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Note 12 - Fair Value Measurements
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

12.    Fair Value Measurements

 

Fair Value of Financial Assets and Liabilities

 

The Partnership’s financial assets and liabilities consist of cash and cash equivalents, a contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents approximate fair value due to their short-term nature. The Partnership uses available market data and valuation methodologies to estimate the fair value of its debt and contract receivable.

 

The following table shows the carrying value and estimated fair value of the Partnership's debt and contract receivable:

 

      

December 31,

 
      

2024

  

2023

 
      

Carrying

  

Estimated

  

Carrying

  

Estimated

 

(In thousands)

 

Fair Value Hierarchy Level

  

Value

  

Fair Value

  

Value

  

Fair Value

 

Debt:

                    

Opco Senior Notes (1)

  3  $28,384  $27,498  $59,224  $56,533 

Opco Credit Facility (2)

  3   113,684   113,684   95,834   95,384 

Assets:

                    

Contract receivable, net (current and long-term) (3)

  3  $26,321  $22,776  $28,946  $24,492 

 

(1)

The fair value of the Opco Senior Notes was estimated by management utilizing the present value replacement method incorporating the interest rate of the Opco Credit Facility.

(2)

The fair value of the Opco Credit Facility approximates the outstanding borrowing amount because the interest rates are variable and reflective of market rates and the terms of the credit facility allow the Partnership to repay this debt at any time without penalty.

(3)

The fair value of the Partnership's contract receivable was determined based on the present value of future cash flow projections related to the underlying asset at a discount rate of 15% at December 31, 2024 and 2023.

 

NRP had embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that were accounted for separately from the preferred units as assets and liabilities at fair value on the Partnership's Consolidated Balance Sheets. Level 3 valuation of the embedded derivatives were based on numerous factors including the likelihood of the event occurring. The embedded derivatives were revalued quarterly and changes in their fair value would have been recorded in other expenses, net on the Partnership's Consolidated Statements of Comprehensive Income. The embedded derivatives had zero value as of December 31, 2023. As a result of the redemption of the Partnership's remaining preferred units in September 2024, NRP no longer has embedded derivatives associated with the preferred units as of December 31, 2024.

 

Fair Value of Non-Financial Assets

 

The Partnership discloses or recognizes its non-financial assets, such as impairments of coal and aggregates properties at fair value on a nonrecurring basis. Refer to Note 9. Mineral Rights, Net for additional disclosures related to the fair value associated with the impaired assets.