NATURAL RESOURCE PARTNERS LP Earnings Per Share Disclosure
In 2025, basic net income per common unit is computed by dividing net income, after considering the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income per common unit includes the effect of NRP's unvested unit-based awards if the inclusion of these items is dilutive.
In 2024 and 2023, basic net income per common unit was computed by dividing net income, after considering income attributable to preferred unitholders, the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred units, and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income per common unit included the effect of NRP's preferred units, warrants, and unvested unit-based awards if the inclusion of these items was dilutive.
The dilutive effect of the preferred units in 2024 and 2023 was calculated using the if-converted method. Under the if-converted method, the preferred units were assumed to be converted at the beginning of the period, and the resulting common units were included in the denominator of the diluted net income per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the preferred units that accumulated during the period were added back to the numerator for purposes of the if-converted calculation. The calculation of diluted net income per common unit for the year ended December 31, 2024 and 2023 included the assumed conversion of the preferred units that remained outstanding during the respective period. The calculation of diluted net income per common unit for the year ended December 31, 2024 and 2023 did not include the assumed conversion of preferred units that were redeemed during the period, as the inclusion of these units would have been anti-dilutive.
The dilutive effect of the warrants in 2024 and 2023 was calculated using the treasury stock method, which assumed that the proceeds from the exercise of these instruments were used to purchase common units at the average market price for the period. The calculation of diluted net income per common unit for the year ended December 31, 2024 and 2023 included the net settlement of the warrants for the period during which they were outstanding.
The dilutive effect of the unvested unit-based awards is calculated using the treasury stock method, which assumes that the proceeds from the vesting of the unvested unit-based awards are used to purchase common units at the average market price for the period. The calculation of diluted net income per common unit for the year ended December 31, 2025, 2024 and 2023, included the impact of the vesting of the unvested unit-based awards.
The following table reconciles the numerators and denominators of the basic and diluted net income per common unit computations and calculates basic and diluted net income per common unit:
| For the Year Ended December 31, | ||||||||||||
| (In thousands, except per unit data) | 2025 | 2024 | 2023 | |||||||||
| Basic net income per common unit | ||||||||||||
| Net income attributable to common unitholders | $ | 133,640 | $ | 151,813 | $ | 196,771 | ||||||
| Weighted average common units—basic | 13,128 | 12,991 | 12,619 | |||||||||
| Basic net income per common unit | $ | 10.18 | $ | 11.69 | $ | 15.59 | ||||||
| Diluted net income per common unit | ||||||||||||
| Weighted average common units—basic | 13,128 | 12,991 | 12,619 | |||||||||
| Plus: dilutive effect of preferred units | — | 281 | 2,059 | |||||||||
| Plus: dilutive effect of warrants | — | 139 | 1,202 | |||||||||
| Plus: dilutive effect of unvested unit-based awards | 183 | 236 | 216 | |||||||||
| Weighted average common units—diluted | 13,311 | 13,647 | 16,096 | |||||||||
| Net income | $ | 136,367 | $ | 183,644 | $ | 278,435 | ||||||
| Less: income attributable to preferred unitholders | — | (1,148 | ) | (2,694 | ) | |||||||
| Less: redemption of preferred units | — | (24,485 | ) | (60,929 | ) | |||||||
| Diluted net income attributable to common unitholders and the general partner | $ | 136,367 | $ | 158,011 | $ | 214,812 | ||||||
| Less: diluted net income attributable to the general partner | (2,727 | ) | (3,160 | ) | (4,296 | ) | ||||||
| Diluted net income attributable to common unitholders | $ | 133,640 | $ | 154,851 | $ | 210,516 | ||||||
| Diluted net income per common unit | $ | 10.04 | $ | 11.35 | $ | 13.08 | ||||||
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.