##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 001-31465
 NATURAL RESOURCE PARTNERS L.P.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    35-2164875(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 601 Jefferson Street, Suite 3600
Houston, Texas 77002
(Address of principal executive offices)
(Zip Code)
 (713) 751-7507
(Registrants telephone number, including area code)
 þ o
  o þ o
 o þ




---



##### 



TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONITEM 1. Financial StatementsConsolidated Balance Sheets as of March 31, 2007 and December 31, 2006
    
    
    4Consolidated Statements of Income For the Three Months Ended March 31, 2007
and 2006
    
    
    5Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2007
and 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    7ITEM 2. Managements Discussion and Analysis of Financial Condition and Results
of OperationsExecutive Overview
    
    
    14Results of Operations
    
    
    18Related Party Transactions
    
    
    20Liquidity and Capital Resources
    
    
    21Environmental
    
    
    23ITEM 3. Quantitative And Qualitative Disclosures About Market Risk
    
    
    23ITEM 4. Controls And Procedures
    
    
    24PART II. OTHER INFORMATIONITEM 1. Legal Proceedings
    
    
    25ITEM 1A. Risk Factors
    
    
    25ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25ITEM 3. Defaults Upon Senior Securities
    
    
    26ITEM 4. Submission Of Matters to a Vote of Security Holders
    
    
    26ITEM 5. Other Information
    
    
    26ITEM 6. Exhibits
    
    
    27Signatures
    
    
    29Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to 18 U.S.C. Section 1350Certification of CFO Pursuant to 18 U.S.C. Section 1350
  2




---



##### Table of Contents



Forward-Looking Statements
     3




---



##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 NATURAL RESOURCE PARTNERS L.P.
 
 CONSOLIDATED BALANCE SHEETS
(In thousands)
 March 31,
    
    
    December 31,2007
    
    
    2006(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    55,617
    
    
    $
    66,044Restricted cash
    
    
    6,242
    
    
    
    Accounts receivable, net of allowance for doubtful accounts
    
    
    27,113
    
    
    
    23,357Accounts receivable  affiliate
    
    
    337
    
    
    
    21Other
    
    
    791
    
    
    
    1,411Total current assets
    
    
    90,100
    
    
    
    90,833Land
    
    
    24,522
    
    
    
    17,781Plant and equipment, net
    
    
    49,069
    
    
    
    29,615Coal and other mineral rights, net
    
    
    1,012,948
    
    
    
    798,135Intangible assets, net
    
    
    107,027
    
    
    
    Loan financing costs, net
    
    
    3,223
    
    
    
    2,197Other assets, net
    
    
    1,207
    
    
    
    932Total assets
    
    $
    1,288,096
    
    
    $
    939,493LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    3,837
    
    
    $
    1,041Accounts payable  affiliate
    
    
    691
    
    
    
    105Current portion of long-term debt
    
    
    9,542
    
    
    
    9,542Accrued incentive plan expenses  current portion
    
    
    3,224
    
    
    
    5,418Property, franchise and other taxes payable
    
    
    4,727
    
    
    
    4,330Accrued interest
    
    
    3,412
    
    
    
    3,846Total current liabilities
    
    
    25,433
    
    
    
    24,282Deferred revenue
    
    
    24,555
    
    
    
    20,654Asset retirement obligation
    
    
    39
    
    
    
    Accrued incentive plan expenses
    
    
    3,578
    
    
    
    4,579Long-term debt
    
    
    465,099
    
    
    
    454,291Partners capital:Common units
    
    
    641,357
    
    
    
    338,912Subordinated units
    
    
    81,965
    
    
    
    83,772Class B units
    
    
    27,825
    
    
    
    General partners interest
    
    
    17,873
    
    
    
    12,138Holders of incentive distribution rights
    
    
    1,110
    
    
    
    1,616Accumulated other comprehensive loss
    
    
    (738
    )
    
    
    (751
    )Total partners capital
    
    
    769,392
    
    
    
    435,687Total liabilities and partners capital
    
    $
    1,288,096
    
    
    $
    939,493
  4




---



##### Table of Contents



NATURAL RESOURCE PARTNERS L.P.
 
 CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per unit data)
 Three months endedMarch 31,2007
    
    
    2006(Unaudited)Revenues:Coal royalties
    
    $
    40,973
    
    
    $
    39,110Aggregate royalties
    
    
    1,745
    
    
    
    Coal processing fees
    
    
    918
    
    
    
    Transportation fees
    
    
    461
    
    
    
    Oil and gas royalties
    
    
    1,258
    
    
    
    1,719Property taxes
    
    
    2,228
    
    
    
    1,749Minimums recognized as revenue
    
    
    454
    
    
    
    371Override royalties
    
    
    1,018
    
    
    
    303Other
    
    
    1,152
    
    
    
    3,276Total revenues
    
    
    50,207
    
    
    
    46,528Operating costs and expenses:Depreciation, depletion and amortization
    
    
    11,752
    
    
    
    7,853General and administrative
    
    
    6,634
    
    
    
    4,115Property, franchise and other taxes
    
    
    3,101
    
    
    
    2,245Transportation costs
    
    
    43
    
    
    
    Coal royalty and override payments
    
    
    286
    
    
    
    691Total operating costs and expenses
    
    
    21,816
    
    
    
    14,904Income from operations
    
    
    28,391
    
    
    
    31,624Other income (expense)Interest expense
    
    
    (7,327
    )
    
    
    (3,618
    )Interest income
    
    
    817
    
    
    
    518Net income
    
    $
    21,881
    
    
    $
    28,524Net income attributable to:General partner(1)
    
    $
    2,819
    
    
    $
    2,095Other holders of incentive distribution rights(1)
    
    $
    1,283
    
    
    $
    821Limited partners
    
    $
    17,779
    
    
    $
    25,608Basic and diluted net income per limited partner unit:Common
    
    $
    0.28
    
    
    $
    0.51Subordinated
    
    $
    0.28
    
    
    $
    0.51Class B
    
    $
    0.28
    
    
    $
    Weighted average number of units outstanding:Common
    
    
    50,893
    
    
    
    33,651Subordinated
    
    
    11,354
    
    
    
    17,030Class B
    
    
    1,048
    
    
    
    
 
 (1)
    
    Other holders of the incentive distribution rights (IDRs) include
the WPP Group (25%) and NRP Investment LP (10%). The net income allocated
to the general partner includes the general partners portion of the IDRs
(65%).  5




---



##### Table of Contents



NATURAL RESOURCE PARTNERS L.P.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Three months endedMarch 31,2007
    
    
    2006(Unaudited)Cash flows from operating activities:Net income
    
    $
    21,881
    
    
    $
    28,524Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation, depletion and amortization
    
    
    11,752
    
    
    
    7,853Non-cash interest charge
    
    
    94
    
    
    
    100Gain on sale of timber assets
    
    
    
    
    
    
    (2,176
    )Change in operating assets and liabilities:Accounts receivable
    
    
    (4,072
    )
    
    
    (4
    )Other assets
    
    
    221
    
    
    
    268Accounts payable and accrued liabilities
    
    
    198
    
    
    
    37Accrued interest
    
    
    (434
    )
    
    
    1,906Deferred revenue
    
    
    3,901
    
    
    
    (632
    )Accrued incentive plan expenses
    
    
    (3,195
    )
    
    
    371Property, franchise and other taxes payable
    
    
    397
    
    
    
    403Net cash provided by operating activities
    
    
    30,743
    
    
    
    36,650Cash flows from investing activities:Acquisition of land, plant and equipment, coal and other mineral rights
    
    
    (13,972
    )
    
    
    (35,000
    )Current payable assumed in business combination
    
    
    1,154
    
    
    
    Proceeds from sale of timber assets
    
    
    
    
    
    
    3,932Cash placed in restricted accounts
    
    
    (6,242
    )
    
    
    Net cash used in investing activities
    
    
    (19,060
    )
    
    
    (31,068
    )Cash flows from financing activities:Proceeds from loans
    
    
    237,000
    
    
    
    50,000Deferred financing costs
    
    
    (1,107
    )
    
    
    Repayment of loans
    
    
    (226,192
    )
    
    
    (15,000
    )Distributions to partners
    
    
    (34,126
    )
    
    
    (20,905
    )Contribution by general partner
    
    
    2,315
    
    
    
    Net cash provided by or (used in) financing activities
    
    
    (22,110
    )
    
    
    14,095Net increase (decrease) in cash and cash equivalents
    
    
    (10,427
    )
    
    
    19,677Cash and cash equivalents at beginning of period
    
    
    66,044
    
    
    
    47,691Cash and cash equivalents at end of period
    
    $
    55,617
    
    
    $
    67,368Supplemental cash flow information:Cash paid during the period for interest
    
    $
    7,648
    
    
    $
    1,600Non-cash investing activities:Units issued in business combinations
    
    $
    343,622
    
    
    $
    Liability assumed in business combination
    
    
    1,950
    
    
    
    
  6




---



##### Table of Contents



NATURAL RESOURCE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation and Organization
     2. Summary of Significant Accounting Policies
 Reclassification
  Business Combinations
  3. Significant Acquisitions
  
    
    Westmoreland.On February 27, 2007, the Partnership acquired an overriding royalty on
225 million tons of coal in the Powder River Basin from Westmoreland Coal Company for
$12.7 million in cash. The reserves are located in the Rocky Butte Reserve in Wyoming.
    
    Dingess-Rum.On January 16, 2007, the Partnership acquired 92 million tons of coal
reserves and approximately 33,700 acres of surface and timber in Logan, Clay and Nicholas
Counties in West Virginia from Dingess-Rum Properties, Inc. As consideration for the
acquisition, the Partnership issued 4,800,000 common units to Dingess-Rum.
 7




---



##### Table of Contents




    
    Cline. On January 4, 2007, the Partnership acquired 49 million tons of coal reserves
in Williamson County, Illinois and Mason County, West Virginia that are leased to
affiliates of The Cline Group. In addition, it acquired transportation assets and
related infrastructure at those mines. As consideration for the transaction the
Partnership issued 7,826,160 common units and 1,083,912 Class B units representing
limited partner interests in NRP.
   Dingess-Rum
    
    Cline(In thousands)Land, plant and equipment
    
    $
    7,935
    
    
    $
    19,155Coal and other mineral rights
    
    
    105,573
    
    
    
    107,064Intangible assets, except goodwill
    
    
    
    
    
    
    91,344Goodwill
    
    
    
    
    
    
    15,817Equity consideration
    
    
    113,396
    
    
    
    230,226Transaction costs and liabilities assumed
    
    
    112
    
    
    
    3,154
   4. Plant and Equipment
  March 31,
    
    
    December 31,2007
    
    
    2006(In thousands)(Unaudited)Plant and equipment at cost
    
    $
    50,656
    
    
    $
    30,266Accumulated depreciation
    
    
    (1,587
    )
    
    
    (651
    )Net book value
    
    $
    49,069
    
    
    $
    29,615
 Three months endedMarch 31,2007
    
    
    2006(In thousands)(Unaudited)Total depreciation expense on plant and equipment
    
    $
    936
    
    
    $
    82
 8




---



##### Table of Contents



5. Coal and Other Mineral Rights
  March 31,
    
    
    December 31,2007
    
    
    2006(In thousands)(Unaudited)Coal and other mineral rights
    
    $
    1,195,653
    
    
    $
    970,342Less accumulated depletion and amortization
    
    
    (182,705
    )
    
    
    (172,207
    )Net book value
    
    $
    1,012,948
    
    
    $
    798,135
 Three months endedMarch 31,2007
    
    
    2006(In thousands)(Unaudited)Total depletion and amortization expense on coal and other mineral interests
    
    $
    10,523
    
    
    $
    7,609
 6. Intangible Assets
  As of March 31, 2007(In thousands)(Unaudited)Gross Carrying
    
    
    AccumulatedAmount
    
    
    AmortizationFinite-lived intangible assetsAbove market transportation contracts
    
    $
    68,236
    
    
    $
    (96
    )Above market coal leases
    
    
    23,108
    
    
    
    (38
    )$
    91,344
    
    
    $
    (134
    )Indefinite-lived intangible assetsGoodwill
    
    $
    15,817Aggregate amortization expenseFor the three months ended March 31, 2007
    
    $
    134
  Estimated amortization expenseFor remainder of year ended December 31, 2007
    
    $
    3,788For year ended December 31, 2008
    
    
    7,095For year ended December 31, 2009
    
    
    7,076For year ended December 31, 2010
    
    
    7,418For year ended December 31, 2011
    
    
    7,577For year ended December 31, 2012
    
    
    7,855
 9




---



##### Table of Contents



7. Two-For-One Limited Partner Unit Split
   8. Long-Term Debt
  March 31,
    
    
    December 31,2007
    
    
    2006(In thousands)(Unaudited)$300 million floating rate revolving credit facility, due March 2012
    
    $
    
    
    
    $
    214,0005.55% senior notes, with semi-annual interest payments in June and
December, with annual principal payments in June, maturing in June 2023
    
    
    50,100
    
    
    
    50,1004.91% senior notes, with semi-annual interest payments in June and
December, with annual principal payments in June, maturing in June 2018
    
    
    61,850
    
    
    
    61,8505.55% senior notes, with semi-annual interest payments in June and
December, maturing June 2013
    
    
    35,000
    
    
    
    35,0005.05% senior notes, with semi-annual interest payments in January and
July, with scheduled principal payments beginning July 2008, maturing in
July 2020
    
    
    100,000
    
    
    
    100,0005.82% senior notes, with semi-annual interest payments in March and
September, with scheduled principal payments beginning March 2010,
maturing in March 2024
    
    
    225,000
    
    
    
    5.31% utility local improvement obligation, with annual principal and
interest payments, maturing in March 2021
    
    
    2,691
    
    
    
    2,883Total debt
    
    
    474,641
    
    
    
    463,833Less  current portion of long term debt
    
    
    (9,542
    )
    
    
    (9,542
    )Long-term debt
    
    $
    465,099
    
    
    $
    454,291
     10




---



##### Table of Contents



9. Net Income Per Unit Attributable to Limited Partners
  10. Related Party Transactions
   Transactions with Cline Related Companies
   11. Commitments and Contingencies
 Legal
  Environmental Compliance
  11




---



##### Table of Contents



12. Major Customers
  Three months endedMarch 31,2007
    
    2006Revenues
    
    Percent
    
    Revenues
    
    PercentDollars in thousands(Unaudited)Lessee A
    
    $
    6,684
    
    
    
    13
    %
    
    $
    1,275
    
    
    
    3
    %Lessee B
    
    
    5,739
    
    
    
    11
    %
    
    
    5,841
    
    
    
    13
    %
 13. Incentive Plans
    Outstanding grants at the beginning of the period
    
    
    515,220Grants during the period
    
    
    162,752Grants vested and paid during the period
    
    
    (176,504
    )Forfeitures during the period
    
    
    (400
    )Outstanding grants at the end of the period
    
    
    501,068
  14. Distributions
  12




---



##### Table of Contents



15. Subsequent Events
 Acquisitions
 Mettiki
 Distributions
  13




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion of the financial condition and results of operations should be read
in conjunction with the historical financial statements and notes thereto included elsewhere in
this filing and the financial statements and footnotes included in the Natural Resource Partners
L.P. Form 10-K , as filed on February 28, 2007.
 
 Executive Overview
 Our Business
    Appalachian Properties
  Ohio Valley Environmental Coalition v. United
States Army Corps of Engineers
 14




---



##### Table of Contents



Metallurgical Coal Revenues
  Integration of New Acquisitions; Increased Diversity of Properties
   Other Sources of Revenues; New Platforms for Growth
   Distributable Cash Flow
   15




---



##### Table of Contents



Reconciliation of GAAP Net cash provided by operating activities  to Non-GAAP Distributable cash flow  (In thousands)
 For the quarter endedMarch 31,(Unaudited)2007
    
    
    2006Cash flow from operations
    
    $
    30,743
    
    
    $
    36,650Less reserves for future principal payments
    
    
    (2,400
    )
    
    
    (2,350
    )Distributable cash flow
    
    $
    28,343
    
    
    $
    34,300
 Acquisitions
  2007 Acquisitions
 Mettiki
 Westmoreland.
 Dingess-Rum
 Cline
 2006 Acquisitions
 Quadrant.
 Bluestone.
 16




---



##### Table of Contents



D.D. Shepherd.
 Red Fox.
 Coal Mountain.
 Williamson Development
 Allegany County, Maryland
 Indiana Reserves
 17




---



##### Table of Contents



Results of Operations
 Natural Resource Partners L.P.
 Three months endedMarch 31,2007
    
    
    2006(In thousands, except per ton data)(Unaudited)Revenues:Coal royalties
    
    $
    40,973
    
    
    $
    39,110Aggregate royalties
    
    
    1,745
    
    
    
    Coal process fees
    
    
    918
    
    
    
    Transportation fees
    
    
    461
    
    
    
    Oil and gas royalties
    
    
    1,258
    
    
    
    1,719Property taxes
    
    
    2,228
    
    
    
    1,749Minimums recognized as revenue
    
    
    454
    
    
    
    371Override royalties
    
    
    1,018
    
    
    
    303Other
    
    
    1,152
    
    
    
    3,276Total revenues
    
    
    50,207
    
    
    
    46,528Operating costs and expenses:Depreciation, depletion and amortization
    
    
    11,752
    
    
    
    7,853General and administrative
    
    
    6,634
    
    
    
    4,115Property, franchise and other taxes
    
    
    3,101
    
    
    
    2,245Transportation costs
    
    
    43
    
    
    
    Coal royalty and override payments
    
    
    286
    
    
    
    691Total expenses
    
    
    21,816
    
    
    
    14,904Income from operations
    
    
    28,391
    
    
    
    31,624Other income (expense):Interest expense
    
    
    (7,327
    )
    
    
    (3,618
    )Interest income
    
    
    817
    
    
    
    518Net income
    
    $
    21,881
    
    
    $
    28,524Other Data:Coal royaltiesAppalachiaNorthern
    
    $
    2,588
    
    
    $
    3,307Central
    
    
    30,429
    
    
    
    25,842Southern
    
    
    4,039
    
    
    
    5,484Total Appalachia
    
    
    37,056
    
    
    
    34,633Illinois Basin
    
    
    1,114
    
    
    
    1,953Northern Powder River Basin
    
    
    2,803
    
    
    
    2,524Total
    
    $
    40,973
    
    
    $
    39,110Production (tons)AppalachiaNorthern
    
    
    1,283
    
    
    
    1,732Central
    
    
    9,291
    
    
    
    8,195Southern
    
    
    1,033
    
    
    
    1,426Total Appalachia
    
    
    11,607
    
    
    
    11,353Illinois Basin
    
    
    502
    
    
    
    1,162Northern Powder River Basin
    
    
    1,401
    
    
    
    1,500Total
    
    
    13,510
    
    
    
    14,015Average gross royalty per tonAppalachiaNorthern
    
    $
    2.02
    
    
    $
    1.91Central
    
    
    3.28
    
    
    
    3.15Southern
    
    
    3.91
    
    
    
    3.85Total Appalachia
    
    
    3.19
    
    
    
    3.05Illinois Basin
    
    
    2.22
    
    
    
    1.68Northern Powder River Basin
    
    
    2.00
    
    
    
    1.68Total
    
    $
    3.03
    
    
    $
    2.79Aggregates:Production
    
    
    1,341
    
    
    
    Average gross royalty
    
    $
    1.18
    
    
    
    
 18




---



##### Table of Contents



Three months ended March 31, 2007 compared with three months ended March 31, 2006
 Revenues
  Appalachia.
    Illinois Basin
 Northern Powder River Basin
 Aggregates Royalty Revenues, Reserves and Production
 Coal Transportation and Processing Revenues
  19




---



##### Table of Contents



Oil and gas royalties.
 Other revenues.
 Operating costs and expenses.
 
    
    Depletion and amortization of $11.8 million, or $3.9 million over first quarter last year
due to acquisitions made during the fourth quarter of 2006 and first quarter of 2007.
    
    General and administrative expenses of $6.6 million for the first quarter of 2007,
compared to $4.1 million for the first quarter of 2006, an increase of $2.5 million, or 61%
due predominately to accruals on long-term incentive plans and additional staff added to
handle NRPs latest acquisitions.
    
    Property, franchise and other taxes of $3.1 million for the first quarter of 2007,
compared to $2.2 million for the first quarter of 2006, an increase of $0.9 million, or 41%,
due to taxes on additional properties we have acquired.
 Interest Expense.
 
 Related Party Transactions
 Partnership Agreement
  Transactions with Cline Affiliates
   20




---



##### Table of Contents



Liquidity and Capital Resources
 Cash Flows and Capital Expenditures
     Contractual Obligations and Commercial Commitments
  
    
    $35 million of 5.55% senior notes due 2013, with a 9-year average life;
    
    $61.85 million of 4.91% senior notes due 2018, with a 7.5-year average life;
    
    $100 million of 5.05% senior notes due 2020, with a 9-year average life;
    
    $2.7 million of 5.31% utility local improvement obligation due 2021;
    
    $50.1 million of 5.55% senior notes due 2023, with a 10-year average life; and
    
    $225 million of 5.82% senior notes due 2024, with a 10-year average life.
 Credit Facility.
  21




---



##### Table of Contents




    
    the higher of the federal funds rate plus an applicable margin ranging from 0% to 0.50%
or the prime rate as announced by the agent bank; or
    
    at a rate equal to LIBOR plus an applicable margin ranging from 0.45% to 1.50%.
   
    
    a ratio of consolidated indebtedness to consolidated EBITDDA (as defined in the credit
agreement) of 3.75 to 1.0 for the four most recent quarters; provided however, if during one
of those quarters we have made an acquisition, then the ratio shall not exceed 4.0 to 1.0
for the quarter in which the acquisition occurred and (1) if the acquisition is in the first
half of the quarter, the next two quarters or (2) if the acquisition is in the second half
of the quarter, the next three quarters; and
    
    a ratio of consolidated EBITDDA to consolidated fixed charges (consisting of consolidated
interest expense and consolidated lease operating expense) of 4.0 to 1.0 for the four most
recent quarters.
 Senior Notes.
  
    
    not permit debt secured by certain liens and debt of subsidiaries to exceed 10% of
consolidated net tangible assets (as defined in the note purchase agreement); and
    
    maintain the ratio of consolidated EBITDA to consolidated fixed charges (consisting of
consolidated interest expense and consolidated operating lease expense) at not less than 3.5
to 1.0.
  Payments due by period(1)Contractual Obligations
    
    Total
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    ThereafterLong-term debt
(including current
maturities)
    
    $
    704.6
    
    
    $
    26.3
    
    
    $
    42.6
    
    
    $
    41.7
    
    
    $
    55.8
    
    
    $
    54.0
    
    
    $
    484.2
 
 (1)
    
    The amounts indicated in the table include principal and interest due on our senior
notes, as well as the utility local improvement obligation related to our property in DuPont,
Washington. Two-for-One Limited Partner Unit Split
  Shelf Registration Statement
  22




---



##### Table of Contents



Off-Balance Sheet Transactions
  Inflation
  
 Environmental
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  Commodity Price Risk
  23




---



##### Table of Contents



Interest Rate Risk
  
 Item 4. Controls and Procedures
   24




---



##### Table of Contents



Part II. Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Cline Transaction
     Dingess-Rum Transaction
  25




---



##### Table of Contents



Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  26




---



##### Table of Contents



Item 6. Exhibits
 ExhibitNumber
    
    
    
    Description2.1
    
    
    
    Second Contribution Agreement, dated January 4, 2007, by and among
Foresight Reserves LP, Adena Minerals, LLC, NRP (GP) LP, Natural
Resource Partners L.P. and NRP (Operating) LLC (incorporated by
reference to Exhibit 2.1 to the Current Report on Form 8-K filed on
January 4, 2007).2.2
    
    
    
    Amendment No. 1 to Second Contribution Agreement, dated April 18,
2007, by and among Natural Resource Partners L.P., NRP (GP) LP, NRP
(Operating) LLC, Foresight Reserves LP and Adena Minerals, LLC
(incorporated by reference to Exhibit 2.1 to the Current Report on
Form 8-K filed on April 19, 2007).2.3
    
    
    
    Purchase and Sale Agreement, dated April 2, 2007, by and among
Natural Resource Partners L.P., WPP LLC and Western Pocahontas
Properties Limited Partnership (incorporated by reference to Exhibit
2.1 to the Current Report on Form 8-K filed on April 3, 2007).3.1
    
    
    
    Fourth Amended and Restated Limited Liability Company Agreement of GP
Natural Resource Partners LLC, dated as of January 4, 2007
(incorporated by reference to Exhibit 3.1 to the Current Report on
Form 8-K filed on January 4, 2007).3.2
    
    
    
    Third Amended and Restated Agreement of Limited Partnership of NRP
(GP) LP, dated as of January 4, 2007 (incorporated by reference to
Exhibit 3.2 to the Current Report on Form 8-K filed on January 4,
2007).4.1
    
    
    
    Second Amended and Restated Agreement of Limited Partnership of
Natural Resource Partners L.P., dated as of January 4, 2007
(incorporated by reference to Exhibit 4.1 of the Current Report on
Form 8-K filed on January 4, 2007).4.2
    
    
    
    Third Amended and Restated Agreement of Limited Partnership of
Natural Resource Partners L.P., dated April 18, 2007 (incorporated by
reference to Exhibit 4.1 of the Current Report on Form 8-K filed on
April 19, 2007).4.3
    
    
    
    Second Supplement to Note Purchase Agreements, dated as of March 28,
2007 among NRP (Operating) LLC and the purchasers signatory thereto
(incorporated by reference to Exhibit 4.1 to the Current Report on
Form 8-K filed on March 29, 2007).4.4
    
    
    
    Second Amendment, dated as of March 28, 2007, to Note Purchase
Agreements dated as of June 19, 2003 among NRP (Operating) LLC and
the purchasers signatory thereto (incorporated by reference to
Exhibit 4.2 to the Current Report on Form 8-K filed on March 29,
2007).4.5
    
    
    
    Form of Series E Note (incorporated by reference to Exhibit 4.3 to
the Current Report on Form 8-K filed March 29, 2007).10.1
    
    
    
    Second Amendment to Credit Agreement, dated as of March 2, 2007, by
and among NRP (Operating) LLC, as Borrower, Citibank, N.A., as
Administrative Agent, and the other lenders party thereto
(incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on March 6, 2007).
 27




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description10.2
    
    
    
    Amended and Restated Credit Agreement, dated as of March 28, 2007,
by and among NRP (Operating) LLC, as Borrower, Citibank, N.A., as
Administrative Agent, and the other lenders party thereto
(incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on March 29, 2007).10.3
    
    
    
    Restricted Business Contribution Agreement, dated January 4, 2007, by
and among Christopher Cline, Foresight Reserves LP, Adena Minerals,
LLC, GP Natural Resource Partners LLC, NRP (GP) LP, Natural Resource
Partners L.P. and NRP (Operating) LLC (incorporated by reference to
Exhibit 10.1 to the Current Report on Form 8-K filed on January 4,
2007).10.4
    
    
    
    Investor Rights Agreement, dated January 4, 2007, by and among NRP
(GP) LP, GP Natural Resource Partners LLC, Robertson Coal Management
and Adena Minerals, LLC (incorporated by reference to Exhibit 10.2 to
the Current Report on Form 8-K filed on January 4, 2007).31.1*
    
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of
Sarbanes-Oxley.31.2*
    
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of
Sarbanes-Oxley.32.1**
    
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350.32.2**
    
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350.
 
 *
    
    Filed herewith.**
    
    Furnished herewith. 28




---



##### Table of Contents



SIGNATURES
  NATURAL RESOURCE PARTNERS L.P.By: NRP (GP) LP, its general partnerBy: GP NATURAL RESOURCEPARTNERS LLC, its general partnerDate: May 3, 2007
    
    By:
    
    /s/ Corbin J. Robertson, Jr.Corbin J. Robertson, Jr.,Chairman of the Board and 
Chief Executive Officer(Principal Executive Officer)Date: May 3, 2007By:
    
    /s/ Dwight L. DunlapDwight L. Dunlap,Chief Financial Officer and 
Treasurer(Principal Financial Officer)Date: May 3, 2007
    
    By:
    
    /s/ Kenneth HudsonKenneth HudsonController(Principal Accounting Officer)
 29




---



##### Table of Contents



Index
to Exhibits
 ExhibitNumber
    
    
    
    Description2.1
    
    
    
    Second Contribution Agreement, dated January 4, 2007, by and among
Foresight Reserves LP, Adena Minerals, LLC, NRP (GP) LP, Natural
Resource Partners L.P. and NRP (Operating) LLC (incorporated by
reference to Exhibit 2.1 to the Current Report on Form 8-K filed on
January 4, 2007).2.2
    
    
    
    Amendment No. 1 to Second Contribution Agreement, dated April 18,
2007, by and among Natural Resource Partners L.P., NRP (GP) LP, NRP
(Operating) LLC, Foresight Reserves LP and Adena Minerals, LLC
(incorporated by reference to Exhibit 2.1 to the Current Report on
Form 8-K filed on April 19, 2007).2.3
    
    
    
    Purchase and Sale Agreement, dated April 2, 2007, by and among
Natural Resource Partners L.P., WPP LLC and Western Pocahontas
Properties Limited Partnership (incorporated by reference to Exhibit
2.1 to the Current Report on Form 8-K filed on April 3, 2007).3.1
    
    
    
    Fourth Amended and Restated Limited Liability Company Agreement of GP
Natural Resource Partners LLC, dated as of January 4, 2007
(incorporated by reference to Exhibit 3.1 to the Current Report on
Form 8-K filed on January 4, 2007).3.2
    
    
    
    Third Amended and Restated Agreement of Limited Partnership of NRP
(GP) LP, dated as of January 4, 2007 (incorporated by reference to
Exhibit 3.2 to the Current Report on Form 8-K filed on January 4,
2007).4.1
    
    
    
    Second Amended and Restated Agreement of Limited Partnership of
Natural Resource Partners L.P., dated as of January 4, 2007
(incorporated by reference to Exhibit 4.1 of the Current Report on
Form 8-K filed on January 4, 2007).4.2
    
    
    
    Third Amended and Restated Agreement of Limited Partnership of
Natural Resource Partners L.P., dated April 18, 2007 (incorporated by
reference to Exhibit 4.1 of the Current Report on Form 8-K filed on
April 19, 2007).4.3
    
    
    
    Second Supplement to Note Purchase Agreements, dated as of March 28,
2007 among NRP (Operating) LLC and the purchasers signatory thereto
(incorporated by reference to Exhibit 4.1 to the Current Report on
Form 8-K filed on March 29, 2007).4.4
    
    
    
    Second Amendment, dated as of March 28, 2007, to Note Purchase
Agreements dated as of June 19, 2003 among NRP (Operating) LLC and
the purchasers signatory thereto (incorporated by reference to
Exhibit 4.2 to the Current Report on Form 8-K filed on March 29,
2007).4.5
    
    
    
    Form of Series E Note (incorporated by reference to Exhibit 4.3 to
the Current Report on Form 8-K filed March 29, 2007).10.1
    
    
    
    Second Amendment to Credit Agreement, dated as of March 2, 2007, by
and among NRP (Operating) LLC, as Borrower, Citibank, N.A., as
Administrative Agent, and the other lenders party thereto
(incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on March 6, 2007).




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description10.2
    
    
    
    Amended and Restated Credit Agreement, dated as of March 28, 2007,
by and among NRP (Operating) LLC, as Borrower, Citibank, N.A., as
Administrative Agent, and the other lenders party thereto
(incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on March 29, 2007).10.3
    
    
    
    Restricted Business Contribution Agreement, dated January 4, 2007, by
and among Christopher Cline, Foresight Reserves LP, Adena Minerals,
LLC, GP Natural Resource Partners LLC, NRP (GP) LP, Natural Resource
Partners L.P. and NRP (Operating) LLC (incorporated by reference to
Exhibit 10.1 to the Current Report on Form 8-K filed on January 4,
2007).10.4
    
    
    
    Investor Rights Agreement, dated January 4, 2007, by and among NRP
(GP) LP, GP Natural Resource Partners LLC, Robertson Coal Management
and Adena Minerals, LLC (incorporated by reference to Exhibit 10.2 to
the Current Report on Form 8-K filed on January 4, 2007).31.1*
    
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of
Sarbanes-Oxley.31.2*
    
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of
Sarbanes-Oxley.32.1**
    
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350.32.2**
    
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350.
 
 *
    
    Filed herewith.**
    
    Furnished herewith.