner Wyoming's trona mining and soda ash refinery business faces competition from a number of soda ash producers in the United States, Europe and Asia, some of which have greater market share and greater financial, production and other resources than Ciner Wyoming does. Some of Ciner Wyoming’s competitors are diversified global corporations that have many lines of business and some have greater capital resources and may be in a better position to withstand a long-term deterioration in the soda ash market. Other competitors, even if smaller in size, may have greater experience and stronger relationships in their local markets. Competitive pressures could make it more difficult for Ciner Wyoming to retain its existing customers and attract new customers, and could also intensify the negative impact of factors that decrease demand for soda ash in the markets it serves, such as adverse economic conditions, weather, higher fuel costs and taxes or other governmental or regulatory actions that directly or indirectly increase the cost or limit the use of soda ash. 10


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    Table of Contents Title to Property We owned substantially all of our coal and aggregates reserves in fee as of December 31, 2020. We lease the remainder from unaffiliated third parties. Ciner Wyoming leases or licenses its trona reserves. We believe that we have satisfactory title to all of our mineral properties, but we have not had a qualified title company confirm this belief. Although title to these properties is subject to encumbrances in certain cases, such as customary easements, rights-of-way, interests generally retained in connection with the acquisition of real property, licenses, prior reservations, leases, liens, restrictions and other encumbrances, we believe that none of these burdens will materially detract from the value of our properties or from our interest in them or will materially interfere with their use in the operation of our business. For most of our properties, the surface, oil and gas and mineral or coal estates are not owned by the same entities. Some of those entities are our affiliates. State law and regulations in most of the states where we do business require the oil and gas owner to coordinate the location of wells so as to minimize the impact on the intervening coal seams. We do not anticipate that the existence of the severed estates will materially impede development of the minerals on our properties. Regulation and Environmental Matters General Operations on our properties must be conducted in compliance with all applicable federal, state and local laws and regulations. These laws and regulations include matters involving the discharge of materials into the environment, employee health and safety, mine permits and other licensing requirements, reclamation and restoration of mining properties after mining is completed, management of materials generated by mining operations, surface subsidence from underground mining, water pollution, legislatively mandated benefits for current and retired coal miners, air quality standards, protection of wetlands, plant and wildlife protection, limitations on land use, storage of petroleum products and substances which are regarded as hazardous under applicable laws and management of electrical equipment containing polychlorinated biphenyls ("PCBs"). Because of extensive, comprehensive and often ambiguous regulatory requirements, violations during natural resource extraction operations are not unusual and, notwithstanding compliance efforts, we do not believe violations can be eliminated entirely. While it is not possible to quantify the costs of compliance with all applicable federal, state and local laws and regulations, those costs have been and are expected to continue to be significant. Our lessees in our coal and aggregates royalty businesses are required to post performance bonds pursuant to federal and state mining laws and regulations for the estimated costs of reclamation and mine closures, including the cost of treating mine water discharge when necessary. In many states our lessees also pay taxes into reclamation funds that states use to achieve reclamation where site specific performance bonds are inadequate to do so. Determinations by federal or state agencies that site specific bonds or state reclamation funds are inadequate could result in increased bonding costs for our lessees or even a cessation of operations if adequate levels of bonding cannot be maintained. We do not accrue for reclamation costs because our lessees are both contractually liable and liable under the permits they hold for all costs relating to their mining operations, including the costs of reclamation and mine closures. Although the lessees typically accrue adequate amounts for these costs, their future operating results would be adversely affected if they later determined these accruals to be insufficient. In recent years, compliance with these laws and regulations has substantially increased the cost of coal mining for all domestic coal producers. In addition, the electric utility industry, which is the most significant end-user of thermal coal, is subject to extensive regulation regarding the environmental impact of its power generation activities, which has affected and is expected to continue to affect demand for coal mined from our properties. Current and future proposed legislation and regulations could be adopted that will have a significant additional impact on the mining operations of our lessees or their customers’ ability to use coal and may require our lessees or their customers to change operations significantly or incur additional substantial costs that would negatively impact the coal industry. Many of the statutes discussed below also apply to Ciner Wyoming’s trona mining and soda ash production operations, and therefore we do not present a separate discussion of statutes related to those activities, except where appropriate. 11


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    Table of Contents Air Emissions The Clean Air Act and corresponding state and local laws and regulations affect all aspects of our business. The Clean Air Act directly impacts our lessees’ coal mining and processing operations by imposing permitting requirements and, in some cases, requirements to install certain emissions control equipment, on sources that emit various hazardous and non-hazardous air pollutants. The Clean Air Act also indirectly affects coal mining operations by extensively regulating the air emissions of coal-fired electric power generating plants. There have been a series of federal rulemakings that are focused on emissions from coal-fired electric generating facilities, including the Cross-State Air Pollution Rule ("CSAPR"), regulating emissions of nitrogen oxide and sulfur dioxide, and the Mercury and Air Toxics Rule ("MATS"), regulating emissions of hazardous air pollutants. Installation of additional emissions control technologies and other measures required under these and other U.S. Environmental Protection Agency ("EPA") regulations make it more costly to operate coal-fired power plants and could make coal a less attractive or even effectively prohibited fuel source in the planning, building and operation of power plants in the future. These rules and regulations have resulted in a reduction in coal’s share of power generating capacity, which has negatively impacted our lessees’ ability to sell coal and our coal-related revenues. Further reductions in coal’s share of power generating capacity as a result of compliance with existing or proposed rules and regulations would have a material adverse effect on our coal-related revenues. Carbon Dioxide and Greenhouse Gas ("GHG") Emissions In December 2009, EPA determined that emissions of carbon dioxide, methane, and other GHGs present an endangerment to public health and welfare because emissions of such gases are, according to EPA, contributing to warming of the Earth’s atmosphere and other climatic changes. Based on its findings, EPA began adopting and implementing regulations to restrict emissions of GHGs under various provisions of the Clean Air Act. In August 2015, EPA published its final Clean Power Plan ("CPP") Rule, a multi-factor plan designed to cut carbon pollution from existing power plants, including coal-fired power plants. The rule required improving the heat rate of existing coal-fired power plants and substituting lower carbon-emission sources like natural gas and renewables in place of coal. As promulgated, the rule would force many existing coal-fired power plants to incur substantial costs in order to comply or alternatively result in the closure of some of these plants, likely resulting in a material adverse effect on the demand for coal by electric power generators. The rule was being challenged by several states, industry participants and other parties in the United States Court of Appeals for the District of Columbia Circuit. In February 2016, the Supreme Court of the United States stayed the CPP Rule pending a decision by the District of Columbia Circuit as well as any subsequent review by the Supreme Court. In April 2017, the United States Court of Appeals for the District of Columbia Circuit granted EPA’s motion to hold the litigation in abeyance. In December 2017, EPA issued a proposed rule repealing the CPP Rule and issued an Advance Notice of Proposed Rulemaking soliciting information regarding a potential replacement rule to the CPP Rule. In August 2018, EPA formally proposed the Affordable Clean Energy ("ACE") Rule, which would replace the CPP Rule. The ACE Rule contemplates a narrower approach than the CPP Rule, focusing on efficiency improvements at existing power plants and eliminating the CPP Rule’s broader goals that envisioned switches to non-fossil fuel energy sources and the implementation of efficiency measures on demand-side entities, which the EPA now considers beyond the reach of its authority under the Clean Air Act. The ACE Rule would also omit specific numerical emissions targets that had been established under the CPP Rule. The ACE Rule went into effect on September 6, 2019. As a result, the United States Court of Appeals for the District of Columbia Circuit dismissed the pending challenges to the CPP Rule as moot. The ACE Rule was challenged by public health groups, environmental groups, states, municipalities, industry groups, and power providers. The legal challenges were consolidated as American Lung Assoc. v. EPA before the D.C. Circuit Court of Appeals. Dozens of parties and over 170 amici filed briefs on the merits, and oral argument was held before a three-judge panel in October 2020. In January 2021, the D.C. Circuit issued a written opinion holding that the ACE Rule was based on EPA’s “erroneous legal premise” that when it determines the “best system of emission reduction” for existing sources, the Clean Air Act mandates that EPA may only consider emission reduction measures that can be applied at and/or to a stationary source (often referred to as “inside-the-fence” measures). The Court vacated and remanded the rule to EPA for further consideration in light of its opinion, which will now occur under the Biden administration. In October 2015, EPA published its final rule on performance standards for greenhouse gas emissions from new, modified, and reconstructed electric generating units. The final rule requires new steam generating units to use highly efficient supercritical pulverized coal boilers that use partial post-combustion carbon capture and storage technology. The final emission standard is less stringent than EPA had originally proposed due to updated cost assumptions, but could still have a material adverse effect on new coal-fired power plants. The final rule has been challenged by several states, industry participants and other parties in the United States Court of Appeals for the District of Columbia Circuit, but is not subject to a stay. In April 12


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    Table of Contents 2017, the court granted EPA’s motion to hold the litigation in abeyance while EPA reviews the rule. In December 2018, EPA issued a proposed rule revising the best system of emission reduction (“BSER”) for newly constructed coal-fired electric generating units, among other changes, to replace the 2015 rule. In a status report filed with the Court on January 15, 2021, EPA requested that the case remain in abeyance until after the transition to the Biden administration. President Obama also announced an emission reduction agreement with China’s President Xi Jinping in November 2014. The United States pledged that by 2025 it would cut climate pollution by 26% to 28% from 2005 levels. China pledged it would reach its peak carbon dioxide emissions around 2030 or earlier, and increase its non-fossil fuel share of energy to around 20% by 2030. In December 2015, the United States was one of 196 countries that participated in the Paris Climate Conference, at which the participants agreed to limit their emissions in order to limit global warming to 2°C above pre-industrial levels, with an aspirational goal of 1.5°C. While there is no way to estimate the impact of these climate pledges and agreements, they could ultimately have an adverse effect on the demand for coal, both nationally and internationally, if implemented. In 2019, President Trump withdrew from the Paris Climate Agreement. In January 2021, President Biden announced that the United States is rejoining the Paris Climate Agreement. Hazardous Materials and Waste The Federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA" or the Superfund law) and analogous state laws impose liability, without regard to fault or the legality of the original conduct, on certain classes of persons that are considered to have contributed to the release of a “hazardous substance” into the environment. We could become liable under federal and state Superfund and waste management statutes if our lessees are unable to pay environmental cleanup costs relating to hazardous substances. In addition, we may have liability for environmental clean-up costs in connection with Ciner Wyoming's soda ash businesses. Water Discharges Operations conducted on our properties can result in discharges of pollutants into waters. The Clean Water Act and analogous state laws and regulations create two permitting programs for mining operations. The National Pollutant Discharge Elimination System (NPDES) program under Section 402 of the statute is administered by the states or EPA and regulates the concentrations of pollutants in discharges of waste and storm water from a mine site. The Section 404 program is administered by the Army Corps of Engineers and regulates the placement of overburden and fill material into channels, streams and wetlands that comprise “waters of the United States.” The scope of waters that may fall within the jurisdictional reach of the Clean Water Act is expansive and may include land features not commonly understood to be a stream or wetlands. The Clean Water Act and its regulations prohibit the unpermitted discharge of pollutants into such waters, including those from a spill or leak. Similarly, Section 404 also prohibits discharges of fill material and certain other activities in waters unless authorized by the issued permit. In June 2015, EPA issued a new rule defining the scope of “Waters of the United States” (WOTUS) that are subject to regulation. The 2015 WOTUS rule was challenged by a number of states and private parties in federal district and circuit courts. In December 2017, EPA and the Corps proposed a rule to repeal the 2015 WOTUS rule and implement the pre-2015 definition. The repeal of the 2015 WOTUS rule took effect in December 2019. In December 2018, EPA and the Corps issued a proposed rule again revising the definition of “Waters of the United States.” The new rule (the Navigable Waters Protection Rule) took effect in June 2020. In most of the pending legal challenges to the 2015 WOTUS rule, the petitioners filed amended complaints to include allegations challenging the 2020 rule. In addition, various industry groups, environmental groups, and states filed new legal challenges to the 2020 rule. Currently, legal challenges to the 2020 rule are pending in at least twelve federal district courts. However, the 2020 rule is currently in effect everywhere in the U.S. except Colorado, where a federal district court issued a preliminary injunction preventing the rule from taking effect. There are motions for preliminary injunctions pending in at least two other courts and cross-motions for summary judgment pending in at least one court. In connection with its review of permits, EPA has at times sought to reduce the size of fills and to impose limits on specific conductance (conductivity) and sulfate at levels that can be unachievable absent treatment at many mines. Such actions by EPA could make it more difficult or expensive to obtain or comply with such permits, which could, in turn, have an adverse effect on our coal-related revenues. 13


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    Table of Contents In addition to government action, private citizens’ groups have continued to be active in bringing lawsuits against operators and landowners. Since 2012, several citizen group lawsuits have been filed against mine operators for allegedly violating conditions in their National Pollutant Discharge Elimination System (“NPDES”) permits requiring compliance with West Virginia’s water quality standards. Some of the lawsuits alleged violations of water quality standards for selenium, whereas others alleged that discharges of conductivity and sulfate were causing violations of West Virginia’s narrative water quality standards, which generally prohibit adverse effects to aquatic life. The citizen suit groups have sought penalties as well as injunctive relief that would limit future discharges of selenium, conductivity or sulfate. The federal district court for the Southern District of West Virginia has ruled in favor of the citizen suit groups in multiple suits alleging violations of the water quality standard for selenium and in two suits alleging violations of water quality standards due to discharges of conductivity (one of which was upheld on appeal by the United States Court of Appeals for the Fourth Circuit in January 2017). Additional rulings requiring operators to reduce their discharges of selenium, conductivity or sulfate could result in large treatment expenses for our lessees. In 2015, the West Virginia Legislature enacted certain changes to West Virginia’s NPDES program to expressly prohibit the direct enforcement of water quality standards against permit holders. EPA approved those changes as a program revision effective in March 2019. This approval may prevent future citizen suits alleging violations of water quality standards. Since 2013, several citizen group lawsuits have been filed against landowners alleging ongoing discharges of pollutants, including selenium and conductivity, from valley fills located at reclaimed mountaintop removal mining sites in West Virginia. In each case, the mine on the subject property has been closed, the property has been reclaimed, and the state reclamation bond has been released. Any determination that a landowner or lessee has liability for discharges from a previously reclaimed mine site could result in substantial compliance costs or fines and would result in uncertainty as to continuing liability for completed and reclaimed coal mine operations. Other Regulations Affecting the Mining Industry Mine Health and Safety Laws The operations of our coal lessees and Ciner Wyoming are subject to stringent health and safety standards that have been imposed by federal legislation since the adoption of the Mine Health and Safety Act of 1969. The Mine Health and Safety Act of 1969 resulted in increased operating costs and reduced productivity. The Mine Safety and Health Act of 1977, which significantly expanded the enforcement of health and safety standards of the Mine Health and Safety Act of 1969, imposes comprehensive health and safety standards on all mining operations. In addition, the Black Lung Acts require payments of benefits by all businesses conducting current mining operations to coal miners with black lung or pneumoconiosis and to some beneficiaries of miners who have died from this disease. Mining accidents in recent years have received national attention and instigated responses at the state and national level that have resulted in increased scrutiny of current safety practices and procedures at all mining operations, particularly underground mining operations. Since 2006, heightened scrutiny has been applied to the safe operations of both underground and surface mines. This increased level of review has resulted in an increase in the civil penalties that mine operators have been assessed for non-compliance. Operating companies and their supervisory employees have also been subject to criminal convictions. The Mine Safety and Health Administration ("MSHA") has also advised mine operators that it will be more aggressive in placing mines in the Pattern of Violations program, if a mine’s rate of injuries or significant and substantial citations exceed a certain threshold. A mine that is placed in a Pattern of Violations program will receive additional scrutiny from MSHA. Surface Mining Control and Reclamation Act of 1977 The Surface Mining Control and Reclamation Act of 1977 ("SMCRA") and similar statutes enacted and enforced by the states impose on mine operators the responsibility of reclaiming the land and compensating the landowner for types of damages occurring as a result of mining operations. To ensure compliance with any reclamation obligations, mine operators are required to post performance bonds. Our coal lessees are contractually obligated under the terms of our leases to comply with all federal, state and local laws, including SMCRA. Upon completion of the mining, reclamation generally is completed by seeding with grasses or planting trees for use as pasture or timberland, as specified in the reclamation plan approved by the state regulatory authority. In addition, higher and better uses of the reclaimed property are encouraged. 14


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    Table of Contents Mining Permits and Approvals Numerous governmental permits or approvals such as those required by SMCRA and the Clean Water Act are required for mining operations. In connection with obtaining these permits and approvals, our lessees may be required to prepare and present to federal, state or local authorities data pertaining to the effect or impact that any proposed production of coal may have upon the environment. The requirements imposed by any of these authorities may be costly and time consuming and may delay commencement or continuation of mining operations. In order to obtain mining permits and approvals from state regulatory authorities, mine operators, including our lessees, must submit a reclamation plan for reclaiming the mined property upon the completion of mining operations. Our lessees have obtained or applied for permits to mine a majority of the reserves that are currently planned to be mined over the next five years. Our lessees are also in the planning phase for obtaining permits for the additional reserves planned to be mined over the following five years. However, given the imposition of new requirements in the permits in the form of policies and the increased oversight review that has been exercised by EPA, there are no assurances that they will not experience difficulty and delays in obtaining mining permits in the future. In addition, EPA has used its authority to create significant delays in the issuance of new permits and the modification of existing permits, which has led to substantial delays and increased costs for coal operators. Employees and Labor Relations As of December 31, 2020, affiliates of our general partner employed 54 people who directly supported our operations. None of these employees were subject to a collective bargaining agreement. Website Access to Partnership Reports Our Internet address is www.nrplp.com. We make available free of charge on or through our Internet website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. Information on our website is not a part of this report. In addition, the SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information filed by us. Corporate Governance Matters Our Code of Business Conduct and Ethics, our Disclosure Controls and Procedures Policy and our Corporate Governance Guidelines adopted by our Board of Directors, as well as the charter for our Audit Committee are available on our website at www.nrplp.com. Copies of our annual report, our Code of Business Conduct and Ethics, our Disclosure Controls and Procedures Policy, our Corporate Governance Guidelines and our committee charters will be made available upon written request to our principal executive office at 1201 Louisiana St., Suite 3400, Houston, Texas 77002. 15


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    Table of Contents ITEM 1A. RISK FACTORS Risks Related to Our Business Cash distributions are not guaranteed and may fluctuate with our performance and the establishment of financial reserves. In addition, our debt agreements and our partnership agreement place restrictions on our ability to pay, and in some cases raise, the quarterly distribution under certain circumstances. Because distributions on the common units are dependent on the amount of cash we generate, distributions fluctuate based on our performance. The actual amount of cash that is available to be distributed each quarter depends on numerous factors, some of which are beyond our control and the control of the general partner. Cash distributions are dependent primarily on cash flow, and not solely on profitability, which is affected by non-cash items. Therefore, cash distributions might be made during periods when we record losses and might not be made during periods when we record profits. The actual amount of cash we have to distribute each quarter is reduced by payments in respect of debt service and other contractual obligations, including distributions on the preferred units, fixed charges, maintenance capital expenditures, and reserves for future operating or capital needs that the board of directors may determine are appropriate. We have significant debt service obligations and obligations to pay cash distributions on our preferred units. To the extent our board of directors deems appropriate, it may determine to decrease the amount of the quarterly distribution on our common units or suspend or eliminate the distribution on our common units altogether. In addition, because our unitholders are required to pay income taxes on their respective shares of our taxable income, our unitholders may be required to pay taxes in excess of any future distributions we make. Our unitholders' share of our portfolio income may be taxable to them even though they receive other losses from our activities. See "—Tax Risks to Our Unitholders—Our unitholders are required to pay taxes on their share of our income even if they do not receive any cash distributions from us. Our unitholders' share of our portfolio income may be taxable to them even though they receive other losses from our activities." The agreements governing our indebtedness and preferred units restrict our ability to pay distributions on our common and preferred units under certain circumstances. The indenture governing our 2025 parent company notes restricts us from paying more than one-half of the quarterly distribution on our preferred units in cash if our consolidated leverage ratio exceeds 3.75x. Our consolidated leverage ratio has risen since the onset of the COVID-19 pandemic and rose above 3.75x during the third quarter of 2020, and we began paying one-half of the required quarterly distribution in kind through the issuance of additional preferred units (“PIK units”) with respect to such quarter. To the extent our leverage ratio continues to exceed 3.75x, which we expect for the foreseeable future, we will be required to continue to pay one-half of the required preferred distributions in PIK units and will be unable to redeem any PIK units until our consolidated leverage ratio falls below 3.75x. Distributions on the outstanding PIK units will accrue and accumulate at 12% per year until such PIK units are redeemed. Under our partnership agreement, to the extent any PIK units are outstanding at any time after January 1, 2022, we will be prohibited from making any distributions with respect to our common units until we have redeemed all such PIK units in cash. In addition, Opco’s revolving credit agreement, the indenture governing our 2025 Senior Notes and our partnership agreement each require that we meet certain consolidated leverage tests in order to raise our quarterly distribution on the common units above the current level of $0.45 per quarter. The maximum leverage covenant under Opco’s revolving credit facility will step down permanently from 4.0x to 3.0x if we increase the common unit distribution above the current level of $0.45 per common unit per quarter. For more information on restrictions on our ability to make distributions on our common units, see "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" and "Item 8. Financial Statements and Supplementary Data—Note 11. Debt, Net." Our leverage and debt service obligations may adversely affect our financial condition, results of operations and business prospects. As of December 31, 2020, we and our subsidiaries had approximately $477.9 million of total indebtedness. The terms and conditions governing the indenture for NRP’s 2025 Senior Notes and Opco’s revolving credit facility and senior notes: • require us to meet certain leverage and interest coverage ratios; 16


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    Table of Contents • require us to dedicate a substantial portion of our cash flow from operations to service our existing debt, thereby reducing the cash available to finance our operations and other business activities and could limit our flexibility in planning for or reacting to changes in our business and the industries in which we operate; • increase our vulnerability to economic downturns and adverse developments in our business; • limit our ability to access the bank and capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures or acquisitions or to refinance existing indebtedness; • place restrictions on our ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations; • place us at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size or less restrictive terms governing their indebtedness; • make it more difficult for us to satisfy our obligations under our debt agreements and increase the risk that we may default on our debt obligations; and • limit management’s discretion in operating our business. Our ability to meet our expenses and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors. We will not be able to control many of these factors, such as economic conditions and governmental regulation. We cannot be certain that our cash flow will be sufficient to allow us to pay the principal and interest on our debt and meet our other obligations, including payment of distributions on the preferred units. If we do not have sufficient funds, we may be required to refinance all or part of our existing debt, borrow more money, or sell assets or raise equity at unattractive prices, including higher interest rates. We are required to make substantial principal repayments each year in connection with Opco’s senior notes, with approximately $40 million due thereunder during 2021. To the extent we borrow to make some of these payments, we may not be able to refinance these amounts on terms acceptable to us, if at all. We may not be able to refinance our debt, sell assets, borrow more money or access the bank and capital markets on terms acceptable to us, if at all. Our ability to comply with the financial and other restrictive covenants in our debt agreements will be affected by the levels of cash flow from our operations and future events and circumstances beyond our control. Failure to comply with these covenants would result in an event of default under our indebtedness, and such an event of default could adversely affect our business, financial condition and results of operations. In July 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after late 2021. Opco’s revolving credit facility includes provisions to determine a replacement rate for LIBOR if necessary during its term, which provide that we will adopt a replacement rate that is broadly accepted by the syndicated loan market. We currently do not expect the transition from LIBOR to have a material impact on us. However, if clear market standards and replacement methodologies have not developed as of the time LIBOR becomes unavailable, we may have difficulty establishing a replacement rate under Opco’s revolving credit facility. In the event that we do not determine a replacement rate for LIBOR, in certain circumstances, Eurodollar Loans under Opco’s revolving credit facility may be suspended and converted to ABR Loans, which could bear higher interest rates. If we are unable to negotiate replacement rates on favorable terms, it could adversely affect our business, financial condition and results of operations. For a description of the interest rate on borrowings under Opco’s revolving credit facility, see “Item 8. Financial Statements and Supplementary Data— Note 11. Item 8. Financial Statements and Supplementary Data—Note 11. Debt, Net.” The ongoing COVID-19 pandemic has adversely affected our business, and the ultimate effect on our financial condition, results of operations, and ability to make cash distributions to unitholders will depend on future developments, which are highly uncertain and cannot be predicted. The ongoing COVID-19 pandemic has adversely affected the global economy, disrupted global supply chains and created significant volatility in the financial markets. In addition, the pandemic has resulted in travel restrictions, business closures and the institution of quarantining and other restrictions on movement in many communities and global trading markets. Coal markets faced substantial challenges prior to the pandemic, and widespread increases in unemployment and decreases in electricity and steel demand further reduced demand and prices for coal. In addition, demand for and prices of soda ash decreased, as global manufacturing slowed. If the reduced demand for and prices of coal and/or soda ash continue for a prolonged period, our financial condition, results of operations, and cash distributions to unitholders may be materially and adversely affected. Our board of directors determined to suspend cash distributions to our common unitholders with respect to the first quarter of 2020 in order to preserve liquidity due to uncertainties created by the pandemic. To the extent our board of 17


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    Table of Contents directors deems necessary, it may determine to suspend cash distributions in future quarters as a result of the pandemic. In addition, Ciner Wyoming suspended cash distributions to its members in 2020 due to adverse effects of the pandemic on the global and domestic soda ash markets. Prices for both metallurgical and thermal coal are volatile and depend on a number of factors beyond our control. Declines in prices could have a material adverse effect on our business and results of operations. Coal prices continue to be volatile and prices could decline substantially from current levels. Production by some of our lessees may not be economic if prices decline further or remain at current levels. The prices our lessees receive for their coal depend upon factors beyond their or our control, including: • the supply of and demand for domestic and foreign coal; • domestic and foreign governmental regulations and taxes; • changes in fuel consumption patterns of electric power generators; • the price and availability of alternative fuels, especially natural gas; • global economic conditions, including the strength of the U.S. dollar relative to other currencies; • global and domestic demand for steel; • tariff rates on imports and trade disputes, particularly involving the United States and China; • the availability of, proximity to and capacity of transportation networks and facilities; • global or national health concerns, including the outbreak of pandemic or contagious disease, such as the ongoing COVID-19 pandemic; • weather conditions; and • the effect of worldwide energy conservation measures. Natural gas is the primary fuel that competes with thermal coal for power generation, and renewable energy sources continue to gain market share in power generation. The abundance and ready availability of cheap natural gas, together with increased governmental regulations on the power generation industry has caused a number of utilities to switch from thermal coal to natural gas and/or close coal-powered generation plants. This switching has resulted in a decline in thermal coal prices, and to the extent that natural gas prices remain low, thermal coal prices will also remain low. Reduced international demand for export thermal coal and increased competition from global producers has also put downward pressure on thermal coal prices. Our lessees produce a significant amount of metallurgical coal that is used for steel production domestically and internationally. Since the amount of steel that is produced is tied to global economic conditions, declines in those conditions could result in the decline of steel, coke and metallurgical coal production. Since metallurgical coal is priced higher than thermal coal, some mines on our properties may only operate profitably if all or a portion of their production is sold as metallurgical coal. If these mines are unable to sell metallurgical coal, they may not be economically viable and may be temporarily idled or closed. Any potential future lessee bankruptcy filings could create additional uncertainty as to the future of operations on our properties and could have a material adverse effect on our business and results of operations. To the extent our lessees are unable to economically produce coal over the long term, the carrying value of our reserves could be adversely affected. A long-term asset generally is deemed impaired when the future expected cash flow from its use and disposition is less than its book value. For the year ended December 31, 2020, we recorded impairment charges of approximately $136 million related to properties that we believe our current or future lessees are unable to operate profitably. Future impairment analyses could result in additional downward adjustments to the carrying value of our assets. Prices for soda ash are volatile. Any substantial or extended decline in soda ash prices could have an adverse effect on Ciner Wyoming’s ability to resume distributions to its members and on our results of operations. The market price of soda ash directly affects the profitability of Ciner Wyoming’s soda ash production operations. If the market price for soda ash declines, Ciner Wyoming’s sales will decrease. In 2020, Ciner Wyoming suspended distributions to its members as a result of the adverse impact of the COVID-19 pandemic on global soda ash markets. Historically, the global 18


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    Table of Contents market and, to a lesser extent, the domestic market for soda ash has been volatile, and those markets are likely to remain volatile in the future. The prices Ciner Wyoming receives for its soda ash depend on numerous factors beyond Ciner Wyoming’s control, including the COVID-19 pandemic, worldwide and regional economic and political conditions impacting supply and demand. In addition, the impact of the Ciner Corporation exit from ANSAC and Ciner Wyoming’s transition to the utilization of Ciner Group’s global distribution network for some of its export operations beginning 2021 could affect prices received for export sales. Glass manufacturers and other industrial customers drive most of the demand for soda ash, and these customers experience significant fluctuations in demand and production costs. Competition from increased use of glass substitutes, such as plastic and recycled glass, has had a negative effect on demand for soda ash. Substantial or extended declines in prices for soda ash could have a material adverse effect on Ciner Wyoming’s ability to resume distributions to its members and on our results of operations. We derive a large percentage of our revenues and other income from a small number of coal lessees. Challenges in the coal mining industry have led to significant consolidation activity. We own significant interests in all of Foresight’s mining operations, which accounted for approximately 26% of our total revenues in 2020. Foresight is required to pay us a fixed amount of $42.0 million during 2021. We also own significant interests in several of Alpha Metallurgical Resource's mining operations, which accounted for approximately 24% of our total revenues in 2020. Certain other lessees have made acquisitions over the past few years resulting in their having an increased interest in our coal reserves. Any interruption in these lessees’ ability to make royalty payments to us could have a disproportionate material adverse effect on our business and results of operations. Bankruptcies in the coal industry, and/or the idling or closure of mines on our properties could have a material adverse effect on our business and results of operations. The current coal price environment, together with high operating costs and limited access to capital, has caused a number of coal producers to file for protection under bankruptcy laws and/or idle or close mines that they cannot operate profitably. To the extent our leases are accepted or assigned in a bankruptcy process, pre-petition amounts are required to be cured in full, but we may ultimately make concessions in the financial terms of those leases in order for the reorganized company or new lessor to operate profitably going forward. To the extent our leases are rejected, operations on those leases will cease, and we will be unlikely to recover the full amount of our rejection damages claims. More of our lessees may file for bankruptcy in the future, which will create additional uncertainty as to the future of operations on our properties and could have a material adverse effect on our business and results of operations. Mining operations are subject to operating risks that could result in lower revenues to us. Our revenues are largely dependent on the level of production of minerals from our properties, and any interruptions to or increases in costs of the production from our properties may reduce our revenues. The level of production and costs thereof are subject to operating conditions or events beyond our or our lessees’ control including: • difficulties or delays in acquiring necessary permits or mining or surface rights; • reclamation costs and bonding costs; • changes or variations in geologic conditions, such as the thickness of the mineral deposits and the amount of rock embedded in or overlying the mineral deposit; • mining and processing equipment failures and unexpected maintenance problems; • the availability of equipment or parts and increased costs related thereto; • the availability of transportation networks and facilities and interruptions due to transportation delays; • adverse weather and natural disasters, such as heavy rains and flooding; • labor-related interruptions and trained personnel shortages; and • mine safety incidents or accidents, including hazardous conditions, roof falls, fires and explosions. While our lessees maintain insurance coverage, there is no assurance that insurance will be available or cover the costs of these risks. Many of our lessees are experiencing rising costs related to regulatory compliance, insurance coverage, permitting 19


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    Table of Contents and reclamation bonding, transportation, and labor. Increased costs result in decreased profitability for our lessees and reduce the competitiveness of coal as a fuel source. In addition, we and our lessees may also incur costs and liabilities resulting from third-party claims for damages to property or injury to persons arising from their operations. The occurrence of any of these events or conditions could have a material adverse effect on our business and results of operations. The adoption of climate change legislation and regulations restricting emissions of greenhouse gases and other hazardous air pollutants have resulted in changes in fuel consumption patterns by electric power generators and a corresponding decrease in coal production by our lessees and reduced coal-related revenues. Enactment of laws and passage of regulations regarding emissions from the combustion of coal in the United States, and internationally and some of its states or other countries, or other actions to limit such emissions, have resulted in and could continue to result in electricity generators switching from coal to other fuel sources and in coal-fueled power plant closures. Further, regulations regarding new coal-fueled power plants could adversely impact the global demand for coal. The potential financial impact on us of existing and future laws, regulations or other policies will depend upon the degree to which any such laws or regulations force electricity generators to diminish their reliance on coal as a fuel source. The amount of coal consumed for domestic electric power generation is affected primarily by the overall demand for electricity, the price and availability of competing fuels for power plants and environmental and other governmental regulations. We expect that substantially all newly constructed power plants in the United States will be fired by natural gas because of lower construction and compliance costs compared to coal-fired plants and because natural gas is a cleaner burning fuel. The increasingly stringent requirements of rules and regulations promulgated under the federal Clean Air Act have resulted in more electric power generators shifting from coal to natural-gas-fired power plants, or to other alternative energy sources such as solar and wind. These changes have resulted in reduced coal consumption and the production of coal from our properties and are expected to continue to have an adverse effect on our coal-related revenues. In addition to EPA’s greenhouse gas initiatives, there are several other federal rulemakings that are focused on emissions from coal-fired electric generating facilities, including the Cross-State Air Pollution Rule (CSAPR), regulating emissions of nitrogen oxide and sulfur dioxide, and the Mercury and Air Toxics Rule (MATS), regulating emissions of hazardous air pollutants. Installation of additional emissions control technologies and other measures required under these and other EPA regulations have made it more costly to operate many coal-fired power plants and have resulted in and are expected to continue to result in plant closures. Further reductions in coal’s share of power generating capacity as a result of compliance with existing or proposed rules and regulations would have a material adverse effect on our coal-related revenues. For more information on regulation of greenhouse gas and other air pollutant emissions, see "Items 1. and 2. Business and Properties— Regulation and Environmental Matters.” Concerns about the environmental impacts of coal combustion, including perceived impacts on global climate issues, are also resulting in unfavorable lending and investment policies by institutions and insurance companies which could significantly affect our ability to raise capital or maintain current insurance levels. Global climate issues continue to attract public and scientific attention. Numerous reports have engendered concern about the impacts of human activity, especially fossil fuel combustion, on global climate issues. In addition to government regulation of greenhouse gas and other air pollutant emissions, there are ongoing efforts affecting the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities and other groups, promoting the divestment of fossil fuel equities and ongoing pressure on lenders to limit funding to companies engaged in the extraction of fossil fuels, such as coal. The impact of such efforts may adversely affect our ability to raise capital. In addition, a number of insurance companies have taken action to limit coverage for companies in the coal industry, which could result in significant increases in our costs of insurance or in our inability to maintain both general liability and director and officer insurance coverage at current levels. 20


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    Table of Contents In addition to climate change and other Clean Air Act legislation, our businesses are subject to numerous other federal, state and local laws and regulations that may limit production from our properties and our profitability. The operations of our lessees and Ciner Wyoming are subject to stringent health and safety standards under increasingly strict federal, state and local environmental, health and safety laws, including mine safety regulations and governmental enforcement policies. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of cleanup and site restoration costs and liens, the issuance of injunctions to limit or cease operations, the suspension or revocation of permits and other enforcement measures that could have the effect of limiting production from our properties. New environmental legislation, new regulations and new interpretations of existing environmental laws, including regulations governing permitting requirements, could further regulate or tax mining industries and may also require significant changes to operations, the incurrence of increased costs or the requirement to obtain new or different permits, any of which could decrease our revenues and have a material adverse effect on our financial condition or results of operations. Under SMCRA, our coal lessees have substantial reclamation obligations on properties where mining operations have been completed and are required to post performance bonds for their reclamation obligations. To the extent an operator is unable to satisfy its reclamation obligations or the performance bonds posted are not sufficient to cover those obligations, regulatory authorities or citizens groups could attempt to shift reclamation liability onto the ultimate landowner, which if successful, could have a material adverse effect on our financial condition. In addition to governmental regulation, private citizens’ groups have continued to be active in bringing lawsuits against coal mine operators and land owners that allege violations of water quality standards resulting from ongoing discharges of pollutants from reclaimed mining operations, including selenium and conductivity. Any determination that a landowner or lessee has liability for discharges from a previously reclaimed mine site would result in uncertainty as to continuing liability for completed and reclaimed coal mine operations and could result in substantial compliance costs or fines. If our lessees do not manage their operations well, their production volumes and our royalty revenues could decrease. We depend on our lessees to effectively manage their operations on our properties. Our lessees make their own business decisions with respect to their operations within the constraints of their leases, including decisions relating to: • the payment of minimum royalties; • marketing of the minerals mined; • mine plans, including the amount to be mined and the method and timing of mining activities; • processing and blending minerals; • expansion plans and capital expenditures; • credit risk of their customers; • permitting; • insurance and surety bonding; • acquisition of surface rights and other mineral estates; • employee wages; • transportation arrangements; • compliance with applicable laws, including environmental laws; and • mine closure and reclamation. A failure on the part of one of our lessees to make royalty payments, including minimum royalty payments, could give us the right to terminate the lease, repossess the property and enforce payment obligations under the lease. If we repossessed any of our properties, we would seek a replacement lessee. We might not be able to find a replacement lessee and, if we did, we might not be able to enter into a new lease on favorable terms within a reasonable period of time. In addition, the existing lessee could be subject to bankruptcy proceedings that could further delay the execution of a new lease or the assignment of the 21


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    Table of Contents existing lease to another operator. If we enter into a new lease, the replacement operator might not achieve the same levels of production or sell minerals at the same price as the lessee it replaced. In addition, it may be difficult for us to secure new or replacement lessees. We have limited approval rights with respect to the management of our Ciner Wyoming soda ash joint venture, including with respect to cash distributions and capital expenditures. In addition, we are exposed to operating risks that we do not experience in the royalty business through our soda ash joint venture and through our ownership of certain coal transportation assets. We do not have control over the operations of Ciner Wyoming. We have limited approval rights with respect to Ciner Wyoming, and our partner controls most business decisions, including decisions with respect to distributions and capital expenditures. During 2020, Ciner Wyoming suspended quarterly cash distributions to its members due to adverse developments in the soda ash market resulting from the COVID-19 pandemic. Distributions remain suspended and may continue to be suspended until the soda ash markets improve. In February 2021, Ciner Resources was informed that an event of default currently exists under a loan to certain non-U.S. companies in the global Ciner Group. While the equity interests in Ciner Wyoming and Ciner Resources are not pledged as security for that loan, the equity interests in in Ciner Holding (the sole member of the general partner of Ciner Resources) and in Ciner Corporation (the parent company of Ciner Holding) are pledged as collateral to the lenders under that loan agreement. Accordingly, unless that event of default is cured or otherwise waived by the requisite number of lenders, the lenders could foreclose on the applicable collateral, which would result in a change of control of Ciner Resources. Although such a change of control would not result in an event of default under the Ciner Wyoming credit agreement, any such change in ownership could, among other consequences, have a material adverse effect on Ciner Wyoming’s business, financial condition, results of operations, and on our relationship with our soda ash joint venture operating partner. In addition, we are ultimately responsible for operating the transportation infrastructure at Foresight’s Williamson mine, and have assumed the capital and operating risks associated with that business. As a result of these investments, we could experience increased costs as well as increased liability exposure associated with operating these facilities. A significant portion of Ciner Wyoming’s historical international sales of soda ash have been to ANSAC, and the termination of the ANSAC membership could adversely affect Ciner Wyoming’s ability to compete in certain international markets and increase Ciner Wyoming’s international sales costs. In July 2020, ANSAC and its members entered into an agreement that, among other things, terminated Ciner Corporation’s membership in ANSAC effective as of December 31, 2020, a year earlier than previously announced. For a limited period after December 31, 2020, Ciner Corporation. will continue to sell, at substantially lower volumes, product to ANSAC for export sales purposes, with a fixed rate per ton selling, general and administrative expense, and will also purchase a limited amount of export logistics services. ANSAC has historically been Ciner Wyoming’s largest customer for the years ended December 31, 2020, 2019 and 2018, accounting for approximately 45%, 60% and 52%, respectively, of its net sales. Without the ANSAC membership, there is no assurance that Ciner Wyoming. will be able to retain existing foreign customers or secure new foreign customers or the related logistics arrangements on favorable terms. The costs to transport and market soda ash following the ANSAC exit could be higher than costs associated with sales through ANSAC. As a result Ciner Wyoming’s business, results of operations and financial condition could be adversely affected. Ciner Wyoming’s deca stockpiles will substantially deplete by 2024, and its production rates will decline approximately 200,000 short tons per year if further investments are not made. In 2024, Ciner Wyoming’s deca stockpiles will be substantially depleted. Without adding additional capacity, Ciner Wyoming's production rates will decline approximately 200,000 short tons, which would further impact Ciner Wyoming's profitability. While Ciner Wyoming is currently evaluating an expansion project that would offset this decline as well as provide additional soda ash production above current rates, there is no guarantee that any such investments will be executed successfully or in a timely manner to enable Ciner Wyoming to maintain its current rates of production. 22


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    Table of Contents Significant delays and/or higher than expected costs associated with Ciner Wyoming’s capacity expansion project could adversely affect Ciner Wyoming’s profitability and ability to resume distributions to us. In 2019, Ciner Wyoming announced a significant capacity expansion capital project intended to increase production levels to up to 3.5 million tons of soda ash per year. When considering the significant investment required by this expansion and the infrastructure improvements designed to increase overall efficiency, combined with the COVID-19 pandemic’s negative impact on Ciner Wyoming’s financial results, Ciner Wyoming has reprioritized the timing of the significant expenditure items in order to increase financial and liquidity flexibility until it has more clarity and visibility into the ongoing impact of the COVID-19 pandemic on its business. The costs of the expansion project could be higher than expected, or the execution of the project could be substantially delayed, which could materially impact Ciner Wyoming’s profitability and result in a further delay of Ciner Wyoming’s resumption of cash distributions to its members, which in turn could have a material adverse effect on us. Fluctuations in transportation costs and the availability or reliability of transportation could reduce the production of coal, soda ash and other minerals from our properties. Transportation costs represent a significant portion of the total delivered cost for the customers of our lessees. Increases in transportation costs could make coal a less competitive source of energy or could make minerals produced by some or all of our lessees less competitive than coal produced from other sources. On the other hand, significant decreases in transportation costs could result in increased competition for our lessees from producers in other parts of the country. Our lessees depend upon railroads, barges, trucks and beltlines to deliver minerals to their customers. Disruption of those transportation services due to weather-related problems, mechanical difficulties, strikes, lockouts, bottlenecks and/or other events could temporarily impair the ability of our lessees to supply coal to their customers and/or increase their costs. Many of our lessees are currently experiencing transportation-related issues due in particular to decreased availability and reliability of rail services and port congestion. Our lessees’ transportation providers may face difficulties in the future that would impair the ability of our lessees to supply minerals to their customers, resulting in decreased royalty revenues to us. In addition, Ciner Wyoming transports its soda ash by rail or truck and ocean vessel. As a result, its business and financial results are sensitive to increases in rail freight, trucking and ocean vessel rates. Increases in transportation costs, including increases resulting from emission control requirements, port taxes and fluctuations in the price of fuel, could make soda ash a less competitive product for glass manufacturers when compared to glass substitutes or recycled glass, or could make Ciner Wyoming’s soda ash less competitive than soda ash produced by competitors that have other means of transportation or are located closer to their customers. Ciner Wyoming may be unable to pass on its freight and other transportation costs in full because market prices for soda ash are generally determined by supply and demand forces. In addition, rail operations are subject to various risks that may result in a delay or lack of service at Ciner Wyoming’s facility, and alternative methods of transportation are impracticable or cost prohibitive. For the year ended December 31, 2020, Ciner Wyoming shipped approximately 97% of its soda ash from the Green River facility on a single rail line owned and controlled by Union Pacific. Ciner Wyoming’s current transportation contract with Union Pacific expires on December 31, 2021. There can be no assurance that this contract will be renewed on terms favorable to Ciner Wyoming or at all. Any substantial interruption in or increased costs related to the transportation of Ciner Wyoming’s soda ash or the failure to renew the rail contract on favorable terms could have a material adverse effect on our financial condition and results of operations. Our reserve estimates depend on many assumptions that may be inaccurate, which could materially adversely affect the quantities and value of our reserves. In addition, we expect to cease reporting coal and hard mineral reserves pursuant to new SEC rules that will be effective for us beginning with the year ending December 31, 2021. Coal, aggregates and industrial minerals reserve engineering requires subjective estimates of underground accumulations of coal, aggregates and industrial minerals, and assumptions and are by nature imprecise. Our reserve estimates may vary substantially from the actual amounts of coal, aggregates and industrial minerals recovered from our reserves. There are numerous uncertainties inherent in estimating quantities of reserves, including many factors beyond our control. Estimates of reserves necessarily depend upon a number of variables and assumptions, any one of which may, if incorrect, result in an estimate that varies considerably from actual results. These factors and assumptions relate to: • future prices, operating costs, capital expenditures, severance and excise taxes, and development and reclamation costs; • production levels; 23


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    Table of Contents • future technology improvements; • the effects of regulation by governmental agencies; and • geologic and mining conditions, which may not be fully identified by available exploration data. Actual production, revenue and expenditures with respect to our reserves will likely vary from estimates, and these variations may be material. As a result, undue reliance should not be placed on our reserve data that is included in this report. In addition, the SEC has adopted new rules to modernize the property disclosure requirements for registrants with significant mining activities, which we will be required to begin to comply with for the fiscal year beginning on January 1, 2021 (reported in the Annual Report on Form 10-K for the year ending December 31, 2021). The new rules contain exceptions that allow royalty companies, such as NRP, to omit information that they lack access to and cannot obtain without incurring an unreasonable burden or expense. As a royalty company, we do not have access to a substantial amount information that will be required to prepare the technical reports used to determine reserves under the new rules, and we will not be able to obtain such information without unreasonable burden or expense. Accordingly, we expect that we will rely on the royalty company exceptions and will therefore cease to report coal and other hard mineral reserves beginning with the year ending December 31, 2021. Our lessees could satisfy obligations to their customers with minerals from properties other than ours, depriving us of the ability to receive amounts in excess of minimum royalty payments. Mineral supply contracts generally do not require operators to satisfy their obligations to their customers with resources mined from specific reserves. Several factors may influence a lessee’s decision to supply its customers with minerals mined from properties we do not own or lease, including the royalty rates under the lessee’s lease with us, mining conditions, mine operating costs, cost and availability of transportation, and customer specifications. In addition, lessees move on and off of our properties over the course of any given year in accordance with their mine plans. If a lessee satisfies its obligations to its customers with minerals from properties we do not own or lease, production on our properties will decrease, and we will receive lower royalty revenues. A lessee may incorrectly report royalty revenues, which might not be identified by our lessee audit process or our mine inspection process or, if identified, might be identified in a subsequent period. We depend on our lessees to correctly report production and royalty revenues on a monthly basis. Our regular lessee audits and mine inspections may not discover any irregularities in these reports or, if we do discover errors, we might not identify them in the reporting period in which they occurred. Any undiscovered reporting errors could result in a loss of royalty revenues and errors identified in subsequent periods could lead to accounting disputes as well as disputes with our lessees. Risks Related to Our Structure Unitholders may not be able to remove our general partner even if they wish to do so. Our general partner manages and operates NRP. Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business. Unitholders have no right to elect the general partner or the directors of the general partner on an annual or any other basis. Furthermore, if unitholders are dissatisfied with the performance of our general partner, they currently have little practical ability to remove our general partner or otherwise change its management. Our general partner may not be removed except upon the vote of the holders of at least 66 2/3% of our outstanding common units (including common units held by our general partner and its affiliates and including common units deemed to be held by the holders of the preferred units who vote along with the common unitholders on an as-converted basis). Because of their substantial ownership in us, the removal of our general partner would be difficult without the consent of both our general partner and its affiliates and the holders of the preferred units. In addition, the following provisions of our partnership agreement may discourage a person or group from attempting to remove our general partner or otherwise change our management: 24


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    Table of Contents • generally, if a person (other than the holders of preferred units) acquires 20% or more of any class of units then outstanding other than from our general partner or its affiliates, the units owned by such person cannot be voted on any matter; and • our partnership agreement contains limitations upon the ability of unitholders to call meetings or to acquire information about our operations, as well as other limitations upon the unitholders’ ability to influence the manner or direction of management. As a result of these provisions, the price at which the common units will trade may be lower because of the absence or reduction of a takeover premium in the trading price. The preferred units are senior in right of distributions and liquidation and upon conversion, would result in the issuance of additional common units in the future, which could result in substantial dilution of our common unitholders’ ownership interests. The preferred units rank senior to our common units with respect to distribution rights and rights upon liquidation. We are required to pay quarterly distributions on the preferred units (plus any PIK units issued in lieu of preferred units) in an amount equal to 12.0% per year prior to paying any distributions on our common units. The preferred units also rank senior to the common units in right of liquidation and will be entitled to receive a liquidation preference in any such case. The preferred units may also be converted into common units under certain circumstances. The number of common units issued in any conversion will be based on the then-current trading price of the common units at the time of conversion. Accordingly, the lower the trading price of our common units at the time of conversion, the greater the number of common units that will be issued upon conversion of the preferred units, which would result in greater dilution to our existing common unitholders. Dilution has the following effects on our common unitholders: • an existing unitholder’s proportionate ownership interest in NRP will decrease; • the amount of cash available for distribution on each unit may decrease; • the relative voting strength of each previously outstanding unit may be diminished; and • the market price of the common units may decline. In addition, to the extent the preferred units are converted into more than 66 2/3% of our common units, the holders of the preferred will have the right to remove our general partner. We may issue additional common units or preferred units without common unitholder approval, which would dilute a unitholder’s existing ownership interests. Our general partner may cause us to issue an unlimited number of common units, without common unitholder approval (subject to applicable New York Stock Exchange ("NYSE") rules). We may also issue at any time an unlimited number of equity securities ranking junior or senior to the common units (including additional preferred units) without common unitholder approval (subject to applicable NYSE rules). In addition, we may issue additional common units upon the exercise of the outstanding warrants held by Blackstone and Goldentree. The issuance of additional common units or other equity securities of equal or senior rank will have the following effects: • an existing unitholder’s proportionate ownership interest in NRP will decrease; • the amount of cash available for distribution on each unit may decrease; and • the relative voting strength of each previously outstanding unit may be diminished; and the market price of the common units may decline. 25


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    Table of Contents Our general partner has a limited call right that may require unitholders to sell their units at an undesirable time or price. If at any time our general partner and its affiliates own 80% or more of the common units, the general partner will have the right, but not the obligation, which it may assign to any of its affiliates, to acquire all, but not less than all, of the remaining common units held by unaffiliated persons at a price generally equal to the then current market price of the common units. As a result, unitholders may be required to sell their common units at a time when they may not desire to sell them or at a price that is less than the price they would like to receive. They may also incur a tax liability upon a sale of their common units. Cost reimbursements due to our general partner may be substantial and will reduce our cash available for distribution to unitholders. Prior to making any distribution on the common units, we reimburse our general partner and its affiliates, including officers and directors of the general partner, for all expenses incurred on our behalf. The reimbursement of expenses and the payment of fees could adversely affect our ability to make distributions. The general partner has sole discretion to determine the amount of these expenses. In addition, our general partner and its affiliates may provide us services for which we will be charged reasonable fees as determined by the general partner. Conflicts of interest could arise among our general partner and us or the unitholders. These conflicts may include the following: • We do not have any employees and we rely solely on employees of affiliates of the general partner; • under our partnership agreement, we reimburse the general partner for the costs of managing and for operating the partnership; • the amount of cash expenditures, borrowings and reserves in any quarter may affect cash available to pay quarterly distributions to unitholders; • the general partner tries to avoid being liable for partnership obligations. The general partner is permitted to protect its assets in this manner by our partnership agreement. Under our partnership agreement the general partner would not breach its fiduciary duty by avoiding liability for partnership obligations even if we can obtain more favorable terms without limiting the general partner’s liability; • under our partnership agreement, the general partner may pay its affiliates for any services rendered on terms fair and reasonable to us. The general partner may also enter into additional contracts with any of its affiliates on behalf of us. Agreements or contracts between us and our general partner (and its affiliates) are not necessarily the result of arm’s- length negotiations; and • the general partner would not breach our partnership agreement by exercising its call rights to purchase limited partnership interests or by assigning its call rights to one of its affiliates or to us. In addition, Blackstone has certain consent rights and board appointment and observation rights. GoldenTree also has more limited consent rights. In the exercise of their applicable consent rights and/or board rights, conflicts of interest could arise between us and our general partner on the one hand, and Blackstone or GoldenTree on the other hand. The control of our general partner may be transferred to a third party without unitholder consent. A change of control may result in defaults under certain of our debt instruments and the triggering of payment obligations under compensation arrangements. Our general partner may transfer its general partner interest to a third party in a merger or in a sale of all or substantially all of its assets without the consent of our unitholders. Furthermore, there is no restriction in our partnership agreement on the ability of the general partner of our general partner from transferring its general partnership interest in our general partner to a third party. The new owner of our general partner would then be in a position to replace the Board of Directors and officers with its own choices and to control their decisions and actions. 26


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    Table of Contents In addition, a change of control would constitute an event of default under our debt agreements. During the continuance of an event of default under our debt agreements, the administrative agent may terminate any outstanding commitments of the lenders to extend credit to us and/or declare all amounts payable by us immediately due and payable. In addition, upon a change of control, the holders of the preferred units would have the right to require us to redeem the preferred units at the liquidation preference or convert all of their preferred units into common units. A change of control also may trigger payment obligations under various compensation arrangements with our officers. Unitholders may not have limited liability if a court finds that unitholder actions constitute control of our business. Our general partner generally has unlimited liability for our obligations, such as our debts and environmental liabilities, except for those contractual obligations that are expressly made without recourse to our general partner. Under Delaware law, however, a unitholder could be held liable for our obligations to the same extent as a general partner if a court determined that the right of unitholders to remove our general partner or to take other action under our partnership agreement constituted participation in the "control" of our business. In addition, Section 17-607 of the Delaware Revised Uniform Limited Partnership Act provides that under some circumstances, a unitholder may be liable to us for the amount of a distribution for a period of three years from the date of the distribution. Tax Risks to Our Unitholders Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes as well as our not being subject to a material amount of entity-level taxation by individual states. If the Internal Revenue Service ("IRS") were to treat us as a corporation for federal income tax purposes or we were to become subject to material additional amounts of entity-level taxation for state tax purposes, then our cash available for distribution to unitholders would be substantially reduced. The anticipated after-tax economic benefit of an investment in our units depends largely on our being treated as a partnership for U.S. federal income tax purposes. Despite the fact that we are organized as a limited partnership under Delaware law, we would be treated as a corporation for U.S. federal income tax purposes unless we satisfy a "qualifying income" requirement. Based on our current operations and current Treasury regulations, we believe we satisfy the qualifying income requirement. However, we have not requested, and do not plan to request, a ruling from the IRS on this or any other matter affecting us. Failing to meet the qualifying income requirement or a change in current law could cause us to be treated as a corporation for U.S. federal income tax purposes or otherwise subject us to taxation as an entity. If we were treated as a corporation for U.S. federal income tax purposes, we would pay federal income tax on our taxable income at the corporate tax rate and would likely be liable for state income tax at varying rates. Distributions to our unitholders would generally be taxed again as corporate distributions, and no income, gains, losses, deductions or credits would flow through to our unitholders. Because tax would be imposed upon us as a corporation, our cash available for distribution to our unitholders would be substantially reduced. Therefore, treatment of us as a corporation would result in a material reduction in the anticipated cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our units. At the state level, several states have been evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise and other forms of taxation. Imposition of a similar tax on us in a jurisdiction in which we operate or in other jurisdictions to which we may expand could substantially reduce the cash available for distribution to our unitholders. The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis. The present U.S. federal income tax treatment of publicly traded partnerships, including us, or an investment in our units, may be modified by administrative, legislative or judicial changes or differing interpretations at any time. Members of Congress have frequently proposed and considered substantive changes to the existing U.S. federal income tax laws that would affect publicly traded partnerships, including proposals that would eliminate our ability to qualify for partnership tax treatment. In addition, the Treasury Department has issued, and in the future may issue, regulations interpreting those laws that affect publicly traded partnerships. There can be no assurance that there will not be further changes to U.S. federal income tax laws or 27


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    Table of Contents the Treasury Department’s interpretation of the qualifying income rules in a manner that could impact our ability to qualify as a partnership in the future. Any modification to the U.S. federal income tax laws and interpretation thereof may or may not be retroactively applied and could make it more difficult or impossible for us to meet the exception for certain publicly traded partnerships to be treated as partnerships for U.S. federal income tax purposes. We are unable to predict whether any changes or other proposals will ultimately be enacted. Any future legislative changes could negatively impact the value of an investment in our units. You are urged to consult with your own tax advisor with respect to the status of regulatory or administrative developments and proposals and their potential effect on your investment in our units. Certain federal income tax preferences currently available with respect to coal exploration and development may be eliminated as a result of future legislation. Changes to U.S. federal income tax laws have been proposed in a prior session of Congress that would eliminate certain key U.S. federal income tax preferences relating to coal exploration and development. These changes include, but are not limited to (i) repealing capital gains treatment of coal and lignite royalties, (ii) eliminating current deductions and 60-month amortization for exploration and development costs relating to coal and other hard mineral fossil fuels, and (iii) repealing the percentage depletion allowance with respect to coal properties. If enacted, these changes would limit or eliminate certain tax deductions that are currently available with respect to coal exploration and development, and any such change could increase the taxable income allocable to our unitholders and negatively impact the value of an investment in our units. Our unitholders are required to pay taxes on their share of our income even if they do not receive any cash distributions from us. Our unitholders' share of our portfolio income may be taxable to them even though they receive other losses from our activities. Because our unitholders are treated as partners to whom we allocate taxable income that could be different in amount than the cash we distribute, our unitholders are required to pay any federal income taxes and, in some cases, state and local income taxes on their share of our taxable income even if they receive no cash distributions from us. Our unitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax due from them with respect to that income. For our unitholders subject to the passive loss rules, our current operations include portfolio activities (such as our coal and mineral royalty businesses) and passive activities (such as our soda ash business). Any passive losses we generate will only be available to offset our passive income generated in the future and will not be available to offset (i) our portfolio income, including income related to our coal and mineral royalty businesses, (ii) a unitholder’s income from other passive activities or investments, including investments in other publicly traded partnerships, or (iii) a unitholder’s salary or active business income. Thus, our unitholders' share of our portfolio income may be subject to federal income tax, regardless of other losses they may receive from us. We may engage in transactions to reduce our indebtedness and manage our liquidity that generate taxable income (including income and gain from the sale of properties and cancellation of indebtedness income) allocable to our unitholders, and income tax liabilities arising therefrom may exceed any distributions made with respect to their units. We may engage in transactions to reduce our leverage and manage our liquidity that would result in income and gain to our unitholders without a corresponding cash distribution. For example, we may sell assets and use the proceeds to repay existing debt, in which case, our unitholders could be allocated taxable income and gain resulting from the sale without receiving a cash distribution. Further, we may pursue opportunities to reduce our existing debt, such as debt exchanges, debt repurchases, or modifications of our existing debt that would result in “cancellation of indebtedness income” (also referred to as “COD income”) being allocated to our unitholders as ordinary taxable income. Our unitholders may be allocated income and gain from these transactions, and income tax liabilities arising therefrom may exceed any distributions we make to our unitholders. The ultimate tax effect of any such income allocations will depend on the unitholder's individual tax position, including, for example, the availability of any suspended passive losses that may offset some portion of the allocable income. Our unitholders may, however, be allocated substantial amounts of ordinary income subject to taxation, without any ability to offset such allocated income against any capital losses attributable to the unitholder’s ultimate disposition of its units. Our unitholders are encouraged to consult their tax advisors with respect to the consequences to them. 28


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    Table of Contents If the IRS contests the federal income tax positions we take, the market for our units may be adversely impacted and the cost of any IRS contest will reduce our cash available for distribution to our unitholders. We have not requested a ruling from the IRS with respect to our treatment as a partnership for federal income tax purposes or any other matter affecting us. The IRS may adopt positions that differ from the positions we take. It may be necessary to resort to administrative or court proceedings to sustain some or all of the positions we take. A court may not agree with some or all of the positions we take. Any contest by the IRS may materially and adversely impact the market for our units and the price at which they trade. In addition, our costs of any contest by the IRS will be borne indirectly by our unitholders and our general partner because the costs will reduce our cash available for distribution. If the IRS makes audit adjustments to our income tax returns for tax years beginning after December 31, 2017, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced. Pursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the IRS makes audit adjustments to our income tax returns, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us. To the extent possible under these rules, our general partner may elect to either pay the taxes (including any applicable penalties and interest) directly to the IRS or, if we are eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited and adjusted return. Although our general partner may elect to have our unitholders and former unitholders take such audit adjustment into account and pay any resulting taxes (including applicable penalties or interest) in accordance with their interests in us during the tax year under audit, there can be no assurance that such election will be practical, permissible or effective in all circumstances. As a result, our current unitholders may bear some or all of the tax liability resulting from such audit adjustment, even if such unitholders did not own units in us during the tax year under audit. If, as a result of any such audit adjustment, we are required to make payments of taxes, penalties and interest, our cash available for distribution to our unitholders might be substantially reduced. Tax gain or loss on the disposition of our common units could be more or less than expected. If our unitholders sell their common units, they will recognize a gain or loss equal to the difference between the amount realized and their tax basis in those common units. Distributions in excess of a common unitholder's allocable share of our net taxable income result in a decrease in the tax basis in such unitholder's common units. Accordingly, the amount, if any, of such prior excess distributions with respect to the common units sold will, in effect, become taxable income to our common unitholders if they sell such common units at a price greater than their tax basis in those common units, even if the price they receive is less than their original cost. In addition, because the amount realized includes a unitholder’s share of our nonrecourse liabilities, if our unitholders sell their common units, they may incur a tax liability in excess of the amount of cash they receive from the sale. A substantial portion of the amount realized from a unitholder’s sale of our units, whether or not representing gain, may be taxed as ordinary income due to potential recapture items, including depletion and depreciation recapture. Thus, a unitholder may recognize both ordinary income and capital loss from the sale of units if the amount realized on a sale of such units is less than such unitholder’s adjusted basis in the units. Net capital loss may only offset capital gains and, in the case of individuals, up to $3,000 of ordinary income per year. In the taxable period in which a unitholder sells its units, such unitholder may recognize ordinary income from our allocations of income and gain to such unitholder prior to the sale and from recapture items that generally cannot be offset by any capital loss recognized upon the sale of units. Our unitholders may be subject to limitation on their ability to deduct interest expense incurred by us. In general, we are entitled to a deduction for interest paid or accrued on indebtedness properly allocable to our trade or business during our taxable year. However, subject to the exceptions in the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act," discussed below), under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For the purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income, and in the case of taxable years beginning before January 1, 2022, any deduction allowable for depreciation, amortization, or depletion to the extent such depreciation, amortization, or depletion is not 29


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    Table of Contents capitalized into cost of goods sold with respect to inventory. If our “business interest” is subject to limitation under these rules, our unitholders will be limited in their ability to deduct their share of any interest expense that has been allocated to them. As a result, unitholders may be subject to limitation on their ability to deduct interest expense incurred by us. For our 2020 taxable year, the CARES Act increases the 30% adjusted taxable income limitation to 50%, unless we elect not to apply such increase. For purposes of determining our 50% adjusted taxable income limitation, we may elect to substitute our 2020 adjusted taxable income with our 2019 adjusted taxable income, which may result in a greater business interest expense deduction. In addition, unitholders may treat 50% of any excess business interest allocated to them in 2019 as deductible in the 2020 taxable year without regard to the 2020 business interest expense limitations. The remaining 50% of such unitholder’s excess business interest is carried forward and subject to the same limitations as other taxable years. Tax-exempt entities face unique tax issues from owning our units that may result in adverse tax consequences to them. Investment in our units by tax-exempt entities, such as employee benefit plans and individual retirement accounts (known as IRAs) raises issues unique to them. For example, virtually all of our income allocated to organizations that are exempt from U.S. federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them. Further, under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, subject to the proposed aggregation rules for certain similarly situated businesses or activities issued by the Treasury Department, a tax- exempt entity with more than one unrelated trade or business (including by attribution from investment in a partnership such as ours that is engaged in one or more unrelated trade or business) is required to compute the unrelated business taxable income of such tax-exempt entity separately with respect to each such trade or business (including for purposes of determining any net operating loss deduction). As a result, for years beginning after December 31, 2017, it may not be possible for tax-exempt entities to utilize losses from an investment in our partnership to offset unrelated business taxable income from another unrelated trade or business and vice versa. Tax-exempt entities should consult a tax advisor before investing in our units. Non-U.S. Unitholders will be subject to U.S. taxes and withholding with respect to their income and gain from owning our units. Non-U.S. unitholders are generally taxed and subject to income tax filing requirements by the United States on income effectively connected with a U.S. trade or business. Income allocated to our unitholders and any gain from the sale of our units will generally be considered to be “effectively connected” with a U.S. trade or business. As a result, distributions to a non-U.S. unitholder will be subject to withholding at the highest applicable effective tax rate and a non-U.S. unitholder who sells or otherwise disposes of a unit will also be subject to U.S. federal income tax on the gain realized from the sale or disposition of that unit. Moreover, the transferee of an interest in a partnership that is engaged in a U.S. trade or business is generally required to withhold 10% of the “amount realized” by the transferor unless the transferor certifies that it is not a foreign person. While the determination of a partner’s “amount realized” generally includes any decrease of a partner’s share of the partnership’s liabilities, recently issued Treasury regulations provide that the “amount realized” on a transfer of an interest in a publicly traded partnership, such as our common units, will generally be the amount of gross proceeds paid to the broker effecting the applicable transfer on behalf of the transferor, and thus will be determined without regard to any decrease in that partner’s share of a publicly traded partnership’s liabilities. The Treasury regulations further provide that withholding on a transfer of an interest in a publicly traded partnership will not be imposed on a transfer that occurs prior to January 1, 2022, and after that date, if effected through a broker, the obligation to withhold is imposed on the transferor’s broker. Prospective foreign unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units. We will treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units. Because we cannot match transferors and transferees of our common units and for other reasons, we have adopted depreciation and amortization positions that may not conform to all aspects of existing Treasury Regulations. A successful IRS challenge to those positions could adversely affect the amount of tax benefits available to our unitholders. It also could affect the timing of these tax benefits or the amount of gain from the sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to our unitholders' tax returns. 30


  • Page 40

    Table of Contents We have adopted certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss and deduction. The IRS may challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of our common units. In determining the items of income, gain, loss and deduction allocable to our unitholders, including when we issue additional units, we must determine the fair market value of our assets. Although we may from time to time consult with professional appraisers regarding valuation matters, we make many fair market value estimates using a methodology based on the market value of our common units as a means to measure the fair market value of our assets. The IRS may challenge these valuation methods and the resulting allocations of income, gain, loss and deduction. We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our common units each month based upon the ownership of our common units on the first day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders. We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our common units each month based upon the ownership of our common units on the first day of each month (the "Allocation Date"), instead of on the basis of the date a particular unit is transferred. Similarly, we generally allocate certain deductions for depreciation of capital additions, gain or loss realized on a sale or other disposition of our assets and, in the discretion of the general partner, any other extraordinary item of income, gain, loss or deduction based upon ownership on the Allocation Date. Treasury Regulations allow a similar monthly simplifying convention, but such regulations do not specifically authorize the use of the proration method we have adopted. If the IRS were to challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders. A unitholder whose units are the subject of a securities loan (e.g., a loan to a "short seller" to cover a short sale of units) may be considered as having disposed of those units. If so, he would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the disposition. Because there are no specific rules governing the U.S. federal income tax consequences of loaning a partnership interest, a unitholder whose units are the subject of a securities loan may be considered as having disposed of the loaned units. In that case, the unitholder may no longer be treated for tax purposes as a partner with respect to those units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition. Moreover, during the period of the loan, any of our income, gain, loss or deduction with respect to those units may not be reportable by the unitholder and any cash distributions received by the unitholder as to those units could be fully taxable as ordinary income. Our unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan of their units are urged to consult a tax advisor to determine whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from borrowing their units. As a result of investing in our units, our unitholders are likely subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire property. In addition to U.S. federal income taxes, our unitholders are likely subject to other taxes, including state and local taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we conduct business or own property now or in the future, even if our unitholders do not live in any of those jurisdictions. Our unitholders are likely required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, our unitholders may be subject to penalties for failure to comply with those requirements. We own property and conduct business in a number of states in the United States. Most of these states impose an income tax on individuals, corporations and other entities. As we make acquisitions or expand our business, we may own assets or conduct business in additional states that impose a personal income tax. It is the unitholder's responsibility to file all U.S. federal, state and local tax returns and pay any taxes due in these jurisdictions. Unitholders should consult with their own tax advisors regarding the filing of such tax returns, the payment of such taxes, and the deductibility of any taxes paid. 31


  • Page 41

    Table of Contents General Risks Our business is subject to cybersecurity risks. Our business is increasingly dependent on information technologies and services. Threats to information technology systems associated with cybersecurity risks and cyber incidents or attacks continue to grow. Although we utilize various procedures and controls to mitigate our exposure to such risks, cybersecurity attacks and other cyber events are evolving, unpredictable, and sometimes difficult to detect, and could lead to unauthorized access to sensitive information or render data or systems unusable. We do not presently maintain insurance coverage to protect against cybersecurity risks. If we procure such coverage in the future, we cannot ensure that it will be sufficient to cover any particular losses we may experience as a result of such cyber- attacks. Any cyber incident could have a material adverse effect on our business, financial condition and results of operations. The ongoing COVID-19 pandemic has adversely affected our business and may continue to do so. The COVID-19 pandemic may also have the effect of heightening many of the other risks described elsewhere in this Item 1A, “Risk Factors.” The extent to which the COVID-19 pandemic adversely affects our business, results of operations, and financial condition will depend on future developments, which remain highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 3. LEGAL PROCEEDINGS We are 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, management believes these ordinary course matters will not have a material effect on our financial position, liquidity or operations. In November 2019, the District Court of Harris County, Texas, 157th Judicial District, issued a ruling in the contingent consideration payment dispute that Anadarko Holding Company and its subsidiary, Big Island Trona Company (together, "Anadarko") brought against us in July 2017. The Trial Court ruled in our favor in all respects and ordered that Anadarko take nothing. Anadarko did not appeal the trial court ruling, and accordingly this lawsuit was concluded in the first quarter of 2020 with no liability to us. ITEM 4. MINE SAFETY DISCLOSURES None. 32


  • Page 42

    Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED UNITHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES NRP Common Units Our common units are listed and traded on the NYSE under the symbol "NRP." As of March 8, 2021, there were approximately 10,655 beneficial and registered holders of our common units. The computation of the approximate number of unitholders is based upon a broker survey. Securities Authorized for Issuance under Equity Compensation Plans The following table shows the securities authorized for issuance under our 2017 Long-Term Incentive Plan at December 31, 2020. The initial number of common units authorized for issuance pursuant to awards under the plan was 800,000. Number of securities remaining available for Number of securities to be Weighted-average exercise future issuance under issued upon exercise of price of outstanding equity compensation plans outstanding options, options, warrants and (excluding securities warrants and rights rights reflected in column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by security holders — — 415,445 (1) Equity compensation plans not approved by security holders n/a n/a n/a Total — — 415,445 (1) As of December 31, 2020, 355,362 phantom units were outstanding under the plan. Each phantom unit represents the right to receive one common unit, together with associated distribution equivalent rights. ITEM 6. SELECTED FINANCIAL DATA Omitted. 33


  • Page 43

    Table of Contents ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction The following discussion and analysis presents management’s view of our business, financial condition and overall performance and should be read in conjunction with our consolidated financial statements and footnotes included elsewhere in this filing. Our discussion and analysis consists of the following subjects: • Executive Overview • Results of Operations • Liquidity and Capital Resources • Off-Balance Sheet Transactions • Inflation • Environmental Regulation • Related Party Transactions • Summary of Critical Accounting Estimates • Recent Accounting Standards As used in this Item 7, 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"). Non-GAAP Financial Measures 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 receivables; less maintenance capital expenditures. 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 asses 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 receivables; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. 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 our ability to make cash distributions and repay debt. 34


  • Page 44

    Table of Contents Cash Flow Cushion Cash flow cushion 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 receivables; less maintenance and expansion capital expenditures, cash flow used in acquisition costs classified as investing or financing activities, one-time beneficial items, mandatory Opco debt repayments, preferred unit distributions and redemption of PIK units and common unit distributions. Cash flow cushion is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Cash flow cushion is a supplemental liquidity measure used by our management to assess our ability to make or raise cash distributions to our common and preferred unitholders and our general partner and repay debt or redeem preferred units. 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, net income attributable to non-controlling interest and gain on reserve swap; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, 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. See "Item 8. Financial Statements and Supplementary Data— Note 11. Debt, Net" included elsewhere in this Annual Report on Form 10-K for a description of Opco’s debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis. 35


  • Page 45

    Table of Contents 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 other natural resources and own a non-controlling 49% interest in Ciner Wyoming LLC ("Ciner Wyoming"), a trona ore mining and soda ash production business. 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 various states across the United States, our oil and gas royalty assets are primarily located in Louisiana and our timber assets are primarily located in West Virginia. 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 Wyoming mines trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries. We expect royalties generated from coal mining operations on our properties and our interest in the Ciner Wyoming soda ash business to generate the substantial majority of our cash flow over the next years. However, over the past year, we have been evaluating our existing portfolio of assets for opportunities to generate alternative sources of revenues without substantial capital investment by us. For example, our surface and mineral acreage owned across the United States may contain geologic formations that are suitable for the long-term sequestration and storage of carbon. To the extent a viable carbon sequestration project is developed on or near our property, we may be able to lease that property as storage in exchange for rent payments. We are also exploring opportunities to lease our surface acreage for renewable energy projects, such as solar arrays and wind farms. In addition, we are assessing our forest timber assets for carbon sequestration project potential whereby we would obtain and sell carbon offset credits in exchange for agreements for long-term forest preservation. There can be no assurance, however, that any of these potential projects will succeed or generate substantial cash flow to NRP. 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. 36


  • Page 46

    Table of Contents Our financial results by segment for the year ended December 31, 2020 are as follows: Operating Segments Corporate Coal Royalty and (In thousands) and Other Soda Ash Financing Total Revenues and other income $ 129,592 $ 10,728 $ — $ 140,320 Net income (loss) from continuing operations $ (40,180) $ 10,543 $ (55,182) $ (84,819) Asset impairments 135,885 — — 135,885 Net income (loss) from continuing operations excluding asset impairments $ 95,705 $ 10,543 $ (55,182) $ 51,066 Adjusted EBITDA (1) $ 104,982 $ 14,025 $ (14,293) $ 104,714 Cash flow provided by (used in) continuing operations Operating activities $ 124,737 $ 14,037 $ (51,206) $ 87,568 Investing activities $ 1,745 $ — $ — $ 1,745 Financing activities $ — $ — $ (87,788) $ (87,788) Distributable cash flow (1) $ 127,482 $ 14,037 $ (51,206) $ 90,248 (1) Free cash flow $ 125,859 $ 14,037 $ (51,206) $ 88,690 Cash flow cushion (1) N/A N/A N/A $ (739) (1) See "—Results of Operations" below for reconciliations to the most comparable GAAP financial measures. Current Results/Market Commentary Business Outlook and Quarterly Distributions The global COVID-19 pandemic has had a significant negative impact on demand for steel, electricity and glass, which translates to lower demand for the coal and soda ash that our properties produce. While demand for metallurgical and thermal coals and soda ash began to rebound during the second half of 2020, prices remain below pre-pandemic levels, and the coal and soda ash markets remain challenged. We are unable to predict the ultimate severity or duration of the COVID-19 pandemic or its impact on our or Ciner Wyoming's business. We ended the year with $199.8 million of liquidity consisting of $99.8 million of cash and cash equivalents and $100.0 million of borrowing capacity under our Opco Credit Facility and generated $88.7 million of free cash flow during the year ended December 31, 2020. As a result, we believe we have the financial flexibility to navigate the effects of the pandemic on our business. We continue to employ remote work protocols and are conducting business as usual despite the pandemic. Despite our liquidity level at the end of the year, our consolidated leverage ratio has risen since early 2020 and was 4.6x at December 31, 2020. The indenture governing our 2025 parent company notes restricts us from paying more than one-half of the quarterly distribution on our preferred units in cash if our consolidated leverage ratio exceeds 3.75x. Accordingly, the Board of Directors of our general partner has declared a distribution on our preferred units to be paid one-half in kind through the issuance of additional preferred units (“PIK units”) for the past two quarters. To the extent our leverage ratio continues to exceed 3.75x, which we expect for the foreseeable future, we will be required to continue to pay one-half of the required preferred distributions in kind and will be unable to redeem any PIK units until our consolidated leverage ratio falls below 3.75x. Distributions on the outstanding PIK units will accrue and accumulate at 12% per year until such PIK units are redeemed. In addition, pursuant to the terms of our partnership agreement, to the extent we have any PIK units outstanding after January 1, 2022, we will be prohibited from paying any common unit distributions until the PIK units are redeemed in full. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, covenants in our debt and partnership agreements, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs. 37


  • Page 47

    Table of Contents Coal Royalty and Other Business Segment Demand for steel and electricity began to rebound in the third quarter and the outlook for our coal businesses has improved, though sales volumes and prices for coal sold from our properties in the fourth quarter remained below pre-pandemic levels. We expect coal markets to remain volatile during 2021, in part as a result of ongoing uncertainties with the COVID-19 pandemic. Our lessees sold 16.8 million tons of coal from our properties in 2020 and we derived approximately 70% of our coal royalty revenues and approximately 60% of our coal royalty sales volumes from metallurgical coal during the same period. Revenues and other income in 2020 were lower by $87.3 million as compared to the prior year. This decrease is primarily a result of a weakened market for metallurgical coal as compared to the prior year due to a decline in global steel demand. As a result, both sales volumes and prices for metallurgical coal sold were lower in 2020 compared to the prior year. Prices for metallurgical coal have rebounded from the lows seen in the second quarter, but are not currently above pre-pandemic levels. In addition, weaker domestic and export thermal coal markets compared to the prior year period resulted in lower revenues from our thermal coal properties. Domestic and export thermal coal markets remained challenged by lower utility demand, continued low natural gas prices and the secular shift to renewable energy. Our thermal coal business results are largely dependent on our various lease agreements with Foresight. In June 2020, we entered into lease amendments with Foresight pursuant to which Foresight agreed to pay us fixed cash payments of $48.75 million in 2020 and $42.0 million in 2021 to satisfy all obligations arising out of the existing various coal mining leases and transportation infrastructure fee agreements between us and Foresight for calendar years 2020 and 2021. These amendments provide us cash flow certainty for our thermal coal business through 2021. During 2020 we received all of the $48.75 million due to us from Foresight. Soda Ash Business Segment Ciner Wyoming has been negatively impacted by the COVID-19 pandemic as lower demand for glass in the global auto, beverage container, and construction industries reduced demand for soda ash. Revenues and other income in 2020 were lower by $36.4 million compared to the prior year primarily due to a combination of lower pricing and volumes sold. However, demand for glass began to rebound in the third quarter and the outlook for our soda ash business has improved. While Ciner Wyoming's business has yet to recover to pre-COVID levels, overall sales volumes increased and overall production volumes increased over second quarter 2020 lows, though global prices remain depressed. While we believe our facility is competitively positioned as one of the lowest cost producers of soda ash in the world, we expect the market to remain volatile as a result of ongoing uncertainties with the COVID-19 pandemic. In order to have financial flexibility during the COVID-19 pandemic, Ciner Wyoming suspended quarterly distributions in the third quarter of 2020. Ciner Wyoming will continue to evaluate, on a quarterly basis, whether to reinstate the distribution. Ciner Wyoming’s ability to pay future quarterly distributions will be dependent in part on its cash reserves, liquidity, total debt levels and anticipated capital expenditures. When considering the significant investment required by Ciner Wyoming’s previously announced expansion project and the infrastructure improvements designed to increase overall efficiency, combined with the COVID-19 pandemic’s negative impact on Ciner Wyoming’s financial results, Ciner Wyoming has reprioritized the timing of the significant capital expenditure items in order to increase financial and liquidity flexibility until it has more clarity and visibility into the ongoing impact of the COVID-19 pandemic on its business. 38


  • Page 48

    Table of Contents Results of Operations Years Ended December 31, 2020 and 2019 Compared Revenues and Other Income The following table includes our revenues and other income by operating segment: For the Year Ended December 31, Percentage Operating Segment (In thousands) 2020 2019 Decrease Change Coal Royalty and Other $ 129,592 $ 216,846 $ (87,254) (40)% Soda Ash 10,728 47,089 (36,361) (77)% Total $ 140,320 $ 263,935 $ (123,615) (47)% The changes in revenues and other income is discussed for each of the operating segments below: 39


  • Page 49

    Table of Contents 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 Year Ended December 31, Increase Percentage (In thousands, except per ton data) 2020 2019 (Decrease) Change Coal sales volumes (tons) Appalachia Northern 647 3,460 (2,813) (81)% Central 10,111 13,377 (3,266) (24)% Southern 889 1,670 (781) (47)% Total Appalachia 11,647 18,507 (6,860) (37)% Illinois Basin 3,381 2,201 1,180 54 % Northern Powder River Basin 1,738 3,036 (1,298) (43)% Total coal sales volumes 16,766 23,744 (6,978) (29)% Coal royalty revenue per ton Appalachia Northern $ 2.36 $ 1.96 $ 0.40 20 % Central 4.17 5.53 (1.36) (25)% Southern 4.75 6.69 (1.94) (29)% Illinois Basin 2.36 4.66 (2.30) (49)% Northern Powder River Basin 3.50 2.90 0.60 21 % Combined average coal royalty revenue per ton 3.70 4.67 (0.97) (21)% Coal royalty revenues Appalachia Northern $ 1,526 $ 6,775 $ (5,249) (77)% Central 42,207 73,960 (31,753) (43)% Southern 4,221 11,169 (6,948) (62)% Total Appalachia 47,954 91,904 (43,950) (48)% Illinois Basin 7,973 10,255 (2,282) (22)% Northern Powder River Basin 6,086 8,809 (2,723) (31)% Unadjusted coal royalty revenues 62,013 110,968 (48,955) (44)% Coal royalty adjustment for minimum leases (1) (10,145) (1,356) (8,789) (648)% Total coal royalty revenues $ 51,868 $ 109,612 $ (57,744) (53)% Other revenues Production lease minimum revenues (1) $ 21,749 $ 24,068 $ (2,319) (10)% Minimum lease straight-line revenues (1) 16,796 14,910 1,886 13 % Property tax revenues 5,786 6,287 (501) (8)% Wheelage revenues 7,025 5,880 1,145 19 % Coal overriding royalty revenues 4,977 13,496 (8,519) (63)% Lease amendment revenues 3,450 7,991 (4,541) (57)% Aggregates royalty revenues 1,717 4,265 (2,548) (60)% Oil and gas royalty revenues 5,816 3,031 2,785 92 % Other revenues 982 1,529 (547) (36)% Total other revenues $ 68,298 $ 81,457 $ (13,159) (16)% Coal royalty and other $ 120,166 $ 191,069 $ (70,903) (37)% Transportation and processing services revenues 8,845 19,279 (10,434) (54)% Gain on asset sales and disposals 581 6,498 (5,917) (91)% Total Coal Royalty and Other segment revenues and other income $ 129,592 $ 216,846 $ (87,254) (40)% (1) Effective January 1, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight Energy Resources LLC ("Foresight") that fixed consideration paid to us over a two-year period. 40


  • Page 50

    Table of Contents Coal Royalty Revenues Total coal royalty revenues decreased $57.7 million from 2019 to 2020 driven by weakened coal markets that resulted in lower coal sales volumes and pricing. The discussion of these decreases by region is as follows: • Appalachia: Sales volumes decreased 37% and coal royalty revenues decreased $44.0 million primarily due to weakened coal demand compounded by the COVID-19 pandemic. • Illinois Basin: Sales volumes increased 54% due to increased activity at the Hillsboro and Williamson mines, while coal royalty revenues decreased $2.3 million primarily due to the idling of our Macoupin property. Additionally, during the year ended December 31, 2020, certain revenues previously classified as coal royalty revenues are classified as production lease minimum revenues or minimum lease straight-line revenues due to contract modifications with Foresight that fixed consideration paid to us over a two-year period. • Northern Powder River Basin: Sales volumes decreased 43% and coal royalty revenues decreased $2.7 million primarily due to our lessee mining off of our property in accordance with its mine plan in 2020, partially offset by a 21% increase in sales prices year-over-year. Other Revenues Other revenues decreased $13.2 million from 2019 to 2020 primarily due to the following: • A $8.5 million decrease in coal overriding royalty revenues primarily as a result of production at the Williamson mine moving off of non-NRP owned coal (on which we receive overriding royalties) and back onto NRP-owned coal reserves. As a result, this decrease in coal overriding royalty revenues was offset by an increase in coal royalty revenues; and • A $4.5 million decrease in lease amendment revenues year-over-year. Transportation and Processing Services Revenues Transportation and processing services revenues decreased $10.4 million primarily due to the temporary cessation of production at the Macoupin mine where we own loadout and other transportation assets in addition to decreased production of non-NRP-owned coal at the Williamson mine where we also own loadout and other transportation assets. Gain on Asset Sales and Disposals Gain on asset sales and disposals decreased $5.9 million primarily due to the disposal of certain mineral rights assets during the third quarter of 2019. Soda Ash Revenues and other income related to our Soda Ash segment decreased $36.4 million primarily due to a combination of lower pricing and volumes sold. Ciner Wyoming was negatively impacted by the COVID-19 pandemic as lower demand for glass in the global auto, beverage container, and construction industries reduced demand for soda ash. 41

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