XML 34 R23.htm IDEA: XBRL DOCUMENT v3.23.3
Note 16 - Credit Losses
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Credit Loss, Financial Instrument [Text Block]

16.    Credit Losses

 

The Partnership is exposed to credit losses through collection of its short-term trade receivables resulting from contracts with customers and a long-term receivable resulting from a financing transaction with a customer. The Partnership records an allowance for current expected credit losses on these receivables based on the loss-rate method. NRP assessed the likelihood of collection of its receivables utilizing historical loss rates, current market conditions, industry and macroeconomic factors, reasonable and supportable forecasts and facts or circumstances of individual customers and properties. Examples of these facts or circumstances include, but are not limited to, contract disputes or renegotiations with the customer and evaluation of short and long-term economic viability of the contracted property. For its long-term contract receivable, management reverts to the historical loss experience immediately after the reasonable and supportable forecast period ends.

 

As of September 30, 2023 and December 31, 2022, NRP had the following current expected credit loss (“CECL”) allowance related to its receivables and long-term contract receivable:

 

  

September 30, 2023

  

December 31, 2022

 

(In thousands)

 

Gross

  

CECL Allowance

  

Net

  

Gross

  

CECL Allowance

  

Net

 

Receivables

 $46,294  $(5,343) $40,951  $47,237  $(4,461) $42,776 

Long-term contract receivable

  27,965   (968)  26,997   29,984   (1,038)  28,946 

Total

 $74,259  $(6,311) $67,948  $77,221  $(5,499) $71,722 

 

NRP recorded $1.6 million and $0.0 million of operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to the change in the CECL allowance during the three months ended September 30, 2023 and 2022, respectively and $0.8 million and $0.6 million during the nine months ended September 30, 2023 and 2022, respectively. 

 

NRP has procedures in place to monitor its ongoing credit exposure through timely review of counterparty balances against contract terms and due dates, account and financing receivable reconciliation, bankruptcy monitoring, lessee audits and dispute resolution. The Partnership may employ legal counsel or collection specialists to pursue recovery of defaulted receivables.