Natural Resource Partners LP

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 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the conference over to Tiffany Samies, Manager of Investor Relations. You may begin.

Thank you. Good morning, and welcome to the Natural Resource Partners first quarter 2024 conference call. Today's call is being webcast, and a replay will be available on our website. Joining me today are Craig Nunez, President and Chief Operating Officer, Chris Zolas, Chief Financial Officer, and Kevin Craig, Executive Vice President. Some of our comments today may include forward-looking statements reflecting NRP's views about future events. These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward-looking statements. These risks are discussed in NRP's Form 10-K and other Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP measures are included in our first quarter press release, which can be found on our website. I would like to remind everyone that we do not intend to discuss the operations or outlook for any particular coalesce or detailed market fundamentals. Now, I would like to turn the call over to Craig Nunez, our President and Chief Operating Officer.

Thank you, Tiffany, and good morning, everyone. NRP generated $72 million of free cash flow in the first quarter and $312 million of free cash flow over the last 12 months. This robust cash generation has allowed us to make noteworthy progress toward our goal of eliminating all financial obligations. As of today, our total remaining obligations, which include debt and preferred equity, stand at approximately $240 million. a 45% decrease from just one year ago. Since embarking on our de-risking strategy in 2015, we have settled 100% of the outstanding warrants, paid off nearly 90% of our debt, and redeemed more than 70% of the preferred equity. We stand firm in our belief that this is the best strategy to maximize the intrinsic value of our business, which should in turn maximize long-term unit holder returns. The primary drivers of our recent strong performance were historically high prices for both metallurgical coal and soda ash, which have declined from record highs and will likely remain volatile for the foreseeable future. We believe that muted investment in new met coal supply will provide support for prices, but not at the record high levels seen in recent years. Soda ash prices are also under pressure from a significant increase in global capacity from new projects in China, Turkey, and the United States. We believe it will take several years for the market to absorb these new supplies. While we expect the partnership's free cash flow to decline from 2023's record level due to these factors, our capital structure is solid and improving, and we anticipate the business will continue to generate robust levels of free cash flow for the foreseeable future. We expect to remain on track to pay off all debt and preferred stock while paying common unit distributions to help cover unit holder tax liabilities associated with owning NRP common units. Our mineral rights business generated 70 million of free cash flow during the first quarter of 2024. Metallurgical coal prices declined in Q1 versus 2023, but remain generally at or above historical norms. While we expect MET prices to remain volatile, Global supply and demand remains in reasonable balance, and we believe it will stay that way for the foreseeable future due to long-term demand trends and continued modest investment in new MET supply. Thermal coal prices experienced significant volatility during the quarter as high inventory levels driven by mild weather and low-priced natural gas put downward pressure on U.S. domestic demand. While we do not believe thermal coal prices will rebound to the record high levels seen in recent years, underinvestment in new sources of thermal coal production and solid international demand should provide price support for the foreseeable future at levels that are competitive when compared to historical norms. Longer term, we believe the domestic thermal market will continue its long-term secular decline. Moving to soda ash, we received a $14 million cash distribution from SysAjam Wyoming in the first quarter of 2024. This quarterly distribution was paid in connection with the fourth quarter 2023 performance, when soda ash prices were much higher than they were during the first quarter. The soda ash market continues to remain oversupplied, putting downward pressure on prices, a trend that began in the second half of last year as new supply flooded the market. Our lower first quarter net income compared to prior quarters reflects this weaker price environment, and we expect future distributions from Sysojam Wyoming to adjust accordingly. Despite the present challenging sodash market, our long-term outlook for our investment in Sysojam Wyoming remains positive. We are one of the world's lowest cost producers of a product that has favorable long-term fundamentals driven by urbanization, the megatrends for renewable energy, and the electrification of the global auto fleet. Our soda ash business remains a key asset in generating value for NRP unit holders today and in the long run. We continue to explore opportunities to lease our mineral and surface assets for permanent underground CO2 sequestration, forest sequestration, lithium production, and the generation of electricity using geothermal wind and solar energy. While we believe the carbon neutral industry is still decades from full development, the potential upside from our carbon neutral initiatives could be significant, all while requiring no capital investment by NRP. And with that, I'll turn the call over to Chris to cover the financial results.