NRP - Earnings call 1 2023 | Natural Resource Partners L.P.

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Operator

Thank you for standing by. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Natural Resource Partners LP First Quarter 2023 Earnings Conference Call. [Operator Instructions] Tiffany Sammis, you may begin your conference.

Tiffany Sammis

Thank you. to Resource welcome XXXX First and Call. Conference morning the Partners Natural Quarter Good being a webcast, available is call Today's and website. on replay our be will

Joining Executive Vice Chief President Chief Craig Officer; President. me Chris Financial Craig, Officer; Zolas, and Kevin and today are Operating Nunez,

other future any that differ our about and could actual to and today materially discussed cause our to NRP's in comments for NRP's filings. involve statements. undertake matters of include Exchange forward-looking our any These Some reflecting forward-looking risks from risks statements, We XX-K Commission may views These are revise events. Form and or forward-looking reason. uncertainties Securities no obligation update publicly statements results

Our measures. today comments include non-GAAP also financial

measures which our quarter to or to not or Additional any details and discuss be reconciliations can remind market do particular operations fundamentals. coal to website. I GAAP included press everyone first are the would release, intend on the comparable most our found we like detailed for that in outlook lessee directly

I you soda commentary our Resources' specific Sisecam for refer to public regarding and business disclosures questions segment. ash addition, In

Officer. I to would call Operating the to Nunez, Now our Chief and turn Craig President over like Craig?

Craig Nunez

impressive, generated and over the one first last XX $XX Tiffany, everyone. our of cash has in Performance generating partnership. with quarterly equally flow. history business of the the free of good you, performances flow morning, best quarter, free cash Thank of $XXX million is NRP the which in million been the months

equity X.Xx common our and in future our debt-free XX% and progress this XX preferred We of available in from months leverage quarter continue down becoming our ended performance at unitholders. We of toward ratio take goal strong to financial just million all will, free of turn, redeemed which $XX.X for equity significant of first the February, advantage maximize ago. to flow redeeming X.Xx, our make cash preferred

$XXX current value record million remained from and consisting year. of price significantly remaining and have million million. Metallurgical into a prices of $XX last We levels while preferred equity approximately to convertible debt, of warrants relative reached settlement the $XXX be million of obligations declined they volatile, strong levels, with have historical to $XXX of highly settled, coal about units common

to we supply-demand believe expect months in weather weakened also will remained North While America have recent in and price future, impacted coal due for significantly we to in demand. for coal well supply. Thermal has met industry new the the warm of the volatility but supported electricity lack continue, primarily balance Europe unusually remain metallurgical foreseeable investment strong as prices

While weather producers will likely producers. historical with The standards always from for continued met for albeit are pricing support to uncertainty constraints with that have lack volatility. that supply relatively foreseeable high we thermal pose the same the additions are also demand, affecting capacity prevented coal at provide thermal thermal unavoidable future, adding levels is thermal of coal believe by

quarter. negotiate of increase a in generated exceed Coupled prices ash global prior Sisecam new record prices levels, a ash order to the Sisecam XXXX. allowed remained for position, year growth in quarter which near Consequently, strong robust these with to continued first the international Soda XX% demand earnings capacity Wyoming low-cost XXXX. domestic book versus soda Wyoming's

of atmosphere. climate our to our global the remain identifying in of in demand land, change carbon to to ongoing increase reduce and energy, to renewable continue ash, its low-cost utilize opportunities We electrification by committed address to the and driven due remains position believe urbanization. We mineral soda Sisecam part part to characteristics and that the for the favorable by outlook for a expanded quarter, In long-term sequestration, new for forest previously long-term geothermal fleet future the auto investment solar long-term doing have a Wyoming initiatives positive in in executing assets our land generation, carbon-neutral by electricity our cash potential subsurface project flows our within no addition transaction, to while the by of expanded NRP. announced sequestration development COX in leases revenue, we carbon-neutral and COX This Montana. capital for all portfolio our first forest solar the requiring transactions lease related to

cover identify results. our the turn to provide working transitional NRP continue that, I'll We economy. And Chris provide large value opportunities capitalize the the to over acreage footprint to to energy on for meaningful with environment, our on to financial benefits call and

Christopher Zolas

Craig, you, everyone. morning, good and Thank

the million first cash $XX flow $XX net quarter, of operating During we and of income. generated million

flow first free quarter year recoupments. Many in coal net producing net million generated royalty balances coal our million thermal recoupable to for of segment XXXX. When and XX% of XX% of sales cash Our operating metallurgical flow Rights utilized and significantly received leases payments and royalty compared greater these $XX the cash quarter, segment income revenues royalty $XX Mineral factors to were lease coal prior XXXX plus of coal up volumes year minimum timing and the coal and higher in their the million quarter year due first initiatives. royalty than quarter, XXXX. prior volumes primarily prices their metallurgical and made payments minimums. Metallurgical of $XX $X strong, of due our carbon-neutral from revenue and cash and as increased prior of flow compared additional was sales increased we income as primarily free Segment to to million our the the

the significantly metallurgical thermal of coal to flow coal consequence, is compared our Rights changes in more prices. to cash changes a Mineral segment in sensitive variability as prices As

decrease from $XX in net as was of higher ash to as This Moving cash Soda Soda of in the in million soda sales prices XXXX. Free segment. $X compared Wyoming prior million to to was first income quarter XXXX million the primarily driven our period. first This to demand business $XX significantly outstanding. compared first Ash Costs debt by in of year flow due segment. a of Net distribution $X quarterly receiving decrease year XXXX income million lower Ash $X the in -- increase million quarter was our million due from the because the less period. higher business segment slightly $XX in strong and XXXX. Shifting the to XXXX for and prior to in lower period. XXXX was million was in This expense Financing our the of million to quarter compared primarily prior interest a year Corporate were $XX Sisecam first in $XX quarter cash

in business of cash prior due as of because paid year in for higher Corporate interest incentive the paid on and increased free Financing cash in XXXX. borrowings and of due to in primarily XXXX XXXX the million credit decreased timing flow compensation the quarter compared to to XXXX Our $X first segment's performance our the payments improved period, facility

call, $XX.X preferred our last from of million in received our February their XXXX, in convert holders As at we units. units of exercising Upon preferred our or notice redemption redeem we of notice, these receiving communicated to to election cash. their earnings preferred position and units for and redeem value in our to million liquidity we exercise $XX.X the consider our intrinsic units rights our determined common right

original outstanding, million annually a distributions. preferred issued million million us remain saving of of $XXX As in $X units, now $XXX.X result, the

distributions to debt and We to expect continue interest redeem repay payments and units. decline as total preferred annual we unitholders our our to preferred

unit million preferred a quarter Regarding distribution XXXX In special a our today, to units. And associated quarterly common partnership XXXX tax common our common unitholders. And owning of XXXX, common per liability cover of distribution for the finally, turn and a March $X.X and to cash cash XXXX distribution of February preferred quarter common over of per million unit unit I'll cash with questions. operator the unitholders common unit distribution $X.XX cash we with $X.XX to XXXX, our distributions, paid in back distribution partnership the that, $X.X call the fourth first a their unitholders. per announced help the to paid $X.XX of

Operator

questions. at this time, are showing there And [Operator I'm no Instructions]

Craig Nunez

Thank everyone, call you participating NRP. for continued for today, your you, operator. of you, and Goodbye. thank in support Thank our

Operator

today's And conference does conclude you. Thank call. this

disconnect. now may You

Natural Resource Partners (NRP) 4 May 232023 Q1 Earnings call transcript