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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on July 19, 2010

Registration No. 333-166550

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



AMENDMENT NO. 2
TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Rhino Resource Partners LP
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
  1221
(Primary Standard Industrial
Classification Code Number)
  27-2377517
(I.R.S. Employer
Identification Number)

424 Lewis Hargett Circle, Suite 250
Lexington, Kentucky 40503
(859) 389-6500

(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)

David G. Zatezalo
424 Lewis Hargett Circle, Suite 250
Lexington, Kentucky 40503
(859) 389-6500
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)



Copies to:

Mike Rosenwasser
Brenda K. Lenahan

Vinson & Elkins L.L.P.
666 Fifth Avenue, 26th Floor
New York, New York 10103
Tel: (212) 237-0000
Fax: (212) 237-0100

 

Charles E. Carpenter
Sean T. Wheeler

Latham & Watkins LLP
885 Third Avenue
New York, New York 10022
Tel: (212) 906-1200
Fax: (212) 751-4864



Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.



          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

          The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


Table of Contents

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission becomes effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated July 19, 2010

PROSPECTUS

3,750,000 Common Units

LOGO

Representing Limited Partner Interests

           This is our initial public offering. We are offering 3,750,000 common units. We have applied to list our common units on the New York Stock Exchange under the symbol "RNO."

           Prior to this offering, there has been no public market for our common units. We anticipate that the initial public offering price will be between $19.00 and $21.00 per common unit.

You should consider the risks which we have described in "Risk Factors" beginning on page 23 before buying our common units.

           These risks include the following:



           In order to comply with certain U.S. laws relating to the ownership of interests in mineral leases on federal lands, we require an owner of our units to be an "eligible citizen." If you are not an eligible citizen, your common units will be subject to redemption. Please read "The Partnership Agreement—Ineligible Citizens; Redemption."

 
  Per Common Unit   Total  

Public offering price

  $     $    

Underwriting discount

  $     $    

Proceeds, before offering expenses, to us

  $     $    



           The underwriters may purchase up to an additional 562,500 common units from us at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

           The underwriters expect to deliver the common units to purchasers on or about                           , 2010.



RAYMOND JAMES

RBC CAPITAL MARKETS

STIFEL NICOLAUS

The date of this prospectus is                           , 2010.


Table of Contents

MAP


Table of Contents


TABLE OF CONTENTS

Summary

  1

Risk Factors

  23

Use of Proceeds

  57

Capitalization

  58

Dilution

  59

Cash Distribution Policy and Restrictions on Distributions

  61

Provisions of Our Partnership Agreement Relating to Cash Distributions

  77

Selected Historical Consolidated and Pro Forma Condensed Consolidated Financial and Operating Data

  94

Management's Discussion and Analysis of Financial Condition and Results of Operations

  98

The Coal Industry

  134

Business

  144

Management

  189

Executive Officer Compensation

  194

Security Ownership of Certain Beneficial Owners and Management

  210

Certain Relationships and Related Party Transactions

  211

Conflicts of Interest and Fiduciary Duties

  214

Description of the Common Units

  224

The Partnership Agreement

  227

Units Eligible for Future Sale

  244

Material Tax Consequences

  246

Investment in Rhino Resource Partners LP by Employee Benefit Plans

  269

Underwriting

  271

Validity of Our Common Units

  276

Experts

  276

Where You Can Find More Information

  277

Forward-Looking Statements

  277

Index to Financial Statements

  F-1

Appendix A—Form of First Amended and Restated Agreement of Limited Partnership of Rhino Resource Partners LP

  A-1

Appendix B—Application for Transfer of Common Units

  B-1

Appendix C—Glossary of Terms

  C-1



        You should rely only on the information contained in this prospectus, any free writing prospectus prepared by or on behalf of us or any other information to which we have referred you in connection with this offering. We have not, and the underwriters have not, authorized any other person to provide you with information different from that contained in this prospectus. Neither the delivery of this prospectus nor sale of our common units means that information contained in this prospectus is correct after the date of this prospectus. This

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prospectus is not an offer to sell or solicitation of an offer to buy our common units in any circumstances under which the offer or solicitation is unlawful.



        Until                                         , 2010 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common units, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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SUMMARY

        This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including the historical and pro forma consolidated financial statements and the notes to those financial statements, before investing in our common units. The information presented in this prospectus assumes that the underwriters' option to purchase additional common units is not exercised unless otherwise noted. You should read "Risk Factors" beginning on page 23 for information about important risks that you should consider before buying our common units.

        References in this prospectus to "Rhino Resource Partners LP," "we," "our," "us" or like terms when used in a historical context refer to the business of our predecessor, Rhino Energy LLC and its subsidiaries, that is being contributed to Rhino Resource Partners LP in connection with this offering, except that, unless otherwise specified, references to our proven and probable reserves, non-reserve coal deposits and coal production do not include the reserves and deposits owned by or the production of Rhino Eastern LLC, a joint venture in which we have a 51% membership interest and for which we serve as manager. When used in the present tense or prospectively, those terms refer to Rhino Resource Partners LP and its subsidiaries. References in this prospectus to "Wexford" refer to Wexford Capital LP, our sponsor, and its affiliates and principals. We include a glossary of some of the terms used in this prospectus as Appendix C.

Rhino Resource Partners LP

        We are a growth-oriented Delaware limited partnership formed to control and operate coal properties and related assets. We produce, process and sell high quality coal of various steam and metallurgical grades. We market our steam coal primarily to electric utility companies as fuel for their steam-powered generators. Customers for our metallurgical coal are primarily steel and coke producers who use our coal to produce coke, which is used as a raw material in the steel manufacturing process.

        Our primary business objective is to make quarterly cash distributions to our unitholders at our minimum quarterly distribution and, over time, increase our quarterly cash distributions. Initially, we will pay our common unitholders distributions of $0.445 per common unit per quarter, or $1.78 per common unit annually, to the extent we have sufficient cash from our operations after establishment of cash reserves and payment of fees and expenses, including payments to our general partner and its affiliates, before we pay any distributions to our subordinated unitholders.

        For the year ended December 31, 2009, we generated revenues of approximately $419.8 million and net income of approximately $19.5 million. For the three months ended March 31, 2010, we generated revenues of approximately $66.6 million and net income of approximately $6.5 million. As of July 13, 2010, we had sales commitments for approximately 99% and 80% of our estimated coal production (including purchased coal to supplement production and excluding results from the joint venture) for the year ending December 31, 2010 and the twelve months ending June 30, 2011, respectively.

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Our Properties

        We have a geographically diverse asset base with coal reserves located in Central Appalachia, Northern Appalachia, the Illinois Basin and the Western Bituminous region. As of March 31, 2010, we controlled an estimated 285.4 million tons of proven and probable coal reserves, consisting of an estimated 272.9 million tons of steam coal and an estimated 12.5 million tons of metallurgical coal. In addition, as of March 31, 2010, we controlled an estimated 122.2 million tons of non-reserve coal deposits. As of March 31, 2010, Rhino Eastern LLC, a joint venture in which we have a 51% membership interest and for which we serve as manager, controlled an estimated 22.4 million tons of proven and probable coal reserves at the Rhino Eastern mining complex located in Central Appalachia, consisting entirely of premium mid-vol and low-vol metallurgical coal, and an estimated 34.3 million tons of non-reserve coal deposits. Our and the joint venture's proven and probable coal reserves and non-reserve coal deposits were the same in all material respects as of December 31, 2009. We currently operate twelve mines, including seven underground and five surface mines, located in Kentucky, Ohio, Colorado and West Virginia. The number of mines that we operate may vary from time to time depending on a number of factors, including the existing demand for and price of coal, depletion of economically recoverable reserves and availability of experienced labor. Excluding results from the joint venture, for the year ended December 31, 2009, we produced approximately 4.7 million tons of coal, purchased approximately 2.0 million tons of coal and sold approximately 6.7 million tons of coal, approximately 99% of which were pursuant to supply contracts. Excluding results from the joint venture, for the three months ended March 31, 2010, we produced approximately 1.0 million tons of coal and sold approximately 0.9 million tons of coal, approximately 99% of which were pursuant to supply contracts. Additionally, the joint venture produced and sold approximately 0.2 million tons and approximately 0.1 million tons of premium mid-vol metallurgical coal for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively.

        Since our predecessor's formation in 2003, we have significantly grown our coal reserves. Since April 2003, we have completed numerous coal asset acquisitions with a total purchase price of approximately $208.3 million. Through these acquisitions and coal lease transactions, we have substantially increased our proven and probable coal reserves and non-reserve coal deposits. We expect to complete the acquisition in July 2010 of certain mining assets of C.W. Mining Company out of bankruptcy for approximately $15.0 million. The assets to be acquired are located in Emery and Carbon Counties, Utah and include coal reserves and non-reserve coal deposits, underground mining equipment and infrastructure, an overland belt conveyor system, a loading facility and support facilities. We intend to fund the asset acquisition with borrowings under our credit agreement.

        In addition, we have successfully grown our production through internal development projects. Between 2004 and 2006, we invested approximately $19.0 million in the Hopedale mine located in Northern Appalachia to develop the estimated 18.5 million tons of proven and probable coal reserves at the mine. The Hopedale mine produced approximately 1.5 million tons of coal for the year ended December 31, 2009 and approximately 0.3 million tons of coal for the three months ended March 31, 2010. In 2007, we completed initial development of Mine 28, a new underground high-vol metallurgical coal mine at the Rob Fork mining complex located in Central Appalachia. We finished additional development work on Mine 28 in 2009, which completes all major foreseen development projects for the life of these reserves. Mine 28 produced approximately 0.4 million tons of metallurgical coal for the year ended December 31, 2009 and approximately 0.1 million tons of metallurgical coal for the three months ended March 31, 2010. As of March 31, 2010, we also controlled or managed a significant amount of

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undeveloped proven and probable coal reserves. These reserves can be developed and produced over time as industry and regional conditions permit. We believe our existing asset base will continue to provide attractive internal growth projects.

        The following table summarizes our and the joint venture's mining complexes, production and reserves by region:

 
   
  Production for the (2)   Proven and Probable Reserves
as of March 31, 2010 (3)
 
 
  Type of
Production (1)
  Year Ended
December 31, 2009
  Three Months
Ended
March 31, 2010
 
Region   Total   Steam   Metallurgical  
 
   
  (in million tons)
 

Central Appalachia

                                   

Tug River Complex (KY, WV)

 

U, S

   
0.5
   
0.1
   
34.8
   
28.8
   
6.0
 

Rob Fork Complex (KY)

 

U, S

   
1.2
   
0.3
   
26.2
   
19.7
   
6.5
 

Deane Complex (KY)

 

U

   
0.6
   
0.1
   
40.8
   
40.8
   
 

Northern Appalachia

                                   

Hopedale Complex (OH)

 

U

   
1.5
   
0.3
   
18.5
   
18.5
   
 

Sands Hill Complex (OH)

 

S

   
0.7
   
0.2
   
8.6
   
8.6
   
 

Leesville Field (OH)

 

U

   
   
   
26.8
   
26.8
   
 

Springdale Field (PA)

 

U

   
   
   
13.8
   
13.8
   
 

Illinois Basin

                                   

Taylorville Field (IL)

 

U

   
   
   
109.5
   
109.5
   
 

Western Bituminous

                                   

McClane Canyon Mine (CO)

 

U

   
0.3
   
0.1
   
6.4
   
6.4
   
 
                           
 

Total

       
4.7
   
1.0
   
285.4
   
272.9
   
12.5
 
                           

Central Appalachia

                                   

Rhino Eastern Complex (WV) (4)

 

U

   
0.2
   
0.1
   
22.4
   
   
22.4
 

(1)
Indicates mining methods that could be employed at each complex and does not necessarily reflect current methods of production. U=underground; S=surface.
(2)
Total production based on actual amounts and not the rounded amounts shown in this table.
(3)
Represents recoverable tons.
(4)
Owned by a joint venture in which we have a 51% membership interest and for which we serve as manager. Amounts shown include 100% of the reserves and production.


Our Business Strategy

        Our principal business strategy is to safely, efficiently and profitably produce and sell both steam and metallurgical coal from our diverse asset base in order to maintain and, over time, increase our quarterly cash distributions. Our plan for executing this strategy includes the following key components:

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Our Competitive Strengths

        We believe the following competitive strengths will enable us to successfully execute our business strategy:

        For a more detailed description of our business strategies and competitive strengths, please read "Business—Our Business Strategy" and "—Our Competitive Strengths."

Risk Factors

        An investment in our common units involves risks. You should carefully consider the following risk factors, those other risks described in "Risk Factors" and the other information in this prospectus, before deciding whether to invest in our common units. The following risks are discussed in more detail in "Risk Factors" beginning on page 23.

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Our Management

        We are managed and operated by the board of directors and executive officers of our general partner, Rhino GP LLC. Following this offering, approximately 69.8% of our outstanding common units and all of our outstanding subordinated units and incentive distribution rights will be owned by Wexford. As a result of owning our general partner, Wexford will have the right to appoint all members of the board of directors of our general partner, including the independent directors. Our unitholders will not be entitled to elect our general partner or its directors or otherwise directly participate in our management or operation. For more information about the executive officers and directors of our general partner, please read "Management."

        Following the consummation of this offering, neither our general partner nor Wexford will receive any management fee or other compensation in connection with our general partner's management of our business, but we will reimburse our general partner and its affiliates, including Wexford, for all expenses they incur and payments they make on our behalf. Our partnership agreement does not set a limit on the amount of expenses for which our general partner and its affiliates may be reimbursed. These expenses include salary, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and expenses allocated to our general partner by its affiliates. Our partnership agreement provides that our general partner will determine in good faith the expenses that are allocable to us.

        In order to maximize operational flexibility, our operations will be conducted through, and our operating assets will be owned by, our wholly owned subsidiary, Rhino Energy LLC, and its subsidiaries. Rhino Resource Partners LP does not have any employees. All of the employees that conduct our business are employed by our general partner or our subsidiaries.

        Wexford Capital LP, or Wexford Capital, is a Securities and Exchange Commission, or SEC, registered investment advisor. Wexford Capital, which was formed in 1994, manages a series of investment funds and has over $6.0 billion of assets under management.

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Conflicts of Interest and Fiduciary Duties

        Our general partner has a legal duty to manage us in a manner beneficial to holders of our common and subordinated units. This legal duty is commonly referred to as a "fiduciary duty." However, the officers and directors of our general partner also have fiduciary duties to manage our general partner in a manner beneficial to Wexford. As a result, conflicts of interest may arise in the future between us and our unitholders, on the one hand, and Wexford and our general partner, on the other hand.

        Delaware law provides that Delaware limited partnerships may, in their partnership agreements, restrict or expand the fiduciary duties owed by the general partner to limited partners and the partnership. Our partnership agreement limits the liability of, and reduces the fiduciary duties owed by, our general partner to our common unitholders. Our partnership agreement also restricts the remedies available to our unitholders for actions that might otherwise constitute a breach of fiduciary duty by our general partner. By purchasing a common unit, a unitholder is treated as having consented to various actions and potential conflicts of interest contemplated in the partnership agreement that might otherwise be considered a breach of fiduciary or other duties under applicable state law.

        For a more detailed description of the conflicts of interest and the fiduciary duties of our general partner, please read "Conflicts of Interest and Fiduciary Duties." For a description of other relationships with our affiliates, please read "Certain Relationships and Related Party Transactions."


Principal Executive Offices

        Our principal executive offices are located at 424 Lewis Hargett Circle, Suite 250, Lexington, Kentucky. Our phone number is (859) 389-6500. Our website address will be http://rhinolp.com. We intend to make our periodic reports and other information filed with or furnished to the SEC available, free of charge, through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.

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The Transactions

        We are a Delaware limited partnership formed in April 2010 by Wexford to own and operate the business that has historically been conducted by Rhino Energy LLC.

        In connection with the closing of this offering, the following will occur:


(1) Assumes the underwriters do not exercise their option to purchase additional common units. If the underwriters do not exercise their option to purchase additional common units, we will issue an additional 562,500 common units to Rhino Energy Holdings LLC at the expiration of the option. If the underwriters exercise their option to purchase up to 562,500 additional common units, the number of common units purchased by the underwriters pursuant to such exercise will be sold to the public instead of being issued to Rhino Energy Holdings LLC. The net proceeds from any exercise of the underwriters' option to purchase additional common units (approximately $10.5 million based on an assumed initial offering price of $20.00 per common unit, if exercised in full, after deducting the estimated underwriting discount and offering expenses payable by us) will be used to reimburse Rhino Energy Holdings LLC for capital expenditures it incurred with respect to the assets contributed to us.

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Organizational Structure

        The following is a simplified diagram of our ownership structure before this offering.

GRAPHIC


(1)
Represents investment funds managed by, and principals of, Wexford Capital. Please read "Certain Relationships and Related Party Transactions—Ownership Interests of Certain Directors of Our General Partner" for additional information.

(2)
Includes a joint venture in which Rhino Energy LLC indirectly owns a 51% membership interest.

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        The following is a simplified diagram of our ownership structure after giving effect to this offering and the related transactions.

Public Common Units

    14.8 %

Interests of Wexford:

       
 

Common Units

    34.2 %
 

Subordinated Units

    49.0 %
 

General Partner Interest

    2.0 %
       

    100.0 %
       

GRAPHIC


(1)
Represents investment funds managed by, and principals of, Wexford Capital. Please read "Security Ownership of Certain Beneficial Owners and Management" and "Certain Relationships and Related Party Transactions—Ownership Interests of Certain Directors of Our General Partner" for additional information.

(2)
Includes a joint venture in which Rhino Energy LLC owns a 51% membership interest.

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The Offering

Common units offered to the public   3,750,000 common units.

 

 

4,312,500 common units if the underwriters exercise their option to purchase additional common units in full.

Units outstanding after this offering

 

12,397,000 common units and 12,397,000 subordinated units, each representing a 49.0% limited partner interest in us. If the underwriters do not exercise their option to purchase additional common units, we will issue 562,500 common units to Rhino Energy Holdings LLC at the expiration of the 30-day option period. If, and to the extent, the underwriters exercise their option to purchase additional common units, the number of units purchased by the underwriters pursuant to such exercise will be sold to the public, and any of the 562,500 common units not purchased by the underwriters pursuant to the option will be issued to Rhino Energy Holdings LLC as part of our formation transactions. Accordingly, the exercise of the underwriters' option will not affect the total number of units outstanding or the amount of cash needed to pay the minimum quarterly distribution on all units. Our general partner will own a 2.0% general partner interest in us.

Use of proceeds

 

We intend to use the estimated net proceeds of approximately $67.0 million from this offering (based on an assumed initial offering price of $20.00 per common unit), after deducting the estimated underwriting discount and offering expenses to repay indebtedness outstanding under our credit agreement. Upon application of the net proceeds from this offering as described herein, we will have $50.1 million of indebtedness outstanding under our credit agreement.

 

 

The net proceeds from any exercise of the underwriters' option to purchase additional common units (approximately $10.5 million based on an assumed initial offering price of $20.00 per common unit, if exercised in full, after deducting the estimated underwriting discount) will be used to reimburse Wexford for capital expenditures incurred with respect to the assets contributed to us.

 

 

Please read "Use of Proceeds."

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Cash distributions   We will make a minimum quarterly distribution of $0.445 per common unit (or $1.78 per common unit on an annualized basis) to the extent we have sufficient cash from operations after establishment of cash reserves and payment of costs and expenses, including reimbursement of expenses to our general partner and its affiliates. These expenses include salary, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and expenses allocated to our general partner by its affiliates. Our partnership agreement does not set a limit on the amount of cash reserves that our general partner may establish or the amount of expenses for which our general partner and its affiliates may be reimbursed. Our ability to pay cash distributions at the minimum quarterly distribution rate is subject to various restrictions and other factors described in more detail under "Cash Distribution Policy and Restrictions on Distributions."

 

 

For the first quarter that we are publicly traded, we will pay investors in this offering a prorated distribution covering the period from the completion of this offering through September 30, 2010, based on the actual length of that period.

 

 

Our partnership agreement requires us to distribute all of our available cash each quarter in the following manner:

 

•       first, 98.0% to the holders of common units and 2.0% to our general partner, until each common unit has received the minimum quarterly distribution of $0.445 plus any arrearages from prior quarters;

 

•       second, 98.0% to the holders of subordinated units and 2.0% to our general partner, until each subordinated unit has received the minimum quarterly distribution of $0.445; and

 

•       third, 98.0% to all unitholders, pro rata, and 2.0% to our general partner, until each unit has received a distribution of $0.5118.


 

 

If cash distributions to our unitholders exceed $0.5118 per unit in any quarter, our unitholders and our general partner will receive distributions according to the following percentage allocations:

 

   
  Marginal Percentage
Interest in
Distributions
 
  Total Quarterly Distribution
   
  General
Partner
 
  Target Amount   Unitholders  
 

above $0.5118 up to $0.5563

    85.0 %   15.0 %
 

above $0.5563 up to $0.6675

    75.0 %   25.0 %
 

above $0.6675

    50.0 %   50.0 %

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    The percentage interests shown for our general partner include its 2.0% general partner interest. We refer to the additional increasing distributions to our general partner as "incentive distributions." Please read "Provisions of Our Partnership Agreement Relating to Cash Distributions—Distributions of Available Cash—General Partner Interest and Incentive Distribution Rights."

 

 

Pro forma cash available for distribution generated during the year ended December 31, 2009 and the twelve months ended March 31, 2010 was approximately $33.4 million and $39.3 million, respectively. The amount of available cash we need to pay the minimum quarterly distribution for four quarters on our common units and subordinated units to be outstanding immediately after this offering and the corresponding distribution on our general partner interest is approximately $45.0 million (or an average of approximately $11.3 million per quarter). As a result, for the year ended December 31, 2009 and the twelve months ended March 31, 2010 we would have generated available cash sufficient to pay 100% of the minimum quarterly distribution on all of our common units, but only approximately 48.3% and 74.8%, respectively, of the minimum quarterly distribution on our subordinated units during those periods. We have not used quarter-by-quarter estimates for each quarter in the year ended December 31, 2009 and the twelve months ended March 31, 2010 to determine if we would have generated available cash sufficient to pay the minimum quarterly distribution for each quarter during those periods. Please read "Cash Distribution Policy and Restrictions on Distributions—Pro Forma and Forecasted Results of Operations and Cash Available for Distribution."

 

 

We believe, based on our financial forecast and related assumptions included in "Cash Distribution Policy and Restrictions on Distributions—Pro Forma and Forecasted Results of Operations and Cash Available for Distribution," that we will have sufficient available cash to pay the minimum quarterly distribution of $0.445 on all of our units and the corresponding distribution on our general partner's 2.0% interest for each quarter in the twelve months ending June 30, 2011. Please read "Cash Distribution Policy and Restrictions on Distributions."

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Subordinated units   Wexford will initially own all of our subordinated units. The principal difference between our common and subordinated units is that in any quarter during the subordination period, the subordinated units will not be entitled to receive any distribution until the common units have received the minimum quarterly distribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Subordinated units will not accrue arrearages.

Conversion of subordinated units

 

The subordination period will end on the first business day after we have earned and paid at least (1) $1.78 (the minimum quarterly distribution on an annualized basis) on each outstanding unit and the corresponding distribution on our general partner's 2.0% interest for each of three consecutive, non-overlapping four quarter periods ending on or after June 30, 2013 or (2) $2.67 (150.0% of the annualized minimum quarterly distribution) on each outstanding unit and the corresponding distributions on our general partner's 2.0% interest and the related distribution on the incentive distribution rights for the four-quarter period immediately preceding that date.

 

 

The subordination period also will end upon the removal of our general partner other than for cause if no subordinated units or common units held by the holders of subordinated units or their affiliates are voted in favor of that removal.

 

 

When the subordination period ends, all subordinated units will convert into common units on a one-for-one basis, and all common units thereafter will no longer be entitled to arrearages. Please read "Provisions of Our Partnership Agreement Relating to Cash Distributions—Subordination Period."

Ineligible citizens and
redemption

 

Only eligible citizens (meaning a person or entity qualified to hold an interest in mineral leases on federal lands) will be entitled to receive distributions or be allocated income or loss from us. If a transferee or a unitholder, as the case may be, does not properly complete the transfer application or any required recertification, for any reason, the transferee or unitholder will have no right to vote its units on any matter and we have the right to redeem such units at a price which is equal to the lower of the transferee's or unitholder's purchase price or the then-current market price of such units. The redemption price will be paid in cash or by delivery of a promissory note, as determined by our general partner. Please read "Description of the Common Units—Transfer of Common Units" and "The Partnership Agreement—Ineligible Citizens; Redemption."

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General partner's right to reset the target distribution levels   Our general partner, as the initial holder of our incentive distribution rights, has the right, at any time when there are no subordinated units outstanding and it has received incentive distributions at the highest level to which it is entitled (48.0%, in addition to distributions paid on its 2.0% general partner interest) for each of the prior four consecutive fiscal quarters, to reset the initial target distribution levels at higher levels based on our cash distributions at the time of the exercise of the reset election. If our general partner transfers all or a portion of our incentive distribution rights in the future, then the holder or holders of a majority of our incentive distribution rights will be entitled to exercise this right. The following assumes that our general partner holds all of the incentive distribution rights at the time that a reset election is made. Following a reset election, the minimum quarterly distribution will be adjusted to equal the reset minimum quarterly distribution, and the target distribution levels will be reset to correspondingly higher levels based on the same percentage increases above the reset minimum quarterly distribution.

 

 

If our general partner elects to reset the target distribution levels, it will be entitled to receive common units and to retain its then-current general partner interest. The number of common units to be issued to our general partner will equal the number of common units which would have entitled the holder to an average aggregate quarterly cash distribution in the prior two quarters equal to the average of the distributions to our general partner on the incentive distribution rights in the prior two quarters. Please read "Provisions of Our Partnership Agreement Relating to Cash Distributions—General Partner's Right to Reset Incentive Distribution Levels."

Issuance of additional units

 

Our partnership agreement authorizes us to issue an unlimited number of additional units without the approval of our unitholders. Please read "Units Eligible for Future Sale" and "The Partnership Agreement—Issuance of Additional Interests."

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Limited voting rights   Our general partner will manage and operate us. Unlike the holders of common stock in a corporation, our unitholders will have only limited voting rights on matters affecting our business. Our unitholders will have no right to elect our general partner or its directors on an annual or other continuing basis. Our general partner may not be removed except by a vote of the holders of at least 662/3% of the outstanding units, including any units owned by our general partner and its affiliates, voting together as a single class. Upon consummation of this offering, Wexford will own an aggregate of 84.9% of our common and subordinated units (or 82.6% of our common and subordinated units, if the underwriters exercise their option to purchase additional common units in full). This will give Wexford the ability to prevent the removal of our general partner. Please read "The Partnership Agreement—Voting Rights."

Limited call right

 

If at any time our general partner and its affiliates own more than 90% of the outstanding common units, our general partner has the right, but not the obligation, to purchase all of the remaining common units at a price equal to the greater of (1) the average of the daily closing price of the common units over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed and (2) the highest per-unit price paid by our general partner or any of its affiliates for common units during the 90-day period preceding the date such notice is first mailed. If our general partner and its affiliates reduce their ownership percentage to below 70% of the outstanding common units, the ownership threshold to exercise the limited call right will be reduced to 80%. Please read "The Partnership Agreement—Limited Call Right."

Estimated ratio of taxable income to distributions

 

We estimate that if you own the common units you purchase in this offering through the record date for distributions for the period ending December 31, 2012, you will be allocated, on a cumulative basis, an amount of federal taxable income for that period that will be approximately 40.0% of the cash distributed to you with respect to that period. For example, if you receive an annual distribution of $1.78 per unit, we estimate that your average allocable federal taxable income per year will be no more than approximately $0.72 per unit. Thereafter, the ratio of allocable taxable income to cash distributions to you could substantially increase. Please read "Material Tax Consequences—Tax Consequences of Unit Ownership—Ratio of Taxable Income to Distributions" for the basis of this estimate.

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Material federal income tax consequences   For a discussion of the material federal income tax consequences that may be relevant to prospective unitholders who are individual citizens or residents of the United States, please read "Material Tax Consequences."

Exchange listing

 

We have applied to list our common units on the New York Stock Exchange, or NYSE, under the symbol "RNO."

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Summary Historical Consolidated and Condensed Consolidated and Pro Forma Condensed Consolidated Financial and Operating Data

        The following table presents summary historical consolidated financial and operating data of our predecessor, Rhino Energy LLC, as of the dates and for the periods indicated. The summary historical consolidated financial data presented as of December 31, 2007 is derived from the audited historical consolidated statement of financial position of Rhino Energy LLC that is not included in this prospectus. The summary historical consolidated financial data presented as of December 31, 2008 and 2009 and for the years ended December 31, 2007, 2008 and 2009 is derived from the audited historical consolidated financial statements of Rhino Energy LLC that are included elsewhere in this prospectus. The historical consolidated financial data as of and for the year ended December 31, 2008 was restated to reflect certain selling, general and administrative expenses within the statement of operations, rather than as a distribution to members in the statement of financial position. The summary historical consolidated financial data presented as of March 31, 2010 and for the three months ended March 31, 2009 and 2010 is derived from the unaudited historical condensed consolidated financial statements of Rhino Energy LLC that are included elsewhere in this prospectus. The summary historical condensed consolidated financial data presented as of March 31, 2009 is derived from our predecessor's accounting records, which are unaudited.

        The summary pro forma condensed consolidated financial data presented for the year ended December 31, 2009 and as of and for the three months ended March 31, 2010 is derived from our unaudited pro forma condensed consolidated financial statements included elsewhere in this prospectus. Our unaudited pro forma condensed consolidated financial statements give pro forma effect to:

        The unaudited pro forma condensed consolidated statement of financial position assumes the items listed above occurred as of March 31, 2010. The unaudited pro forma condensed consolidated statements of operations data for the year ended December 31, 2009 and for the three months ended March 31, 2010 assume the items listed above occurred as of January 1, 2009. We have not given pro forma effect to incremental selling, general and administrative expenses of approximately $3.0 million that we expect to incur as a result of being a publicly traded partnership.

        For a detailed discussion of the summary historical consolidated financial information contained in the following table, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following table should also be read in conjunction with "Use of Proceeds," "Business—Our History" and the audited historical consolidated financial statements of Rhino Energy LLC and our unaudited pro forma condensed consolidated financial statements included elsewhere in this prospectus. Among other things, the historical consolidated and unaudited pro forma condensed consolidated financial

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statements include more detailed information regarding the basis of presentation for the information in the following table.

        The following table presents a non-GAAP financial measure, EBITDA, which we use in our business as it is an important supplemental measure of our performance and liquidity. EBITDA represents net income before interest expense, income taxes and depreciation, depletion and amortization. This measure is not calculated or presented in accordance with generally accepted accounting principles, or GAAP. We explain this measure under"—Non-GAAP Financial Measure" and reconcile it to its most directly comparable financial measures calculated and presented in accordance with GAAP.

 
  Rhino Energy LLC Historical    
   
 
 
  Consolidated   Condensed
Consolidated
  Rhino Resource Partners LP
Pro Forma Condensed
Consolidated
 
 
  Year Ended December 31,   Three Months
Ended
March 31,
  Year Ended
December 31,
  Three Months
Ended
March 31,
 
 
   
  2008
(as restated)
   
 
 
  2007   2009   2009   2010   2009   2010  
 
  (in thousands, except per unit data)
 

Statement of Operations Data:

                                           

Total revenues

  $ 403,452   $ 438,924   $ 419,790   $ 116,706   $ 66,603   $ 419,790   $ 66,603  

Costs and expenses:

                                           
 

Cost of operations (exclusive of depreciation, depletion and amortization shown separately below)

    318,405     364,912     336,335     98,317     46,352     336,335     46,352  
 

Freight and handling costs

    4,021     10,223     3,990     938     673     3,990     673  
 

Depreciation, depletion and amortization

    30,750     36,428     36,279     9,974     7,765     36,279     7,765  
 

Selling, general and administrative (exclusive of depreciation, depletion and amortization shown separately above)

    15,370     19,042     16,754     4,376     3,678     16,754     3,678  
 

(Gain) loss on sale of assets

    (944 )   451     1,710         (1 )   1,710     (1 )
                               

Income from operations

    35,849     7,868     24,721     3,101     8,136     24,721     8,136  

Interest and other income (expense):

                                           
 

Interest expense

    (5,579 )   (5,501 )   (6,222 )   (1,170 )   (1,471 )   (4,291 )   (992 )
 

Interest income

    317     149     71     87     8     71     8  
 

Equity in net income (loss) of unconsolidated affiliate(1)

        (1,587 )   893     (43 )   (130 )   893     (130 )
                               

Total interest and other income (expense)

    (5,263 )   (6,939 )   (5,259 )   (1,125 )   (1,592 )   (3,327 )   (1,114 )

Income tax benefit

    (126 )                        
                               

Net income

  $ 30,714   $ 929   $ 19,462   $ 1,976   $ 6,544   $ 21,394   $ 7,023  
                               

Net income per limited partner unit, basic:

                                           
 

Common units

                                $ 1.306   $ 0.360  
 

Subordinated units

                                $ 0.385   $ 0.196  

Net income per limited partner unit, diluted:

                                           
 

Common units

                                $ 1.304   $ 0.358  
 

Subordinated units

                                $ 0.385   $ 0.196  

Weighted average number of limited partner units outstanding, basic:

                                           
 

Common units

                                  12,397,000     12,397,000  
 

Subordinated units

                                  12,397,000     12,397,000  

Weighted average number of limited partner units outstanding, diluted:

                                           
 

Common units

                                  12,411,479     12,447,417  
 

Subordinated units

                                  12,397,000     12,397,000  

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  Rhino Energy LLC Historical    
   
 
 
  Consolidated   Condensed
Consolidated
  Rhino Resource Partners LP
Pro Forma Condensed
Consolidated
 
 
  Year Ended December 31,   Three Months Ended
March 31,
  Year Ended
December 31,
  Three Months
Ended
March 31,
 
 
   
  2008
(as restated)
   
 
 
  2007   2009   2009   2010   2009   2010  
 
  (in thousands, except per ton data)
 

Statement of Cash Flows Data:

                                           

Net cash provided by (used in):

                                           
 

Operating activities

  $ 52,493   $ 57,211   $ 41,495   $ 3,274   $ 4,555              
 

Investing activities

  $ (28,098 ) $ (106,638 ) $ (27,345 ) $ (11,732 ) $ (6,541 )            
 

Financing activities

  $ (21,192 ) $ 47,781   $ (15,401 ) $ 7,028   $ 1,647              

Other Financial Data:

                                           

EBITDA

  $ 66,917   $ 42,858   $ 61,964   $ 13,119   $ 15,779   $ 61,964   $ 15,779  

Capital expenditures (1)

  $ 32,773   $ 92,741   $ 29,657   $ 10,965   $ 6,637   $ 29,657   $ 6,637  

Balance Sheet Data (at period end):

                                           

Cash and cash equivalents

  $ 3,583   $ 1,937   $ 687   $ 508   $ 347   $ 687   $ 347  

Property and equipment, net

  $ 211,657   $ 282,863   $ 270,680   $ 283,685   $ 269,603   $ 270,680   $ 269,603  

Total assets

  $ 275,992   $ 352,536   $ 339,985   $ 369,112   $ 347,488   $ 339,985   $ 347,488  

Total liabilities

  $ 158,152   $ 234,225   $ 201,584   $ 248,825   $ 202,543   $ 134,634   $ 135,593  

Total debt

  $ 83,954   $ 133,077   $ 122,137   $ 145,107   $ 123,833   $ 55,187   $ 56,883  

Members'/partners' equity

  $ 117,841   $ 118,311   $ 138,401   $ 120,287   $ 144,944   $ 205,351   $ 211,894  

Operating Data (2):

                                           

Tons of coal sold

    8,159     7,977     6,699     1,939     949     6,699     949  

Tons of coal produced/purchased

    8,024     8,017     6,732     1,991     1,044     6,732     1,044  

Coal revenues per ton (3)

  $ 48.30   $ 51.25   $ 59.98   $ 58.33   $ 65.98   $ 59.98   $ 65.98  

Cost of operations per ton (4)

  $ 39.02   $ 45.75   $ 50.21   $ 50.69   $ 48.82   $ 50.21   $ 48.82  

(1)
The following table presents a reconciliation of total capital expenditures to net cash used for capital expenditures on a historical basis for each of the periods indicated:

 
  Rhino Energy LLC Historical  
 
  Consolidated   Condensed
Consolidated
 
 
  Year Ended December 31,   Three Months Ended
March 31,
 
 
  2007   2008   2009   2009   2010  
 
  (in thousands)
 

Reconciliation of total capital expenditures to net cash used for capital expenditures:

                               

Additions to property, plant and equipment

  $ 14,599   $ 78,076   $ 27,836   $ 9,144   $ 6,637  

Acquisitions of coal companies and coal properties

    18,174     14,665     1,821     1,821      
                       

Total capital expenditures

  $ 32,773   $ 92,741   $ 29,657   $ 10,965   $ 6,637  
                       
(2)
In May 2008, we entered into a joint venture with an affiliate of Patriot Coal Corporation, or Patriot, that acquired the Rhino Eastern mining complex which commenced production in August 2008. We have a 51% membership interest in, and serve as manager for, the joint venture. The operating data do not include data with respect to the Rhino Eastern mining complex. The joint venture produced and sold approximately 0.2 million tons and approximately 0.1 million tons of premium mid-vol metallurgical coal for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively.
(3)
Coal revenues per ton represent total coal revenues, derived from the sale of coal from all business segments, divided by total tons of coal sold for all segments.
(4)
Cost of operations per ton represents the cost of operations (exclusive of depreciation, depletion and amortization) from all business segments divided by total tons of coal sold for all segments.

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Non-GAAP Financial Measure

        EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, to assess:

        EBITDA should not be considered an alternative to net income, income from operations, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA excludes some, but not all, items that affect net income, income from operations and cash flows from operating activities, and these measures may vary among other companies.

        EBITDA as presented below may not be comparable to similarly titled measures of other companies. The following table presents a reconciliation of EBITDA to the most directly comparable GAAP financial measures, on a historical basis and pro forma basis, as applicable, for each of the periods indicated.

 
  Rhino Energy LLC Historical    
   
 
 
  Consolidated   Condensed
Consolidated
  Rhino Resource Partners LP
Pro Forma Condensed
Consolidated
 
 
  Year Ended December 31,   Three Months
Ended
March 31,
  Year Ended December 31,   Three Months
Ended
March 31,
 
 
   
  2008
(as restated)
   
 
 
  2007   2009   2009   2010   2009   2010  
 
  (in thousands)
 

Reconciliation of EBITDA to net income:

                                           

Net income

  $ 30,714   $ 929   $ 19,462   $ 1,976   $ 6,544   $ 21,394   $ 7,023  

Plus:

                                           
 

Depreciation, depletion and amortization

    30,750     36,428     36,279     9,974     7,765     36,279     7,765  
 

Interest expense

    5,579     5,501     6,222     1,170     1,471     4,291     992  

Less:

                                           
 

Income tax benefit

    126                          
                               

EBITDA

  $ 66,917   $ 42,858   $ 61,964   $ 13,119   $ 15,779   $ 61,964   $ 15,779  
                               

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  Rhino Energy LLC Historical  
 
  Consolidated   Condensed
Consolidated
 
 
  Year Ended December 31,   Three Months
Ended
March 31,
 
 
   
  2008
(as restated)
   
 
 
  2007   2009   2009   2010  
 
  (in thousands)
 

Reconciliation of EBITDA to net cash provided by operating activities:

                               

Net cash provided by operating activities

  $ 52,493   $ 57,211   $ 41,495   $ 3,274   $ 4,555  

Plus:

                               
 

Increase in net operating assets

    10,553         17,190     9,601     10,828  
 

Decrease in provision for doubtful accounts

    175                  
 

Gain on sale of assets

    944                 1  
 

Gain on retirement of advance royalties

    115                  
 

Interest expense

    5,579     5,501     6,222     1,170     1,471  
 

Settlement of litigation

            1,773          
 

Equity in net income of unconsolidated affiliate

            893          

Less:

                               
 

Decrease in net operating assets

        10,440              
 

Accretion on interest-free debt

    360     569     200     44     49  
 

Amortization of advance royalties

    700     471     215     83     276  
 

Increase in provision for doubtful accounts

            19          
 

Loss on sale of assets

        451     1,710          
 

Loss on retirement of advance royalties

        45     712         78  
 

Income tax benefit

    126                  
 

Accretion on asset retirement obligations

    1,757     2,709     2,753     756     542  
 

Equity in net loss of unconsolidated affiliate

        1,587         43     130  
 

Payment of abandoned public offering expenses (a)

        3,582              
                       

EBITDA

  $ 66,917   $ 42,858   $ 61,964   $ 13,119   $ 15,779  
                       

(a)
In 2008, we attempted an initial public offering, which was not consummated. We recorded the related deferred costs as a selling, general and administrative, or SG&A, expense in August of that year.

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RISK FACTORS

        Limited partner interests are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. You should carefully consider the following risk factors together with all of the other information included in this prospectus in evaluating an investment in our common units.

        If any of the following risks were to occur, our business, financial condition, results of operations and cash available for distribution could be materially adversely affected. In that case, we might not be able to make distributions on our common units, the trading price of our common units could decline, and you could lose all or part of your investment.

Risks Inherent in Our Business

We may not have sufficient cash to enable us to pay the minimum quarterly distribution on our common units following establishment of cash reserves and payment of costs and expenses, including reimbursement of expenses to our general partner.

        We may not have sufficient cash each quarter to pay the full amount of our minimum quarterly distribution of $0.445 per unit, or $1.78 per unit per year, which will require us to have available cash of approximately $11.3 million per quarter, or $45.0 million per year, based on the number of common and subordinated units and the general partner interest to be outstanding after the completion of this offering. The amount of cash we can distribute on our common and subordinated units principally depends upon the amount of cash we generate from our operations, which will fluctuate from quarter to quarter based on, among other things:

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        For a description of additional restrictions and factors that may affect our ability to pay cash distributions, please read "Cash Distribution Policy and Restrictions on Distributions."

We must generate approximately $45.0 million of available cash from operating surplus to pay the minimum quarterly distribution for four quarters on all of our common units and subordinated units that will be outstanding immediately after this offering and the corresponding distribution on our general partner interest. For the year ended December 31, 2009 and the twelve months ended March 31, 2010, we would have generated approximately $33.4 million and $39.3 million of available cash from operating surplus, respectively, and would have been able to pay the full minimum quarterly distribution on all of our common units, but only approximately 48.3% and 74.8%, respectively, of the minimum quarterly distribution on our subordinated units during those periods.

        We must generate approximately $45.0 million (or approximately $11.3 million per quarter) of available cash to pay the minimum quarterly distribution for four quarters on all of our common units and subordinated units that will be outstanding immediately after this offering and the corresponding distribution on our general partner interest. We did not generate $45.0 million of available cash from operating surplus during the year ended December 31, 2009 or the twelve months ended March 31, 2010. The amount of available cash from operating surplus we generated with respect to those periods was approximately $33.4 million and $39.3 million, respectively. As a result, for those periods, we would have generated aggregate available cash sufficient to pay 100% of the aggregate minimum quarterly distribution on our common units, but only approximately 48.3% and 74.8%, respectively, of the minimum quarterly distribution on our subordinated units during those periods. We have not used quarter-by-quarter estimates for each quarter in the year ended December 31, 2009 and the twelve months ended March 31, 2010 to determine if we would have generated available cash sufficient to pay the minimum quarterly distribution for each quarter during those periods.

The assumptions underlying our forecast of cash available for distribution included in "Cash Distribution Policy and Restrictions on Distributions" are inherently uncertain and subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause cash available for distribution to differ materially from those estimated.

        We would have generated sufficient cash available for distribution to pay 100% of the minimum quarterly distribution on all of our common units during the year ended December 31, 2009 and the twelve months ended March 31, 2010, but only approximately 48.3% and 74.8%, respectively, of the minimum quarterly distribution on our subordinated units during those periods. The forecast of cash available for distribution set forth in "Cash Distribution Policy and Restrictions on Distributions" includes our forecast of our results of operations and cash available for distribution for the twelve months ending June 30, 2011. Our ability to pay the full minimum quarterly distribution in the forecast period is based on a number of assumptions that

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may not prove to be correct, which are discussed in "Cash Distribution Policy and Restrictions on Distributions." These assumptions include, but are not limited to, the following:

        Our forecast of cash available for distribution has been prepared by management, and we have not received an opinion or report on it from any independent registered public accountants. The assumptions underlying our forecast of cash available for distribution are inherently uncertain and are subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause cash available for distribution to differ materially from that which is forecasted. If we do not achieve our forecasted results, we may not be able to pay the minimum quarterly distribution or any amount on our common units or subordinated units, in which event the market price of our common units may decline materially. Please read "Cash Distribution Policy and Restrictions on Distributions."

A decline in coal prices could adversely affect our results of operations and cash available for distribution to our unitholders.

        Our results of operations and the value of our coal reserves are significantly dependent upon the prices we receive for our coal as well as our ability to improve productivity and control costs. The prices we receive for coal depend upon factors beyond our control, including:

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        Any adverse change in these factors could result in weaker demand and lower prices for our products. In addition, the recent global economic downturn, particularly with respect to the U.S. economy, coupled with the global financial and credit market disruptions, have had an impact on the coal industry generally and may continue to do so until economic conditions improve. The demand for electricity in the United States decreased during 2009 as compared to 2008, which led to a decline in the demand for and prices of coal. The demand for electricity may remain at low levels or further decline if economic conditions remain weak. If these trends continue, we may not be able to sell all of the coal we are capable of producing or sell our coal at prices comparable to recent years. Recent low prices for natural gas, which is a substitute for coal generated power, may also lead to continued decreased coal consumption by electricity-generating utilities. A substantial or extended decline in the prices we receive for our coal supply contracts could materially and adversely affect our results of operations.

We could be negatively impacted by the competitiveness of the global markets in which we compete and declines in the market demand for coal.

        We compete with coal producers in various regions of the United States and overseas for domestic and international sales. The domestic demand for, and prices of, our coal primarily depend on coal consumption patterns of the domestic electric utility industry and the domestic steel industry. Consumption by the domestic electric utility industry is affected by the demand for electricity, environmental and other governmental regulations, technological developments and the price of competing coal and alternative fuel sources, such as natural gas, nuclear, hydroelectric power and other renewable energy sources. Consumption by the domestic steel industry is primarily affected by economic growth and the demand for steel used in construction as well as appliances and automobiles. In recent years, the competitive environment for coal was impacted by sustained growth in a number of the largest markets in the world, including the United States, China, Japan and India, where demand for both electricity and steel have supported prices for steam and metallurgical coal. The economic stability of these markets has a significant effect on the demand for coal and the level of competition in supplying these markets. The cost of ocean transportation and the value of the U.S. dollar in relation to foreign currencies significantly impact the relative attractiveness of our coal as we compete on price with foreign coal producing sources. During the last several years, the U.S. coal industry has experienced increased consolidation, which has contributed to the industry becoming more competitive. Increased competition by coal producers or producers of alternate fuels could decrease the demand for, or pricing of, or both, for our coal, adversely impacting our results of operations and cash available for distribution.

        Portions of our coal reserves possess quality characteristics that enable us to mine, process and market them as either metallurgical coal or high quality steam coal, depending on prevailing market conditions. A decline in the metallurgical market relative to the steam market could cause us to shift coal from the metallurgical market to the steam market, potentially reducing the price we could obtain for this coal and adversely impacting our cash flows, results of operations and cash available for distribution.

Our mining operations are subject to extensive and costly environmental laws and regulations, and such current and future laws and regulations could materially increase our operating costs or limit our ability to produce and sell coal.

        The coal mining industry is subject to numerous and extensive federal, state and local environmental laws and regulations, including laws and regulations pertaining to permitting and

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licensing requirements, air quality standards, plant and wildlife protection, reclamation and restoration of mining properties, the discharge of materials into the environment, the storage, treatment and disposal of wastes, protection of wetlands, surface subsidence from underground mining and the effects that mining has on groundwater quality and availability. The costs, liabilities and requirements associated with these laws and regulations are significant and time-consuming and may delay commencement or continuation of our operations. Moreover, the possibility exists that new laws or regulations (or new judicial interpretations or enforcement policies of existing laws and regulations) could materially affect our mining operations, results of operations and cash available for distribution to our unitholders, either through direct impacts such as those regulating our existing mining operations, or indirect impacts such as those that discourage or limit our customers' use of coal. Although we believe that we are in substantial compliance with existing laws and regulations, we may, in the future, experience violations that would subject us to administrative, civil and criminal penalties and a range of other possible sanctions. The enforcement of laws and regulations governing the coal mining industry has increased substantially. As a result, the consequences for any noncompliance may become more significant in the future.

        Our operations use petroleum products, coal processing chemicals and other materials that may be considered "hazardous materials" under applicable environmental laws and have the potential to generate other materials, all of which may affect runoff or drainage water. In the event of environmental contamination or a release of these materials, we could become subject to claims for toxic torts, natural resource damages and other damages and for the investigation and clean up of soil, surface water, groundwater, and other media, as well as abandoned and closed mines located on property we operate. Such claims may arise out of conditions at sites that we currently own or operate, as well as at sites that we previously owned or operated, or may acquire.

The government extensively regulates our mining operations, especially with respect to mine safety and health, which imposes significant actual and potential costs on us, and future regulation could increase those costs or limit our ability to produce coal.

        Coal mining is subject to inherent risks to safety and health. As a result, the coal mining industry is subject to stringent safety and health standards. Recent fatal mining accidents in West Virginia have received national attention and have led to responses at the state and national levels that have resulted in increased scrutiny of coal mining operations, particularly underground mining operations. More stringent state and federal mine safety laws and regulations have included increased sanctions for non-compliance. Moreover, workplace accidents are likely to result in more stringent enforcement and possibly the passage of new laws and regulations.

        In 2006, the Federal Mine Improvement and New Emergency Response Act of 2006, or the MINER Act, was enacted. The MINER Act significantly amended the Federal Mine Safety and Health Act of 1977, or the Mine Act, imposing more extensive and stringent compliance standards, increasing criminal penalties and establishing a maximum civil penalty for non-compliance, and expanding the scope of federal oversight, inspection, and enforcement activities. Following the passage of the MINER Act, the U.S. Mine Safety and Health Administration, or MSHA, issued new or more stringent rules and policies on a variety of topics, including:

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        Subsequent to passage of the MINER Act, Illinois, Kentucky, Pennsylvania, Ohio and West Virginia have enacted legislation addressing issues such as mine safety and accident reporting, increased civil and criminal penalties, and increased inspections and oversight. Other states may pass similar legislation in the future. Also, additional federal and state legislation that further increase mine safety regulation, inspection and enforcement, particularly with respect to underground mining operations, has been considered in light of recent fatal mine accidents. Further workplace accidents are likely to also result in more stringent enforcement and possibly the passage of new laws and regulations.

        Although we are unable to quantify the full impact, implementing and complying with these new laws and regulations could have an adverse impact on our results of operations and cash available for distribution to our unitholders and could result in harsher sanctions in the event of any violations. Please read "Business—Regulation and Laws."

Penalties, fines or sanctions levied by MSHA could have a material adverse effect on our business, results of operations and cash available for distribution. Our Mine 28 recently received a number of notices of violation from MSHA.

        Surface and underground mines like ours are continuously inspected by MSHA, which often leads to notices of violation. Recently, MSHA has been conducting more frequent and more comprehensive inspections.

        Recently, our Mine 28 was included on a list of forty eight mines that would have faced "pattern of violation" sanctions had the owners/operators of such mines not contested the notices of violation. This list was publicly released by U.S. Representative George Miller on April 14, 2010. MSHA inspected Mine 28 again promptly thereafter, and issued additional notices of violation. As a result of these and future inspections and alleged violations, we could be subject to material fines, penalties or sanctions. Mine 28, as well as any of our other mines, could be subject to a temporary or extended shut down as a result of an alleged MSHA violation. Any such penalties, fines or sanctions could have a material adverse effect on our business, results of operations and cash available for distribution.

We may be unable to obtain and/or renew permits necessary for our operations, which could prevent us from mining certain reserves.

        Numerous governmental permits and approvals are required for mining operations, and we can face delays, challenges to, and difficulties in acquiring, maintaining or renewing necessary permits and approvals, including environmental permits. The permitting rules, and the interpretations of these rules, are complex, change frequently, and are often subject to discretionary interpretations by regulators, all of which may make compliance more difficult or

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impractical, and may possibly preclude the continuance of ongoing mining operations or the development of future mining operations. In addition, the public has certain statutory rights to comment upon and otherwise impact the permitting process, including through court intervention. Over the past few years, the length of time needed to bring a new surface mine into production has increased because of the increased time required to obtain necessary permits. The slowing pace at which permits are issued or renewed for new and existing mines has materially impacted production in certain regions, primarily in Central Appalachia, but could also affect Northern Appalachia and other regions in the future.

        Individual or general permits under Section 404 of the federal Clean Water Act, or the CWA, are required to discharge dredged or fill material into waters of the United States. Surface coal mining operators obtain such permits to authorize such activities as the creation of slurry ponds, stream impoundments, and valley fills. The U.S. Army Corps of Engineers, or the Corps, is authorized to issue "nationwide" permits for specific categories of activities that are similar in nature and that are determined to have minimal adverse environmental effects. Nationwide Permit 21, or NWP 21, authorizes the disposal of dredged or fill material from mining activities into the waters of the United States. However on June 17, 2010, the Corps suspended the use of NWP 21, but NWP 21 authorizations already granted remain in effect. Individual Section 404 permits for valley fill surface mining activities, which we also currently utilize, are subject to legal uncertainties. On March 23, 2007, the United States District Court for the Southern District of West Virginia rescinded several individual Section 404 permits issued to other mining operations based on a finding that the Corps issued the permits in violation of the CWA and the National Environmental Policy Act, or NEPA. This decision is currently on appeal to the United States Court of Appeals for the Fourth Circuit. Additionally, on March 26, 2010, the U.S. Environmental Protection Agency, or EPA, announced a proposal to exercise its Section 404(c) "veto" power with regard to the Spruce No. 1 Surface Mine in West Virginia, which was previously permitted in 2007. This would be the first time the EPA's Section 404(c) "veto" power would be applied to a previously permitted project. Moreover, on April 1, 2010, the EPA issued interim final guidance substantially revising the environmental review of Section 402 and Section 404 permits by state and federal agencies. Please read "Business—Regulation and Laws—Clean Water Act" for a discussion of recent litigation and regulatory developments related to the CWA. An inability to conduct our mining operations pursuant to applicable permits would reduce our production and cash flows, which could limit our ability to make distributions to our unitholders.

Our mining operations are subject to operating risks that could adversely affect production levels and operating costs.

        Our mining operations are subject to conditions and events beyond our control that could disrupt operations, resulting in decreased production levels and increased costs.

        These risks include:

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        Any of these conditions may increase the cost of mining and delay or halt production at particular mines for varying lengths of time, which in turn could adversely affect our results of operations and cash available for distribution to our unitholders.

        Mining accidents present a risk of various potential liabilities depending on the nature of the accident, the location, the proximity of employees or other persons to the accident scene and a range of other factors. Possible liabilities arising from a mining accident include workmen's compensation claims or civil lawsuits for workplace injuries, claims for personal injury or property damage by people living or working nearby and fines and penalties including possible criminal enforcement against us and certain of our employees. In addition, a significant accident that results in a mine shut-down could give rise to liabilities for failure to meet the requirements of coal-supply agreements especially if the counterparties dispute our invocation of the force majeure provisions of those agreements. We maintain insurance coverage as a strategy to mitigate the risks of certain of these liabilities, including business interruption insurance, but those policies are subject to various exclusions and limitations and we cannot assure you that we will receive coverage under those policies for any personal injury, property damage or business interruption claims that may arise out of such an accident. Moreover, certain potential liabilities such as fines and penalties are not insurable risks. Thus, a serious mine accident may result in material liabilities that adversely affect our results of operations and cash available for distribution.

Fluctuations in transportation costs or disruptions in transportation services could increase competition or impair our ability to supply coal to our customers, which could adversely affect our results of operations and cash available for distribution to our unitholders.

        Transportation costs represent a significant portion of the total cost of coal for our customers and, as a result, the cost of transportation is a critical factor in a customer's purchasing decision. Increases in transportation costs could make coal a less competitive energy source or could make our coal production less competitive than coal produced from other sources.

        Significant decreases in transportation costs could result in increased competition from coal producers in other regions. For instance, coordination of the many eastern U.S. coal loading facilities, the large number of small shipments, the steeper average grades of the terrain and a more unionized workforce are all issues that combine to make shipments originating in the eastern United States inherently more expensive on a per-mile basis than shipments originating in the western United States. Historically, high coal transportation rates from the western coal producing regions limited the use of western coal in certain eastern markets. The increased competition could have an adverse effect on our results of operations and cash available for distribution to our unitholders.

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        We depend primarily upon railroads, barges and trucks to deliver coal to our customers. Disruption of any of these services due to weather-related problems, strikes, lockouts, accidents, mechanical difficulties and other events could temporarily impair our ability to supply coal to our customers, which could adversely affect our results of operations and cash available for distribution to our unitholders.

        In recent years, the states of Kentucky and West Virginia have increased enforcement of weight limits on coal trucks on their public roads. It is possible that other states may modify their laws to limit truck weight limits. Such legislation and enforcement efforts could result in shipment delays and increased costs. An increase in transportation costs could have an adverse effect on our ability to increase or to maintain production and could adversely affect our results of operations and cash available for distribution.

A shortage of skilled labor in the mining industry could reduce productivity and increase operating costs, which could adversely affect our results of operations and cash available for distribution to our unitholders.

        Efficient coal mining using modern techniques and equipment requires skilled laborers. The coal industry is experiencing a shortage of skilled labor as well as rising labor and benefit costs, due in large part to demographic changes as existing miners retire at a faster rate than new miners are entering the workforce. If the shortage of experienced labor continues or worsens or coal producers are unable to train enough skilled laborers, there could be an adverse impact on labor productivity, an increase in our costs and our ability to expand production may be limited. If coal prices decrease or our labor prices increase, our results of operations and cash available for distribution to our unitholders could be adversely affected.

Unexpected increases in raw material costs, such as steel, diesel fuel and explosives could adversely affect our results of operations.

        Our coal mining operations are affected by commodity prices. We use significant amounts of steel, diesel fuel, explosives and other raw materials in our mining operations, and volatility in the prices for these raw materials could have a material adverse effect on our operations. We typically hedge our exposure to commodity prices, such as diesel fuel and explosives, through forward purchase contracts with our suppliers. Steel prices and the prices of scrap steel, natural gas and coking coal consumed in the production of iron and steel fluctuate significantly and may change unexpectedly. For example, steel prices have recently increased. Additionally, a limited number of suppliers exist for explosives, and any of these suppliers may divert their products to other industries. Shortages in raw materials used in the manufacturing of explosives, which, in some cases, do not have ready substitutes, or the cancellation of supply contracts under which these raw materials are obtained, could increase the prices and limit the ability of our contractors to obtain these supplies. Future volatility in the price of steel, diesel fuel, explosives or other raw materials will impact our operating expenses and could adversely affect our results of operations and cash available for distribution.

If we are not able to acquire replacement coal reserves that are economically recoverable, our results of operations and cash available for distribution to our unitholders could be adversely affected.

        Our results of operations and cash available for distribution to our unitholders depend substantially on obtaining coal reserves that have geological characteristics that enable them to be mined at competitive costs and to meet the coal quality needed by our customers. Because we deplete our reserves as we mine coal, our future success and growth will depend, in part, upon our ability to acquire additional coal reserves that are economically recoverable. If we fail to

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acquire or develop additional reserves, our existing reserves will eventually be depleted. Replacement reserves may not be available when required or, if available, may not be capable of being mined at costs comparable to those characteristic of the depleting mines. We may not be able to accurately assess the geological characteristics of any reserves that we acquire, which may adversely affect our results of operations and cash available for distribution to our unitholders. Exhaustion of reserves at particular mines with certain valuable coal characteristics also may have an adverse effect on our operating results that is disproportionate to the percentage of overall production represented by such mines. Our ability to obtain other reserves in the future could be limited by restrictions under our existing or future debt agreements, competition from other coal companies for attractive properties, the lack of suitable acquisition candidates or the inability to acquire coal properties on commercially reasonable terms.

Inaccuracies in our estimates of coal reserves and non-reserve coal deposits could result in lower than expected revenues and higher than expected costs.

        We base our and the joint venture's coal reserve and non-reserve coal deposit estimates on engineering, economic and geological data assembled and analyzed by our staff, which is periodically audited by independent engineering firms. These estimates are also based on the expected cost of production and projected sale prices and assumptions concerning the permitability and advances in mining technology. The estimates of coal reserves and non-reserve coal deposits as to both quantity and quality are periodically updated to reflect the production of coal from the reserves, updated geologic models and mining recovery data, recently acquired coal reserves and estimated costs of production and sales prices. There are numerous factors and assumptions inherent in estimating quantities and qualities of coal reserves and non-reserve coal deposits and costs to mine recoverable reserves, including many factors beyond our control. Estimates of economically recoverable coal reserves necessarily depend upon a number of variable factors and assumptions, all of which may vary considerably from actual results. These factors and assumptions relate to:

        For these reasons, estimates of the quantities and qualities of the economically recoverable coal attributable to any particular group of properties, classifications of coal reserves and non-reserve coal deposits based on risk of recovery, estimated cost of production and estimates of net cash flows expected from particular reserves as prepared by different engineers or by the

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same engineers at different times may vary materially due to changes in the above factors and assumptions. Actual production from identified coal reserve and non-reserve coal deposit areas or properties and revenues and expenditures associated with our and the joint venture's mining operations may vary materially from estimates. Accordingly, these estimates may not reflect our and the joint venture's actual coal reserves or non-reserve coal deposits. Any inaccuracy in our estimates related to our and the joint venture's coal reserves and non-reserve coal deposits could result in lower than expected revenues and higher than expected costs, which could have a material adverse effect on our ability to make cash distributions.

The amount of estimated maintenance capital expenditures our general partner is required to deduct from operating surplus each quarter could increase in the future, resulting in a decrease in available cash from operating surplus that could be distributed to our unitholders.

        Our partnership agreement requires our general partner to deduct from operating surplus each quarter estimated maintenance capital expenditures as opposed to actual maintenance capital expenditures in order to reduce disparities in operating surplus caused by fluctuating maintenance capital expenditures, such as reserve replacement costs or refurbishment or replacement of mine equipment. Our initial annual estimated maintenance capital expenditures for purposes of calculating operating surplus will be approximately $15.5 million. This amount is based on our current estimates of the amounts of expenditures we will be required to make in the future to maintain our long-term operating capacity, which we believe to be reasonable. Our partnership agreement does not cap the amount of maintenance capital expenditures that our general partner may estimate. This amount has been taken into consideration in calculating our forecasted cash available for distribution in "Cash Distribution Policy and Restrictions on Distributions." The initial amount of our estimated maintenance capital expenditures may be more than our initial actual maintenance capital expenditures, which will reduce the amount of available cash from operating surplus that we would otherwise have available for distribution to unitholders. The amount of estimated maintenance capital expenditures deducted from operating surplus is subject to review and change by the board of directors of our general partner at least once a year, with any change approved by the conflicts committee. In addition to estimated maintenance capital expenditures, reimbursement of expenses incurred by our general partner and its affiliates will reduce the amount of available cash from operating surplus that we would otherwise have available for distribution to our unitholders. Please see "Risks Inherent in an Investment in Us—Cost reimbursements due to our general partner and its affiliates for services provided to us or on our behalf will reduce cash available for distribution to our unitholders. The amount and timing of such reimbursements will be determined by our general partner."

Existing and future laws and regulations regulating the emission of sulfur dioxide and other compounds could affect coal consumers and as a result reduce the demand for our coal. A reduction in demand for our coal could adversely affect our results of operations and cash available for distribution to our unitholders.

        Federal, state and local laws and regulations extensively regulate the amount of sulfur dioxide, particulate matter, nitrogen oxides, mercury and other compounds emitted into the air from electric power plants and other consumers of our coal. These laws and regulations can require significant emission control expenditures, and various new and proposed laws and regulations may require further emission reductions and associated emission control expenditures. A certain portion of our coal has a medium to high sulfur content, which results in increased sulfur dioxide emissions when combusted and therefore the use of our coal imposes certain additional costs on customers. Accordingly, these laws and regulations may affect demand and prices for our higher sulfur coal. Please read "Business—Regulation and Laws."

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Federal and state laws restricting the emissions of greenhouse gases in areas where we conduct our business or sell our coal could adversely affect our operations and demand for our coal.

        Recent scientific studies have suggested that emissions of certain gases, commonly referred to as "greenhouse gases" and including carbon dioxide and methane, may be contributing to warming of the Earth's atmosphere. In response to such studies, the U.S. Congress is considering legislation to reduce emissions of greenhouse gases. Many states have already taken legal measures to reduce emissions of greenhouse gases, primarily through the development of regional greenhouse gas cap-and-trade programs.

        In the wake of the Supreme Court's April 2, 2007 decision in Massachusetts, et al. v. EPA, which held that greenhouse gases fall under the definition of "air pollutant" in the federal Clean Air Act, or CAA, in December 2009, the Environmental Protection Agency, or EPA, issued a final rule declaring that six greenhouse gases, including carbon dioxide and methane, "endanger both the public health and the public welfare of current and future generations." The issuance of this "endangerment finding" allows the EPA to begin regulating greenhouse gas emissions under existing provisions of the federal CAA. In late September and early October 2009, in anticipation of the issuance of the endangerment finding, the EPA officially proposed two sets of rules regarding possible future regulation of greenhouse gas emissions under the CAA. One of these proposals would require the use of the best available control technology for greenhouse gas emissions whenever certain stationary sources, such as power plants, are built or significantly modified.

        The permitting of new coal-fired power plants has also recently been contested by state regulators and environmental organizations for concerns related to greenhouse gas emissions from the new plants. In October 2007, state regulators in Kansas became the first to deny an air emissions construction permit for a new coal-fired power plant based on the plant's projected emissions of carbon dioxide. Other state regulatory authorities have also rejected the construction of new coal-fired power plants based on the uncertainty surrounding the potential costs associated with greenhouse gas emissions from these plants under future laws limiting the emissions of carbon dioxide. In addition, several permits issued to new coal-fired power plants without limits on greenhouse gas emissions have been appealed to EPA's Environmental Appeals Board.

        As a result of these current and proposed laws, regulations and trends, electricity generators may elect to switch to other fuels that generate less greenhouse gas emissions, possibly further reducing demand for our coal, which could adversely affect our results of operations and cash available for distribution to our unitholders. Please read "Business—Regulation and Laws—Carbon Dioxide Emissions."

Federal and state laws require bonds to secure our obligations to reclaim mined property. Our inability to acquire or failure to maintain, obtain or renew these surety bonds could have an adverse effect on our ability to produce coal, which could adversely affect our results of operations and cash available for distribution to our unitholders.

        We are required under federal and state laws to place and maintain bonds to secure our obligations to repair and return property to its approximate original state after it has been mined (often referred to as "reclamation") and to satisfy other miscellaneous obligations. Federal and state governments could increase bonding requirements in the future. Certain business transactions, such as coal leases and other obligations, may also require bonding. We may have difficulty procuring or maintaining our surety bonds. Our bond issuers may demand higher fees, additional collateral, including supporting letters of credit or posting cash collateral, or other

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terms less favorable to us upon those renewals. The failure to maintain or the inability to acquire sufficient surety bonds, as required by state and federal laws, could subject us to fines and penalties as well as the loss of our mining permits. Such failure could result from a variety of factors, including:

        We maintain surety bonds with third parties for reclamation expenses and other miscellaneous obligations. It is possible that we may in the future have difficulty maintaining our surety bonds for mine reclamation. Due to current economic conditions and the volatility of the financial markets, surety bond providers may be less willing to provide us with surety bonds or maintain existing surety bonds or may demand terms that are less favorable to us than the terms we currently receive. We may have greater difficulty satisfying the liquidity requirements under our existing surety bond contracts. As of March 31, 2010, we had $65.8 million in reclamation surety bonds, secured by $18.5 million in letters of credit outstanding under our credit agreement. Our credit agreement provides for a $200 million working capital revolving credit agreement, of which up to $50.0 million may be used for letters of credit. If we do not maintain sufficient borrowing capacity under our revolving credit agreement for additional letters of credit, we may be unable to obtain or renew surety bonds required for our mining operations. For more information, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreement." If we do not maintain sufficient borrowing capacity or have other resources to satisfy our surety and bonding requirements, our operations and cash available for distribution to our unitholders could be adversely affected.

We depend on a few customers for a significant portion of our revenues. If a substantial portion of our supply contracts terminate or if any of these customers were to significantly reduce their purchases of coal from us, and we are unable to successfully renegotiate or replace these contracts on comparable terms, then our results of operations and cash available for distribution to our unitholders could be adversely affected.

        We sell a material portion of our coal under supply contracts. As of July 13, 2010 we had sales commitments for approximately 99% and 80% of our estimated coal production (including purchased coal to supplement our production and excluding results from the joint venture) for the year ending December 31, 2010 and the twelve months ending June 30, 2011, respectively. When our current contracts with customers expire, our customers may decide not to extend or enter into new contracts. As of July 13, 2010, we had supply contracts for commitments that expire between July 31, 2010 and December 31, 2014. Of these committed tons, under the terms of the supply contracts, we will ship 20% during the remainder of 2010, 26% in 2011, 24% in 2012, 21% in 2013 and 9% in 2014. We derived approximately 85% and 86% of our total revenues from coal sales (excluding results from the joint venture) to our ten largest customers for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively, with affiliates of our top three customers accounting for approximately 52.2% and approximately 48.6% of our coal sales revenues for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively.

        In the absence of long-term contracts, our customers may decide to purchase fewer tons of coal than in the past or on different terms, including different pricing terms. Negotiations to

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extend existing contracts or enter into new long-term contracts with those and other customers may not be successful, and those customers may not continue to purchase coal from us under long-term coal supply contracts or may significantly reduce their purchases of coal from us. Due to the recent volatility in the market prices for metallurgical coal, there has been a recent trend towards quarterly supply contracts. As a result, customers may be less willing to enter into long-term coal supply contracts for our metallurgical coal. In addition, interruption in the purchases by or operations of our principal customers could significantly affect our results of operations and cash available for distribution. Unscheduled maintenance outages at our customers' power plants and unseasonably moderate weather are examples of conditions that might cause our customers to reduce their purchases. Our mines may have difficulty identifying alternative purchasers of their coal if their existing customers suspend or terminate their purchases. The amount and terms of sales of coal produced from our Rhino Eastern mining complex are controlled by an affiliate of Patriot pursuant to the joint venture agreement. We cannot guarantee that Patriot will be successful in obtaining coal supply contracts at favorable prices, if at all, which could have a material adverse effect on our results of operations and cash available for distribution to our unitholders. For additional information relating to these contracts, please read "Business—Customers—Coal Supply Contracts."

Any change in consumption patterns by utilities away from the use of coal, such as resulting from current low natural gas prices, could affect our ability to sell the coal we produce, which could adversely affect our results of operations and cash available for distribution to our unitholders.

        Excluding results from the joint venture, steam coal accounted for approximately 95% of our coal sales volume for the year ended December 31, 2009 and approximately 86% of our coal sales volume for the three months ended March 31, 2010. The majority of our sales of steam coal for the year ended December 31, 2009 and the three months ended March 31, 2010 were to electric utilities for use primarily as fuel for domestic electricity consumption. According to the U.S. Department of Energy's Energy Information Administration, the domestic electric utility industry accounted for approximately 94% of domestic coal consumption in 2009. The amount of coal consumed by the domestic electric utility industry is affected primarily by the overall demand for electricity, environmental and other governmental regulations, and the price and availability of competing fuels for power plants such as nuclear, natural gas and oil as well as alternative sources of energy. We compete generally with producers of other fuels, such as natural gas and oil. A decline in price for these fuels, could cause demand for coal to decrease and adversely affect the price of our coal. For example, low natural gas prices have led, in some instances, to decreased coal consumption by electricity-generating utilities. If alternative energy sources, such as nuclear, hydroelectric, wind or solar, become more cost-competitive on an overall basis, demand for coal could decrease and the price of coal could be materially and adversely affected. Further, legislation requiring, subsidizing or providing tax benefit for the use of alternative energy sources and fuels, or legislation providing financing or incentives to encourage continuing technological advances in this area, could further enable alternative energy sources to become more competitive with coal. A decrease in coal consumption by the domestic electric utility industry could adversely affect the price of coal, which could materially adversely affect our results of operations and cash available for distribution to our unitholders.

Certain provisions in our long-term supply contracts may provide limited protection during adverse economic conditions, may result in economic penalties to us or permit the customer to terminate the contract.

        Price adjustment, "price re-opener" and other similar provisions in our supply contracts may reduce the protection from short-term coal price volatility traditionally provided by such contracts. As of July 13, 2010, one of our coal supply contracts relating to sales commitments for

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our estimated coal production through 2014 contained provisions that allow for the purchase price to be renegotiated at periodic intervals. This price re-opener provision requires the parties to agree on a new price. Failure of the parties to agree on a price under the price re-opener provision can lead to termination of the contract. Any adjustment or renegotiations leading to a significantly lower contract price could adversely affect our results of operations and cash available for distribution to our unitholders. We are currently renegotiating the purchase price pursuant to this price re-opener provision.

        Coal supply contracts also typically contain force majeure provisions allowing temporary suspension of performance by us or our customers during the duration of specified events beyond the control of the affected party. Most of our coal supply contracts also contain provisions requiring us to deliver coal meeting quality thresholds for certain characteristics such as Btu, sulfur content, ash content, hardness and ash fusion temperature. Failure to meet these specifications could result in economic penalties, including price adjustments, the rejection of deliveries or termination of the contracts. In addition, certain of our supply contracts permit the customer to terminate the agreement in the event of changes in regulations affecting our industry that increase the price of coal beyond a specified limit.

Disruption in supplies of coal produced by contractors operating at our mines could temporarily impair our ability to fill our customers' orders or increase our costs.

        We at times use contractors to operate certain of our mines. For both the year ended December 31, 2009 and the three months ended March 31, 2010, approximately 4% of our total coal production was from contractor-operated mines. Disruption in our supply of these contractors and outside vendors could temporarily impair our ability to fill our customers' orders or require us to pay higher prices in order to obtain the required coal from other sources. Operational difficulties at contractor-operated mines, changes in demand for contract miners from other coal producers and other factors beyond our control could affect the availability, pricing and quality of coal produced by our contractors. Any increase in the prices we pay for contractor-produced coal could increase our costs and therefore adversely affect our results of operations and cash available for distribution to our unitholders.

Defects in title in the properties that we own or loss of any leasehold interests could limit our ability to mine these properties or result in significant unanticipated costs.

        We conduct a significant part of our mining operations on leased properties. A title defect or the loss of any lease could adversely affect our ability to mine the associated reserves. Title to most of our owned and leased properties and the associated mineral rights is not usually verified until we make a commitment to develop a property, which may not occur until after we have obtained necessary permits and completed exploration of the property. In some cases, we rely on title information or representations and warranties provided by our grantors or lessors, as the case may be. Our right to mine some reserves would be adversely affected by defects in title or boundaries or if a lease expires. Any challenge to our title or leasehold interest could delay the exploration and development of the property and could ultimately result in the loss of some or all of our interest in the property. Mining operations from time to time may rely on a lease that we are unable to renew on terms at least as favorable, if at all. In such event, we may have to close down or significantly alter the sequence of mining operations or incur additional costs to obtain or renew such leases, which could adversely affect our future coal production. If we mine on property that we do not control, we could incur liability for such mining. Wexford will not indemnify us for losses attributable to title defects in the properties that we own or lease.

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Our work force could become unionized in the future, which could adversely affect our production and labor costs and increase the risk of work stoppages.

        Currently, none of our employees are represented under collective bargaining agreements. However, we cannot assure you that all of our work force will remain union-free in the future. If some or all of our work force were to become unionized, it could adversely affect our productivity and labor costs and increase the risk of work stoppages.

We depend on key personnel for the success of our business.

        We depend on the services of our senior management team and other key personnel. The loss of the services of any member of senior management or key employee could have an adverse effect on our business and reduce our ability to make distributions to our unitholders. We may not be able to locate or employ on acceptable terms qualified replacements for senior management or other key employees if their services were no longer available.

If the assumptions underlying our reclamation and mine closure obligations are materially inaccurate, we could be required to expend greater amounts than anticipated.

        The Federal Surface Mining Control and Reclamation Act of 1977 and counterpart state laws and regulations establish operational, reclamation and closure standards for all aspects of surface mining as well as most aspects of underground mining. Estimates of our total reclamation and mine closing liabilities are based upon permit requirements and our engineering expertise related to these requirements. The estimate of ultimate reclamation liability is reviewed both periodically by our management and annually by independent third-party engineers. The estimated liability can change significantly if actual costs vary from assumptions or if governmental regulations change significantly. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Asset Retirement Obligations." Wexford will not indemnify us against any reclamation or mine closing liabilities associated with our assets.

We may invest in non-coal natural resource assets, which could have a material adverse effect on our results of operations and cash available for distribution to our unitholders.

        Part of our business strategy is to expand our operations through strategic acquisitions, which may include investing in non-coal natural resources assets. Our management team has no experience investing in or operating non-coal natural resources assets and we may be unable to hire additional management with relevant expertise in acquiring and operating such assets. Furthermore, the acquisition of non-coal natural resource assets could expose us to new and additional operating and regulatory risks. Investments in non-coal natural resource assets could have a material adverse effect on our results of operations and cash available for distribution to our unitholders.

Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.

        Our level of indebtedness could have important consequences to us, including the following:

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        Increases in our total indebtedness would increase our total interest expense, which would in turn reduce our forecasted cash available for distribution. As of December 31, 2009 our current portion of long-term debt that will be funded from cash flows from operating activities during 2010 was approximately $2.2 million. Our ability to service our indebtedness will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing distributions, reducing or delaying our business activities, acquisitions, investments and/or capital expenditures, selling assets, restructuring or refinancing our indebtedness, or seeking additional equity capital or bankruptcy protection. We may not be able to effect any of these remedies on satisfactory terms, or at all.

Our credit agreement contains operating and financial restrictions that may restrict our business and financing activities and limit our ability to pay distributions upon the occurrence of certain events.

        The operating and financial restrictions and covenants in our credit agreement and any future financing agreements could restrict our ability to finance future operations or capital needs or to engage, expand or pursue our business activities. For example, our credit agreement restricts our ability to:

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        In addition, our payment of principal and interest on our debt will reduce cash available for distribution on our units. Our credit agreement limits our ability to pay distributions upon the occurrence of the following events, among others, which would apply to us and our subsidiaries:

        Any subsequent refinancing of our current debt or any new debt could have similar restrictions. Our ability to comply with the covenants and restrictions contained in our credit agreement may be affected by events beyond our control, including prevailing economic, financial and industry conditions. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we violate any of the restrictions, covenants, ratios or tests in our credit agreement, a significant portion of our indebtedness may become immediately due and payable, and our lenders' commitment to make further loans to us may terminate. We might not have, or be able to obtain, sufficient funds to make these accelerated payments. In addition, our obligations under our credit agreement will be secured by substantially all of our assets, and if we are unable to repay our indebtedness under our credit agreement, the lenders could seek to foreclose on such assets.

        For more information, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreement."

Risks Inherent in an Investment in Us

Wexford owns and controls our general partner, which has sole responsibility for conducting our business and managing our operations. Our general partner and its affiliates, including Wexford, have conflicts of interest with us and limited fiduciary duties, and they may favor their own interests to the detriment of us and our unitholders.

        Following the offering, Wexford will own and control our general partner and will appoint all of the directors of our general partner. Although our general partner has a fiduciary duty to manage us in a manner beneficial to us and our unitholders, the executive officers and directors of our general partner have a fiduciary duty to manage our general partner in a manner beneficial to Wexford. Therefore, conflicts of interest may arise between Wexford and its affiliates, including our general partner, on the one hand, and us and our unitholders, on the other hand. In resolving these conflicts of interest, our general partner may favor its own interests and the interests of its affiliates over the interests of our common unitholders.

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        In addition, Wexford currently holds substantial interests in other companies in the energy and natural resource sectors. We may compete directly with entities in which Wexford has an interest for acquisition opportunities and potentially will compete with these entities for new business or extensions of the existing services provided by us. Please read "—Our sponsor, Wexford Capital, and affiliates of our general partner may compete with us" and "Conflicts of Interest and Fiduciary Duties."

Common units held by unitholders who are not eligible citizens will be subject to redemption.

        In order to comply with U.S. laws with respect to the ownership of interests in mineral leases on federal lands, we have adopted certain requirements regarding those investors who own our common units. As used in this prospectus, an eligible citizen means a person or entity qualified to hold an interest in mineral leases on federal lands. As of the date hereof, an eligible citizen must be: (1) a citizen of the United States; (2) a corporation organized under the laws of the United States or of any state thereof; or (3) an association of U.S. citizens, such as a partnership or limited liability company, organized under the laws of the United States or of any state thereof, but only if such association does not have any direct or indirect foreign ownership, other than foreign ownership of stock in a parent corporation organized under the laws of the United States or of any state thereof. For the avoidance of doubt, onshore mineral leases or any direct or indirect interest therein may be acquired and held by aliens only through stock ownership, holding or control in a corporation organized under the laws of the United States or of any state thereof. Unitholders who are not persons or entities who meet the requirements to be an eligible citizen run the risk of having their units redeemed by us at the lower of their purchase price cost or the then-current market price. The redemption price will be paid in cash or by delivery of a promissory note, as determined by our general partner. Please read "Description of the Common Units—Transfer of Common Units" and "The Partnership Agreement—Ineligible Citizens; Redemption."

Our general partner intends to limit its liability regarding our obligations.

        Our general partner intends to limit its liability under contractual arrangements so that the counterparties to such arrangements have recourse only against our assets, and not against our general partner or its assets. Our general partner may therefore cause us to incur indebtedness or other obligations that are nonrecourse to our general partner. Our partnership agreement provides that any action taken by our general partner to limit its liability is not a breach of our general partner's fiduciary duties, even if we could have obtained more favorable terms without the limitation on liability. In addition, we are obligated to reimburse or indemnify our general partner to the extent that it incurs obligations on our behalf. Any such reimbursement or indemnification payments would reduce the amount of cash otherwise available for distribution to our unitholders.

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Our partnership agreement requires that we distribute all of our available cash, which could limit our ability to grow and make acquisitions.

        We expect that we will distribute all of our available cash to our unitholders and will rely primarily upon external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund our acquisitions and expansion capital expenditures. As a result, to the extent we are unable to finance growth externally, our cash distribution policy will significantly impair our ability to grow.

        In addition, because we distribute all of our available cash, our growth may not be as fast as that of businesses that reinvest their available cash to expand ongoing operations. To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level. There are no limitations in our partnership agreement or our credit agreement on our ability to issue additional units, including units ranking senior to the common units. The incurrence of additional commercial borrowings or other debt to finance our growth strategy would result in increased interest expense, which, in turn, may impact the available cash that we have to distribute to our unitholders.

Our partnership agreement limits our general partner's fiduciary duties to holders of our common and subordinated units.

        Our partnership agreement contains provisions that modify and reduce the fiduciary standards to which our general partner would otherwise be held by state fiduciary duty law. For example, our partnership agreement permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner, or otherwise free of fiduciary duties to us and our unitholders. This entitles our general partner to consider only the interests and factors that it desires and relieves it of any duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or our limited partners. Examples of decisions that our general partner may make in its individual capacity include:

        By purchasing a common unit, a unitholder is treated as having consented to the provisions in the partnership agreement, including the provisions discussed above. Please read "Conflicts of Interest and Fiduciary Duties—Fiduciary Duties."

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Our partnership agreement restricts the remedies available to holders of our common and subordinated units for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty.

        Our partnership agreement contains provisions that restrict the remedies available to unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty under state fiduciary duty law. For example, our partnership agreement:

        In connection with a situation involving a transaction with an affiliate or a conflict of interest, any determination by our general partner must be made in good faith. If an affiliate transaction or the resolution of a conflict of interest is not approved by our common unitholders or the conflicts committee and the board of directors of our general partner determines that the resolution or course of action taken with respect to the affiliate transaction or conflict of interest satisfies either of the standards set forth in subclauses (3) and (4) above, then it will be presumed that, in making its decision, the board of directors acted in good faith, and in any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. Please read "Conflicts of Interest and Fiduciary Duties."

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Our sponsor, Wexford Capital, and affiliates of our general partner may compete with us.

        Our partnership agreement provides that our general partner will be restricted from engaging in any business activities other than acting as our general partner and those activities incidental to its ownership interest in us. Affiliates of our general partner, including our sponsor, Wexford Capital, and its investment funds, are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with us. Through its investment funds, Wexford Capital currently holds substantial interests in other companies in the energy and natural resources sectors. Wexford Capital, through its investment funds and managed accounts, makes investments and purchases entities in the coal and oil and natural gas sectors. These investments and acquisitions may include entities or assets that we would have been interested in acquiring. Therefore, Wexford Capital may compete with us for investment opportunities and Wexford may own an interest in entities that compete with us.

        Pursuant to the terms of our partnership agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our general partner or any of its affiliates, including its executive officers, directors and Wexford Capital. Any such person or entity that becomes aware of a potential transaction, agreement, arrangement or other matter that may be an opportunity for us will not have any duty to communicate or offer such opportunity to us. Any such person or entity will not be liable to us or to any limited partner for breach of any fiduciary duty or other duty by reason of the fact that such person or entity pursues or acquires such opportunity for itself, directs such opportunity to another person or entity or does not communicate such opportunity or information to us. This may create actual and potential conflicts of interest between us and affiliates of our general partner and result in less than favorable treatment of us and our unitholders. Please read "Conflicts of Interest and Fiduciary Duties."

Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to its incentive distribution rights, without the approval of the conflicts committee of its board of directors or the holders of our common units. This could result in lower distributions to holders of our common units.

        Our general partner has the right, at any time when there are no subordinated units outstanding and it has received incentive distributions at the highest level to which it is entitled (48.0%) for each of the prior four consecutive fiscal quarters, to reset the initial target distribution levels at higher levels based on our distributions at the time of the exercise of the reset election. Following a reset election by our general partner, the minimum quarterly distribution will be adjusted to equal the reset minimum quarterly distribution and the target distribution levels will be reset to correspondingly higher levels based on percentage increases above the reset minimum quarterly distribution.

        If our general partner elects to reset the target distribution levels, it will be entitled to receive a number of common units and will retain its then-current general partner interest. The number of common units to be issued to our general partner will equal the number of common units which would have entitled the holder to an average aggregate quarterly cash distribution in the prior two quarters equal to the average of the distributions to our general partner on the incentive distribution rights in the prior two quarters. We anticipate that our general partner would exercise this reset right in order to facilitate acquisitions or internal growth projects that would not be sufficiently accretive to cash distributions per common unit without such conversion. It is possible, however, that our general partner could exercise this reset election at a time when it is experiencing, or expects to experience, declines in the cash distributions it receives related to its incentive distribution rights and may, therefore, desire to be issued

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common units rather than retain the right to receive incentive distributions based on the initial target distribution levels. As a result, a reset election may cause our common unitholders to experience a reduction in the amount of cash distributions that our common unitholders would have otherwise received had we not issued new common units to our general partner in connection with resetting the target distribution levels. Please read "Provisions of Our Partnership Agreement Relating to Cash Distributions—General Partner's Right to Reset Incentive Distribution Levels."

Holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors, which could reduce the price at which the common units will trade.

        Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management's decisions regarding our business. Unitholders will have no right on an annual or ongoing basis to elect our general partner or its board of directors. The board of directors of our general partner, including the independent directors, is chosen entirely by Wexford, as a result of it owning our general partner, and not by our unitholders. Please read "Management—Management of Rhino Resource Partners LP" and "Certain Relationships and Related Party Transactions—Ownership Interests of Certain Directors of Our General Partner." Unlike publicly traded corporations, we will not conduct annual meetings of our unitholders to elect directors or conduct other matters routinely conducted at annual meetings of stockholders of corporations. As a result of these limitations, the price at which the common units will trade could be diminished because of the absence or reduction of a takeover premium in the trading price.

Even if holders of our common units are dissatisfied, they cannot initially remove our general partner without its consent.

        If our unitholders are dissatisfied with the performance of our general partner, they will have limited ability to remove our general partner. Unitholders initially will be unable to remove our general partner without its consent because our general partner and its affiliates will own sufficient units upon the completion of this offering to be able to prevent its removal. The vote of the holders of at least 662/3% of all outstanding common and subordinated units voting together as a single class is required to remove our general partner. Following the closing of this offering, Wexford will own an aggregate of 84.9% of our common and subordinated units (or 82.6% of our common and subordinated units, if the underwriters exercise their option to purchase additional common units in full). Also, if our general partner is removed without cause during the subordination period and no units held by the holders of the subordinated units or their affiliates are voted in favor of that removal, all remaining subordinated units will automatically be converted into common units and any existing arrearages on the common units will be extinguished. Cause is narrowly defined in our partnership agreement to mean that a court of competent jurisdiction has entered a final, non-appealable judgment finding our general partner liable for actual fraud or willful or wanton misconduct in its capacity as our general partner. Cause does not include most cases of charges of poor management of the business.

Unitholders will experience immediate and substantial dilution of $11.75 per common unit.

        The assumed initial public offering price of $20.00 per common unit exceeds pro forma net tangible book value of $8.25 per common unit. Based on the assumed initial public offering price of $20.00 per common unit, unitholders will incur immediate and substantial dilution of $11.75 per common unit. This dilution results primarily because the assets contributed to us by

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affiliates of our general partner are recorded at their historical cost in accordance with GAAP, and not their fair value. Please read "Dilution."

Our general partner interest or the control of our general partner may be transferred to a third party without unitholder consent.

        Our general partner may transfer its general partner interest to a third party in a merger or in a sale of all or substantially all of its assets without the consent of our unitholders. Furthermore, our partnership agreement does not restrict the ability of the members of our general partner to transfer their respective membership interests in our general partner to a third party. The new members of our general partner would then be in a position to replace the board of directors and executive officers of our general partner with their own designees and thereby exert significant control over the decisions taken by the board of directors and executive officers of our general partner. This effectively permits a "change of control" without the vote or consent of the unitholders.

Our general partner has a limited call right that may require unitholders to sell their common units at an undesirable time or price.

        If at any time our general partner and its affiliates own more than 90% of the common units, our general partner will have the right, but not the obligation, which it may assign to any of its affiliates or to us, to acquire all, but not less than all, of the common units held by unaffiliated persons at a price equal to the greater of (1) the average of the daily closing price of the common units over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed and (2) the highest per-unit price paid by our general partner or any of its affiliates for common units during the 90-day period preceding the date such notice is first mailed. If our general partner and its affiliates reduce their ownership percentage to below 70% of the outstanding common units, the ownership threshold to exercise the limited call rights will be reduced to 80%. As a result, unitholders may be required to sell their common units at an undesirable time or price and may not receive any return or a negative return on their investment. Unitholders may also incur a tax liability upon a sale of their units. Our general partner is not obligated to obtain a fairness opinion regarding the value of the common units to be repurchased by it upon exercise of the limited call right. There is no restriction in our partnership agreement that prevents our general partner from issuing additional common units and exercising its call right. If our general partner exercised its limited call right, the effect would be to take us private and, if the units were subsequently deregistered, we would no longer be subject to the reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act. Upon consummation of this offering, and assuming no exercise of the underwriters' option to purchase additional common units, Wexford will own an aggregate of 84.9% of our common and subordinated units. At the end of the subordination period, assuming no additional issuances of units (other than upon the conversion of the subordinated units), Wexford will own 84.9% of our common units. For additional information about the limited call right, please read "The Partnership Agreement—Limited Call Right."

We may issue additional units without unitholder approval, which would dilute existing unitholder ownership interests.

        Our partnership agreement does not limit the number of additional limited partner interests we may issue at any time without the approval of our unitholders. The issuance of additional common units or other equity interests of equal or senior rank will have the following effects:

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The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public or private markets, including sales by Wexford or other large holders.

        After this offering, we will have 12,397,000 common units and 12,397,000 subordinated units outstanding, which includes the 3,750,000 common units we are selling in this offering that may be resold in the public market immediately. All of the subordinated units will convert into common units on a one-for-one basis at the end of the subordination period. All of the 8,647,000 common units (8,084,500 if the underwriters exercise in full their option to purchase additional common units) that are issued to Rhino Energy Holdings LLC will be subject to resale restrictions under a 180-day lock-up agreement with the underwriters. Each of the lock-up agreements with the underwriters may be waived in the discretion of certain of the underwriters. Sales by Wexford or other large holders of a substantial number of our common units in the public markets following this offering, or the perception that such sales might occur, could have a material adverse effect on the price of our common units or could impair our ability to obtain capital through an offering of equity securities. In addition, we have agreed to provide registration rights to Wexford. Under our agreement, our general partner and its affiliates have registration rights relating to the offer and sale of any units that they hold, subject to certain limitations. Please read "Units Eligible for Future Sale."

Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our common units.

        Our partnership agreement restricts unitholders' voting rights by providing that any units held by a person or group that owns 20% or more of any class of units then outstanding, other than our general partner and its affiliates, their transferees and persons who acquired such units with the prior approval of the board of directors of our general partner, cannot vote on any matter.

Cost reimbursements due to our general partner and its affiliates for services provided to us or on our behalf will reduce cash available for distribution to our unitholders. The amount and timing of such reimbursements will be determined by our general partner.

        Prior to making any distribution on the common units, we will reimburse our general partner and its affiliates for all expenses they incur and payments they make on our behalf. Our partnership agreement does not set a limit on the amount of expenses for which our general partner and its affiliates may be reimbursed. These expenses include salary, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and expenses allocated to our general partner by its affiliates. Our partnership agreement provides that our general partner will determine in good faith the expenses that are allocable to us. The reimbursement of expenses and payment of fees, if any, to our general partner and its affiliates will reduce the amount of available cash to pay cash distributions to our unitholders. Please read "Cash Distribution Policy and Restrictions on Distributions."

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While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including provisions requiring us to make cash distributions contained therein, may be amended.

        While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including provisions requiring us to make cash distributions contained therein, may be amended. Our partnership agreement generally may not be amended during the subordination period without the approval of our public common unitholders. However, our partnership agreement can be amended with the consent of our general partner and the approval of a majority of the outstanding common units (including common units held by Wexford) after the subordination period has ended. At the closing of this offering, Wexford will own approximately 69.8% of the outstanding common units and all of our outstanding subordinated units. Please read "The Partnership Agreement—Amendment of the Partnership Agreement."

There is no existing market for our common units, and a trading market that will provide you with adequate liquidity may not develop. The price of our common units may fluctuate significantly, and unitholders could lose all or part of their investment.

        Prior to this offering, there has been no public market for the common units. After this offering, there will be only 3,750,000 publicly traded common units. We do not know the extent to which investor interest will lead to the development of a trading market or how liquid that market might be. Unitholders may not be able to resell their common units at or above the initial public offering price. Additionally, the lack of liquidity may result in wide bid-ask spreads, contribute to significant fluctuations in the market price of the common units and limit the number of investors who are able to buy the common units.

        The initial public offering price for our common units will be determined by negotiations between us and the representative of the underwriters and may not be indicative of the market price of the common units that will prevail in the trading market. The market price of our common units may decline below the initial public offering price. The market price of our common units may also be influenced by many factors, some of which are beyond our control, including:

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Unitholders may have liability to repay distributions and in certain circumstances may be personally liable for the obligations of the Partnership.

        Under certain circumstances, unitholders may have to repay amounts wrongfully returned or distributed to them. Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, or the Delaware Act, we may not make a distribution to our unitholders if the distribution would cause our liabilities to exceed the fair value of our assets. Delaware law provides that for a period of three years from the date of the impermissible distribution, limited partners who received the distribution and who knew at the time of the distribution that it violated Delaware law will be liable to the limited partnership for the distribution amount. A purchaser of units who becomes a limited partner is liable for the obligations of the transferring limited partner to make contributions to the partnership that are known to the purchaser of units at the time it became a limited partner and for unknown obligations if the liabilities could be determined from the partnership agreement. Liabilities to partners on account of their partnership interests and liabilities that are non-recourse to the partnership are not counted for purposes of determining whether a distribution is permitted.

        It may be determined that the right, or the exercise of the right by the limited partners as a group, to (i) remove or replace our general partner, (ii) approve some amendments to our partnership agreement or (iii) take other action under our partnership agreement constitutes "participation in the control" of our business. A limited partner that participates in the control of our business within the meaning of the Delaware Act may be held personally liable for our obligations under the laws of Delaware, to the same extent as our general partner. This liability would extend to persons who transact business with us under the reasonable belief that the limited partner is a general partner. Neither our partnership agreement nor the Delaware Act specifically provides for legal recourse against our general partner if a limited partner were to lose limited liability through any fault of our general partner. See "The Partnership Agreement—Limited Liability."

The New York Stock Exchange does not require a publicly traded limited partnership like us to comply with certain of its corporate governance requirements.

        We have applied to list our common units on the NYSE. Because we will be a publicly traded limited partnership, the NYSE does not require us to have a majority of independent directors on our general partner's board of directors or to establish a compensation committee or a nominating and corporate governance committee. Accordingly, unitholders will not have the same protections afforded to certain corporations that are subject to all of the NYSE corporate governance requirements. Please read "Management—Management of Rhino Resource Partners LP."

We cannot provide absolute assurance as to our ability to establish and maintain effective internal controls in accordance with applicable federal securities laws and regulations, and we may incur significant costs in our efforts.

        Prior to this offering, we have not been required to file reports with the SEC. Upon the completion of this offering, we will become subject to the public reporting requirements of the Exchange Act. We prepare our consolidated financial statements in accordance with GAAP, but our internal accounting controls may not currently meet all standards applicable to companies with publicly traded securities. Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a publicly traded partnership.

        Subsequent to the audit of our consolidated financial statements for the year ended December 31, 2009, our independent registered public accounting firm identified a deficiency in

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our internal control over financial reporting as a result of a restatement of our consolidated financial statements as of December 31, 2008 which constituted a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. As a result of the identified material weakness, we restated our consolidated historical financial statements for the year ended December 31, 2008. Please read Note 18 to the Rhino Energy LLC historical audited consolidated financial statements included elsewhere in this prospectus. Although we have taken measures to improve our internal control over financial reporting, we cannot assure you that additional material weaknesses that may result in a material misstatement of our financial statements will not occur in the future.

We will incur increased costs as a result of being a publicly traded partnership.

        We have no history operating as a publicly traded partnership. As a publicly traded partnership, we will incur significant legal, accounting and other expenses that we did not incur prior to this offering. In addition, the Sarbanes-Oxley Act of 2002, as well as rules implemented by the SEC and the NYSE, require publicly-traded entities to adopt various corporate governance practices that will further increase our costs. Before we are able to make distributions to our members, we must first pay or reserve cash for our expenses, including the costs of being a public company. As a result, the amount of cash we have available for distribution to our members will be affected by the costs associated with being a public company.

        Prior to this offering, we have not filed reports with the SEC. Following this offering, we will become subject to the public reporting requirements of the Exchange Act. We expect these rules and regulations to increase certain of our legal and financial compliance costs and to make activities more time-consuming and costly. For example, as a result of becoming a publicly-traded company, we are required to have at least three independent directors, create an audit committee and adopt policies regarding internal controls and disclosure controls and procedures, including the preparation of reports on internal controls over financial reporting. In addition, we will incur additional costs associated with our SEC reporting requirements.

        We also expect to incur significant expense in order to obtain director and officer liability insurance. Because of the limitations in coverage for directors, it may be more difficult for us to attract and retain qualified persons to serve on our board or as executive officers.

        We estimate that we will incur approximately $3.0 million of incremental costs per year associated with being a publicly-traded company; however, it is possible that our actual incremental costs of being a publicly-traded company will be higher than we currently estimate.

Tax Risks

        In addition to reading the following risk factors, please read "Material Tax Consequences" for a more complete discussion of the expected material federal income tax consequences of owning and disposing of common units.

Our tax treatment depends on our status as a partnership for federal income tax purposes. If the IRS were to treat us as a corporation for federal income tax purposes or we become subject to additional amounts of entity-level taxation, then our cash available for distribution to our unitholders would be substantially reduced.

        The anticipated after-tax economic benefit of an investment in the common units depends largely on our being treated as a partnership for federal income tax purposes. We have not

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requested, and do not plan to request, a ruling from the Internal Revenue Service, or IRS, on this or any other tax matter affecting us.

        Despite the fact that we are a limited partnership under Delaware law, it is possible in certain circumstances for a partnership such as ours to be treated as a corporation for federal income tax purposes. Although we do not believe based upon our current operations that we are so treated, a change in our business or a change in current law could cause us to be treated as a corporation for federal income tax purposes or otherwise subject us to taxation as an entity.

        If we were treated as a corporation for federal income tax purposes, we would pay federal income tax on our taxable income at the corporate tax rate, which is currently a maximum of 35%, and would likely pay state and local income tax at varying rates. Distributions to you would generally be taxed again as corporate distributions, and no income, gains, losses, deductions, or credits would flow through to you. Because a tax would be imposed upon us as a corporation, our cash available for distribution to you would be substantially reduced. Therefore, treatment of us as a corporation would result in a material reduction in the anticipated cash flow and after-tax return to the unitholders, likely causing a substantial reduction in the value of our common units.

The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.

        Current law may change so as to cause us to be treated as a corporation for federal income tax purposes or otherwise subjecting us to entity-level taxation. Specifically, the present federal income tax treatment of publicly traded partnerships, including us, or an investment in our common units may be modified by administrative, legislative or judicial interpretation at any time. For example, at the federal level, legislation has been proposed that would eliminate partnership tax treatment for certain publicly traded partnerships. Although such legislation would not apply to us as currently proposed, it could be amended prior to enactment in a manner that does apply to us. Any modification to the federal income tax laws and interpretations thereof may or may not be applied retroactively. We are unable to predict whether any of these changes, or other proposals, will ultimately be enacted. Any such changes could negatively impact the value of an investment in our common units.

If we were subjected to a material amount of additional entity-level taxation by individual states, it would reduce our cash available for distribution to our unitholders.

        Changes in current state law may subject us to additional entity-level taxation by individual states. Because of widespread state budget deficits and other reasons, several states are evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise and other forms of taxation. Imposition of any such taxes may substantially reduce the cash available for distribution to you.

        Our partnership agreement provides that if a law is enacted or existing law is modified or interpreted in a manner that subjects us to additional amounts of entity-level taxation, the minimum quarterly distribution amount and the target distribution amounts may be adjusted to reflect the impact of that law on us.

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If the IRS contests the federal income tax positions we take, the market for our common units may be adversely impacted and the cost of any IRS contest will reduce our cash available for distribution to our unitholders.

        We have not requested a ruling from the IRS with respect to our treatment as a partnership for federal income tax purposes or any other matter affecting us. The IRS may adopt positions that differ from the conclusions of our counsel expressed in this prospectus or from the positions we take, and the IRS's positions may ultimately be sustained. It may be necessary to resort to administrative or court proceedings to sustain some or all of our counsel's conclusions or the positions we take. A court may not agree with some or all of our counsel's conclusions or positions we take. Any contest with the IRS may materially and adversely impact the market for our common units and the price at which they trade. In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders and our general partner because the costs will reduce our cash available for distribution.

Unitholders' share of our income will be taxable for U.S. federal income tax purposes even if they do not receive any cash distributions from us.

        Because our unitholders will be treated as partners to whom we will allocate taxable income which could be different in amount than the cash we distribute, a unitholder's allocable share of our taxable income will be taxable to it, which may require the payment of federal income taxes and, in some cases, state and local income taxes on their share of our taxable income even if they receive no cash distributions from us. Unitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax liability that results from that income.

Tax gain or loss on the disposition of our common units could be more or less than expected.

        If you sell your common units, you will recognize a gain or loss for federal income tax purposes equal to the difference between the amount realized and your tax basis in those common units. Because distributions in excess of your allocable share of our net taxable income decrease your tax basis in your common units, the amount, if any, of such prior excess distributions with respect to the units you sell will, in effect, become taxable income to you if you sell such units at a price greater than your tax basis in those units, even if the price you receive is less than your original cost. Furthermore, a substantial portion of the amount realized, whether or not representing gain, may be taxed as ordinary income due to potential recapture items, including depletion and depreciation recapture. In addition, because the amount realized includes a unitholder's share of our nonrecourse liabilities, if you sell your units, you may incur a tax liability in excess of the amount of cash you receive from the sale. Please read "Material Tax Consequences—Disposition of Common Units—Recognition of Gain or Loss" for a further discussion of the foregoing.

Tax-exempt entities and non-U.S. persons face unique tax issues from owning our common units that may result in adverse tax consequences to them.

        Investment in common units by tax-exempt entities, such as individual retirement accounts (known as IRAs), and non-U.S. persons raises issues unique to them. For example, virtually all of our income allocated to organizations that are exempt from federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them. Distributions to non-U.S. persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-U.S. persons will be required to file U.S. federal tax returns and pay tax on their share of our taxable income. If you are a tax-exempt entity or a non-U.S. person, you should consult a tax advisor before investing in our common units.

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We will treat each purchaser of common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units.

        Due to a number of factors, including our inability to match transferors and transferees of common units, we will adopt depreciation and amortization positions that may not conform to all aspects of existing Treasury Regulations. A successful IRS challenge to those positions could adversely affect the amount of tax benefits available to you. Our counsel is unable to opine as to the validity of such filing positions. It also could affect the timing of these tax benefits or the amount of gain from your sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to your tax returns. Please read "Material Tax Consequences—Tax Consequences of Unit Ownership—Section 754 Election" for a further discussion of the effect of the depreciation and amortization positions we will adopt.

We prorate our items of income, gain, loss and deduction, for U.S. federal income tax purposes, between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.

        We generally prorate our items of income, gain, loss and deduction, for U.S. federal income tax purposes, between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred. Nonetheless, we allocate certain deductions for depreciation of capital additions based upon the date the underlying property is placed in service. The use of this proration method may not be permitted under existing Treasury Regulations. Recently, however, the U.S. Treasury Department issued proposed Treasury Regulations that provide a safe harbor pursuant to which publicly traded partnerships may use a similar monthly simplifying convention to allocate tax items among transferor and transferee unitholders. Nonetheless, the proposed regulations do not specifically authorize the use of the proration method we have adopted. If the IRS were to challenge our proration method, we may be required to change our allocation of items of income, gain, loss and deduction among our unitholders. Please read "Material Tax Consequences—Disposition of Common Units—Allocations Between Transferors and Transferees."

A unitholder whose units are loaned to a "short seller" to cover a short sale of units may be considered as having disposed of those units. If so, he would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the disposition.

        Because a unitholder whose units are loaned to a "short seller" to cover a short sale of units may be considered as having disposed of the loaned units, he may no longer be treated for tax purposes as a partner with respect to those units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition. Moreover, during the period of the loan to the short seller, any of our income, gain, loss or deduction with respect to those units may not be reportable by the unitholder and any cash distributions received by the unitholder as to those units could be fully taxable as ordinary income. Our counsel has not rendered an opinion regarding the treatment of a unitholder where common units are loaned to a short seller to cover a short sale of common units; therefore, unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to consult a tax advisor to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from loaning their units.

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We will adopt certain valuation methodologies, for U.S. federal income tax purposes, that may result in a shift of income, gain, loss and deduction between our general partner and the unitholders. The IRS may challenge this treatment, which could adversely affect the value of the common units.

        When we issue additional units or engage in certain other transactions, we will determine the fair market value of our assets and allocate any unrealized gain or loss attributable to our assets to the capital accounts of our unitholders and our general partner. Our methodology may be viewed as understating the value of our assets. In that case, there may be a shift of income, gain, loss and deduction between certain unitholders and our general partner, which may be unfavorable to such unitholders. Moreover, under our valuation methods, subsequent purchasers of common units may have a greater portion of their Internal Revenue Code Section 743(b) adjustment allocated to our tangible assets and a lesser portion allocated to our intangible assets. The IRS may challenge our valuation methods, or our allocation of the Section 743(b) adjustment attributable to our tangible and intangible assets, and allocations of taxable income, gain, loss and deduction between our general partner and certain of our unitholders.

        A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income or loss being allocated to our unitholders. It also could affect the amount of taxable gain from our unitholders' sale of common units and could have a negative impact on the value of the common units or result in audit adjustments to our unitholders' tax returns without the benefit of additional deductions.

The sale or exchange of 50% or more of our capital and profits interests during any twelve-month period will result in the termination of our partnership for federal income tax purposes.

        We will be considered to have technically terminated for federal income tax purposes if there is a sale or exchange of 50% or more of the total interests in our capital and profits within a twelve-month period. For purposes of determining whether a technical tax termination has occurred, a sale or exchange of 50% or more of the total interests in our capital and profits could occur if, for example, Rhino Energy Holdings LLC, which will own approximately 83.2% of the total interests in our capital and profits immediately after the consummation of this offering, sells or exchanges a majority of the interests it owns in us within a period of twelve months. For purposes of determining whether the 50% threshold has been met, multiple sales of the same unit will be counted only once. While we would continue our existence as a Delaware limited partnership, our technical termination would, among other things, result in the closing of our taxable year for all unitholders, which would result in us filing two tax returns (and our unitholders could receive two Schedules K-1) for one fiscal year and could result in a deferral of depreciation deductions allowable in computing our taxable income. In the case of a unitholder reporting on a taxable year other than a fiscal year ending December 31, the closing of our taxable year may also result in more than twelve months of our taxable income or loss being includable in his taxable income for the year of termination. A technical termination would not affect our classification as a partnership for federal income tax purposes, but instead, we would be treated as a new partnership for tax purposes. If treated as a new partnership, we must make new tax elections and could be subject to penalties if we are unable to determine that a technical termination occurred. The IRS has recently announced a relief procedure whereby if a publicly traded partnership that has technically terminated requests and the IRS grants special relief, among other things, the partnership will be required to provide only a single Schedule K-1 to unitholders for the tax years in which the termination occurs.

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Certain federal income tax preferences currently available with respect to coal exploration and development may be eliminated as a result of future legislation.

        Among the changes contained in President Obama's Budget Proposal, or the Budget Proposal, for Fiscal Year 2011 is the elimination of certain key U.S. federal income tax preferences relating to coal exploration and development. The Budget Proposal would (1) eliminate current deductions and 60-month amortization for exploration and development costs relating to coal and other hard mineral fossil fuels, (2) repeal the percentage depletion allowance with respect to coal properties, (3) repeal capital gains treatment of coal and lignite royalties, and (4) exclude from the definition of domestic production gross receipts all gross receipts derived from the sale, exchange, or other disposition of coal, other hard mineral fossil fuels, or primary products thereof. The passage of any legislation as a result of the Budget Proposal or any other similar changes in U.S. federal income tax laws could eliminate certain tax deductions that are currently available with respect to coal exploration and development, and any such change could increase the taxable income allocable to our unitholders and negatively impact the value of an investment in our units.

Unitholders will likely be subject to state and local taxes and return filing requirements in states where they do not live as a result of investing in our common units.

        In addition to federal income taxes, unitholders will likely be subject to other taxes, including state and local taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we do business or control property now or in the future, even if they do not live in any of those jurisdictions. Unitholders will likely be required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, unitholders may be subject to penalties for failure to comply with those requirements. We initially expect to conduct business in a number of states, most of which also impose an income tax on corporations and other entities. In addition, many of these states also impose a personal income tax on individuals. As we make acquisitions or expand our business, we may control assets or conduct business in additional states that impose a personal income tax. It is your responsibility to file all U.S. federal, state and local tax returns. Our counsel has not rendered an opinion on the state or local tax consequences of an investment in our common units.

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USE OF PROCEEDS

        Based on an assumed initial offering price of $20.00 per common unit, we expect to receive net proceeds of approximately $67.0 million from the sale of 3,750,000 common units offered by this prospectus, after deducting the estimated underwriting discount and offering expenses payable by us.

        We intend to use all of the net proceeds from this offering to repay indebtedness outstanding under our credit agreement, which was incurred for working capital needs and the acquisitions of coal properties and mining equipment. We may reborrow any amounts repaid under our credit agreement. Upon application of the net proceeds from this offering as described herein, we will have $50.1 million of indebtedness outstanding under our credit agreement.

        On June 30, 2010, we amended our credit agreement. References to our credit agreement refer to the credit agreement as amended. Our credit agreement bears interest at either (1) LIBOR plus 3.0% to 3.5% per annum, depending on our leverage ratio, or (2) a base rate that is the sum of (i) the higher of (a) the prime rate, (b) the federal funds rate plus 0.5% or (c) LIBOR plus 1.0% and (ii) 1.5% to 2.0% per annum, depending on our leverage ratio. We incur letter of credit fees equal to the then applicable spread above LIBOR on the undrawn face amount of standby letters of credit issued and a 15 basis point fronting fee payable to the administrative agent on the aggregate face amount of such letters of credit. In addition, we incur a commitment fee on the unused portion of the credit agreement at a rate of 0.5% per annum based on the unused portion of the facility. The credit agreement will mature in February 2013. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreement."

        The net proceeds from any exercise of the underwriters' option to purchase additional common units (approximately $10.5 million based on an assumed initial offering price of $20.00 per common unit, if exercised in full) will be used to reimburse Wexford for capital expenditures incurred with respect to the assets contributed to us. If the underwriters do not exercise their option to purchase additional common units, we will issue 562,500 common units to Rhino Energy Holdings LLC at the expiration of the option period. If and to the extent the underwriters exercise their option to purchase additional common units, the number of units purchased by the underwriters pursuant to such exercise will be issued to the public and the remainder, if any, will be issued to Rhino Energy Holdings LLC. Accordingly, the exercise of the underwriters' option will not affect the total number of units outstanding or the amount of cash needed to pay the minimum quarterly distribution on all units. Please read "Underwriting."

        Affiliates of Raymond James & Associates, Inc. and RBC Capital Markets Corporation are lenders under our credit agreement and will receive their pro rata portion of the net proceeds from this offering through the repayment of borrowings they have extended under the credit agreement.

        A $1.00 increase or decrease in the assumed initial public offering price of $20.00 per common unit would cause the net proceeds from this offering, after deducting the estimated underwriting discount and offering expenses payable by us, to increase or decrease, respectively, by approximately $3.5 million. In addition, we may also increase or decrease the number of common units we are offering. Each increase of 1.0 million common units offered by us, together with a concomitant $1.00 increase in the assumed public offering price to $21.00 per common unit, would increase net proceeds to us from this offering by approximately $23.1 million. Similarly, each decrease of 1.0 million common units offered by us, together with a concomitant $1.00 decrease in the assumed initial offering price to $19.00 per common unit, would decrease the net proceeds to us from this offering by approximately $21.2 million.

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CAPITALIZATION

        The following table shows our capitalization as of March 31, 2010:

        This table is derived from, and should be read together with, the unaudited pro forma condensed consolidated financial statements and the accompanying notes included elsewhere in this prospectus. You should also read this table in conjunction with "Summary—The Transactions," "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 
  As of March 31, 2010  
 
  Actual   Pro Forma  
 
  (in thousands)
 

Debt:

             
 

Credit facility

  $ 117,020   $ 50,070  
 

Other debt

    6,813     6,813  
           
 

Total debt

    123,833     56,883  
           

Members'/partners' equity:

             
 

Rhino Energy LLC

    143,467      
 

Rhino Resource Partners LP:

             
 

Held by public:

             
   

Common units (1)

        31,188  
 

Held by Wexford:

             
   

Common units

        71,916  
   

Subordinated units

        103,104  
   

General partner interest

        4,208  
 

Accumulated other comprehensive income

   
1,477
   
1,477
 
           
   

Total members'/partners' equity

    144,944     211,894  
           
     

Total capitalization (1)

  $ 268,777   $ 268,777  
           

(1)
Each $1.00 increase or decrease in the assumed public offering price of $20.00 per common unit would increase or decrease, respectively, each of total partners' equity and total capitalization by approximately $3.5 million, after deducting the estimated underwriting discount and offering expenses payable by us. We may also increase or decrease the number of common units we are offering. Each increase of 1.0 million common units offered by us, together with a concomitant $1.00 increase in the assumed offering price to $21.00 per common unit, would increase total partners' equity and total capitalization by approximately $23.1 million. Similarly, each decrease of 1.0 million common units offered by us, together with a concomitant $1.00 decrease in the assumed offering price to $19.00 per common unit, would decrease total partners' equity and total capitalization by approximately $21.2 million. The information discussed above is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

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DILUTION

        Dilution is the amount by which the offering price will exceed the net tangible book value per common unit after the offering. Assuming an initial public offering price of $20.00 per common unit, on a pro forma basis as of March 31, 2010, after giving effect to the offering of common units and the related transactions, our net tangible book value was approximately $208.9 million, or $8.25 per common unit. The pro forma net tangible book value excludes $2.1 million of deferred financing costs and $1.0 million of intangible assets and goodwill. Purchasers of our common units in this offering will experience substantial and immediate dilution in net tangible book value per common unit for financial accounting purposes, as illustrated in the following table.

Assumed initial public offering price per common unit

        $ 20.00  

Net tangible book value per common unit before the offering (1)

  $ 6.58        

Increase in net tangible book value per common unit attributable to purchasers in the offering

    1.67        
             

Less: Pro forma net tangible book value per common unit after the offering (2)

          8.25  
             

Immediate dilution in net tangible book value per common unit to purchasers in the offering (3)

        $ 11.75  
             

(1)
Determined by dividing the net tangible book value of the contributed assets and liabilities by the number of units (8,647,000 common units, 12,397,000 subordinated units and the 2.0% general partner interest represented by 506,000 notional general partner units) to be issued to our general partner and its affiliates for their contribution of assets and liabilities to us. The number of units notionally represented by the 2.0% general partner interest is determined by multiplying the total number of units deemed to be outstanding (i.e., the total number of common and subordinated units outstanding divided by 98.0%) by the 2.0% general partner interest.
(2)
Determined by dividing our pro forma net tangible book value, after giving effect to the use of the net proceeds of the offering by the total number of units (12,397,000 common units, 12,397,000 subordinated units and the 2.0% general partner interest represented by 506,000 notional general partner units). The number of units notionally represented by the 2.0% general partner interest is determined by multiplying the total number of units deemed to be outstanding (i.e., the total number of common and subordinated units outstanding divided by 98.0%) by the 2.0% general partner interest.
(3)
Each $1.00 increase or decrease in the assumed public offering price of $20.00 per common unit would increase or decrease, respectively, our pro forma net tangible book value by approximately $3.75 million, or approximately $0.32 per common unit, and dilution per common unit to investors in this offering by approximately $0.68 per common unit, after deducting the estimated underwriting discount and offering expenses payable by us. We may also increase or decrease the number of common units we are offering. An increase of 1.0 million common units offered by us, together with a concomitant $1.00 increase in the assumed offering price to $21.00 per common unit, would result in a pro forma net tangible book value of approximately $232.0 million, or $18.70 per common unit, and dilution per common unit to investors in this offering would be $12.12 per common unit. Similarly, a decrease of 1.0 million common units offered by us, together with a concomitant $1.00 decrease in the assumed public offering price to $19.00 per common unit, would result in an pro forma net tangible book value of approximately $188.0 million, or $15.13 per common unit, and dilution per common unit to investors in this offering would be $8.55 per common unit. The information discussed above is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

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        The following table sets forth the number of units that we will issue and the total consideration contributed to us by our general partner and its affiliates and by the purchasers of our common units in this offering upon consummation of the transactions contemplated by this prospectus.

 
  Units   Total Consideration  
 
  Number   Percent   Amount   Percent  

General partner and its affiliates (1)(2)

    21,550,000     85.2 % $ 143,467,246     65.7 %

New investors

    3,750,000     14.8 %   75,000,000     34.3 %
                   

Total

    25,300,000     100 % $ 218,467,246     100 %
                   

(1)
Upon the consummation of the transactions contemplated by this prospectus, our general partner and its affiliates will own 8,647,000 common units, 12,397,000 subordinated units and a 2.0% general partner interest represented by 506,000 notional general partner units. The number of units notionally represented by the 2.0% general partner interest is determined by multiplying the total number of units deemed to be outstanding (i.e., the total number of common and subordinated units outstanding divided by 98.0%) by the 2.0% general partner interest.
(2)
The assets contributed by Wexford will be recorded at historical cost. The pro forma book value of the consideration provided by Wexford as of March 31, 2010 would have been approximately $179,228,919.

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CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS

        You should read the following discussion of our cash distribution policy in conjunction with specific assumptions included in this section. In addition, you should read "Forward-Looking Statements" and "Risk Factors" for information regarding statements that do not relate strictly to historical or current facts and certain risks inherent in our business.

        For additional information regarding our historical and pro forma consolidated results of operations, you should refer to the audited historical consolidated financial statements as of December 31, 2008 and 2009 and for the years ended December 31, 2007, 2008 and 2009 and the unaudited historical condensed consolidated financial statements as of March 31, 2010 and for the three months ended March 31, 2009 and 2010 of Rhino Energy LLC and our unaudited pro forma condensed consolidated financial statements as of and for the year ended December 31, 2009 and as of and for the three months end March 31, 2010, included elsewhere in this prospectus.

General

Rationale for Our Cash Distribution Policy

        Our partnership agreement requires us to distribute all of our available cash each quarter. Our cash distribution policy reflects a judgment that our unitholders will be better served by our distributing rather than retaining our available cash. Our partnership agreement generally defines available cash as, for each quarter, cash generated from our business in excess of the amount of cash reserves established by our general partner to provide for the conduct of our business, to comply with applicable law, any of our debt instruments or other agreements or to provide for future distributions to our unitholders for any one or more of the next four quarters. Our available cash may also include, if our general partner so determines, all or any portion of the cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made subsequent to the end of such quarter. Because we are not subject to an entity-level federal income tax, we have more cash to distribute to our unitholders than would be the case were we subject to federal income tax.

Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy

        There is no guarantee that we will distribute quarterly cash distributions to our unitholders. Our distribution policy is subject to certain restrictions and may be changed at any time. The reasons for such uncertainties in our stated cash distribution policy include the following factors:

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Our Ability to Grow is Dependent on Our Ability to Access External Expansion Capital

        Our partnership agreement requires us to distribute all of our available cash to our unitholders on a quarterly basis. As a result, we expect that we will rely primarily upon external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund any future expansion capital expenditures. To the extent we are unable to finance growth externally, our cash distribution policy will significantly impair our ability to grow. In addition, because we distribute all of our available cash, our growth may not be as fast as businesses that reinvest all of their available cash to expand ongoing operations. To the extent we issue additional units, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level. There are no limitations in our partnership agreement or our credit agreement on our ability to issue additional units, including units ranking senior to the common units. The incurrence of additional commercial borrowings or other debt to finance our growth would result in increased interest expense, which in turn may impact the available cash that we have to distribute to our unitholders.

Minimum Quarterly Distribution

        Upon the consummation of this offering, the board of directors of our general partner will establish a minimum quarterly distribution of $0.445 per unit for each complete quarter, or $1.78 per unit on an annualized basis, to be paid within 45 days after the end of each quarter. This equates to an aggregate cash distribution of $11.3 million per quarter, or $45.0 million per year, based on the number of common and subordinated units and 2.0% general partner interest to be outstanding immediately after completion of this offering. Our ability to make cash distributions equal to the minimum quarterly distribution pursuant to our cash distribution policy will be subject to the factors described above under "—General—Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy." The amount of available cash needed to pay the minimum quarterly distribution on all of the common units, subordinated units and 2.0% general partner interest to be outstanding immediately after this offering for one quarter and for four quarters is summarized in the table below:

 
   
  Distributions  
 
  Number of
Units
 
 
  One Quarter   Annualized  

Common units

    12,397,000   $ 5,516,665   $ 22,066,660  

Subordinated units

    12,397,000     5,516,665     22,066,660  

General partner interest (1)

    506,000     225,170     900,680  
               
 

Total

    25,300,000   $ 11,258,500   $ 45,034,000  
               

(1)
The number of units notionally represented by the 2.0% general partner interest is determined by multiplying the total number of units deemed to be outstanding (i.e., the total number of common and subordinated units outstanding divided by 98.0%) by the 2.0% general partner interest.

        If the underwriters do not exercise their option to purchase additional common units, we will issue 562,500 common units to Rhino Energy Holdings LLC at the expiration of the option period. If and to the extent the underwriters exercise their option to purchase additional common units, the number of units purchased by the underwriters pursuant to such exercise will be sold to the public and the remainder, if any, will be issued to Rhino Energy Holdings LLC. Accordingly, the exercise of the underwriters' option will not affect the total number of units outstanding or the amount of cash needed to pay the minimum quarterly distribution on all units. Please read "Underwriting."

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        As of the date of this offering, our general partner will be entitled to 2.0% of all distributions that we make prior to our liquidation. Our general partner's initial 2.0% interest in these distributions may be reduced if we issue additional units in the future and our general partner does not contribute a proportionate amount of capital to us to maintain its initial 2.0% general partner interest.

        During the subordination period, before we make any quarterly distributions to our subordinated unitholders, our common unitholders are entitled to receive payment of the minimum quarterly distribution plus any arrearages in distributions from prior quarters. Please read "Provisions of Our Partnership Agreement Relating to Cash Distributions—Subordination Period." We cannot guarantee, however, that we will pay the minimum quarterly distribution on the common units in any quarter.

        We do not have a legal obligation to pay distributions at our minimum quarterly distribution rate or at any other rate except as provided in our partnership agreement. Our cash distribution policy is consistent with the terms of our partnership agreement, which requires that we distribute all of our available cash quarterly. Under our partnership agreement, available cash is generally defined to mean, for each quarter, cash generated from our business in excess of the amount of reserves established by our general partner to provide for the conduct of our business, to comply with applicable law, any of our debt instruments or other agreements or to provide for future distributions to our unitholders for any one or more of the next four quarters.

        Although holders of our common units may pursue judicial action to enforce provisions of our partnership agreement, including those related to requirements to make cash distributions as described above, our partnership agreement provides that any determination made by our general partner in its capacity as our general partner must be made in good faith and that any such determination will not be subject to any other standard imposed by the Delaware Act or any other law, rule or regulation or at equity. Our partnership agreement provides that, in order for a determination by our general partner to be made in "good faith," our general partner must believe that the determination is in our best interest. Please read "Conflicts of Interest and Fiduciary Duties."

        Our cash distribution policy, as expressed in our partnership agreement, may not be modified or repealed without amending our partnership agreement; however, the actual amount of our cash distributions for any quarter is subject to fluctuations based on the amount of cash we generate from our business and the amount of reserves our general partner establishes in accordance with our partnership agreement as described above.

        We will pay our distributions on or about the 15th day of each of February, May, August and November to holders of record on or about the 1st day of each such month. If the distribution date does not fall on a business day, we will make the distribution on the business day immediately preceding the indicated distribution date. We will adjust the quarterly distribution for the period from the closing of this offering through September 30, 2010 based on the actual length of the period.

Pro Forma and Forecasted Results of Operations and Cash Available for Distribution

        In this section, we present in detail the basis for our belief that we will be able to pay the minimum quarterly distribution on all of our common units and subordinated units and make the corresponding distributions on our 2.0% general partner interest for the twelve months ending June 30, 2011. We present a table, consisting of pro forma and forecasted results of operations and cash available for distribution for the year ended December 31, 2009, the twelve

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months ended March 31, 2010 and the twelve months ending June 30, 2011. In the table that follows, we show our pro forma results of operations and the amount of cash available for distribution we would have had for the year ended December 31, 2009 and the twelve months ended March 31, 2010 based on our unaudited pro forma condensed consolidated statements of operations included elsewhere in this prospectus and our forecasted results of operations and the forecasted amount of cash available for distribution for the twelve months ending June 30, 2011 and the significant assumptions upon which this forecast is based.

        Our unaudited pro forma condensed consolidated financial statements are derived from the audited historical and the unaudited historical condensed consolidated financial statements of Rhino Energy LLC included elsewhere in this prospectus and our predecessor's accounting records, which are unaudited. Our unaudited pro forma condensed consolidated financial statements should be read together with "Selected Historical Consolidated and Pro Forma Condensed Consolidated Financial and Operating Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the audited historical consolidated financial statements of Rhino Energy LLC and the notes to those statements included elsewhere in this prospectus.

        We must generate approximately $45.0 million (or approximately $11.3 million per quarter) of available cash to pay the minimum quarterly distribution for four quarters on all of our common units and subordinated units that will be outstanding immediately after this offering and the corresponding distribution on our general partner interest. We did not, however, generate $45.0 million of available cash from operating surplus during the year ended December 31, 2009 or the twelve months ended March 31, 2010. The amount of available cash from operating surplus we generated with respect to those periods was approximately $33.4 million and $39.3 million, respectively. As a result, for those periods, we would have generated available cash sufficient to pay 100% of the minimum quarterly distribution on our common units, but only approximately 48.3% and 74.8%, respectively, of the minimum quarterly distribution on our subordinated units during those periods. We have not used quarter-by-quarter estimates for each quarter in the year ended December 31, 2009 and the twelve months ended March 31, 2010 to determine if we would have generated available cash sufficient to pay the minimum quarterly distribution for each quarter during those periods.

        The following table also sets forth our calculation of forecasted cash available for distribution to our unitholders and general partner for the twelve months ending June 30, 2011. We forecast that our cash available for distribution generated during the twelve months ending June 30, 2011 will be approximately $74.8 million. This amount would be sufficient to pay the minimum quarterly distribution of $0.445 per unit on all of our common units and subordinated units and the corresponding distribution on our general partner's 2.0% general partner interest for each quarter in the four quarters ending June 30, 2011.

        We are providing the financial forecast to supplement our pro forma and historical consolidated financial statements in support of our belief that we will have sufficient cash available to allow us to pay cash distributions on all of our common units and subordinated units and the corresponding distributions on our general partner's 2.0% general partner interest for each quarter in the twelve months ending June 30, 2011 at the minimum quarterly distribution rate. Please read "—Significant Forecast Assumptions" for further information as to the assumptions we have made for the financial forecast. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" for information as to the accounting policies we have followed for the financial forecast.

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        Our forecast reflects our judgment as of the date of this prospectus of conditions we expect to exist and the course of action we expect to take during the twelve months ending June 30, 2011. We believe that our actual results of operations will approximate those reflected in our forecast, but we can give no assurance that our forecasted results will be achieved. If our estimates are not achieved, we may not be able to pay distributions on our common units and subordinated units at the minimum quarterly distribution rate of $0.445 per unit each quarter (or $1.78 per unit on an annualized basis) or any other rate. The assumptions and estimates underlying the forecast are inherently uncertain and, though we consider them reasonable as of the date of this prospectus, are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the forecast, including, among others, risks and uncertainties contained in "Risk Factors." Accordingly, there can be no assurance that the forecast is indicative of our future performance or that actual results will not differ materially from those presented in the forecast. Inclusion of the forecast in this prospectus should not be regarded as a representation by any person that the results contained in the forecast will be achieved.

        We do not, as a matter of course, make public forecasts as to future sales, earnings or other results. However, we have prepared the following forecast to present the forecasted cash available for distribution to our unitholders and general partner during the forecasted period. The accompanying forecast was not prepared with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in our view, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management's knowledge and belief, the expected course of action and our expected future financial performance. However, this information is not necessarily indicative of future results.

        Neither our independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the forecast contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the forecast. We do not undertake to release publicly after this offering any revisions or updates to the financial forecast or the assumptions on which our forecasted results of operations are based.

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Rhino Resource Partners LP
Cash Available for Distribution

 
  Pro Forma (1)   Forecasted (1)(2)  
 
  Year Ended
December 31,
2009
  Twelve Months
Ended
March 31,
2010
  Twelve Months
Ending
June 30,
2011
 
 
  (in thousands, except average coal price)
 

Operating Data:

                   

Coal produced in tons

    4,705     4,218     4,400  

(Increase) decrease to coal inventory in tons

    (34 )   (77 )   241  

Coal purchased in tons

    2,027     1,567     115  
               

Coal sales in tons

    6,699     5,708     4,757  

Steam coal sales in tons—committed (3)

    6,277     5,270     3,239  

Wgt. avg. steam coal sales price per ton—committed (3)

  $ 54.39   $ 54.58   $ 56.86  

Metallurgical coal sales in tons—committed (3)

    354     363     391  

Wgt. avg. metallurgical coal sales price per ton—committed (3)

  $ 162.57   $ 165.12   $ 127.09  

Steam coal sales in tons—uncommitted

    68     65     808  

Wgt. avg. steam coal sales price per ton—uncommitted

  $ 46.62   $ 45.74   $ 52.68  

Metallurgical coal sales in tons—uncommitted

    n/a     10     319  

Wgt. avg. metallurgical coal sales price per ton—uncommitted

    n/a   $ 85.00   $ 110.00  

Financial Data:

                   

Coal sales revenue—committed (3)

  $ 398,595   $ 347,212   $ 233,873  

Coal sales revenue—uncommitted

    3,157     3,852     77,604  

Other coal sales revenue (4)

    5,050     4,997     1,305  

Other revenues (5)

    12,988     13,626     15,195  
               
   

Total revenues

  $ 419,790   $ 369,686   $ 327,977  
               

Costs and expenses:

                   
 

Cost of operations (exclusive of depreciation, depletion and amortization shown separately below)

  $ 336,335   $ 284,370   $ 220,095  
 

Freight and handling

    3,990     3,725     3,907  
 

Depreciation, depletion and amortization (6)

    36,279     34,070     36,345  
 

Selling, general and administrative (exclusive of depreciation, depletion and amortization shown separately above)

    16,754     16,056     15,482  
 

Incremental selling, general and administrative

            3,000  
 

Loss on sale of assets

    1,710     1,709      
               
   

Total costs and expenses

  $ 395,069   $ 339,930   $ 278,829  
               

Income from operations

  $ 24,721   $ 29,756   $ 49,148  

Interest and other income (expense):

                   
 

Interest expense

    (4,291 )   (4,113 )   (3,803 )
 

Interest income

    154     75      
 

Other income (expense)

    (83 )   (83 )    
 

Equity in net income of unconsolidated affiliate

    893     806     8,705  
               

Net income

  $ 21,394   $ 26,441   $ 54,049  
               

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  Pro Forma (1)   Forecasted (1)(2)  
 
  Year Ended
December 31,
2009
  Twelve Months
Ended
March 31,
2010
  Twelve Months
Ending
June 30,
2011
 
 
  (in thousands, except distributions per unit)
 

Net income

  $ 21,394   $ 26,441   $ 54,049  
               

Plus:

                   
 

Depreciation, depletion and amortization

    36,279     34,070     36,345  
 

Interest expense

    4,291     4,113     3,803  
               

EBITDA (6)

  $ 61,964   $ 64,623   $ 94,197  
               

Less:

                   
 

Cash interest expense

    (4,291 )   (4,113 )   (2,681 )
 

Equity in net income of unconsolidated affiliate (7)

    (893 )   (806 )    
 

Maintenance capital expenditures (8)

    (23,393 )   (20,356 )   (16,686 )
 

Expansion capital expenditures (8)

    (6,264 )   (4,973 )   (46,092 )

Plus:

                   
 

Borrowings or cash on hand for expansion capital expenditures (8)

    6,264     4,973     46,092  
               

Cash available for distribution

  $ 33,387   $ 39,349   $ 74,831  
               

Implied cash distributions based on the minimum quarterly distribution per unit:

                   
 

Annualized minimum quarterly distribution per unit

  $ 1.78   $ 1.78   $ 1.78  
 

Distribution to common unitholders

  $ 22,067   $ 22,067   $ 22,067  
 

Distribution to subordinated unitholder

    22,067     22,067     22,067  
 

Distribution to general partner

    901     901     901  
               
   

Total distributions (9)

  $ 45,034   $ 45,034   $ 45,034  
               

Excess (shortfall)

  $ (11,647 ) $ (5,685 ) $ 29,797  
               

(1)
In May 2008, we entered into a joint venture, Rhino Eastern LLC, with an affiliate of Patriot that acquired the Rhino Eastern mining complex, which commenced production in August 2008. We have a 51% membership interest in, and serve as manager for, the joint venture.


We account for the results of operations for the joint venture using the equity method. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates." Using the equity method, we recognize our proportionate share of the joint venture's net income as a single component of other income and include it in "Equity in net income of unconsolidated affiliate." As such, the operating data do not include data with respect to the Rhino Eastern mining complex. The financial data reflect the results of operations for the joint venture only in our presentation and analyses of net income and EBITDA and only with respect to our 51% membership interest in the joint venture.

(2)
The forecasted column is based on the assumptions set forth in "—Significant Forecast Assumptions" below. Please see "—Quarterly Forecast Information" for forecasted results of operations and cash available for distribution presented on a quarter-by-quarter basis.

(3)
Represents coal sold on a committed basis for the year ended December 31, 2009 and the twelve months ended March 31, 2010, in each case, on a pro forma basis, and coal committed for sale for the twelve months ending June 30, 2011.

(4)
Other coal revenues consist of coal quality adjustments and transportation revenue.

(5)
Other revenues consist of limestone sales, coal handling, royalties, contract mining and rental income.

(6)
Please read "Selected Historical Consolidated and Pro Forma Condensed Consolidated Financial and Operating Data—Non-GAAP Financial Measure."

(7)
According to the terms of the joint venture agreement for Rhino Eastern LLC, the joint venture is to distribute all available funds to the members. The amount of available funds is determined by a committee comprised of two Rhino representatives and two Patriot representatives. That same committee will determine the timing and amount of cash distributions by the joint venture. To date, the joint venture, which commenced production in August 2008, has not made any cash distributions. However, as a result of the advancement of the joint venture operations past a development and rehabilitation stage and into a period of more consistent operations, our continuing to expand production and favorable metallurgical coal prices, we forecast a substantial increase in net income of our joint

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(8)
Historically, we have not made a distinction between maintenance capital expenditures and expansion capital expenditures. For purposes of this presentation, however, we have evaluated our capital expenditures for the year ended December 31, 2009 and the twelve months ended March 31, 2010 to determine which of them would have been classified as maintenance capital expenditures versus expansion capital expenditures, in accordance with our partnership agreement, at the time they were made. Based on this evaluation, we estimate that our maintenance capital expenditures for the year ended December 31, 2009 and the twelve months ended March 31, 2010 would have been $23.4 million and $20.6 million, respectively, and our expansion capital expenditures for the year ended December 31, 2009 and the twelve months ended March 31, 2010 would have been $6.3 million and $5.0 million, respectively. The amount of our actual maintenance capital expenditures may differ substantially from period to period, which could cause similar fluctuations in the amounts of operating surplus, adjusted operating surplus and available cash for distribution to our unitholders if we subtracted actual maintenance capital expenditures from operating surplus. To eliminate these fluctuations, our partnership agreement requires that an estimate of the maintenance capital expenditures necessary to maintain our operating capacity (as opposed to amounts actually spent) be subtracted from operating surplus each quarter. The $16.7 million of maintenance capital expenditures for the forecasted twelve months ending June 30, 2011 represents estimated maintenance capital expenditures as defined in our partnership agreement. The amount of estimated maintenance capital expenditures deducted from operating surplus is subject to review and change by the board of directors of our general partner at least once a year, provided that any change must be approved by the conflicts committee. Our partnership agreement does not cap the amount of maintenance capital expenditures that our general partner may estimate. We estimate that our expansion capital expenditures for the twelve months ending June 30, 2011 will be approximately $46.1 million. We expect to fund such expenditures with borrowings under our credit agreement. Please read "Provisions of Our Partnership Agreement Relating to Cash Distributions—Capital Expenditures" for a further discussion of maintenance capital expenditures and expansion capital expenditures.

(9)
Represents the amount that would be required to pay distributions for four quarters at our minimum quarterly distribution rate of $1.78 per unit on all of the common and subordinated units that will be outstanding immediately following this offering, and the related distributions on our general partner's 2.0% general partner interest.

Significant Forecast Assumptions

        The forecast has been prepared by and is the responsibility of our management. Our forecast reflects our judgment as of the date of this prospectus of conditions we expect to exist and the course of action we expect to take during the twelve months ending June 30, 2011. While the assumptions disclosed in this prospectus are not all-inclusive, the assumptions listed are those that we believe are significant to our forecasted results of operations. We believe we have a reasonable objective basis for these assumptions. We believe our actual results of operations will approximate those reflected in our forecast, but we can give no assurance that our forecasted results will be achieved. There will likely be differences between our forecast and the actual results and those differences could be material. If the forecast is not achieved, we may not be able to pay cash distributions on our common units at the minimum distribution rate or at all.

        Production and Revenues. We forecast that our total revenues for the twelve months ending June 30, 2011 will be approximately $328.0 million, as compared to approximately $419.8 million and $369.7 million, in each case on a pro forma basis, for the year ended December 31, 2009 and the twelve months ended March 31, 2010, respectively. Our forecast is based primarily on the following assumptions:

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        Cost of Operations. We forecast our cost of operations, excluding the cost of purchased coal and results from the joint venture, will be approximately $214.0 million for the twelve months ending June 30, 2011, as compared to approximately $227.2 million for the year ended December 31, 2009 and approximately $201.7 million for the twelve months ended March 31, 2010, in each case on a pro forma basis. Cost of operations primarily includes the cost of labor and benefits, operating supplies, equipment maintenance, rental and lease cost of equipment, royalties, taxes and transportation costs. The decrease in cost of operations is attributable primarily to decreased coal production for the forecasted period as compared to production in the year ended December 31, 2009 and the twelve months ended March 31, 2010, in each case on a pro forma basis. We forecast that our cost of operations per ton for the twelve months ending June 30, 2011 will be $46.27, as compared to $50.21 for the year ended December 31, 2009 and $47.27 for the twelve months ended March 31, 2010, in each case on a pro forma basis. This decrease is attributable primarily to cost cutting measures put into effect in 2009 and continued in the first quarter of 2010, and an increase in coal sold out of inventory and a decrease in rental and lease expense related to our mining equipment in the year ended December 31, 2009 and the twelve months ended March 31, 2010, in each case on a pro forma basis. Our forecasted cost of operations could vary significantly because of the large number of variables taken into consideration, many of which are beyond our control.

        We forecast our cost of purchased coal will be approximately $6.1 million for the forecasted period as compared to approximately $109.1 million for the year ended December 31, 2009 and approximately $82.7 million for the twelve months ended March 31, 2010, in each case on a pro forma basis. This decrease is attributable primarily to approximately 0.1 million tons of purchased coal in the forecast period as compared to approximately 2.0 million tons in the year ended December 31, 2009 and approximately 1.6 million tons in the twelve months ended March 31, 2010, in each case on a pro forma basis.

        Depreciation, Depletion and Amortization. We forecast depreciation, depletion and amortization expense to be approximately $36.3 million for the twelve months ending June 30, 2011, as compared to approximately $36.3 million for the year ended December 31, 2009 and approximately $34.1 million for the twelve months ended March 31, 2010, in each case on a pro forma basis. The increase in depreciation, depletion and amortization expense of approximately $2.2 million as compared to the twelve months ended March 31, 2010 is due to an increase in depreciation expense of approximately $0.3 million, an increase in depletion expense of approximately $0.5 million and an increase in amortization expense of approximately $1.4 million.

        Selling, General and Administrative. We forecast selling, general and administrative expenses to be approximately $18.5 million for the twelve months ending June 30, 2011, as compared to approximately $16.8 million for the year ended December 31, 2009, and approximately $16.1 million for the twelve months ended March 31, 2010, in each case on a pro forma basis. The forecasted selling, general and administrative expenses include wage increases, bonuses payable to certain executive officers upon the consummation of our initial public offering, inflationary increases in employee benefits and incremental expenses associated with being a publicly traded partnership of approximately $3.0 million.

        Financing. We forecast interest expense of approximately $3.8 million for the twelve months ending June 30, 2011, as compared to approximately $4.3 million for the year ended December 31, 2009 and approximately $4.1 million for the twelve months ended March 31,

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2010, in each case on a pro forma basis. Our total debt balance as of December 31, 2009, and March 31, 2010, in each case on a pro forma basis, was approximately $55.2 million and approximately $56.9 million, respectively. Our interest expense for the twelve months ending June 30, 2011 is based on the following assumptions:

        Equity in net income of unconsolidated affiliate.    We forecast that our share of net income of our unconsolidated affiliate, a joint venture that owns the Rhino Eastern mining complex, will be approximately $8.7 million for the twelve months ending June 30, 2011, as compared to approximately $0.9 million and $0.8 million, in each case on a pro forma basis, for the year ended December 31, 2009 and the twelve months ended March 31, 2010, respectively. Our forecast is based on the following assumptions:

        Capital Expenditures. We forecast capital expenditures for the twelve months ending June 30, 2011 based on the following assumptions:

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        Regulatory, Industry and Economic Factors. We forecast our results of operations for the twelve months ending June 30, 2011 based on the following assumptions related to regulatory, industry and economic factors:

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Quarterly Forecast Information

        The following table presents our forecasted results of operations and cash available for distribution on a quarter-by-quarter basis for the forecast period. The following forecast reflects our judgment as of the date of this prospectus of conditions we expect to exist and the course of action we expect to take for the twelve months ending June 30, 2011. Please see "—Significant Forecast Assumptions." The assumptions and estimates underlying the forecast for the twelve months ending June 30, 2011 are inherently uncertain, and estimating the precise quarter in which each revenue and expense will be recognized increases the level of uncertainty of the quarterly forecast information. Accordingly, there can be no assurance that actual quarter-by-quarter results will not differ materially from the quarter-by-quarter forecast information presented below. However, to the extent that a shortfall were to occur during a quarter in the forecast period, we believe we would be able to make working capital borrowings to pay distributions in such quarter, and would likely be able to repay such borrowings in a subsequent quarter, because we believe the total cash available for distribution for the forecast period will be more than sufficient to pay the aggregate minimum quarterly distribution to all unitholders and the corresponding distribution to our general partner for the forecast period.

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Rhino Resource Partners LP
Quarterly Forecast Information

 
  Forecasted  
 
  Three Months Ending    
 
 
  September 30,
2010
  December 31,
2010
  March 31,
2011
  June 30,
2011,
  Twelve Months
Ending June 30,
2011
 
 
  (in thousands, except average coal price)
 

Operating Data:

                               

Coal produced in tons

    937     1,006     1,220     1,237     4,400  

(Increase) decrease to coal inventory in tons

    109     128     5     (1 )   241  

Coal purchased in tons

    55     60             115  
                       

Coal sales in tons

    1,101     1,194     1,225     1,236     4,757  

Steam coal sales in tons—committed

    970     968     650     650     3,239  

Wgt. avg. steam coal sales price per ton—committed

  $ 54.70   $ 54.65   $ 60.08   $ 60.15   $ 56.86  

Metallurgical coal sales in tons—committed

    131     148     53     60     391  

Wgt. avg. metallurgical coal sales price per ton—committed

  $ 137.69   $ 138.64   $ 96.71   $ 102.13   $ 127.09  

Steam coal sales in tons—uncommitted

        51     377     380     808  

Wgt. avg. steam coal sales price per ton—uncommitted

    n/a   $ 44.50   $ 53.78   $ 52.70   $ 52.68  

Metallurgical coal sales in tons—uncommitted

        27     146     146     319  

Wgt. avg. metallurgical coal sales price per ton—uncommitted

    n/a   $ 110.00   $ 110.00   $ 110.00   $ 110.00  

Financial Data:

                               

Coal sales revenue—committed

  $ 71,049   $ 73,412   $ 44,157   $ 45,256   $ 233,873  

Coal sales revenue—uncommitted

        5,263     36,276     36,065     77,604  

Other coal sales revenue

    303     322     330     350     1,305  

Other revenues

    4,415     4,432     3,373     2,974     15,195  
                       
   

Total revenues (1)

  $ 75,767   $ 83,430   $ 84,135   $ 84,645   $ 327,977  
                       

Costs and expenses:

                               
 

Cost of operations (exclusive of depreciation, depletion and amortization shown separately below)

  $ 53,276   $ 56,720   $ 55,306   $ 54,792   $ 220,095  
 

Freight and handling

    644     839     1,141     1,283     3,907  
 

Depreciation, depletion and amortization

    9,006     8,898     9,264     9,177     36,345  
 

Selling, general and administrative (exclusive of depreciation, depletion and amortization shown separately above)

    3,784     3,778     4,027     3,894     15,482  
 

Incremental selling, general and administrative

    750     750     750     750     3,000  
 

Loss on sale of assets

                     
                       
   

Total costs and expenses (1)

  $ 67,460   $ 70,985   $ 70,488   $ 69,896   $ 278,829  
                       

Income from operations

  $ 8,307   $ 12,444   $ 13,647   $ 14,749   $ 49,148  

Interest and other income (expense):

                               
 

Interest expense

    (909 )   (798 )   (951 )   (1,145 )   (3,803 )
 

Interest income

                     
 

Other income (expense)

                     
 

Equity in net income of unconsolidated affiliate

    979     1,566     3,051     3,109     8,705  
                       

Net income (1)

  $ 8,376   $ 13,213   $ 15,747   $ 16,713   $ 54,049  
                       

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  Forecasted  
 
  Three Months Ending    
 
 
  September 30,
2010
  December 31,
2010
  March 31,
2011
  June 30,
2011,
  Twelve Months
Ending June 30,
2011
 
 
  (in thousands, except distributions per unit)
 

Net income (1)

  $ 8,376   $ 13,213   $ 15,747   $ 16,713   $ 54,049  
                       

Plus:

                               
 

Depreciation, depletion and amortization

    9,006     8,898     9,264     9,177     36,345  
 

Interest expense

    909     798     951     1,145     3,803  
                       

EBITDA (1)

  $ 18,291   $ 22,909   $ 25,962   $ 27,035   $ 94,197  
                       

Less:

                               
 

Cash interest expense

    (793 )   (581 )   (634 )   (673 )   (2,681 )
 

Maintenance capital expenditures

    (3,540 )   (3,755 )   (4,675 )   (4,716 )   (16,686 )
 

Expansion capital expenditures

    (9,554 )   (5,914 )   (10,789 )   (19,836 )   (46,092 )

Plus:

                               
 

Borrowings or cash on hand for expansion capital expenditures

    9,554     5,914     10,789     19,836     46,092  
                       

Cash available for distribution (1)

  $ 13,958   $ 18,573   $ 20,653   $ 21,646   $ 74,831  
                       

Implied cash distributions based on the minimum quarterly distribution per unit:

                               
 

Annualized minimum quarterly distribution per unit

  $ 0.445   $ 0.445   $ 0.445   $ 0.445   $ 1.78  
 

Distribution to common unitholders

  $ 5,517   $ 5,517   $ 5,517   $ 5,517   $ 22,067  
 

Distribution to subordinated unitholder

    5,517     5,517     5,517     5,517     22,067  
 

Distribution to general partner

    225     225     225     225     901  
                       
   

Total distributions (1)

  $ 11,259   $ 11,259   $ 11,259   $ 11,259   $ 45,034  
                       

Excess (shortfall) (1)

  $ 2,700   $ 7,315   $ 9,395   $ 10,388   $ 29,797  
                       

(1)
Based on actual amounts and not the rounded amounts shown in this table.

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PROVISIONS OF OUR PARTNERSHIP AGREEMENT RELATING TO CASH DISTRIBUTIONS

        Set forth below is a summary of the significant provisions of our partnership agreement that relate to cash distributions.

Distributions of Available Cash

General

        Our partnership agreement requires that, within 45 days after the end of each quarter, beginning with the quarter ending September 30, 2010, we distribute all of our available cash to unitholders of record on the applicable record date. We will adjust the minimum quarterly distribution for the period from the closing of the offering through September 30, 2010.

Definition of Available Cash

        Available cash, for any quarter, consists of all cash and cash equivalents on hand at the end of that quarter:

        The purpose and effect of the last bullet point above is to allow our general partner, if it so decides, to use cash from working capital borrowings made after the end of the quarter but on or before the date of determination of available cash for that quarter to pay distributions to unitholders. Under our partnership agreement, working capital borrowings are borrowings that are made under a credit agreement, commercial paper facility or similar financing arrangement, and in all cases are used solely for working capital purposes or to pay distributions to partners and with the intent of the borrower to repay such borrowings within twelve months from sources other than additional working capital borrowings.

Distributions of the Minimum Quarterly Distribution

        We will distribute to the holders of common and subordinated units on a quarterly basis the minimum quarterly distribution of $0.445 per unit, or $1.78 on an annualized basis, to the extent we have sufficient cash from our operations after establishment of cash reserves and payment of fees and expenses, including payments to our general partner and its affiliates. However, there is no guarantee that we will pay the minimum quarterly distribution on the units in any quarter. Even if our cash distribution policy is not modified or revoked, the amount of distributions paid

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under our policy and the decision to make any distribution is determined by our general partner, taking into consideration the terms of our partnership agreement.

General Partner Interest and Incentive Distribution Rights

        Initially, our general partner will be entitled to 2.0% of all distributions that we make prior to our liquidation. Our general partner has the right, but not the obligation, to contribute a proportionate amount of capital to us to maintain its current general partner interest. Our general partner's initial 2.0% interest in our distributions may be reduced if we issue additional limited partner units in the future and our general partner does not contribute a proportionate amount of capital to us to maintain its 2.0% general partner interest.

        Our general partner also currently holds incentive distribution rights that entitle it to receive increasing percentages, up to a maximum of 50.0%, of the cash we distribute from operating surplus (as defined below) in excess of $0.445 per unit per quarter. The maximum distribution of 50.0% includes distributions paid to our general partner on its 2.0% general partner interest and assumes that our general partner maintains its general partner interest at 2.0%. The maximum distribution of 50.0% does not include any distributions that our general partner may receive on any limited partner units that it owns.

Operating Surplus and Capital Surplus

General

        All cash distributed will be characterized as either "operating surplus" or "capital surplus." Our partnership agreement requires that we distribute available cash from operating surplus differently than available cash from capital surplus.

Operating Surplus

        Operating surplus consists of:

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        As described above, operating surplus does not reflect actual cash on hand that is available for distribution to our unitholders and is not limited to cash generated by our operations. For example, it includes $25.0 million that will enable us, if we choose, to distribute as operating surplus cash we receive in the future from non-operating sources such as asset sales, issuances of securities and long-term borrowings that would otherwise be distributed as capital surplus. In addition, the effect of including, as described above, certain cash distributions on equity interests in operating surplus will be to increase operating surplus by the amount of any such cash distributions. As a result, we may also distribute as operating surplus up to the amount of any such cash that we receive from non-operating sources.

        The proceeds of working capital borrowings increase operating surplus and repayments of working capital borrowings are generally operating expenditures, as described below, and thus reduce operating surplus when made. However, if a working capital borrowing is not repaid during the twelve-month period following the borrowing, it will be deemed repaid at the end of such period, thus decreasing operating surplus at such time. When such working capital borrowing is in fact repaid, it will be excluded from operating expenditures because operating surplus will have been previously reduced by the deemed repayment.

        We define operating expenditures in the partnership agreement, and it generally means all of our cash expenditures, including, but not limited to, taxes, reimbursement of expenses to our general partner or its affiliates, payments made under interest rate hedge agreements or commodity hedge agreements (provided that (1) with respect to amounts paid in connection with the initial purchase of an interest rate hedge contract or a commodity hedge contract, such amounts will be amortized over the life of the applicable interest rate hedge contract or commodity hedge contract and (2) payments made in connection with the termination of any interest rate hedge contract or commodity hedge contract prior to the expiration of its stipulated settlement or termination date will be included in operating expenditures in equal quarterly installments over the remaining scheduled life of such interest rate hedge contract or commodity hedge contract), officer compensation, repayment of working capital borrowings, debt service

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payments and estimated maintenance capital expenditures (as discussed in further detail below), provided that operating expenditures will not include:

Capital Surplus

        Capital surplus is defined in our partnership agreement as any distribution of available cash in excess of our operating surplus. Accordingly, capital surplus would generally be generated by:

        All available cash distributed by us on any date from any source will be treated as distributed from operating surplus until the sum of all available cash distributed since the closing of the initial public offering equals the operating surplus from the closing of the initial public offering through the end of the quarter immediately preceding that distribution. Any excess available cash distributed by us on that date will be deemed to be capital surplus.

Characterization of Cash Distributions

        Our partnership agreement requires that we treat all available cash distributed as coming from operating surplus until the sum of all available cash distributed since the closing of this offering equals the operating surplus from the closing of this offering through the end of the quarter immediately preceding that distribution. Our partnership agreement requires that we treat any amount distributed in excess of operating surplus, regardless of its source, as capital surplus. We do not anticipate that we will make any distributions from capital surplus.

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Capital Expenditures

        Estimated maintenance capital expenditures reduce operating surplus, but expansion capital expenditures, actual maintenance capital expenditures and investment capital expenditures do not. Maintenance capital expenditures are those capital expenditures required to maintain our long-term operating capacity. Examples of maintenance capital expenditures include expenditures associated with the replacement of equipment and coal reserves, whether through the expansion of an existing mine or the acquisition or development of new reserves, to the extent such expenditures are made to maintain our long-term operating capacity. Maintenance capital expenditures will also include interest (and related fees) on debt incurred and distributions on equity issued (including incremental distributions on incentive distribution rights) to finance all or any portion of the construction or development of a replacement asset that is paid in respect of the period that begins when we enter into a binding obligation to commence constructing or developing a replacement asset and ending on the earlier to occur of the date that any such replacement asset commences commercial service and the date that it is abandoned or disposed of. Capital expenditures made solely for investment purposes will not be considered maintenance capital expenditures.

        Because our maintenance capital expenditures can be irregular, the amount of our actual maintenance capital expenditures may differ substantially from period to period, which could cause similar fluctuations in the amounts of operating surplus, adjusted operating surplus and cash available for distribution to our unitholders if we subtracted actual maintenance capital expenditures from operating surplus.

        Our partnership agreement will require that an estimate of the average quarterly maintenance capital expenditures necessary to maintain our operating capacity over the long-term be subtracted from operating surplus each quarter as opposed to the actual amounts spent. The amount of estimated maintenance capital expenditures deducted from operating surplus for those periods will be subject to review and change by our general partner at least once a year, provided that any change is approved by our conflicts committee. The estimate will be made at least annually and whenever an event occurs that is likely to result in a material adjustment to the amount of our maintenance capital expenditures, such as a major acquisition or the introduction of new governmental regulations that will impact our business. Our partnership agreement does not cap the amount of maintenance capital expenditures that our general partner may estimate. For purposes of calculating operating surplus, any adjustment to this estimate will be prospective only. For a discussion of the amounts we have allocated toward estimated maintenance capital expenditures, please read "Cash Distribution Policy and Restrictions on Distributions."

        The use of estimated maintenance capital expenditures in calculating operating surplus will have the following effects:

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        Expansion capital expenditures are those capital expenditures that we expect will increase our operating capacity over the long term. Examples of expansion capital expenditures include the acquisition of reserves, equipment or a new mine or the expansion of an existing mine, to the extent such capital expenditures are expected to expand our long-term operating capacity. Expansion capital expenditures will also include interest (and related fees) on debt incurred and distributions on equity issued (including incremental distributions on incentive distribution rights) to finance all or any portion of the construction of such capital improvement in respect of the period that commences when we enter into a binding obligation to commence construction of a capital improvement and ending on the earlier to occur of date any such capital improvement commences commercial service and the date that it is disposed of or abandoned. Capital expenditures made solely for investment purposes will not be considered expansion capital expenditures.

        Investment capital expenditures are those capital expenditures that are neither maintenance capital expenditures nor expansion capital expenditures. Investment capital expenditures largely will consist of capital expenditures made for investment purposes. Examples of investment capital expenditures include traditional capital expenditures for investment purposes, such as purchases of securities, as well as other capital expenditures that might be made in lieu of such traditional investment capital expenditures, such as the acquisition of a capital asset for investment purposes or development of assets that are in excess of the maintenance of our existing operating capacity, but which are not expected to expand, for more than the short term, our operating capacity.

        As described below, neither investment capital expenditures nor expansion capital expenditures are included in operating expenditures, and thus will not reduce operating surplus. Because expansion capital expenditures include interest payments (and related fees) on debt incurred to finance all or a portion of the construction, replacement or improvement of a capital asset during the period that begins when we enter into a binding obligation to commence construction of a capital improvement and ending on the earlier to occur of the date any such capital asset commences commercial service and the date that it is abandoned or disposed of, such interest payments also do not reduce operating surplus. Losses on disposition of an investment capital expenditure will reduce operating surplus when realized and cash receipts from an investment capital expenditure will be treated as a cash receipt for purposes of calculating operating surplus only to the extent the cash receipt is a return on principal.

        Capital expenditures that are made in part for maintenance capital purposes, investment capital purposes and/or expansion capital purposes will be allocated as maintenance capital expenditures, investment capital expenditures or expansion capital expenditure by our general partner.

Subordination Period

General

        Our partnership agreement provides that, during the subordination period (which we define below), the common units will have the right to receive distributions of available cash from operating surplus each quarter in an amount equal to $0.445 per common unit, which amount is defined in our partnership agreement as the minimum quarterly distribution, plus any arrearages in the payment of the minimum quarterly distribution on the common units from prior quarters, before any distributions of available cash from operating surplus may be made on the subordinated units. These units are deemed "subordinated" because for a period of time, referred to as the subordination period, the subordinated units will not be entitled to receive any

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distributions from operating surplus until the common units have received the minimum quarterly distribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Furthermore, no arrearages will be paid on the subordinated units. The practical effect of the subordinated units is to increase the likelihood that during the subordination period there will be sufficient available cash from operating surplus to pay the minimum quarterly distribution on the common units.

Subordination Period

        Except as described below, the subordination period will begin on the closing date of this offering and expire on the first business day after the distribution to unitholders in respect of any quarter, beginning with the quarter ending June 30, 2013, if each of the following has occurred:

Early Termination of Subordination Period

        Notwithstanding the foregoing, the subordination period will automatically terminate on the first business day after the distribution to unitholders in respect of any quarter, if each of the following has occurred:

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Expiration Upon Removal of the General Partner

        In addition, if the unitholders remove our general partner other than for cause:

Expiration of the Subordination Period

        When the subordination period ends, each outstanding subordinated unit will convert into one common unit and will then participate pro-rata with the other common units in distributions of available cash.

Adjusted Operating Surplus

        Adjusted operating surplus is intended to reflect the cash generated from operations during a particular period and therefore excludes net increases in working capital borrowings and net drawdowns of reserves of cash generated in prior periods. Adjusted operating surplus consists of:

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Distributions of Available Cash From Operating Surplus During the Subordination Period

        Our partnership agreement requires that we make distributions of available cash from operating surplus for any quarter during the subordination period in the following manner:

        The preceding discussion is based on the assumptions that our general partner maintains its 2.0% general partner interest and that we do not issue additional classes of equity interests.

Distributions of Available Cash From Operating Surplus After the Subordination Period

        Our partnership agreement requires that we make distributions of available cash from operating surplus for any quarter after the subordination period in the following manner:

        The preceding discussion is based on the assumptions that our general partner maintains its 2.0% general partner interest and that we do not issue additional classes of equity interests.

General Partner Interest and Incentive Distribution Rights

        Our partnership agreement provides that our general partner initially will be entitled to 2.0% of all distributions that we make prior to our liquidation. Our general partner has the right, but not the obligation, to contribute a proportionate amount of capital to us to maintain its 2.0% general partner interest if we issue additional units. Our general partner's 2.0% interest, and the percentage of our cash distributions to which it is entitled, will be proportionately reduced if we issue additional units in the future (other than the issuance of common units upon exercise by the underwriters of their option to purchase additional common units or the issuance of common units upon conversion of outstanding subordinated units) and our general partner does not contribute a proportionate amount of capital to us in order to maintain its 2.0% general partner interest. Our partnership agreement does not require that the general partner fund its capital contribution with cash and our general partner may fund its capital contribution by the contribution to us of common units or other property.

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        Incentive distribution rights represent the right to receive an increasing percentage (13.0%, 23.0% and 48.0%, in each case, not including distributions paid to the general partner on its 2.0% general partner interest) of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved. Our general partner currently holds the incentive distribution rights, but may transfer these rights separately from its general partner interest, subject to restrictions in the partnership agreement.

        The following discussion assumes that our general partner maintains its 2.0% general partner interest, that there are no arrearages on common units and that our general partner continues to own the incentive distribution rights.

        If for any quarter:

then, our partnership agreement requires that we distribute any additional available cash from operating surplus for that quarter among the unitholders and the general partner in the following manner:

Percentage Allocations of Available Cash From Operating Surplus

        The following table illustrates the percentage allocations of available cash from operating surplus between the unitholders and our general partner based on the specified target distribution levels. The amounts set forth under "Marginal Percentage Interest in Distributions" are the percentage interests of our general partner and the unitholders in any available cash from operating surplus we distribute up to and including the corresponding amount in the column "Total Quarterly Distribution Per Unit." The percentage interests shown for our unitholders and our general partner for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimum quarterly distribution. The percentage interests set forth below for our general partner include distributions paid on its 2.0% general partner interest, assume our general partner has contributed any additional capital to maintain

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its 2.0% general partner interest and has not transferred its incentive distribution rights and there are no arrearages on common units.

 
   
  Marginal Percentage
Interest in Distributions
   
 
 
  Total Quarterly
Distribution Per Unit
  Unitholders   General
Partner
   
 

Minimum Quarterly Distribution

  $0.445   98.0%     2.0 %      

First Target Distribution

  up to $0.5118   98.0%     2.0 %      

Second Target Distribution

  above $0.5118 up to $0.5563   85.0%     15.0 %      

Third Target Distribution

  above $0.5563 up to $0.6675   75.0%     25.0 %      

Thereafter

  above $0.6675   50.0%     50.0 %      

General Partner's Right to Reset Incentive Distribution Levels

        Our general partner, as the initial holder of our incentive distribution rights, has the right under our partnership agreement to elect to relinquish the right to receive incentive distribution payments based on the initial cash target distribution levels and to reset, at higher levels, the minimum quarterly distribution amount and cash target distribution levels upon which the incentive distribution payments to our general partner would be set. If our general partner transfers all or a portion of our incentive distribution rights in the future, then the holder or holders of a majority of our incentive distribution rights will be entitled to exercise this right. The following discussion assumes that our general partner holds all of the incentive distribution rights at the time that a reset election is made. The right to reset the minimum quarterly distribution amount and the target distribution levels upon which the incentive distributions are based may be exercised, without approval of our unitholders or the conflicts committee of our general partner, at any time when there are no subordinated units outstanding and we have made cash distributions to the holders of the incentive distribution rights at the highest level of incentive distribution for each of the prior four consecutive fiscal quarters. The reset minimum quarterly distribution amount and target distribution levels will be higher than the minimum quarterly distribution amount and the target distribution levels prior to the reset such that there will be no incentive distributions paid under the reset target distribution levels until cash distributions per unit following this event increase as described below. We anticipate that our general partner would exercise this reset right in order to facilitate acquisitions or internal growth projects that would otherwise not be sufficiently accretive to cash distributions per common unit, taking into account the existing levels of incentive distribution payments being made to our general partner.

        In connection with the resetting of the minimum quarterly distribution amount and the target distribution levels and the corresponding relinquishment by our general partner of incentive distribution payments based on the target cash distributions prior to the reset, our general partner will be entitled to receive a number of newly issued common units based on a predetermined formula described below that takes into account the "cash parity" value of the average cash distributions related to the incentive distribution rights received by our general partner for the two quarters prior to the reset event as compared to the average cash distributions per common unit during this period. In addition, our general partner will be issued a general partner interest necessary to maintain its general partner interest in us immediately prior to the reset election.

        The number of common units that our general partner would be entitled to receive from us in connection with a resetting of the minimum quarterly distribution amount and the target distribution levels then in effect would be equal to the quotient determined by dividing (x) the

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average amount of cash distributions received by our general partner in respect of its incentive distribution rights during the two consecutive fiscal quarters ended immediately prior to the date of such reset election by (y) the average of the amount of cash distributed per common unit during each of these two quarters.

        Following a reset election, the minimum quarterly distribution amount will be reset to an amount equal to the average cash distribution amount per unit for the two fiscal quarters immediately preceding the reset election (which amount we refer to as the "reset minimum quarterly distribution") and the target distribution levels will be reset to be correspondingly higher such that we would distribute all of our available cash from operating surplus for each quarter thereafter as follows:

        The following table illustrates the percentage allocation of available cash from operating surplus between the unitholders and our general partner at various cash distribution levels (1) pursuant to the cash distribution provisions of our partnership agreement in effect at the closing of this offering, as well as (2) following a hypothetical reset of the minimum quarterly distribution and target distribution levels based on the assumption that the average quarterly cash distribution amount per common unit during the two fiscal quarters immediately preceding the reset election was $0.7120.

 
   
   
  Marginal Percentage
Interest in
Distribution
   
   
 
  Quarterly Distribution
Per Unit
Prior to Reset
  Unitholders   General
Partner
  Quarterly Distribution
Per Unit
Following Hypothetical Reset

Minimum Quarterly Distribution

    $0.445     98.0 %   2.0 % $0.7120

First Target Distribution

    up to $0.5118     98.0 %   2.0 % up to $0.8188(1)

Second Target Distribution

    above $0.5118 up to $0.5563     85.0 %   15.0 % above $0.8188(1) up to $0.8900(2)

Third Target Distribution

    above $0.5563 up to $0.6675     75.0 %   25.0 % above $0.8900(2) up to $1.0680(3)

Thereafter

    above $0.6675     50.0 %   50.0 % above $1.0680(3)

(1)
This amount is 115.0% of the hypothetical reset minimum quarterly distribution.
(2)
This amount is 125.0% of the hypothetical reset minimum quarterly distribution.
(3)
This amount is 150.0% of the hypothetical reset minimum quarterly distribution.

        The following table illustrates the total amount of available cash from operating surplus that would be distributed to the unitholders and our general partner, including in respect of

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incentive distribution rights, based on an average of the amounts distributed for a quarter for the two quarters immediately prior to the reset. The table assumes that immediately prior to the reset there would be 24,794,000 common units outstanding, our general partner has maintained its 2.0% general partner interest, and the average distribution to each common unit would be $0.7120 per quarter for the two quarters prior to the reset.

 
   
   
  Cash Distributions to General Partner
Prior to Reset
   
 
 
   
  Cash
Distributions
to Common
Unitholders
Prior to Reset
   
 
 
  Quarterly
Distributions
Per Unit
Prior to Reset
   
 
 
  Common
Units
  2.0% General
Partner
Interest
  Incentive
Distribution
Rights
  Total   Total
Distributions
 

Minimum Quarterly Distribution

  $0.445   $ 11,033,330   $   $ 225,170   $   $ 225,170   $ 11,258,500  

First Target Distribution

 

up to $0.5118

   
1,655,000
   
   
33,776
   
   
33,776
   
1,688,775
 

Second Target Distribution

 

above $.5118

                                     

  up to $0.5563     1,103,333         25,961     168,745     194,706     1,298,039  

Third Target Distribution

 

above $0.5563

                                     

  up to $0.6675     2,758,333         73,556     845,889     919,444     3,677,777  

Thereafter

 

above $0.6675

   
1,103,333
   
   
44,133
   
1,059,200
   
1,103,333
   
2,206,666
 
                               

      $ 17,653,328   $   $ 402,595   $ 2,073,833   $ 2,476,428   $ 20,129,756  
                               

        The following table illustrates the total amount of available cash from operating surplus that would be distributed to the unitholders and our general partner, including in respect of incentive distribution rights, with respect to the quarter in which the reset occurs. The table reflects that as a result of the reset there would be 27,706,687 common units outstanding, our general partner's 2.0% interest has been maintained, and the average distribution to each common unit would be $0.7120. The number of common units to be issued to our general partner upon the reset was calculated by dividing (1) the average of the amounts received by our general partner in respect of its incentive distribution rights for the two quarters prior to the reset as shown in the table above, or $2,073,833, by (2) the average available cash distributed on each common unit for the two quarters prior to the reset as shown in the table above, or $0.7120.

 
   
   
  Cash Distributions to General Partner
After Reset
   
 
 
   
  Cash
Distributions
to Common
Unitholders
After Reset
   
 
 
  Quarterly
Distributions
Per Unit
After Reset
   
 
 
  Common
Units
  2.0% General
Partner
Interest
  Incentive
Distribution
Rights
  Total   Total
Distributions
 

Minimum Quarterly Distribution

    $0.7120   $ 17,653,328   $ 2,073,833   $ 402,595   $   $ 2,476,428   $ 20,129,756  

First Target Distribution

    up to $0.8188                          

Second Target Distribution

    above $0.8188                                      

    up to $0.8900                          

Third Target Distribution

    above $0.8900                                      

    up to $1.0680                          

Thereafter

    above $1.0680                          
                                 

        $ 17,653,328   $ 2,073,833   $ 402,595   $   $ 2,476,428   $ 20,129,756  
                                 

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        Our general partner will be entitled to cause the minimum quarterly distribution amount and the target distribution levels to be reset on more than one occasion, provided that it may not make a reset election except at a time when it has received incentive distributions for the prior four consecutive fiscal quarters based on the highest level of incentive distributions that it is entitled to receive under our partnership agreement.

Distributions From Capital Surplus

How Distributions From Capital Surplus Will Be Made

        Our partnership agreement requires that we make distributions of available cash from capital surplus, if any, in the following manner:

        The preceding paragraph assumes that our general partner maintains its 2.0% general partner interest and that we do not issue additional classes of equity interests.

Effect of a Distribution From Capital Surplus

        Our partnership agreement treats a distribution of capital surplus as the repayment of the initial unit price from this initial public offering, which is a return of capital. The initial public offering price less any distributions of capital surplus per unit is referred to as the "unrecovered initial unit price." Each time a distribution of capital surplus is made, the minimum quarterly distribution and the target distribution levels will be reduced in the same proportion as the corresponding reduction in the unrecovered initial unit price. Because distributions of capital surplus will reduce the minimum quarterly distribution and target distribution levels after any of these distributions are made, it may be easier for our general partner to receive incentive distributions and for the subordinated units to convert into common units. However, any distribution of capital surplus before the unrecovered initial unit price is reduced to zero cannot be applied to the payment of the minimum quarterly distribution or any arrearages.

        Once we distribute capital surplus on a unit issued in this offering in an amount equal to the initial unit price, our partnership agreement specifies that the minimum quarterly distribution and the target distribution levels will be reduced to zero. Our partnership agreement specifies that we then make all future distributions from operating surplus, with 50.0% being paid to the holders of units and 50.0% to our general partner. The percentage interests shown for our general partner include its 2.0% general partner interest and assume our general partner has not transferred the incentive distribution rights.

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Adjustment to the Minimum Quarterly Distribution and Target Distribution Levels

        In addition to adjusting the minimum quarterly distribution and target distribution levels to reflect a distribution of capital surplus, if we combine our units into fewer units or subdivide our units into a greater number of units, our partnership agreement specifies that the following items will be proportionately adjusted:

        For example, if a two-for-one split of the common units should occur, the minimum quarterly distribution, the target distribution levels and the unrecovered initial unit price would each be reduced to 50.0% of its initial level. If we combine our common units into a lesser number of units or subdivide our common units into a greater number of units, we will combine or subdivide our subordinated units using the same ratio applied to the common units. Our partnership agreement provides that we do not make any adjustment by reason of the issuance of additional units for cash or property.

        In addition, if legislation is enacted or if existing law is modified or interpreted by a governmental taxing authority, so that we become taxable as a corporation or otherwise subject to taxation as an entity for federal, state or local income tax purposes, our partnership agreement specifies that the minimum quarterly distribution and the target distribution levels for each quarter may, in the sole discretion of the general partner, be reduced by multiplying each distribution level by a fraction, the numerator of which is available cash for that quarter and the denominator of which is the sum of available cash for that quarter plus our general partner's estimate of our aggregate liability for the quarter for such income taxes payable by reason of such legislation or interpretation. To the extent that the actual tax liability differs from the estimated tax liability for any quarter, the difference will be accounted for in subsequent quarters.

Distributions of Cash Upon Liquidation

General

        If we dissolve in accordance with the partnership agreement, we will sell or otherwise dispose of our assets in a process called liquidation. We will first apply the proceeds of liquidation to the payment of our creditors. We will distribute any remaining proceeds to the unitholders, the general partner and the holders of the incentive distribution rights, in accordance with their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation.

        The allocations of gain and loss upon liquidation are intended, to the extent possible, to entitle the holders of common units to a preference over the holders of subordinated units upon our liquidation, to the extent required to permit common unitholders to receive their unrecovered initial unit price plus the minimum quarterly distribution for the quarter during which liquidation occurs plus any unpaid arrearages in payment of the minimum quarterly distribution on the common units. However, there may not be sufficient gain upon our

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liquidation to enable the common unitholders to fully recover all of these amounts, even though there may be cash available for distribution to the holders of subordinated units. Any further net gain recognized upon liquidation will be allocated in a manner that takes into account the incentive distribution rights of our general partner.

Manner of Adjustments for Gain

        The manner of the adjustment for gain is set forth in the partnership agreement. If our liquidation occurs before the end of the subordination period, we will allocate any gain to the partners in the following manner:

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        The percentage interests set forth above for our general partner include its 2.0% general partner interest and assume our general partner has not transferred the incentive distribution rights.

        If the liquidation occurs after the end of the subordination period, the distinction between common and subordinated units will disappear, so that clause (3) of the second bullet point above and all of the third bullet point above will no longer be applicable.

Manner of Adjustments for Losses

        If our liquidation occurs before the end of the subordination period, after making allocations of loss to the general partner and the unitholders in a manner intended to offset in reverse order the allocations of gains that have previously been allocated, we will generally allocate any loss to our general partner and the unitholders in the following manner:

        If the liquidation occurs after the end of the subordination period, the distinction between common and subordinated units will disappear, so that all of the first bullet point above will no longer be applicable.

Adjustments to Capital Accounts

        Our partnership agreement requires that we make adjustments to capital accounts upon the issuance of additional units. In this regard, our partnership agreement specifies that we allocate any unrealized and, for U.S. federal income tax purposes, unrecognized gain resulting from the adjustments to the unitholders and the general partner in the same manner as we allocate gain upon liquidation. In the event that we make positive adjustments to the capital accounts upon the issuance of additional units, our partnership agreement requires that we generally allocate any later negative adjustments to the capital accounts resulting from the issuance of additional units or upon our liquidation in a manner which results, to the extent possible, in the partners' capital account balances equaling the amount which they would have been if no earlier positive adjustments to the capital accounts had been made. By contrast to the allocations of gain, and except as provided above, we generally will allocate any unrealized and unrecognized loss resulting from the adjustments to capital accounts upon the issuance of additional units to the unitholders and our general partner based on their respective percentage ownership of us. In this manner, prior to the end of the subordination period, we generally will allocate any such loss equally with respect to our common and subordinated units. In the event we make negative adjustments to the capital accounts as a result of such loss, future positive adjustments resulting from the issuance of additional units will be allocated in a manner designed to reverse the prior negative adjustments, and special allocations will be made upon liquidation in a manner that results, to the extent possible, in our unitholders' capital account balances equaling the amounts they would have been if no earlier adjustments for loss had been made.

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SELECTED HISTORICAL CONSOLIDATED AND CONDENSED CONSOLIDATED AND PRO FORMA CONDENSED CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following table presents selected historical consolidated financial and operating data of our predecessor, Rhino Energy LLC, as of the dates and for the periods indicated. The selected historical consolidated financial data presented as of March 31, 2006 and December 31, 2006 and 2007 and for the years ended March 31, 2006 and nine months ended December 31, 2006 is derived from the audited historical consolidated financial statements of Rhino Energy LLC that are not included in this prospectus. The historical consolidated financial data as of and for the year ended December 31, 2008 was restated to reflect certain selling, general and administrative expenses within the statement of operations, rather than as a distribution to members in the statement of financial position. The selected historical consolidated financial data presented as of December 31, 2008 and 2009 and for the years ended December 31, 2007, 2008 and 2009 is derived from the audited historical consolidated financial statements of Rhino Energy LLC that are included elsewhere in this prospectus. The selected historical consolidated financial data presented as of March 31, 2010 and for the three months ended March 31, 2009 and 2010 is derived from the unaudited historical condensed consolidated financial statements of Rhino Energy LLC that are included elsewhere in this prospectus. The selected historical condensed consolidated financial data presented as of March 31, 2009 is derived from our predecessor's accounting records, which are unaudited. Effective April 1, 2006, Rhino Energy LLC changed its fiscal year end from March 31 to December 31.

        The selected pro forma condensed consolidated financial data presented for the year ended December 31, 2009 and as of and for the three months ended March 31, 2010 is derived from our unaudited pro forma condensed consolidated financial statements included elsewhere in this prospectus. Our unaudited pro forma condensed consolidated financial statements give pro forma effect to:

        The unaudited pro forma condensed consolidated statement of financial position assumes the items listed above occurred as of March 31, 2010. The unaudited pro forma condensed consolidated statements of operations data for the year ended December 31, 2009 and the three months ended March 31, 2010 assume the items listed above occurred as of January 1, 2009. We have not given pro forma effect to the incremental selling, general and administrative expenses of approximately $3.0 million that we expect to incur as a result of being a publicly traded partnership.

        For a detailed discussion of the selected historical consolidated financial information contained in the following table, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following table should also be read in conjunction with "Use of Proceeds," "Business—Our History" and the audited historical consolidated financial statements of Rhino Energy LLC and our unaudited pro forma condensed consolidated financial statements included elsewhere in this prospectus. Among other things,

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the historical consolidated and unaudited pro forma condensed consolidated financial statements include more detailed information regarding the basis of presentation for the information in the following table.

        The following table presents a non-GAAP financial measure, EBITDA, which we use in our business as it is an important supplemental measure of our performance and liquidity. EBITDA represents net income before interest expense, income taxes and depreciation, depletion and amortization. This measure is not calculated or presented in accordance with GAAP. We explain this measure under "—Non-GAAP Financial Measure" and reconcile it to its most directly comparable financial measures calculated and presented in accordance with GAAP.

 
  Rhino Energy LLC Historical   Rhino Resource Partners LP
Pro Forma Condensed
Consolidated
 
 
  Consolidated   Condensed
Consolidated
   
   
 
 
  Year Ended
March 31,
  Nine Months
Ended
December 31,
  Year Ended December 31,   Three Months Ended
March 31,
  Year Ended
December 31,
  Three Months
Ended
March 31,
 
 
   
  2008
(as restated)
   
 
 
  2006   2006   2007   2009   2009   2010   2009   2010  
 
  (in thousands, except per unit data)
 

Statement of Operations Data:

                                                       

Total revenues

  $ 363,960   $ 300,839   $ 403,452   $ 438,924   $ 419,790   $ 116,706   $ 66,603   $ 419,790   $ 66,603  

Costs and expenses:

                                                       
 

Cost of operations (exclusive of depreciation, depletion and amortization shown separately below)

    291,208     241,185     318,405     364,912     336,335     98,317     46,352     336,335     46,352  
 

Freight and handling costs

    6,343     2,768     4,021     10,223     3,990     938     673     3,990     673  
 

Depreciation, depletion and amortization

    13,744     28,471     30,750     36,428     36,279     9,974     7,765     36,279     7,765  
 

Selling, general and administrative (exclusive of depreciation, depletion and amortization shown separately above)

    17,129     18,573     15,370     19,042     16,754     4,376     3,678     16,754     3,678  
 

(Gain) loss on sale of assets

    (377 )   746     (944 )   451     1,710         (1 )   1,710     (1 )
                                       
   

Total costs and expenses

    328,047     291,742     367,602     431,056     395,069     113,605     58,466     395,069     58,466  
                                       

Income from operations

    35,913     9,096     35,849     7,868     24,721     3,101     8,136     24,721     8,136  

Interest and other income (expense):

                                                       
 

Interest expense

    (4,976 )   (6,498 )   (5,579 )   (5,501 )   (6,222 )   (1,170 )   (1,471 )   (4,291 )   992  
 

Interest income

    412     312     317     149     71     87     8     71     8  
 

Equity in net income (loss) of unconsolidated affiliate(1)

                (1,587 )   893     (43 )   (130 )   893     (130 )
 

Other—net

    491     272                              
                                       

Total interest and other expense

    (4,073 )   (5,914 )   (5,263 )   (6,939 )   (5,259 )   (1,125 )   (1,592 )   (3,327 )   (1,114 )
                                       

Income before income tax expense

    31,840     3,182     30,588     929     19,462     1,976     6,544     21,394     7,023  

Income tax expense (benefit)

    178     125     (126 )                        
                                       

Net income

  $ 31,661   $ 3,057   $ 30,714   $ 929   $ 19,462   $ 1,976   $ 6,544   $ 21,394   $ 7,023  

Net income per limited partner unit, basic:

                                                       
 

Common units

                                              $1.306     $0.360  
 

Subordinated units

                                              $0.385     $0.196  

Net income per limited partner unit, diluted:

                                                       
 

Common units

                                              $1.304     $0.358  
 

Subordinated units

                                              $0.385     $0.196  

Weighted average number of limited partner units outstanding, basic:

                                                       
 

Common units