REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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NRP (GP) LP
 CONSOLIDATED BALANCE SHEETS
(In thousands, except for unit information)
 December 31,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    86,566
    
    
    $
    93,759Accounts receivable, net of allowance for doubtful accounts
    
    
    27,142
    
    
    
    31,884Accounts receivable  affiliates
    
    
    4,342
    
    
    
    1,351Other
    
    
    930
    
    
    
    934Total current assets
    
    
    118,980
    
    
    
    127,928Land
    
    
    24,343
    
    
    
    24,343Plant and equipment, net
    
    
    64,267
    
    
    
    67,204Coal and other mineral rights, net
    
    
    1,151,313
    
    
    
    979,692Intangible assets, net
    
    
    165,160
    
    
    
    102,828Loan financing costs, net
    
    
    2,891
    
    
    
    2,679Other assets, net
    
    
    569
    
    
    
    498Total assets
    
    $
    1,527,523
    
    
    $
    1,305,172LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    915
    
    
    $
    861Accounts payable  affiliates
    
    
    179
    
    
    
    365Obligation related to acquisition
    
    
    2,969
    
    
    
    Current portion of long-term debt
    
    
    32,235
    
    
    
    17,235Accrued incentive plan expenses  current portion
    
    
    6,544
    
    
    
    4,973Property, franchise and other taxes payable
    
    
    6,164
    
    
    
    6,122Accrued interest
    
    
    10,300
    
    
    
    6,419Total current liabilities
    
    
    59,306
    
    
    
    35,975Deferred revenue
    
    
    67,018
    
    
    
    40,754Accrued incentive plan expenses
    
    
    7,371
    
    
    
    4,242Long-term debt
    
    
    626,587
    
    
    
    478,822Partners Capital:NRP (GP) LP partners capital:Limited partners interest
    
    
    15,423
    
    
    
    15,617General partners interest
    
    
    1
    
    
    
    1Accumulated other comprehensive loss
    
    
    (597
    )
    
    
    (648
    )Total NRP (GP) LP partners capital
    
    
    14,827
    
    
    
    14,970Noncontrolling interest
    
    
    752,414
    
    
    
    730,409Total partners capital
    
    
    767,241
    
    
    
    745,379Total liabilities and partners capital
    
    $
    1,527,523
    
    
    $
    1,305,172
  1




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NRP (GP) LP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation and Organization
   2. Summary of Significant Accounting Policies
 Principles of Consolidation
  Business Combinations
  Fair Value Measurements
  Use of Estimates
  Cash Equivalents
  Accounts Receivable
  2




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Land, Coal and Mineral Rights
  Plant and Equipment
  Intangible Assets
  Asset Impairment
  Concentration of Credit Risk
  Deferred Financing Costs
  Property Taxes
  3




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Share-Based Payment
  New Accounting Standards
       4




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3. Acquisitions
 AzConAgg.
 Colt.
 Blue Star.
 Gatling Ohio.
 Massey- Jewell Smokeless
 5




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Macoupin.
 Coal Properties.
 Mid-Vol Coal Preparation Plant
 Licking River Preparation Plant
 4. Allowance for Doubtful Accounts
  2009
    
    
    2008(In thousands)Balance, January 1
    
    $
    366
    
    
    $
    1,272Provision charged to operations:Additions to the reserve
    
    
    37
    
    
    
    366Collections of previously reserved accounts
    
    
    (31
    )
    
    
    (1,037
    )Total charged (credited) to operations
    
    
    6
    
    
    
    (671
    )Non-recoverable balances written off
    
    
    
    
    
    
    (235
    )Balance, December 31
    
    $
    372
    
    
    $
    366
 5. Plant and Equipment
  December 31,
    
    
    December 31,2009
    
    
    2008(In thousands)Plant construction in process
    
    $
    
    
    
    $
    8,524Plant and equipment at cost
    
    
    81,782
    
    
    
    68,197Less accumulated depreciation
    
    
    (17,515
    )
    
    
    (9,517
    )Net book value
    
    $
    64,267
    
    
    $
    67,204
 6. Coal and Other Mineral Rights
  December 31,
    
    
    December 31,2009
    
    
    2008(In thousands)Coal and other mineral rights
    
    $
    1,460,462
    
    
    $
    1,253,314Less accumulated depletion and amortization
    
    
    (309,149
    )
    
    
    (273,622
    )Net book value
    
    $
    1,151,313
    
    
    $
    979,692
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7. Intangible Assets
  December 31,
    
    
    December 31,2009
    
    
    2008(In thousands)Above market contracts
    
    $
    173,312
    
    
    $
    107,557Less accumulated amortization
    
    
    (8,152
    )
    
    
    (4,729
    )Net book value
    
    $
    165,160
    
    
    $
    102,828
 8. Long-Term Debt
  December 31,
    
    
    December 31,2009
    
    
    2008(In thousands)$300 million floating rate revolving credit facility, due March 2012
    
    $
    28,000
    
    
    $
    48,0005.55% senior notes, with semi-annual interest payments in June and
December, maturing June 2013
    
    
    35,000
    
    
    
    35,0004.91% senior notes, with semi-annual interest payments in June and
December, with annual principal payments in June, maturing in June 2018
    
    
    43,700
    
    
    
    49,7508.38% senior notes, with semi-annual interest payments in March and
September, with scheduled principal payments beginning March 2013,
maturing in March 2019
    
    
    150,000
    
    
    
    5.05% senior notes, with semi-annual interest payments in January and
July, with annual principal payments in July, maturing in July 2020
    
    
    84,615
    
    
    
    92,3085.31% utility local improvement obligation, with annual principal and
interest payments, maturing in March 2021
    
    
    2,307
    
    
    
    2,4995.55% senior notes, with semi-annual interest payments in June and
December, with annual principal payments in June, maturing in June 2023
    
    
    40,200
    
    
    
    43,5005.82% senior notes, with semi-annual interest payments in March and
September, with scheduled principal payments beginning March 2010,
maturing in March 2024
    
    
    225,000
    
    
    
    225,0008.92% senior notes, with semi-annual interest payments in March and
September, with scheduled principal payments beginning March 2014,
maturing in March 2024
    
    
    50,000
    
    
    
    Total debt
    
    
    658,822
    
    
    
    496,057Less  current portion of long term debt
    
    
    (32,235
    )
    
    
    (17,235
    )Long-term debt
    
    $
    626,587
    
    
    $
    478,822
 Principal payments due in:2010
    
    $
    32,2352011
    
    
    31,5182012
    
    
    58,8012013
    
    
    87,2302014
    
    
    56,175Thereafter
    
    
    392,863$
    658,822
  
    
    Maintain a ratio of consolidated indebtedness to consolidated EBITDA (as defined in the
note purchase agreement) of no more than 4.0 to 1.0 for the four most recent quarters;
 
    
    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
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
    
    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.
      
    
    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.
  9. Fair Value Measurements
   
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
    
    Level 2  Observable inputs other than Level 1 prices, such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by observable market data
for substantially the full term of the assets or liabilities.
    
    Level 3  Unobservable inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or liabilities. Level 3
assets and liabilities include financial instruments whose value is determined
using pricing models, discounted cash flow methodologies, or similar techniques, as
well as instruments for which the determination of fair value requires significant
management judgment or estimation.
  8




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10. NRPs Adoption of the Two-Class Method
   11. Related Party Transactions
 Reimbursements to Affiliates of our General Partner
  Transactions with Cline Affiliates
  Quintana Capital Group GP, Ltd.
   9




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Office Building in Huntington, West Virginia
  12. Commitments and Contingencies
 Legal
  Acquisition
  Environmental Compliance
  Lease
  14. Incentive Plans
  10




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Outstanding grants at the beginning of the period
    
    
    571,284Grants during the period
    
    
    207,366Grants vested and paid during the period
    
    
    (125,052
    )Forfeitures during the period
    
    
    Outstanding grants at the end of the period
    
    
    653,598
   15. Subsequent Events (Unaudited)
  Acquisitions
   Distributions
   11