NPR(NRP) - 2019 Q4 - Annual Report

PART I Business and Properties Natural Resource Partners L.P. manages diversified mineral properties and a 49% equity interest in a soda ash business, operating through two segments - Natural Resource Partners L.P., formed in 2002, is a publicly traded Delaware limited partnership owning, managing, and leasing a diversified portfolio of mineral properties (coal, other natural resources) and a 49% non-controlling interest in Ciner Wyoming LLC (trona ore mining and soda ash production)[17][18][19] Segment Revenue (2019, In thousands) | Segment | Amount (In thousands) | % of Total | | :-------------------- | :-------------------- | :--------- | | Coal Royalty and Other | $216,846 | 82% | | Soda Ash | $47,089 | 18% | | Total | $263,935 | 100% | - The Coal Royalty and Other segment leases reserves to experienced mine operators under long-term leases, with royalty payments based on a percentage of sale price or fixed rate per ton, often including minimum payments, limiting direct exposure to environmental, permitting, and labor risks[25][26][27][28] Coal Reserves by Region (as of Dec 31, 2019, Tons in thousands) | Region | Underground (Tons in thousands) | Surface (Tons in thousands) | Total (Tons in thousands) | | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Appalachia Basin | 1,080,001 | 265,204 | 1,345,205 | | Illinois Basin | 299,818 | 5,074 | 304,892 | | Northern Powder River Basin | — | 163,555 | 163,555 | | Gulf Coast | — | 1,957 | 1,957 | | Total | 1,379,819 | 435,790 | 1,815,609 | Coal Sales Volumes by Region (Year Ended Dec 31, 2019, Tons in thousands) | Region | Thermal (Tons in thousands) | Metallurgical (Tons in thousands) | Total (Tons in thousands) | | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Appalachia Basin | 6,368 | 12,139 | 18,507 | | Illinois Basin | 2,201 | — | 2,201 | | Northern Powder River Basin | 3,036 | — | 3,036 | | Total | 11,605 | 12,139 | 23,744 | - The Soda Ash segment's 49% equity interest in Ciner Wyoming, a trona ore mining and soda ash production business, makes it one of the largest and lowest-cost producers globally[63][64] - Ciner Wyoming is undertaking a significant capacity expansion project to increase production to 3.5 million tons/year, which will be partly funded by reinvesting cash, leading to reduced distributions to partners (expected $25 million to $28 million annually) until the project is funded[74] - The company faces significant customer concentration, with Foresight Energy and its subsidiaries accounting for $58.9 million and Contura Energy for $40.7 million in total revenues in 2019[75] - Operations are subject to extensive federal, state, and local environmental, health, and safety regulations, including those related to air emissions (Clean Air Act, GHG emissions), water discharges (Clean Water Act), and mine safety[81][82][83][85][86][87][91][95][97] - Compliance costs are significant, and new regulations or legal challenges could adversely impact coal demand and operational costs[81][82][83][85][86][87][91][95][97] Risk Factors The partnership faces significant risks from volatile commodity prices, high leverage, operational challenges, environmental regulations, and structural issues - Cash distributions are not guaranteed and may fluctuate, with debt agreements and the partnership agreement restricting the ability to increase distributions[104][105] - The company's significant leverage ($524.1 million total indebtedness as of December 31, 2019) and debt service obligations could adversely affect its financial condition and limit operational flexibility[107] - Prices for both metallurgical and thermal coal are volatile and depend on factors beyond the company's control, including supply/demand, regulations, and alternative fuels, with declines potentially leading to asset impairments[109][112][113][114] - The company derives a large percentage of revenues from a small number of coal lessees (e.g., Foresight Energy, Contura Energy), making it vulnerable to interruptions in their ability to make royalty payments or to their bankruptcies and mine closures[115][116] - Mining operations are subject to various operating risks (e.g., permitting delays, equipment failures, transportation disruptions, adverse weather, labor issues, safety incidents) that could result in lower revenues, while increased regulatory compliance costs, insurance, and permitting expenses also impact profitability[117][119] - Climate change legislation and regulations, including those restricting greenhouse gas emissions, have led to and will continue to lead to changes in fuel consumption patterns by electric power generators, reducing coal demand and related revenues[120][121][122] - Concerns about environmental impacts also affect lending and investment policies, potentially limiting capital access and increasing insurance costs[120][121][122] - Prices for soda ash are volatile, directly affecting Ciner Wyoming's profitability, and high natural gas prices increase production costs, impacting competitiveness[126][131] - The planned termination of ANSAC membership could adversely affect Ciner Wyoming's ability to compete internationally and increase sales costs[126][131] - Significant delays or higher-than-expected costs associated with Ciner Wyoming's capacity expansion project could adversely affect its profitability and ability to make distributions, with the depletion of deca stockpiles by 2023 further impacting production rates without this expansion[132] - Unitholders have limited ability to remove the general partner due to high voting thresholds and substantial ownership by the general partner and preferred unitholders[143][144] - The preferred units are senior in distributions and liquidation, and their conversion could result in substantial dilution of common unitholders' ownership interests[146][147] - The company's tax treatment as a partnership for U.S. federal income tax purposes is critical; if treated as a corporation, cash available for distribution would be substantially reduced[157][158][159] - Unitholders are required to pay taxes on their share of income even if they receive no cash distributions, and certain transactions to reduce indebtedness may generate taxable income without corresponding cash distributions[165][167] Unresolved Staff Comments No unresolved staff comments are reported - No unresolved staff comments[183] Legal Proceedings The company is involved in routine legal proceedings, with a significant 2017 Anadarko lawsuit concluding in its favor in 2019 with no liability - The company is involved in various legal proceedings in the ordinary course of business, which management believes will not have a material effect on its financial position, liquidity, or operations[185] - A lawsuit filed by Anadarko in July 2017 alleged that a 2013 internal restructuring triggered an acceleration of a contingent consideration payment obligation (up to $50 million) related to the acquisition of an interest in OCI Wyoming, L.P[186][187][188][189] - In November 2019, the trial court ruled in the company's favor, concluding the case with no liability[190] Mine Safety Disclosures No mine safety disclosures are reported - No mine safety disclosures[191] PART II Market for Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities NRP common units trade on the NYSE, with 13,180 holders and 613,018 units available under the 2017 Long-Term Incentive Plan - Common units are listed and traded on the NYSE under the symbol "NRP" As of February 10, 2020, there were approximately 13,180 beneficial and registered holders[194] Securities Authorized for Issuance under Equity Compensation Plans (as of Dec 31, 2019) | Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | :------------------------------------------------ | :-------------------------------------------------------------------------------- | :-------------------------------------------------------------------- | :-------------------------------------------------------------------------------------------------------------------------------- | | Equity compensation plans approved by security holders | — | — | 613,018 | | Equity compensation plans not approved by security holders | n/a | n/a | n/a | | Total | — | — | 613,018 | - As of December 31, 2019, 157,789 phantom units were outstanding under the 2017 Long-Term Incentive Plan, each representing the right to receive one common unit[196] Selected Financial Data This section summarizes five-year financial data and reconciles non-GAAP measures, showing a net loss and decreased cash flow in 2019 Selected Historical Financial Data (2015-2019, In thousands, except per unit data) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :---------------------------------------- | :----- | :----- | :----- | :----- | :----- | | Total revenues and other income | $263,935 | $278,512 | $246,325 | $279,244 | $300,635 | | Asset impairments | $148,214 | $18,280 | $2,967 | $15,861 | $378,327 | | Income (loss) from operations | $51,321 | $192,538 | $176,559 | $181,157 | $(170,699) | | Net income (loss) from continuing operations | $(25,414) | $122,360 | $82,485 | $90,626 | $(260,443) | | Net income (loss) | $(24,458) | $140,047 | $88,667 | $96,892 | $(571,720) | | Basic Net income (loss) per common unit | $(4.35) | $8.77 | $5.06 | $7.78 | $(45.75) | | Diluted Net income (loss) per common unit | $(4.35) | $6.76 | $3.96 | $7.78 | $(45.75) | | Distributions paid per common unit | $2.65 | $1.80 | $1.80 | $1.80 | $2.70 | | Net cash provided by operating activities of continuing operations | $137,319 | $178,282 | $112,151 | $80,243 | $144,907 | | Total assets | $1,085,907 | $1,341,647 | $1,389,164 | $1,448,649 | $1,674,865 | | Total debt, net | $516,198 | $672,758 | $809,348 | $1,130,271 | $1,211,441 | - The company uses non-GAAP financial measures such as Distributable Cash Flow (DCF), Free Cash Flow (FCF), and Adjusted EBITDA to assess its ability to make cash distributions, repay debt, and evaluate financial performance[201][202][203][206] Reconciliation of Net Cash Provided by Operating Activities to DCF, FCF, and Cash Flow Cushion (2015-2019, In thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :------------------------------------------------ | :----- | :----- | :----- | :----- | :----- | | Net cash provided by operating activities of continuing operations | $137,319 | $178,282 | $112,151 | $80,243 | $144,907 | | Distributable cash flow | $144,933 | $383,980 | $121,958 | $255,172 | $157,815 | | Free cash flow | $139,040 | $183,440 | $121,324 | $75,970 | $144,210 | | Cash flow cushion | $7,762 | $16,080 | $9,248 | $(29,444) | $(8,339) | Reconciliation of Net Income (Loss) from Continuing Operations to Adjusted EBITDA (2015-2019, In thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :------------------------------------------------ | :----- | :----- | :----- | :----- | :----- | | Net income (loss) from continuing operations | $(25,414) | $122,360 | $82,485 | $90,626 | $(260,443) | | Adjusted EBITDA | $199,228 | $230,241 | $211,483 | $235,273 | $240,553 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses 2019 financial performance, highlighting a 5% revenue decrease, increased operating expenses, and reduced cash flow, while prioritizing balance sheet strength - The company's executive overview highlights its diversified natural resource portfolio and 49% non-controlling interest in Ciner Wyoming, with a key objective of strengthening the balance sheet and maintaining liquidity amidst commodity price volatility[210][213] 2019 Financial Results by Segment (In thousands) | Metric | Coal Royalty and Other | Soda Ash | Corporate and Financing | Total | | :------------------------------------------------ | :--------------------- | :------- | :---------------------- | :------ | | Revenues and other income | $216,846 | $47,089 | $— | $263,935 | | Net income (loss) from continuing operations | $21,211 | $46,840 | $(93,465) | $(25,414) | | Asset impairments | 148,214 | — | — | 148,214 | | Adjusted EBITDA | $184,357 | $31,601 | $(16,730) | $199,228 | | Distributable cash flow | $187,106 | $31,601 | $(73,145) | $144,933 | | Free cash flow | $180,584 | $31,601 | $(73,145) | $139,040 | | Cash flow cushion | N/A | N/A | N/A | $7,762 | - The Coal Royalty and Other segment experienced weakened coal markets and lower activity in the second half of 2019, with sales volumes decreasing 12% year-over-year[215][216] - Four lessees filed for bankruptcy in 2019, and Foresight Energy (the largest lessee) is evaluating restructuring options, posing ongoing challenges[217][223] - The Soda Ash segment's performance is stable, but Ciner Wyoming's significant capacity expansion project will reduce cash distributions to partners (expected $25 million to $28 million annually) until funded, impacting near-term cash flow[218][219] - Total revenues and other income decreased by $14.6 million (5%) in 2019 compared to 2018, driven by a $19.7 million decrease in coal royalty revenues and the absence of a $25.0 million litigation settlement gain from 2018[221][225][226] - This decrease was partially offset by a $31.9 million increase in other revenues, primarily from production lease minimums and minimum lease straight-line revenues[228] - Total operating expenses increased by $126.6 million (147%) in 2019, primarily due to a $129.9 million increase in asset impairments, reflecting deterioration in thermal coal markets and lessee capital constraints[229][230] - Interest expense, net, decreased by $22.7 million (32%) due to lower debt balances[229][230](index=230&type=chunk] - Distributable Cash Flow (DCF) and Free Cash Flow (FCF) decreased by $239.0 million and $44.4 million, respectively, in 2019, largely due to lower cash distributions from Ciner Wyoming and the absence of a one-time litigation settlement payment received in 2018[235][237] - Cash flow cushion decreased by $8.3 million[235][237] - As of December 31, 2019, total liquidity was $198.3 million ($98.3 million cash and $100.0 million borrowing capacity)[239][240] - Cash flows from operating activities decreased $51.6 million, while cash flows used in financing activities increased $49.3 million, primarily due to the redemption of 2022 Senior Notes and issuance of 2025 Senior Notes[242] Long-Term Contractual Obligations (as of Dec 31, 2019, In thousands) | Contractual Obligations | Total | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | | :------------------------------------------------ | :----- | :----- | :----- | :----- | :----- | :----- | :--------- | | NRP: Long-term debt principal payments | $300,000 | $— | $— | $— | $— | $— | $300,000 | | NRP: Long-term debt interest payments | $150,563 | $27,375 | $27,375 | $27,375 | $27,375 | $27,375 | $13,688 | | Opco: Long-term debt principal payments | $224,056 | $46,176 | $39,396 | $39,396 | $39,396 | $31,028 | $28,664 | | Opco: Long-term debt interest payments | $39,865 | $12,447 | $9,868 | $7,631 | $5,020 | $2,724 | $2,175 | | Rental leases | $14,012 | $483 | $483 | $483 | $483 | $483 | $11,597 | | Total | $728,496 | $86,481 | $77,122 | $74,885 | $72,274 | $61,610 | $356,124 | Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from volatile coal and soda ash prices, impacting revenues and profitability, and interest rate fluctuations on variable-rate borrowings - The company's revenues and financial results are substantially dependent on prevailing commodity prices, particularly for coal, which has historically been volatile, with depressed prices potentially reducing revenues or triggering asset impairments or debt covenant violations[268] - The market price of soda ash and energy costs directly affect the profitability of Ciner Wyoming's operations, which are also subject to historical and future volatility[270] - Interest rate risk primarily stems from variable-rate borrowings under the Opco Credit Facility, which is based on LIBOR, though no outstanding borrowings existed as of December 31, 2019[271] Fair Value of Debt and Contract Receivable (as of Dec 31, 2019, In thousands) | Metric | Fair Value Hierarchy Level | Carrying Value | Estimated Fair Value | | :-------------------------- | :------------------------- | :------------- | :------------------- | | Debt: | | | | | NRP 2025 Senior Notes | 1 | $294,084 | $269,250 | | Opco Senior Notes | 3 | $222,114 | $201,090 | | Assets: | | | | | Contract receivable (current and long-term) | 3 | $38,945 | $33,460 | Financial Statements and Supplementary Data This section provides audited consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes, along with independent auditor reports - Ernst & Young LLP issued an unqualified opinion on the company's consolidated financial statements and internal control over financial reporting for the period ended December 31, 2019[278][279][280] - Deloitte & Touche LLP also issued an unqualified opinion on the financial statements of Ciner Wyoming LLC[285] Consolidated Balance Sheets (as of Dec 31, In thousands) | Metric | 2019 | 2018 | | :-------------------------------- | :----- | :----- | | Total current assets | $132,084 | $242,543 | | Mineral rights, net | $605,096 | $743,112 | | Equity in unconsolidated investment | $263,080 | $247,051 | | Total assets | $1,085,907 | $1,341,647 | | Total current liabilities | $62,708 | $148,746 | | Long-term debt, net | $470,422 | $557,574 | | Total liabilities | $585,292 | $756,514 | | Class A Convertible Preferred Units | $164,587 | $164,587 | | Total partners' capital | $338,963 | $423,481 | | Total liabilities and capital | $1,085,907 | $1,341,647 | Consolidated Statements of Comprehensive Income (Loss) (Years Ended Dec 31, In thousands) | Metric | 2019 | 2018 | 2017 | | :------------------------------------------------ | :----- | :----- | :----- | | Total revenues and other income | $263,935 | $278,512 | $246,325 | | Total operating expenses | $212,614 | $85,974 | $69,766 | | Income from operations | $51,321 | $192,538 | $176,559 | | Net income (loss) from continuing operations | $(25,414) | $122,360 | $82,485 | | Net income (loss) | $(24,458) | $140,047 | $88,667 | | Basic net income (loss) per common unit | $(4.35) | $8.77 | $5.06 | | Diluted net income (loss) per common unit | $(4.35) | $6.76 | $3.96 | Consolidated Statements of Cash Flows (Years Ended Dec 31, In thousands) | Metric | 2019 | 2018 | 2017 | | :------------------------------------------------ | :----- | :----- | :----- | | Net cash provided by operating activities of continuing operations | $137,319 | $178,282 | $112,151 | | Net cash provided by investing activities of continuing operations | $8,221 | $7,607 | $9,807 | | Net cash used in financing activities of continuing operations | $(253,305) | $(6,839) | $(134,149) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(107,765) | $176,203 | $(10,544) | | Cash, cash equivalents and restricted cash at end of period | $98,265 | $206,030 | $29,827 | - The company adopted ASC 606 (Revenue from Contracts with Customers) effective January 1, 2018, changing revenue recognition for royalty lease arrangements, and ASC 842 (Leases) effective January 1, 2019, which had no material impact[281][337][340] - It expects a $5 million reduction in financial assets upon adopting ASU No. 2016-13 (Credit Losses) on January 1, 2020[281][337][340] - The company recorded $125.9 million in asset impairments in 2019, primarily related to coal properties and intangible assets, driven by deterioration in thermal coal markets, lessee capital constraints, and reduced cash flow expectations[398][401] - In April 2019, the company issued $300 million of 9.125% senior notes due 2025 and used the proceeds, along with cash on hand, to redeem its 2022 Senior Notes, incurring a $29.3 million loss on extinguishment of debt[406][410] - Foresight Energy and Contura Energy were major customers in 2019, accounting for 22.9% and 15.8% of total revenues, respectively, highlighting customer concentration risk[445] Changes In and Disagreements with Accountants on Accounting and Financial Disclosure No changes in or disagreements with accountants on accounting and financial disclosure are reported - No changes in or disagreements with accountants on accounting and financial disclosure[476] Controls and Procedures Management and independent auditors concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019 - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that disclosure controls and procedures were effective as of December 31, 2019, at a reasonable assurance level[477] - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2019, based on the COSO 2013 framework, and concluded it was effective at a reasonable assurance level[478] - Ernst & Young LLP, the independent registered public accounting firm, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2019[479][483] Other Information No other information is reported in this section - No other information to report[491] PART III Directors and Executive Officers of the Managing General Partner and Corporate Governance This section details the managing general partner's directors and executive officers, their experience, and the company's corporate governance structure - The company's management is provided by executive officers and directors of GP Natural Resource Partners LLC, the managing general partner, who are employees of affiliated private companies and reimbursed by NRP[494][526] - Key executive officers include Corbin J. Robertson, Jr. (Chairman & CEO), Craig W. Nunez (President & COO), Christopher J. Zolas (CFO & Treasurer), Kathryn S. Wilson (VP, General Counsel & Secretary), and Kevin J. Craig (EVP, Coal)[495][496][497][498][499] - The Board of Directors includes five independent directors (Messrs. Claro, Gordy, Navarre, Smith, Vecellio) as per NYSE standards[511][512] - The Audit Committee and Compensation, Nominating and Governance (CNG) Committee are staffed solely by independent directors[520] - The Audit Committee, composed of Mr. Smith (Chairman), Mr. Claro, and Mr. Navarre (two of whom are Audit Committee Financial Experts), met seven times in 2019 to oversee financial reporting and independent auditors[512][513][514][515][516][517][518][519] - The CNG Committee, chaired by Mr. Vecellio, met four times to review and approve executive and director compensation[520] Executive Compensation Executive compensation, including base salaries, short-term cash incentives, and long-term equity awards, is detailed, with the CNG Committee aligning incentives with performance - Executive officers are employed by affiliates and reimbursed by NRP based on time allocated, with a compensation strategy aiming to retain qualified management and preserve long-term equity value, tying incentive compensation to performance[526][527] - The CNG Committee, with input from Longnecker & Associates (L&A), found that while base salaries and short-term incentives were generally in line with peers, long-term incentive compensation was well below the peer group median, with future recommendations aiming to align long-term incentives with the peer group[531] - 2019 compensation for executive officers included base salaries, discretionary short-term cash incentives (based on a percentage of base salary), and long-term equity incentive awards in the form of phantom units under the 2017 Plan, vesting in February 2022 and accruing Distribution Equivalent Rights (DERs)[529][535][536] Summary Compensation Table (2019, In thousands) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | :---------------------------------------- | :--- | :--------- | :-------- | :--------------- | :------------------------- | :-------- | | Corbin J. Robertson, Jr.—CEO | 2019 | — | 938,868 | 1,306,222 | — | 2,245,090 | | Craig W. Nunez—President and COO | 2019 | 500,000 | 408,204 | 653,111 | 16,800 | 1,578,115 | | Christopher J. Zolas—CFO | 2019 | 355,000 | 284,000 | 492,581 | 16,800 | 1,148,381 | | Kathryn S. Wilson—VP, General Counsel & Secretary | 2019 | 340,271 | 272,217 | 507,178 | 16,128 | 1,135,794 | | Kevin J. Craig—EVP, Coal | 2019 | 310,500 | 248,400 | 434,854 | 15,120 | 1,008,874 | Grants of Plan-Based Awards in 2019 (2017 Plan Phantom Units) | Named Executive Officer | Grant Date | Number of Units | Grant Date Fair Value | | :-------------------------- | :--------- | :-------------- | :-------------------- | | Corbin J. Robertson, Jr. | 2/14/2019 | 31,498 | $1,306,222 | | Craig W. Nunez | 2/14/2019 | 15,749 | $653,111 | | Christopher J. Zolas | 2/14/2019 | 11,878 | $492,581 | | Kathryn S. Wilson | 2/14/2019 | 12,230 | $507,178 | | Kevin J. Craig | 2/14/2019 | 10,486 | $434,854 | Outstanding Equity Awards at December 31, 2019 (2017 Plan Phantom Units) | Named Executive Officer | Unvested Phantom Units | Market Value of Unvested Phantom Units | | :-------------------------- | :--------------------- | :------------------------------------- | | Corbin J. Robertson, Jr. | 45,891 | $922,868 | | Craig W. Nunez | 22,946 | $461,444 | | Christopher J. Zolas | 17,635 | $354,640 | | Kathryn S. Wilson | 17,028 | $342,433 | | Kevin J. Craig | 15,476 | $311,222 | - Upon a change in control, 2017 Plan Phantom Units held by named executive officers would immediately vest, with estimated total potential payments for these awards, including accumulated DERs, ranging from $354,251 to $1,049,736 per executive as of December 31, 2019[556][557] - Directors' compensation in 2019 included a $75,000 cash retainer and 2017 Plan common unit awards, with committee members receiving additional fees[558][559] - The ratio of CEO total compensation to the median service provider's total compensation in 2019 was 20:1[566] Security Ownership of Certain Beneficial Owners and Management This section details beneficial ownership of common and preferred units, highlighting major holders like Corbin J. Robertson, Jr. (19.7% common) and The Blackstone Group Inc. (57% preferred) Common Unit Ownership (as of Feb 24, 2020) | Name of Beneficial Owner | Common Units | Percentage of Common Units | | :-------------------------------- | :----------- | :------------------------- | | Corbin J. Robertson, Jr. | 2,411,395 | 19.7% | | Western Pocahontas Corporation | 1,739,007 | 14.2% | | Western Pocahontas Properties Limited Partnership | 1,727,986 | 14.1% | | JPMorgan Chase & Co. | 1,050,335 | 8.6% | | The Goldman Sachs Group, Inc. | 835,403 | 6.8% | | Directors and Officers as a Group | 3,302,305 | 26.9% | Preferred Unit Ownership (as of Feb 24, 2020) | Name of Beneficial Owner | Preferred Units | Percentage of Preferred Units | | :-------------------------------- | :-------------- | :-------------------------- | | The Blackstone Group Inc. | 142,500 | 57% | | GoldenTree Asset Management, LP | 107,500 | 43% | Certain Relationships and Related Transactions, and Director Independence This section outlines related party transactions, potential conflicts of interest governed by agreements like the Omnibus Agreement, and reaffirms director independence - The Omnibus Agreement restricts GP affiliates (WPP Group and entities controlled by Corbin J. Robertson, Jr.) from engaging in certain "restricted businesses" and outlines procedures for offering such opportunities to NRP, with a total fair market value limit of $75 million for new restricted businesses[574][575][576][577][578][579][580][581][582][583] - The Board Representation and Observation Rights Agreement grants Blackstone the right to appoint one director and one observer, with GoldenTree having a contingent right to appoint a director or observer if Blackstone's ownership falls below a certain threshold[584] - A formal conflicts policy governs investment opportunities between NRP and Quintana Capital (controlled by Corbin J. Robertson, Jr.), categorizing them into "NRP Businesses," "Shared Businesses," and "Non-NRP Businesses," with specific offer procedures for each[585][586][587][588] - Related party transactions in 2019 included $0.2 million in coal royalty revenues from Quinwood Coal Partners LP (controlled by Corbin J. Robertson, III), $1.7 million in coal royalty and wheelage revenues from Industrial Minerals Group LLC (minority owned by Corbin J. Robertson, III), and approximately $0.8 million paid for an office building lease from Western Pocahontas Properties Limited Partnership[589][590][591] - Conflicts of interest may arise between the general partner/affiliates and the partnership/limited partners, with the partnership agreement allowing the general partner to resolve these conflicts if the resolution is deemed "fair and reasonable," considering various factors, and may not always involve separate counsel for common unitholders[593][594][595][596][597][598][599][600][601][602][603][604][605][606][607][608] Principal Accountant Fees and Services This section details fees paid to Ernst & Young LLP for audit and tax services, and outlines the Audit Committee's pre-approval policy to ensure auditor independence Fees for Professional Services by Ernst & Young LLP (In thousands) | Fee Type | 2019 | 2018 | | :--------------- | :----- | :----- | | Audit Fees | $1,070 | $957 | | Tax Fees | $533 | $501 | - Audit fees include services related to the annual integrated audit, subsidiary audits, quarterly reviews, SEC filings, and acquisition work[618] - Tax fees cover assistance with tax planning, compliance, and return preparation[618] - The Audit Committee has an Audit and Non-Audit Services Pre-Approval Policy to ensure auditor independence, allowing for both general and specific pre-approval of services, and considering consistency with SEC rules, efficiency, and the overall relationship of fees[614][615][616][617][618] - The Audit Committee Chairman, Stephen P. Smith, has delegated authority for certain pre-approvals, with decisions reported to the full committee, and the policy outlines specific types of audit, audit-related, and tax services that may receive general pre-approval, setting annual fee levels[620][621][622][623][624][625][626][627] PART IV Exhibits and Financial Statement Schedules This section lists all exhibits and financial statement schedules, including Ciner Wyoming LLC financials, various agreements, and CEO/CFO certifications - The section includes references to the company's financial statements and schedules, as well as the financial statements of Ciner Wyoming LLC (Exhibit 99.1)[630] - A comprehensive list of exhibits is provided, including various agreements (e.g., Purchase Agreement, Partnership Agreements, Note Purchase Agreements, Credit Agreements, Registration Rights Agreements, Board Representation and Observation Rights Agreement) and forms related to equity compensation plans[631][632][633] - Other exhibits include a list of subsidiaries, consents from independent auditors (Ernst & Young LLP and Deloitte & Touche LLP), CEO and CFO certifications (pursuant to Sections 302 and 1350 of Sarbanes-Oxley), and XBRL (eXtensible Business Reporting Language) documents[633] Signatures This section contains the required signatures for the Annual Report on Form 10-K from the CEO, CFO, and other directors - The Annual Report on Form 10-K is signed by Corbin J. Robertson, Jr. (Chairman of the Board, Director, and Chief Executive Officer) and Christopher J. Zolas (Chief Financial Officer and Treasurer) on behalf of Natural Resource Partners L.P. on February 27, 2020[635][636] - Additional directors, including Galdino J. Claro, Russell D. Gordy, Alexander D. Greene, S. Reed Morian, Paul B. Murphy, Jr., Richard A. Navarre, Corbin J. Robertson III, Stephen P. Smith, and Leo A. Vecellio, Jr., also signed the report[638][639]