Natural Resource Partners L.P. Reports Third Quarter 2009 Results

Third Quarter 2009 Highlights:

HOUSTON, Nov. 4 /PRNewswire-FirstCall/ -- Natural Resource Partners L.P.
(NYSE: NRP) announced today distributable cash flow, a non-GAAP measure, of
$30.1 million for the third quarter of 2009, down 44% from the prior year
third quarter. Distributable cash flow is reconciled to net cash provided by
operating activities, a GAAP measure, in a table attached. Net income
attributable to the limited partners was $25.2 million, or $0.36 per unit, for
the third quarter this year versus $36.2 million, or $0.55 per unit, for the
same period last year.

Highlights
----------
3Q09 2Q09 3Q08
---- ---- ----
(in thousands except per ton and per unit)
Coal production: 11,283 11,784 14,935
Coal royalty revenues: $49,307 $46,380 $58,323
Average coal royalty revenue
per ton: $4.37 $3.94 $3.91
Total revenues: $63,962 $59,487 $76,196
Net income to limited partners: $25,161 $4,804 $36,154
Average units outstanding in
quarter: 69,451 66,946 64,891
Net income per unit: $0.36 $0.07 $0.55
Distributable cash flow: $30,061 $49,068 $53,965

"As reflected in our third quarter results as compared to second quarter of
2009, we are beginning to see improvements in the coal markets and
particularly in the global metallurgical coal markets. These improvements
yielded NRP improved price realizations across the board in all basins for
both the quarter and year-to-date," said Nick Carter, President and Chief
Operating Officer. "As the U.S. economy improves, natural gas prices increase
and utility stockpiles burn down, we expect both production and prices to
rebound."

Third Quarter 2009 versus Second Quarter 2009

Total revenues in the third quarter increased $4.5 million, or 8% from the
second quarter of 2009, primarily due to higher coal royalty revenues as a
result of increased realizations for coal royalty per ton. Coal production
decreased 501,000 tons, or 4%, while average coal royalty revenue per ton
increased $0.43, or approximately 11% this quarter. In the third quarter,
metallurgical coal production by NRP's lessees increased by approximately 1
million tons over the second quarter of 2009; while steam coal decreased by
approximately 1.5 million tons. The other increases in total revenues were
predominantly related to override royalties and minimums recognized as
royalties.

Net income attributable to the limited partners improved $20.4 million in the
third quarter to $25.2 million, up from the $4.8 million reported in the
second quarter. The improvement was due to several factors:
-- Improvement in third quarter revenues of $4.5 million;
-- Lower expenses in third quarter of approximately $9.3 million compared
to the second quarter, primarily due to an $8.2 million non-cash
write-off of a lease that occurred in the second quarter; and

-- The holders of the incentive distribution rights, including the
general
partner, were allocated $7.35 million less due to the forgiveness of
the
highest splits for the third quarter distribution. This equates to a
$0.10 per unit improvement for the quarter.

Net income per unit improved by $0.29 per unit to $0.36 per unit in the third
quarter, up from the $0.07 reported in the second quarter of 2009. Offsetting
slightly the positive reasons listed above, the average number of units
outstanding for the third quarter increased by approximately 4.6 million units
due to units issued during the second quarter for an acquisition.

Distributable cash flow decreased 39% from the second quarter 2009 to $30.1
million due predominantly to changes in working capital that offset
improvements in revenues. The largest change in working capital was $14.2
million in accrued interest due to interest payments on senior notes due
semi-annually.

Third Quarter and Nine Month Results

Revenues
Third Quarter
Total revenues of $64.0 million for the third quarter of 2009 were $12.2
million, or 16%, less than the $76.2 million reported for the third quarter
2008, which was the highest ever reported by NRP. The decrease in total
revenues included approximately $9 million related to coal royalty revenues,
where production fell 3.6 million tons from 2008, offset somewhat by
significantly higher average gross royalty revenue per ton. The average gross
royalty revenue per ton rose $0.46, or 12%, from third quarter 2008 to the
third quarter 2009 due to higher prices for steam coal and more production and
sales of metallurgical coal, which garners a much higher price than steam
coal. The remainder of the decrease was spread across all lines of revenue,
including aggregates, infrastructure, oil and gas, overrides and other, all
due to the current economy.

Nine Months
Total revenues for the first nine months of 2009 were $190.2 million, or 12%
less than the $215.8 million reported for the comparable period last year.
Coal royalty revenues accounted for $19.2 million of the decrease, mainly due
to 10 million fewer tons of coal produced in 2009 than in 2008. The lower
production occurred across all regions as production curtailments by NRP's
lessees occurred for both steam and metallurgical coal in response to lower
demand. The impact of the lower production was abated somewhat by a $0.49
improvement in the average gross royalty revenue per ton. The remainder of
the decline was due predominantly to declines in aggregates, oil and gas, and
overrides, all of which were impacted by lower demand that affected both
production and price.

Expenses
Third Quarter
Total expenses of $22.6 million for the third quarter of 2009 were virtually
flat compared to the third quarter of 2008. Depreciation, depletion and
amortization expenses were down $4.1 million due to lower production in 2009,
offset by $4.2 million in higher general and administrative expenses and
property and franchise taxes. These expenses were higher due to fluctuations
in NRP's long-term incentive plan accrual, as well as higher property taxes in
several states.

Interest expenses increased $3.9 million in the third quarter 2009 due to
additional debt incurred to fund acquisitions and higher interest rates.

Nine Months
Total expenses of $79.7 million for the first nine months of 2009 rose $5.6
million from the $74.1 million reported for the first nine months of 2008.
Excluding the $8.2 million non-cash write-off of a terminated lease that
occurred in the second quarter of 2009, NRP would have seen an overall net
reduction in expenses of $2.6 million. Normal depreciation, depletion and
amortization were down due to lower production and general and administrative
expenses increased due to incentive compensation accruals.

Net Income Attributable to the Limited Partners
Third Quarter
Net income attributable to the limited partners of $25.2 million declined
$11.0 million from the $36.2 million reported for the third quarter of 2008.
Partially offsetting the lower revenues and higher interest costs, the holders
of the incentive distribution rights agreed, as a part of a recent
acquisition, to forego the distribution for the highest splits for the third
quarter of 2009.

Net income per limited partner unit declined to $0.36 per unit in the third
quarter 2009 from the $0.55 per unit reported in the third quarter 2008. In
addition to the discussion above on net income attributable to the limited
partners, the net income per unit was impacted by the issuance of an
additional 4.6 million units for an acquisition in 2009.

Nine Months
Net income attributable to the limited partners declined $39.3 million to
$51.6 million or $0.77 per unit for the third quarter 2009 from $90.8 million
or $1.40 per unit for the first nine months of 2008 due to all the items
discussed previously.

Distributable Cash Flow
Third Quarter
Distributable cash flow for the third quarter of 2009 declined to $30.1
million from the $54.0 million reported in the same period last year. In
addition to the operating items discussed above, distributable cash flow was
impacted by higher semi-annual interest payments that were made in the third
quarter and an increase of $3.8 million in the accrual for future principal
payments.

Nine Months
Distributable cash flow for the nine months decreased by $31.6 million to
$114.6 million. The first nine months of distributable cash flow was reduced
for accruals for future principal payments in the amount of $11.3 million for
the first nine months of 2009 versus the first nine months of 2008.

Current Market

Coal markets for metallurgical coal are improving. While utilization for U.S.
steel plants has averaged less than 50% over the course of the year, the
current utilization rate is up to approximately 60%. While this rate is still
lower than the 70% utilization rate in October 2008, monthly raw steel
production has increased every month since April. The coal producers are also
exporting more metallurgical coal. Exports of metallurgical coal for the
month of August, the latest data available, were 30% higher than August of
2008.

While the metallurgical coal markets have improved, there is still significant
steam coal inventory at utilities. Overall demand for electricity is down
approximately 4% year-to-date, and steam coal demand is down even further due
to weak industrial demand and low natural gas prices.

Acquisitions and Liquidity

In the third quarter of 2009, NRP completed its 38th acquisition since its
initial public offering. NRP acquired coal reserves associated with the Deer
Run mine in the Illinois Basin for an initial payment of $10 million, with
future acquisitions of reserves at Deer Run, totaling $245 million, to be
completed over the next 27 months. Following the initial acquisition at Deer
Run, NRP has $22.0 million outstanding on it credit facility with an
additional $278 million available.

Even after making $25.2 million in annual principal and semi-annual interest
payments during the third quarter, NRP had $60.9 million in cash and cash
equivalents at September 30, 2009.

Distributions

As reported on October 21, the Board of Directors of NRP's general partner
declared a quarterly distribution of $0.54 per unit. This represents a 2.9%
increase over the third quarter 2008 and is unchanged from the second quarter
2009. Simultaneous with the announcement of the Deer Run acquisition, the
holders of the incentive distribution rights opted to forego the highest
splits for the third and fourth quarter distributions of 2009. This equates
to a savings of $7.35 million in distributions per quarter to the partnership.

Company Profile

Natural Resource Partners L.P. is headquartered in Houston, TX, with its
operations headquarters in Huntington, WV. NRP is a master limited
partnership that is principally engaged in the business of owning and managing
mineral reserve properties. NRP owns coal reserves and coal handling and
transportation infrastructure in the three major coal producing regions of the
United States: Appalachia, the Illinois Basin and the Powder River Basin. In
addition, the partnership owns and manages aggregate reserves in Texas, West
Virginia and Washington.

For additional information, please contact Kathy H. Roberts at 713-751-7555 or
kroberts@nrplp.com. Further information about NRP is available on the
partnership's website at http://www.nrplp.com.

Disclosure of Non-GAAP Financial Measures
Distributable cash flow represents cash flow from operations less actual
principal payments and cash reserves set aside for scheduled principal
payments on the senior notes. Distributable cash flow is a "non-GAAP
financial measure" that is presented because management believes it is a
useful adjunct to net cash provided by operating activities under GAAP.
Distributable cash flow is a significant liquidity metric that is an indicator
of NRP's ability to generate cash flows at a level that can sustain or support
an increase in quarterly cash distributions paid to its partners.
Distributable cash flow is also the quantitative standard used throughout the
investment community with respect to publicly traded partnerships.
Distributable cash flow 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. A reconciliation of distributable cash flow
to net cash provided by operating activities is included in the tables
attached to this release. Distributable cash flow may not be calculated the
same for NRP as other companies.

Forward-Looking Statements
This press release may include "forward-looking statements" as defined by the
Securities and Exchange Commission. Such statements include the current coal
market conditions and borrowing capacity. All statements, other than
statements of historical facts, included in this press release that address
activities, events or developments that the partnership expects, believes or
anticipates will or may occur in the future are forward-looking statements.
These statements are based on certain assumptions made by the partnership
based on its experience and perception of historical trends, current
conditions, expected future developments and other factors it believes are
appropriate in the circumstances. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control of
the partnership. These risks include, but are not limited to, decreases in
demand for coal; changes in operating conditions and costs; production cuts by
our lessees; commodity prices; unanticipated geologic problems; changes in the
legislative or regulatory environment and other factors detailed in Natural
Resource Partners' Securities and Exchange Commission filings. Natural
Resource Partners L.P. has no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.

-Financial statements follow-

Natural Resource Partners L.P.
Operating Statistics
(In thousands except per ton data)

Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(unaudited) (unaudited)
Coal Royalties:
Coal royalty revenues:
Appalachia
Northern $3,998 $3,433 $9,931 $11,838
Central 33,688 40,371 101,874 117,642
Southern 4,849 5,397 14,755 14,697
----- ----- ------ ------
Total Appalachia $42,535 $49,201 $126,560 $144,177
Illinois Basin 5,413 6,438 16,234 14,995
Northern Powder River Basin 1,359 2,684 5,500 8,329
----- ----- ----- -----
Total $49,307 $58,323 $148,294 $167,501
======= ======= ======== ========

Coal royalty production (tons):
Appalachia
Northern 1,238 1,172 3,304 4,436
Central 6,984 8,859 21,962 27,430
Southern 799 1,015 2,438 3,239
--- ----- ----- -----
Total Appalachia 9,021 11,046 27,704 35,105
Illinois Basin 1,723 2,441 5,005 5,899
Northern Powder River Basin 539 1,448 2,840 4,493
--- ----- ----- -----
Total 11,283 14,935 35,549 45,497
====== ====== ====== ======

Average royalty revenue per ton:
Appalachia
Northern $3.23 $2.93 $3.01 $2.67
Central 4.82 4.56 4.64 4.29
Southern 6.07 5.32 6.05 4.54
Total Appalachia 4.72 4.45 4.57 4.11
Illinois Basin 3.14 2.64 3.24 2.54
Northern Powder River Basin 2.52 1.85 1.94 1.85

Combined average royalty
revenue per ton $4.37 $3.91 $4.17 $3.68

Aggregates:
Royalty revenues $1,400 $1,980 $3,377 $5,028
Aggregate royalty bonus $300 $300 $1,320 $2,544
Production: 1,148 1,484 2,629 3,876
Average base royalty per ton: $1.22 $1.33 $1.28 $1.30

Natural Resource Partners L.P.
Consolidated Statements of Income
(In thousands, except per unit data)

Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Revenues:
Coal royalties $49,307 $58,323 $148,294 $167,501
Aggregate royalties 1,700 2,280 4,697 7,575
Coal processing fees 1,508 2,044 5,808 5,698
Transportation fees 3,049 3,183 8,634 8,193
Oil and gas royalties 1,203 2,201 3,649 5,579
Property taxes 3,311 2,263 9,036 7,760
Minimums recognized as revenue 775 737 1,065 1,193
Override royalties 2,077 3,133 5,961 7,638
Other 1,032 2,032 3,038 4,706
----- ----- ----- -----
Total revenues 63,962 76,196 190,182 215,843
Operating costs and expenses:
Depreciation, depletion and
amortization 12,952 17,042 48,026 48,849
General and administrative 4,586 1,732 17,926 12,771
Property, franchise and
other taxes 4,273 2,822 11,399 10,569
Transportation costs 403 431 1,144 960
Coal royalty and override
payments 353 287 1,214 939
--- --- ----- ---
Total operating costs
and expenses 22,567 22,314 79,709 74,088
------ ------ ------ ------
Income from operations 41,395 53,882 110,473 141,755
Other income (expense)
Interest expense (10,762) (6,912) (29,516) (21,336)
Interest income 18 368 196 1,124
--- --- --- -----
Net income $30,651 $47,338 $81,153 $121,543
======= ======= ======= ========
Net income attributable to:
General partner $513 $738 $1,052 $1,854
==== ==== ====== ======
Holders of incentive
distribution rights $4,977 $10,446 $28,538 $28,845
====== ======= ======= =======
Limited partners $25,161 $36,154 $51,563 $90,844
======= ======= ======= =======

Basic and diluted net income
per limited partner unit: $0.36 $0.55 $0.77 $1.40
===== ===== ===== =====

Weighted average number of
units outstanding: 69,451 64,891 67,113 64,891
====== ====== ====== ======

Natural Resource Partners L.P.
Statements of Cash Flows
(In thousands)

Three Months For the Nine Months
Ended Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Cash flows from operating
activities:
Net income $30,651 $47,338 $81,153 $121,543
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion
and amortization 12,952 17,042 48,026 48,849
Non-cash interest charge 326 31 1,336 266
Loss from disposition of
assets - - - 32
Change in operating assets
and liabilities:
Accounts receivable (1,885) (2,323) (20) (11,294)
Other assets 312 308 579 892
Accounts payable and
accrued liabilities 104 18 (143) 447
Accrued interest (7,123) (2,934) (3,214) (3,199)
Deferred revenue 1,996 1,263 10,306 3,989
Accrued incentive plan
expenses 840 (1,584) 2,408 (506)
Property, franchise and
other taxes payable (53) (886) (1,632) (1,876)
--- ---- ------ ------
Net cash provided by
operating activities 38,120 58,273 138,799 159,143
------ ------ ------- -------

Cash flows from investing
activities:
Acquisition of land, coal
and other mineral rights (19,345) - (114,986) -
Acquisition or construction
of plant and equipment - (2,498) (1,157) (9,952)
--- ------- ------ ------
Net cash used in
investing activities (19,345) (2,498) (116,143) (9,952)
------- ------ -------- ------

Cash flows from financing
activities:
Proceeds from loans 22,000 - 325,000 -
Deferred financing costs - - (661) -
Repayments of loans (7,693) (7,692) (168,235) (17,235)
Retirement of purchase
obligation related to
reserve and infrastructure (3,000) - (63,000) -
Costs associated with
issuance of units - - (21) -
Distributions to partners (50,697) (44,125) (144,787) (125,885)
------- ------- -------- --------
Net cash used in
financing activities (39,390) (51,817) (51,704) (143,120)
------- ------- ------- --------
Net increase or (decrease)
in cash and cash equivalents (20,615) 3,958 (29,048) 6,071
Cash and cash equivalents at
beginning of period 81,495 60,454 89,928 58,341
------ ------ ------ ------
Cash and cash equivalents at
end of period $60,880 $64,412 $60,880 $64,412
======= ======= ======= =======

SUPPLEMENTAL INFORMATION:
Cash paid during the
period for interest $17,556 $9,729 $31,316 $24,179
======= ====== ======= =======
Non-cash investing activities:
Equity issued for
acquisitions $- $- $95,910 $-
Liability assumed in
acquisition - - 1,170 -

Non-cash financing activities:
Purchase obligation
related to reserve and
infrastructure acquisition $14,802 $- $74,022 $-

Natural Resource Partners L.P.
Consolidated Balance Sheets
(In thousands, except for unit information)

ASSETS

September 30, December 31,
2009 2008
---- ----
(unaudited)
Current assets:
Cash and cash equivalents $60,880 $89,928
Accounts receivable, net of allowance for
doubtful accounts 29,873 31,883
Accounts receivable - affiliate 2,211 1,351
Other 254 934
--- ---
Total current assets 93,218 124,096
Land 24,343 24,343
Plant and equipment, net 69,087 67,204
Coal and other mineral rights, net 1,157,092 979,692
Intangible assets 162,779 102,828
Loan financing costs, net 3,005 2,679
Other assets, net 599 498
--- ---
Total assets $1,510,123 $1,301,340
========== ==========

LIABILITIES AND PARTNERS' CAPITAL

Current liabilities:
Accounts payable and accrued liabilities $927 $861
Accounts payable - affiliate 156 365
Obligation related to acquisitions 11,843 -
Current portion of long-term debt 32,235 17,235
Accrued incentive plan expenses - current
portion 4,235 3,179
Property, franchise and other taxes
payable 4,490 6,122
Accrued interest 3,362 6,419
----- -----
Total current liabilities 57,248 34,181
Deferred revenue 51,060 40,754
Accrued incentive plan expenses 5,594 4,242
Long-term debt 620,587 478,822
Partners' capital:
Common units (69,451,136 in 2009,
64,891,136 in 2008) 757,550 719,341
General partner's interest 13,717 13,579
Holders of incentive distribution rights 4,977 11,069
Accumulated other comprehensive loss (610) (648)
---- ----
Total partners' capital 775,634 743,341
------- -------
Total liabilities and partners'
capital $1,510,123 $1,301,340
========== ==========

Natural Resource Partners L.P.
Reconciliation of GAAP Financial Measurements to
Non-GAAP Financial Measurements
(In thousands)

Reconciliation of GAAP "Net cash provided by operating activities"
To Non-GAAP "Distributable cash flow"

Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(unaudited) (unaudited)

Net cash provided by operating
activities $38,120 $58,273 $138,799 $159,143
Less scheduled principal payments (7,693) (7,691) (17,235) (17,234)
Less reserves for future
principal payments (8,059) (4,308) (24,177) (12,924)
Add reserves used for scheduled
principal payments 7,693 7,691 17,235 17,234
----- ----- ------ ------
Distributable cash flow $30,061 $53,965 $114,622 $146,219
======= ======= ======== ========

SOURCE Natural Resource Partners L.P.

Kathy H. Roberts of Natural Resource Partners L.P., +1-713-751-7555,
kroberts@nrplp.com