NPR(NRP) - 2019 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Natural Resource Partners L.P.'s unaudited consolidated financial statements, including balance sheets, income, capital, and cash flow statements, with detailed notes on accounting policies, segments, and debt ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS This item presents the Partnership's unaudited consolidated financial statements, including balance sheets, income, capital, and cash flow statements, detailing financial position, performance, and liquidity, with explanatory notes Consolidated Balance Sheets Presents the Partnership's financial position, showing assets, liabilities, and capital at specific dates Consolidated Balance Sheet Highlights (In thousands): | Metric | Sep 30, 2019 | Dec 31, 2018 | Change | | :-------------------------------- | :----------- | :----------- | :------- | | Total current assets | $143,709 | $242,543 | $(98,834) | | Total assets | $1,243,904 | $1,341,647 | $(97,743) | | Total current liabilities | $74,255 | $148,746 | $(74,491) | | Total liabilities | $613,063 | $756,514 | $(143,451) | | Total capital | $466,254 | $420,546 | $45,708 | Consolidated Statements of Comprehensive Income Details the Partnership's financial performance, including revenues, expenses, and net income for the reporting periods Consolidated Statements of Comprehensive Income Highlights (In thousands): | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | Change | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | Change | | :------------------------------------------ | :-------------------------- | :-------------------------- | :----- | :-------------------------- | :-------------------------- | :----- | | Total revenues and other income | $63,709 | $58,207 | $5,502 | $212,219 | $187,955 | $24,264 | | Total operating expenses | $14,115 | $14,861 | $(746) | $51,842 | $47,510 | $4,332 | | Income from operations | $49,594 | $43,346 | $6,248 | $160,377 | $140,445 | $19,932 | | Net income from continuing operations | $39,163 | $25,853 | $13,310 | $94,034 | $87,268 | $6,766 | | Net income | $39,170 | $28,541 | $10,629 | $94,240 | $90,989 | $3,251 | | Basic Net income per common unit | $2.53 | $1.71 | $0.82 | $5.73 | $5.44 | $0.29 | | Diluted Net income per common unit | $1.66 | $1.30 | $0.36 | $3.92 | $4.06 | $(0.14) | Consolidated Statements of Partners' Capital Outlines changes in the Partnership's equity, reflecting net income, distributions, and other capital adjustments Partners' Capital Changes (In thousands): | Metric | Sep 30, 2019 | Dec 31, 2018 | Change | | :------------------------------------------ | :----------- | :----------- | :------- | | Balance at beginning of period (Dec 31, 2018) | $423,481 | $420,546 | $2,935 | | Net income (9 months) | $94,240 | $90,989 | $3,251 | | Distributions to common unitholders & GP | $(27,087) | $(16,863) | $(10,224) | | Distributions to preferred unitholders | $(22,500) | $(22,765) | $265 | | Balance at end of period (Sep 30, 2019) | $466,254 | $383,766 | $82,488 | - Net income attributable to preferred unitholders was $7.5 million for both the three and nine months ended September 30, 2019 and 2018[19][21] Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities, indicating liquidity changes Consolidated Statements of Cash Flows Highlights (In thousands): | Metric | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | Change | | :------------------------------------------ | :-------------------------- | :-------------------------- | :----- | | Net cash provided by operating activities | $117,921 | $107,548 | $10,373 | | Net cash provided by (used in) investing activities | $7,406 | $(3,814) | $11,220 | | Net cash used in financing activities | $(219,194) | $(70,174) | $(149,020) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(93,867) | $33,560 | $(127,427) | | Cash, cash equivalents and restricted cash at end of period | $112,163 | $63,387 | $48,776 | - Cash paid for interest of continuing operations decreased from $58.153 million in 2018 to $36.270 million in 2019 for the nine months ended September 30[27] Notes to Consolidated Financial Statements This section provides detailed explanations for the consolidated financial statements, covering accounting policies, segment information, debt, fair value, related parties, and other significant financial disclosures Note 1. Basis of Presentation Explains the Partnership's business, accounting principles, and significant reclassifications and standard adoptions - The Partnership's primary business involves owning, managing, and leasing a diversified portfolio of mineral properties in the United States, including coal and other natural resources, and a 49% non-controlling interest in Ciner Wyoming LLC (trona ore mining and soda ash production)[30] - The financial statements are unaudited and prepared in accordance with GAAP for interim financial information and Rule 10-01 of Regulation S-X, and should be read in conjunction with the 2018 Annual Report on Form 10-K[31] - Prior period information for the construction aggregates business and non-operated oil and gas working interest assets has been reclassified as discontinued operations[32] - Restricted cash of $12.5 million (Sep 30, 2019) and $104.2 million (Dec 31, 2018) is designated for debt repayment, acquisitions, or capital expenditures, with $97.1 million used in the first nine months of 2019 to repay Opco Senior Notes[33] - The Partnership adopted ASC 842, Leases, on January 1, 2019, using a modified retrospective approach, which did not materially impact the consolidated financial statements[34][35] - The Partnership is continuing to evaluate ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), effective after December 15, 2019, but does not expect a material effect on its consolidated financial statements[38] Note 2. Revenues from Contracts with Customers Details the sources and recognition of revenue from customer contracts, including coal royalties and other services Coal Royalty and Other Segment Revenues (In thousands): | Revenue Source | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | Change | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | :-------------------------- | :-------------------------- | :----- | | Coal royalty revenues | $24,727 | $30,709 | $(5,982) | $87,561 | $96,473 | $(8,912) | | Production lease minimum revenues | $2,752 | $1,769 | $983 | $21,331 | $6,310 | $15,021 | | Minimum lease straight-line revenues | $3,982 | $567 | $3,415 | $11,152 | $1,739 | $9,413 | | Lease amendment revenues | $1,535 | $— | $1,535 | $6,720 | $— | $6,720 | | Oil and gas royalty revenues | $374 | $1,427 | $(1,053) | $2,575 | $5,679 | $(3,104) | | Total Coal royalty and other revenues | $39,919 | $42,518 | $(2,599) | $154,037 | $134,912 | $19,125 | | Transportation and processing services | $3,865 | $6,853 | $(2,988) | $14,740 | $17,238 | $(2,498) | Receivables and Contract Liabilities (In thousands): | Metric | Sep 30, 2019 | Dec 31, 2018 | | :-------------------------- | :----------- | :----------- | | Accounts receivable, net | $24,758 | $29,001 | | Current portion of deferred revenue | $5,047 | $3,509 | | Deferred revenue | $43,587 | $49,044 | - Deferred revenue balance at September 30, 2019, was $48.634 million, with an increase of $37.315 million due to minimums and lease amendment fees and recognition of $41.234 million of previously deferred revenue during the nine months ended September 30, 2019[43] - The Partnership has non-cancelable annual minimum payments due under coal and aggregates royalty leases totaling $68.602 million, with a weighted average remaining lease term of 9.6 years[43] Note 3. Discontinued Operations Provides information on reclassified business segments, including their assets, liabilities, and income - The Partnership reclassified its construction aggregates business and non-operated oil and gas working interest assets as discontinued operations following their sales in December 2018 and July 2016, respectively[47] - Total assets of discontinued operations were $988 thousand as of September 30, 2019, and $993 thousand as of December 31, 2018, while total liabilities were $174 thousand and $947 thousand, respectively[48] Income from Discontinued Operations (In thousands): | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenues and other income | $7 | $36,810 | $245 | $104,420 | | Total operating expenses | $0 | $34,114 | $39 | $100,671 | | Income (loss) from discontinued operations | $7 | $2,688 | $206 | $3,721 | - Capital expenditures related to discontinued operations were $9.7 million during the nine months ended September 30, 2018[50] Note 4. Common and Preferred Unit Distributions Outlines the Partnership's policies and amounts for quarterly cash distributions to common and preferred unitholders - The Partnership makes quarterly cash distributions to common and preferred unitholders, with the general partner receiving 2% of common unit distributions[51][52] - Net income attributable to common unitholders and the general partner is reduced by $7.5 million for preferred unit distributions for both the three and nine months ended September 30, 2019 and 2018[53] Distributions Declared and Paid (In thousands, except per unit data): | Period Covered | Common Unit Distribution per Unit | Total Common Unit Distribution | Preferred Unit Distribution per Unit | Total Preferred Unit Distribution | | :-------------------------------- | :------------------------------ | :----------------------------- | :--------------------------------- | :-------------------------------- | | Oct 1 - Dec 31, 2018 | $0.45 | $5,625 | $30.00 | $7,500 | | Jan 1 - Mar 31, 2019 | $0.45 | $5,630 | $30.00 | $7,500 | | Special Distribution (May 2019) | $0.85 | $10,635 | $— | $— | | Apr 1 - Jun 30, 2019 | $0.45 | $5,630 | $30.00 | $7,500 | - A special distribution of $0.85 per common unit was made in May 2019 to cover common unitholders' tax liability from the sale of the construction aggregates business[57] Note 5. Net Income Per Common Unit Explains the calculation of basic and diluted net income per common unit, including dilutive effects - Basic net income per common unit is calculated by dividing net income (after non-controlling interest, preferred unitholders, and general partner interest) by the weighted average common units outstanding[58] - Diluted net income per common unit includes the dilutive effect of preferred units (if-converted method), warrants (treasury stock method), and unvested unit-based awards[59][60] Net Income Per Common Unit (In thousands, except per unit data): | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income attributable to common unitholders | $31,036 | $20,972 | $70,305 | $66,619 | | Weighted average common units—basic | 12,261 | 12,246 | 12,259 | 12,243 | | Basic net income per common unit | $2.53 | $1.71 | $5.73 | $5.44 | | Weighted average common units—diluted | 23,157 | 21,840 | 23,584 | 21,841 | | Diluted net income attributable to common unitholders | $38,386 | $28,322 | $92,355 | $88,669 | | Diluted net income per common unit | $1.66 | $1.30 | $3.92 | $4.06 | Note 6. Segment Information Presents financial data for the Partnership's operating segments: Coal Royalty and Other, and Soda Ash - The Partnership operates in two segments - Coal Royalty and Other (coal, industrial mineral, aggregates, oil & gas royalties, timber) and Soda Ash (49% non-controlling equity interest in Ciner Wyoming)[65][66] - The construction aggregates business was sold in December 2018 to reduce debt and focus on core segments[67] - Corporate and Financing segment includes unallocated corporate overhead, interest, and financing costs[71] Segment Revenues and Net Income (Loss) from Continuing Operations (In thousands): | Metric | Coal Royalty and Other (3M Sep 2019) | Soda Ash (3M Sep 2019) | Corporate and Financing (3M Sep 2019) | Total (3M Sep 2019) | Coal Royalty and Other (9M Sep 2019) | Soda Ash (9M Sep 2019) | Corporate and Financing (9M Sep 2019) | Total (9M Sep 2019) | | :------------------------------------------ | :----------------------------------- | :--------------------- | :------------------------------------ | :------------------ | :----------------------------------- | :--------------------- | :------------------------------------ | :------------------ | | Revenues | $43,784 | $13,818 | $— | $57,602 | $168,777 | $36,833 | $— | $205,610 | | Net income (loss) from continuing operations | $40,252 | $13,595 | $(14,684) | $39,163 | $136,566 | $36,610 | $(79,142) | $94,034 | Segment Total Assets of Continuing Operations (In thousands): | Metric | Sep 30, 2019 | Dec 31, 2018 | | :-------------------------------- | :----------- | :----------- | | Coal Royalty and Other | $969,425 | $986,680 | | Soda Ash | $258,063 | $247,051 | | Corporate and Financing | $15,428 | $106,923 | | Total assets of continuing operations | $1,242,916 | $1,340,654 | Note 7. Equity Investment Details the Partnership's 49% equity investment in Ciner Wyoming, including income allocation and distributions - The Partnership accounts for its 49% investment in Ciner Wyoming using the equity method[75] Equity Investment in Ciner Wyoming (In thousands): | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Balance at beginning of period | $251,135 | $245,524 | $247,051 | $245,433 | | Income allocation to NRP's equity interests | $15,068 | $10,036 | $40,511 | $38,525 | | Distribution | $(6,370) | $(12,250) | $(25,480) | $(36,750) | | Balance at end of period | $258,063 | $242,901 | $258,063 | $242,901 | Ciner Wyoming Summarized Financial Information (In thousands): | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :---------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Sales | $137,148 | $123,366 | $397,378 | $354,467 | | Net income | $30,750 | $20,481 | $82,675 | $78,623 | Note 8. Mineral Rights, Net Provides a breakdown of mineral rights by type, including cost, net book value, and depletion expense Mineral Rights, Net (In thousands): | Mineral Type | Sep 30, 2019 Cost | Sep 30, 2019 Net Book Value | Dec 31, 2018 Cost | Dec 31, 2018 Net Book Value | | :-------------------------- | :---------------- | :-------------------------- | :---------------- | :-------------------------- | | Coal properties | $1,147,692 | $688,570 | $1,164,845 | $713,635 | | Aggregates properties | $41,589 | $28,457 | $24,920 | $13,106 | | Oil and gas royalty properties | $12,395 | $4,572 | $12,395 | $4,763 | | Other | $13,156 | $11,555 | $13,158 | $11,608 | | Total mineral rights, net | $1,214,832 | $733,154 | $1,215,318 | $743,112 | - Depletion expense for mineral rights was $2.8 million (Q3 2019) and $9.5 million (9M 2019), a decrease from $3.9 million (Q3 2018) and $12.8 million (9M 2018)[77] - A gain of $6.1 million (Q3 2019) and $6.6 million (9M 2019) was recorded from the disposal of certain coal mineral rights[78] Note 9. Intangible Assets, Net Details the Partnership's intangible assets, primarily coal royalty and transportation contracts, and their amortization - Intangible assets primarily consist of above-market coal royalty and transportation contracts with Foresight Energy LP[79] Intangible Assets, Net (In thousands): | Metric | Sep 30, 2019 | Dec 31, 2018 | | :-------------------------- | :----------- | :----------- | | Intangible assets at cost | $81,109 | $81,109 | | Less: accumulated amortization | $(40,648) | $(38,596) | | Total intangible assets, net | $40,461 | $42,513 | - Amortization expense for intangible assets was $0.5 million (Q3 2019) and $2.1 million (9M 2019), a decrease from $0.9 million (Q3 2018) and $2.3 million (9M 2018)[79] Note 10. Debt, Net Outlines the Partnership's debt structure, including senior notes, credit facilities, and related financing transactions Debt Outstanding (In thousands): | Debt Type | Sep 30, 2019 | Dec 31, 2018 | Change | | :------------------------------------------ | :----------- | :----------- | :------- | | NRP LP debt: 2025 Senior Notes | $300,000 | $— | $300,000 | | NRP LP debt: 2022 Senior Notes | $— | $345,638 | $(345,638) | | Total Opco Senior Notes | $244,390 | $341,500 | $(97,110) | | Total debt at face value | $544,390 | $687,138 | $(142,748) | | Total debt, net | $536,167 | $672,758 | $(136,591) | | Current portion of long-term debt, net | $45,789 | $115,184 | $(69,395) | | Total long-term debt, net | $490,378 | $557,574 | $(67,196) | - In April 2019, NRP issued $300 million of 9.125% Senior Notes due June 2025 and used the proceeds, along with $76 million cash, to redeem the 2022 Senior Notes[83] - The early redemption of the 2022 Senior Notes resulted in an $18.1 million call premium and a $10.4 million write-off of unamortized debt issuance costs and discount, totaling $29.3 million loss on extinguishment of debt[87] - The Opco Credit Facility term was extended to April 2023, with $100 million available borrowing capacity and no outstanding borrowings as of September 30, 2019[89] - Opco made mandatory principal payments of $97.1 million on its Senior Notes during the nine months ended September 30, 2019, including a $49.3 million prepayment from the construction aggregates business sale[93] - The Partnership was in compliance with all financial covenants of its debt agreements as of September 30, 2019[88][196] Note 11. Fair Value Measurements Describes the fair value of financial instruments, including debt and contract receivables, and their valuation hierarchy - The carrying amounts of cash, cash equivalents, and restricted cash approximate fair value due to their short-term nature[95] Fair Value of Debt and Contract Receivable (In thousands): | Metric | Fair Value Hierarchy Level | Sep 30, 2019 Carrying Value | Sep 30, 2019 Estimated Fair Value | Dec 31, 2018 Carrying Value | Dec 31, 2018 Estimated Fair Value | | :------------------------------------------ | :------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | NRP 2025 Senior Notes | 1 | $293,824 | $287,250 | $— | $— | | NRP 2022 Senior Notes | 1 | $— | $— | $334,024 | $356,871 | | Opco Senior Notes | 3 | $242,343 | $234,003 | $338,734 | $352,599 | | Contract receivable (current and long-term) | 3 | $39,416 | $33,784 | $40,776 | $34,704 | - Embedded derivatives in preferred units, related to conversion options, redemption features, and change of control, had zero value as of September 30, 2019, and December 31, 2018[96] Note 12. Related Party Transactions Details transactions with affiliated entities, including management services, overhead costs, and royalty revenues - The Partnership reimburses affiliates of its General Partner (QMC and WPPLP) for employee management services and overhead costs, included in operating and maintenance expenses and general and administrative expenses[98] Direct G&A Expenses Charged by QMC and WPPLP (In thousands): | Expense Type | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating and maintenance expenses | $1,598 | $1,560 | $4,806 | $4,694 | | General and administrative expenses | $855 | $934 | $2,704 | $2,714 | - Coal royalty revenues from Industrial Minerals Group LLC, a related party, totaled $0.4 million (Q3 2019) and $0.9 million (9M 2019)[102] Note 13. Major Customers Identifies key customers and their contribution to the Partnership's revenues, primarily in the Coal Royalty segment Revenues from Major Customers (In thousands): | Customer | 3 Months Ended Sep 30, 2019 Revenues | 3 Months Ended Sep 30, 2019 Percent | 3 Months Ended Sep 30, 2018 Revenues | 3 Months Ended Sep 30, 2018 Percent | 9 Months Ended Sep 30, 2019 Revenues | 9 Months Ended Sep 30, 2019 Percent | 9 Months Ended Sep 30, 2018 Revenues | 9 Months Ended Sep 30, 2018 Percent | | :---------------- | :----------------------------------- | :---------------------------------- | :----------------------------------- | :---------------------------------- | :----------------------------------- | :---------------------------------- | :----------------------------------- | :---------------------------------- | | Foresight Energy | $12,375 | 21% | $15,035 | 26% | $44,604 | 22% | $40,456 | 22% | | Contura Energy | $9,190 | 16% | $4,709 | 8% | $32,915 | 16% | $16,091 | 9% | - Revenues from Foresight Energy and Contura Energy are included within the Coal Royalty and Other segment[104] - Contura Energy's revenues for 2019 include the combined company after its merger with Alpha Natural Resources in Q4 2018[105] Note 14. Commitments and Contingencies Discloses legal proceedings and other commitments that could potentially impact the Partnership's financial position - The Partnership is involved in various legal proceedings, which management believes will not have a material effect on its financial position, liquidity, or operations[106][212] - A lawsuit filed by Anadarko in July 2017 alleges an acceleration of NRP's obligation to pay up to $50 million in contingent consideration related to a 2013 acquisition of an interest in OCI Wyoming[107][110] - The Partnership estimates a possible range of loss for the Anadarko lawsuit between $0 (if it prevails) and approximately $40 million plus interest, court costs, and attorneys' fees (if Anadarko prevails), with a ruling pending after a trial in October 2019[110] Note 15. Unit-Based Compensation Provides information on unit-based awards, their valuation, compensation expense, and unvested outstanding awards - Unit-based awards granted in 2019 and 2018 were valued using the closing price of NRP's units as of the grant date[112] - Total unit-based compensation expense was $0.5 million (Q3 2019) and $1.8 million (9M 2019), an increase from $0.2 million (Q3 2018) and $0.9 million (9M 2018)[112] - The unamortized cost for unvested outstanding awards was $4.0 million as of September 30, 2019, to be recognized over a weighted average period of 2.2 years[112] Unit Activity in Outstanding Grants (In thousands, except exercise price): | Metric | Common Units | Weighted Average Exercise Price | | :-------------------------- | :----------- | :------------------------------ | | Outstanding at January 1, 2019 | 55 | $29.10 | | Granted | 129 | $41.41 | | Fully vested and issued | (12) | $41.47 | | Forfeitures | (15) | $37.33 | | Outstanding at September 30, 2019 | 157 | $37.48 | Note 16. Financing Transaction Describes the accounting treatment for the Sugar Camp lease, classified as a financing transaction, and related amounts - The Partnership's lease of rail loadout and infrastructure at the Sugar Camp mine to a Foresight Energy subsidiary is accounted for as a financing transaction (Sugar Camp lease)[114] - The Sugar Camp lease expires in 2032 with renewal options, providing minimum payments of $5.0 million per year and variable throughput fees[114] Sugar Camp Lease Related Amounts (In thousands): | Metric | Sep 30, 2019 | Dec 31, 2018 | | :-------------------------- | :----------- | :----------- | | Accounts receivable | $347 | $661 | | Contract receivable (current and long-term) | $39,416 | $40,776 | | Unearned income | $22,667 | $25,058 | | Projected remaining payments | $62,430 | $66,495 | Note 17. Leases Details the Partnership's operating lease for an office building and other lease arrangements, including liabilities and expenses - As of September 30, 2019, the Partnership had one operating lease for an office building owned by WPPLP, with a five-year base term and five additional five-year renewal options, capitalized as a right-of-use asset and lease liability of $3.5 million[116] - Total operating lease expenses were $0.1 million (Q3 2019) and $0.4 million (9M 2019)[116] Operating Lease Liability Maturity Analysis (In thousands): | Year | Remaining Annual Lease Payments | | :--------- | :------------------------------ | | 2019 | $121 | | 2020 | $483 | | 2021 | $483 | | 2022 | $483 | | 2023 | $483 | | After 2023 | $12,079 | | Total lease payments | $14,132 | | Less: present value adjustment | $(10,623) | | Total operating lease liability | $3,509 | - The Partnership leases infrastructure at its Macoupin property to a Foresight Energy subsidiary, accounted for as an operating lease, generating variable throughput fees of $1.1 million (Q3 2019) and $3.6 million (9M 2019)[119] Note 18. Subsequent Events Reports significant events occurring after the balance sheet date, such as declared distributions - In October 2019, the Board of Directors declared a distribution of $0.45 per common unit and $7.5 million for preferred units for the third quarter of 2019[120] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses the Partnership's financial condition and performance, covering business overview, segment results, liquidity, capital resources, market risks, and non-GAAP financial measures INFORMATION REGARDING FORWARD-LOOKING STATEMENTS Highlights that the report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ - The report contains forward-looking statements about business strategy, liquidity, capital, commodity prices, revenues, expenses, Ciner Wyoming operations, distributions, governmental policies, and economic conditions[125] - Forward-looking statements are not guarantees, and actual results may differ materially due to risks and uncertainties detailed in "Item 1A. Risk Factors" in this 10-Q and the Annual Report on Form 10-K[126] NON-GAAP FINANCIAL MEASURES Defines and explains non-GAAP financial measures like Adjusted EBITDA, Distributable Cash Flow (DCF), and Free Cash Flow (FCF), used to assess performance and liquidity Adjusted EBITDA Defines Adjusted EBITDA as a non-GAAP measure for assessing financial performance, adjusted for specific non-operating items - Adjusted EBITDA is a non-GAAP measure defined as net income (loss) from continuing operations adjusted for specific items like equity earnings, distributions from unconsolidated investment, interest expense, DDA, and asset impairments[127] - Adjusted EBITDA is used by management and external users to assess financial performance, but it has limitations and should not be considered an alternative to GAAP measures like net income or cash flows from operating activities[127] Distributable Cash Flow Defines Distributable Cash Flow (DCF) as a non-GAAP liquidity measure for assessing the ability to make distributions and repay debt - Distributable Cash Flow (DCF) is a non-GAAP liquidity measure calculated from net cash provided by operating activities of continuing operations, adjusted for distributions from unconsolidated investment, asset sales, and return of long-term contract receivable, less maintenance capital expenditures and non-controlling interest distributions[129] - DCF is used by management and external users to assess the Partnership's ability to make cash distributions and repay debt, but it is not a GAAP measure and may not be comparable to other companies' calculations[129] Free Cash Flow Defines Free Cash Flow (FCF) as a non-GAAP liquidity measure for assessing the ability to make distributions and repay debt before mandatory repayments - Free Cash Flow (FCF) is a non-GAAP liquidity measure, calculated before mandatory debt repayments, derived from net cash provided by operating activities of continuing operations, adjusted for distributions from unconsolidated investment and return of long-term contract receivable, less maintenance and expansion capital expenditures and non-controlling interest distributions[130] - FCF is used by management and external users to assess the Partnership's ability to make cash distributions and repay debt, but it is not a GAAP measure and may not be comparable to other companies' calculations[130] Introduction Outlines the scope of management's discussion, covering business, financial condition, operations, and accounting estimates - The discussion and analysis covers the Partnership's business, financial condition, and performance, including an executive overview, results of operations, liquidity, capital resources, off-balance sheet transactions, related party transactions, critical accounting estimates, and recent accounting standards[131] Executive Overview Provides a high-level summary of the Partnership's diversified natural resource business and key strategic objectives - The Partnership is a diversified natural resource company primarily engaged in owning, managing, and leasing mineral properties (coal and other natural resources) and holds a 49% non-controlling interest in Ciner Wyoming (soda ash production)[133][134] - Key objectives include strengthening the balance sheet, maintaining sufficient liquidity to manage commodity price volatility, servicing debt, and making distributions to unitholders[136] Executive Overview - 9 Months Ended Sep 30, 2019 (In thousands): | Metric | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | | :------------------------------------------ | :--------------------- | :------- | :---------------------- | :------ | | Revenues and other income | $175,386 | $36,833 | $— | $212,219 | | Net income (loss) from continuing operations | $136,566 | $36,610 | $(79,142) | $94,034 | | Adjusted EBITDA | $148,796 | $25,257 | $(12,799) | $161,254 | | Distributable cash flow | $147,783 | $25,257 | $(47,153) | $125,331 | | Free cash flow | $141,172 | $25,257 | $(47,153) | $119,276 | Current Results/Market Commentary Reviews current market conditions and their impact on the Coal Royalty and Other and Soda Ash segments, including price pressures, demand trends, and strategic outlook Coal Royalty and Other Business Segment Discusses market conditions for coal, including price trends, sales volumes, and the impact of lessee bankruptcies - Coal Royalty and Other segment results were stable in H1 2019 but saw reduced realizations in Q3 due to weakened market demand and lower activity[139] - Approximately 65% of coal royalty revenues and 55% of coal royalty sales volumes were from metallurgical coal during the nine months ended September 30, 2019[139] - Metallurgical coal prices and sales volumes declined in Q3 2019 due to global economic slowdown and lessees moving off properties[140] - The domestic thermal coal market is challenged by low natural gas prices and growing stockpiles, while the export market is weakened by lower demand, international competition, and LNG oversupply[141] - Four lessees filed for bankruptcy in the last six months, and Foresight Energy (largest lessee) is evaluating restructuring options, posing risks to future performance[142] Soda Ash Business Segment Examines the global soda ash market, Ciner Wyoming's performance, and planned capacity expansion impacts on distributions - Ciner Wyoming's results are affected by global soda ash supply and demand, with stable domestic demand driven by glass-making industries and growing international demand influenced by global GDP[143] - Ciner Wyoming plans a significant capacity expansion, funded partly by reinvesting cash, which will decrease cash distributions to the Partnership to $25-$28 million per year for the next two to three years[144] - The Partnership expects long-term benefits from increased productivity and cash distributions after the capital project's completion[144] Business Outlook Presents the Partnership's expectations for future performance, acknowledging market challenges and financial resilience - The Partnership expects market challenges to adversely impact future results compared to recent performance[145] - The Partnership believes its strengthened financial profile will help navigate a sustained downturn[145] Results of Operations Provides a comparative analysis of financial performance for the three and nine months ended September 30, 2019 and 2018, detailing revenues, expenses, and key financial metrics Third Quarter of 2019 and 2018 Compared Compares the Partnership's financial results for Q3 2019 versus Q3 2018, analyzing changes in revenues, expenses, and non-GAAP financial measures Revenues and Other Income Analyzes the changes in total revenues and other income, broken down by operating segment for the quarter Revenues and Other Income by Operating Segment (In thousands): | Operating Segment | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | Increase (Decrease) | Percentage Change | | :---------------- | :-------------------------- | :-------------------------- | :------------------ | :---------------- | | Coal Royalty and Other | $49,891 | $49,371 | $520 | 1% | | Soda Ash | $13,818 | $8,836 | $4,982 | 56% | | Total | $63,709 | $58,207 | $5,502 | 9% | Coal Royalty Revenues Examines the changes in coal royalty revenues, including sales volumes and their impact on regional performance Coal Sales Volumes and Royalty Revenue (Q3 2019 vs Q3 2018): | Region | Sales Volumes (tons, in thousands) 2019 | Sales Volumes (tons, in thousands) 2018 | Change % | Royalty Revenue (in thousands) 2019 | Royalty Revenue (in thousands) 2018 | Change % | | :-------------------------- | :-------------------------------------- | :-------------------------------------- | :------- | :---------------------------------- | :---------------------------------- | :------- | | Appalachia | 3,950 | 4,568 | (14)% | $20,290 | $24,547 | (17)% | | Illinois Basin | 551 | 609 | (10)% | $2,658 | $2,973 | (11)% | | Northern Powder River Basin | 532 | 855 | (38)% | $2,492 | $3,237 | (23)% | | Total | 5,033 | 6,032 | (17)% | $24,727 | $30,709 | (19)% | - The decrease in coal royalty revenues was driven by lower coal sales volumes due to weakened coal markets, temporary idling of properties from lessee bankruptcies, and the idling of the Pinnacle mine[153][157] Other Revenues Details the factors contributing to changes in other revenues, such as lease minimums and oil and gas royalties - Other revenues increased by $3.4 million, mainly due to $3.4 million in minimum lease straight-line revenues from the Hillsboro property and $1.5 million in lease amendment revenues[153] - These increases were partially offset by lower coal overriding royalty revenues (due to reduced sales volumes) and lower oil and gas royalty revenues (due to lower natural gas prices)[153] Transportation and Processing Services Revenues Discusses the decrease in transportation and processing services revenues due to weakened coal demand - Transportation and processing services revenues decreased by $3.0 million (44%) due to weakened demand for Illinois Basin coal, leading to fewer tons transported[154] Gain on Asset Sales and Disposals Reports the increase in gain from asset sales and disposals, primarily from mineral right assets - Gain on asset sales and disposals increased by $6.1 million, primarily from the disposal of certain mineral right assets[155] Soda Ash Analyzes the increase in Soda Ash segment revenues and other income driven by higher production and prices - Soda Ash segment revenues and other income increased by $5.0 million (56%) due to higher production and sales volumes and increased domestic and international sales prices[156] Operating Expenses Details the changes in consolidated operating expenses, including operating, maintenance, DDA, and G&A costs Consolidated Operating Expenses (In thousands): | Expense Category | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | Increase (Decrease) | Percentage Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :------------------ | :---------------- | | Operating and maintenance expenses | $5,994 | $6,790 | $(796) | (12)% | | Depreciation, depletion and amortization | $3,384 | $4,888 | $(1,504) | (31)% | | General and administrative expenses | $4,253 | $3,183 | $1,070 | 34% | | Asset impairments | $484 | $— | $484 | 100% | | Total operating expenses | $14,115 | $14,861 | $(746) | (5)% | - Operating and maintenance expenses decreased by $0.8 million due to lower legal costs[159] - Depreciation, depletion, and amortization decreased by $1.5 million due to lower coal sales volumes[159] - General and administrative expenses increased by $1.1 million due to higher legal costs[159] Interest Expense, Net Explains the decrease in net interest expense due to lower debt balances from repayments - Interest expense, net, decreased by $7.1 million primarily due to lower debt balances from debt repayments[159] Income from Discontinued Operations Reports the decrease in income from discontinued operations following the sale of the aggregates business - Income from discontinued operations decreased by $2.7 million due to the sale of the construction aggregates business in Q4 2018[160] Adjusted EBITDA (Non-GAAP Financial Measure) Analyzes the change in Adjusted EBITDA by segment, highlighting the impact of Ciner Wyoming distributions Adjusted EBITDA by Segment (In thousands): | Operating Segment | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | Coal Royalty and Other | $44,120 | $42,940 | $1,180 | | Soda Ash | $6,147 | $12,250 | $(6,103) | | Corporate and Financing | $(4,253) | $(3,183) | $(1,070) | | Total Adjusted EBITDA | $46,014 | $52,007 | $(5,993) | - Adjusted EBITDA decreased by $6.0 million, primarily due to lower cash distributions from Ciner Wyoming[161] Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures) Examines the changes in DCF and FCF, driven by asset disposals, interest payments, and Ciner Wyoming distributions DCF and FCF by Segment (In thousands): | Operating Segment | 3 Months Ended Sep 30, 2019 DCF | 3 Months Ended Sep 30, 2019 FCF | 3 Months Ended Sep 30, 2018 DCF & FCF | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------------------------ | | Coal Royalty and Other | $47,661 | $41,553 | $43,194 | | Soda Ash | $6,147 | $6,147 | $12,250 | | Corporate and Financing | $(5,507) | $(5,507) | $(27,368) | | Total | $48,179 | $42,193 | $28,076 | - DCF increased by $20.1 million and FCF by $14.1 million, primarily due to proceeds from asset disposals and lower interest payments in the Corporate and Financing segment[166] - The increase was partially offset by lower cash distributions from Ciner Wyoming and reduced coal royalty revenues[166] First Nine Months of 2019 and 2018 Compared Compares the Partnership's financial results for the first nine months of 2019 versus 2018, analyzing revenues, expenses, and non-GAAP financial measures Revenues and Other Income Analyzes the changes in total revenues and other income, broken down by operating segment for the nine-month period Revenues and Other Income by Operating Segment (In thousands): | Operating Segment | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | Increase (Decrease) | Percentage Change | | :---------------- | :-------------------------- | :-------------------------- | :------------------ | :---------------- | | Coal Royalty and Other | $175,386 | $152,969 | $22,417 | 15% | | Soda Ash | $36,833 | $34,986 | $1,847 | 5% | | Total | $212,219 | $187,955 | $24,264 | 13% | Coal Royalty Revenues Examines the changes in coal royalty revenues, including sales volumes and their impact on regional performance for the nine months Coal Sales Volumes and Royalty Revenue (9M 2019 vs 9M 2018): | Region | Sales Volumes (tons, in thousands) 2019 | Sales Volumes (tons, in thousands) 2018 | Change % | Royalty Revenue (in thousands) 2019 | Royalty Revenue (in thousands) 2018 | Change % | | :-------------------------- | :-------------------------------------- | :-------------------------------------- | :------- | :---------------------------------- | :---------------------------------- | :------- | | Appalachia | 14,415 | 14,360 | 0.4% | $75,005 | $79,221 | (5)% | | Illinois Basin | 1,646 | 2,091 | (21)% | $7,739 | $9,533 | (19)% | | Northern Powder River Basin | 1,979 | 2,896 | (32)% | $6,347 | $7,817 | (19)% | | Total | 18,040 | 19,347 | (7)% | $87,561 | $96,473 | (9)% | - Appalachia revenues decreased by $4.2 million (5%) despite flat sales volumes, primarily due to weakened coal markets, temporary idling of properties, and the Pinnacle mine[174] - Illinois Basin sales volumes decreased 21% and revenues decreased $1.8 million due to flooding, transportation logistics issues, and weakened thermal export/domestic demand[174] - Northern Powder River Basin sales volumes decreased 32% and revenues decreased $1.5 million as the lessee mined off the property[174] Other Revenues Details the factors contributing to changes in other revenues, such as production lease minimums and lease amendment fees - Other revenues increased by $28.0 million, primarily due to $15.0 million in production lease minimum revenues, $9.4 million in minimum lease straight-line revenues (Hillsboro property), and $6.7 million in lease amendment revenues[174] - These increases were partially offset by $3.1 million in lower oil and gas royalty revenues due to lower natural gas prices[174] Transportation and Processing Services Revenues Discusses the decrease in transportation and processing services revenues due to weakened coal demand for the nine months - Transportation and processing services revenues decreased by $2.5 million (14%) due to weakened demand for Illinois Basin coal[175] Gain on Asset Sales and Disposals Reports the increase in gain from asset sales and disposals, primarily from mineral right assets in Q3 2019 - Gain on asset sales and disposals increased by $5.8 million, primarily from the disposal of certain mineral right assets in Q3 2019[176] Soda Ash Analyzes the increase in Soda Ash segment revenues and other income, offset by a prior year royalty dispute settlement - Soda Ash segment revenues and other income increased by $1.8 million (5%) due to higher production and sales volumes and increased domestic and international sales prices[177] - The increase was partially offset by a $12.7 million income from a royalty dispute settlement in Q2 2018[177] Operating and Other Expenses Details the changes in consolidated operating and other expenses, including O&M, DDA, G&A, interest, and debt extinguishment loss Consolidated Operating and Other Expenses (In thousands): | Expense Category | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | Increase (Decrease) | Percentage Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :------------------ | :---------------- | | Operating and maintenance expenses | $26,813 | $21,122 | $5,691 | 27% | | Depreciation, depletion and amortization | $11,746 | $15,364 | $(3,618) | (24)% | | General and administrative expenses | $12,799 | $10,782 | $2,017 | 19% | | Asset impairments | $484 | $242 | $242 | 100% | | Total operating expenses | $51,842 | $47,510 | $4,332 | 9% | | Interest expense, net | $37,061 | $53,177 | $(16,116) | (30)% | | Loss on extinguishment of debt | $29,282 | $— | $29,282 | 100% | | Total other expenses, net | $66,343 | $53,177 | $13,166 | 25% | - Operating and maintenance expenses increased by $5.7 million due to bad debt expense in Q2 2019[180] - Depreciation, depletion, and amortization decreased by $3.6 million due to lower coal sales volumes[180] - General and administrative expenses increased by $2.0 million due to higher legal and consulting costs[180] - Interest expense, net, decreased by $16.1 million due to lower debt balances[180] - Loss on extinguishment of debt was $29.3 million, related to the premium paid and write-off of costs for redeeming the 2022 Senior Notes[180] Income from Discontinued Operations Reports the decrease in income from discontinued operations following the sale of the construction aggregates business - Income from discontinued operations decreased by $3.5 million due to the sale of the construction aggregates business in Q4 2018[180] Adjusted EBITDA (Non-GAAP Financial Measure) Analyzes the change in Adjusted EBITDA by segment, highlighting the impact of Coal Royalty and Soda Ash performance Adjusted EBITDA by Segment (In thousands): | Operating Segment | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | Coal Royalty and Other | $148,796 | $131,337 | $17,459 | | Soda Ash | $25,257 | $36,750 | $(11,493) | | Corporate and Financing | $(12,799) | $(10,782) | $(2,017) | | Total Adjusted EBITDA | $161,254 | $157,305 | $3,949 | - Adjusted EBITDA increased by $3.9 million, driven by a $17.5 million increase in the Coal Royalty and Other segment (higher revenues, offset by O&M) and an $11.5 million decrease in the Soda Ash segment (lower cash distributions)[183] Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures) Examines the changes in DCF and FCF, driven by lease fees, interest payments, and Ciner Wyoming distributions DCF and FCF by Segment (In thousands): | Operating Segment | 9 Months Ended Sep 30, 2019 DCF | 9 Months Ended Sep 30, 2019 FCF | 9 Months Ended Sep 30, 2018 DCF | 9 Months Ended Sep 30, 2018 FCF | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Coal Royalty and Other | $147,783 | $141,172 | $135,554 | $134,728 | | Soda Ash | $25,257 | $25,257 | $36,750 | $36,750 | | Corporate and Financing | $(47,153) | $(47,153) | $(68,982) | $(68,982) | | Total | $125,331 | $119,276 | $103,322 | $102,496 | - DCF and FCF increased by $22.0 million and $16.8 million, respectively, driven by increased lease amendment fees and Hillsboro minimum payments in the Coal Royalty and Other segment, and lower cash paid for interest in the Corporate and Financing segment[188] - These increases were partially offset by an $11.5 million decrease in cash distributions from Ciner Wyoming in the Soda Ash segment[188] Liquidity and Capital Resources Discusses the Partnership's liquidity, cash flow movements, capital resources, debt obligations, and compliance with financial covenants Current Liquidity Details the Partnership's total liquidity, including cash, restricted cash, and available borrowing capacity - Total liquidity as of September 30, 2019, was $212.2 million, consisting of $99.6 million in cash and cash equivalents, $12.5 million in restricted cash, and $100.0 million in available borrowing capacity under the Opco Credit Facility[190] - The $12.5 million restricted cash is designated for debt repayment, acquisitions, or capital expenditures, with plans to use it for Opco Senior Notes principal payments in 2019[190] Cash Flows Analyzes changes in cash flows from operating, investing, and financing activities and their primary drivers - Cash flows from operating activities increased by $10.4 million, driven by timing of interest payments, lower interest on Opco Senior Notes, and collection of lease amendment fees and Hillsboro minimum payment, partially offset by lower cash distributions from Ciner Wyoming and reduced coal royalty revenues[191] - Cash flows provided by investing activities increased by $11.2 million, primarily due to lower capital expenditures from discontinued operations in 2019 and a $5.8 million increase in proceeds from asset sales[192] - Cash flows used in financing activities increased by $149.0 million, mainly due to the redemption of 2022 Senior Notes ($345.6 million), increased Opco Senior Notes payments ($41.4 million), and higher debt issuance costs ($26.2 million), partially offset by $300 million from 2025 Senior Notes issuance[193][194] Capital Resources and Obligations Outlines the Partnership's debt outstanding and confirms compliance with financial covenants Debt Outstanding (In thousands): | Metric | Sep 30, 2019 | Dec 31, 2018 | Change | | :------------------------------------------ | :----------- | :----------- | :------- | | Current portion of long-term debt, net | $45,789 | $115,184 | $(69,395) | | Long-term debt, net | $490,378 | $557,574 | $(67,196) | | Total debt, net | $536,167 | $672,758 | $(136,591) | - The Partnership was in compliance with the terms of the financial covenants contained in its debt agreements as of September 30, 2019[196] Off-Balance Sheet Transactions Confirms the absence of off-balance sheet arrangements that could pose risks to liquidity or capital resources - The Partnership has no off-balance sheet arrangements with unconsolidated entities or related parties, and therefore no off-balance sheet risks to liquidity and capital resources[197] Related Party Transactions Refers to Note 12 for detailed information on transactions with related parties - Information on related party transactions is incorporated by reference from Note 12 to the consolidated financial statements[198] Summary of Critical Accounting Estimates States that there have been no significant changes to critical accounting estimates since the prior annual report - There have been no significant changes to critical accounting estimates from those disclosed in the 2018 Annual Report on Form 10-K[199] Recent Accounting Standards Refers to Note 1 for information regarding the adoption and evaluation of recent accounting standards - Information on recent accounting standards is incorporated by reference from Note 1 to the consolidated financial statements[200] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Discusses the Partnership's exposure to market risks, including commodity price volatility for coal and soda ash, and interest rate risk from variable rate borrowings Commodity Price Risk Highlights the Partnership's significant exposure to volatile commodity prices for coal and soda ash, impacting revenues and profitability - The Partnership's revenues, operating results, and financial condition are substantially dependent on prevailing commodity prices, especially coal, which has historically been volatile[201] - Depressed coal prices could significantly reduce revenues and potentially trigger asset impairments or debt covenant violations[201] - Lessees' ability to secure long-term coal contracts is challenging, and increased spot market sales could lead to more volatile coal royalty revenues[202] - The market price of soda ash and energy costs directly affect Ciner Wyoming's profitability, and global market volatility for soda ash is expected to continue[205] Interest Rate Risk Addresses interest rate risk primarily from variable rate borrowings under the Opco Credit Facility - Interest rate risk primarily arises from variable interest rate borrowings under the Opco Credit Facility, which is based on LIBOR[206] - As of September 30, 2019, there were no outstanding borrowings under the Opco Credit Facility, limiting immediate interest rate exposure[206] ITEM 4. CONTROLS AND PROCEDURES Reports on the effectiveness of disclosure controls and procedures and confirms no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures Confirms the effectiveness of disclosure controls and procedures as of September 30, 2019, ensuring timely and accurate reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2019, ensuring timely and accurate reporting of information required under the Exchange Act[207] Changes in the Partnership's Internal Control Over Financial Reporting States that no material changes occurred in internal control over financial reporting during the first nine months of 2019 - No material changes occurred in the Partnership's internal control over financial reporting during the first nine months of 2019[208] PART II. OTHER INFORMATION Contains additional information including legal proceedings, risk factors, equity sales, senior security defaults, mine safety, and a list of exhibits ITEM 1. LEGAL PROCEEDINGS Details the Partnership's involvement in legal proceedings, with management assessing no material financial impact - The Partnership is involved in various ordinary course legal proceedings, which management believes will not have a material effect on its financial position, liquidity, or operations[212] - More information on legal proceedings, including the Anadarko lawsuit, is incorporated by reference from Note 14 and the 2018 Annual Report on Form 10-K[213] ITEM 1A. RISK FACTORS Reports no material changes to previously disclosed risk factors during the reporting period - No material changes to risk factors were disclosed during the period, other than those previously reported in the 2018 Annual Report on Form 10-K and Q2 2019 Quarterly Report on Form 10-Q[214] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Confirms no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[215] ITEM 3. DEFAULTS UPON SENIOR SECURITIES States that there were no defaults upon senior securities to report during the period - No defaults upon senior securities to report[216] ITEM 4. MINE SAFETY DISCLOSURES Confirms no mine safety disclosures to report for the current period - No mine safety disclosures to report[217] ITEM 5. OTHER INFORMATION Indicates that there is no other information to report in this section - No other information to report[218] ITEM 6. EXHIBITS Lists various agreements, certifications, and XBRL documents filed as exhibits to the report - The exhibits include various agreements (Purchase, Partnership, Indenture), certifications (CEO, CFO), and XBRL documents[221] [Signatures](index=58&type=section&id=