NATURAL RESOURCE PARTNERS LP Leases Disclosure

19.    Leases

 

As of December 31, 2025, the Partnership had two operating leases for office buildings. On January 1, 2019, the Partnership entered into a new lease for the West Virginia office building owned by WPPLP with a five-year base term and five additional five-year renewal options. Effective January 1, 2024, the Partnership entered its first five-year renewal term that expires on December 31, 2028. Upon lease commencement and as of December 31, 2025 and 2024, the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance Sheets using the present value of the future lease payments over 30 years. On January 1, 2023, the Partnership entered into a new lease for an office building in Houston with an 11.4 year initial term and two additional five-year renewal options. Upon lease commencement and as of December 31, 2025 and 2024, the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance Sheets using the present value of the future lease payments over 21.4 years. The Partnership's right-of-use asset included within other long-term assets, net on its Consolidated Balance Sheets totaled $4.1 million and $4.2 million at  December 31, 2025 and 2024, respectively. The Partnership's lease liability included in other non-current liabilities on its Consolidated Balance Sheets totaled $4.4 million at both December 31, 2025 and 2024. During each of the years ended December 31, 2025, 2024 and 2023, the Partnership incurred total operating lease expenses of $0.6 million included in both operating and maintenance expenses and general and administrative expenses on its Consolidated Statements of Comprehensive Income.

 

The following table details the maturity analysis of the Partnership's operating lease liability and reconciles the undiscounted cash flows to the operating lease liability included on its Consolidated Balance Sheet:

 

Remaining Annual Lease Payments (In thousands)		December 31, 2025
2026		$	604
2027			607
2028			611
2029			614
2030			617
After 2030			10,808
Total lease payments (1)		$	13,861
Less: present value adjustment (2)			(9,506	)
Total operating lease liability		$	4,355

 

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(1)	The remaining lease terms of the Partnership's two operating leases are 23 years and 18.4 years.

(2)

The present value of the operating lease liability on the Partnership's Consolidated Balance Sheets was calculated using a 13.5% discount rate on the 30-year lease and a 13.4% discount rate on the 21.4-year lease. These rates represent the Partnership's estimated incremental borrowing rates under its two operating leases. As the Partnership's leases do not provide an implicit rate, the Partnership estimated the incremental borrowing rates at the time the leases were entered into by utilizing the rate of the Partnership's secured debt and adjusting it for factors that reflect the profile of borrowing over the 30-year and 21.4-year expected lease terms, respectively.