Natural Resource Partners LP

Thank you for standing by. My name is Kate and I'll be your conference operator today. At this time, I would like to welcome everyone to the Natural Resource Partners LP fourth 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 with the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Tiffany Sammons, Investor Relations. Please go ahead.

Thank you. Good morning and welcome to the Natural Resource Partners fourth 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 fourth 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 $251 million of free cash flow, redeemed all remaining preferred units, and settled all outstanding warrants in 2024. Additionally, We increased our credit facility capacity by $45 million to $200 million and extended the maturity date of that facility by two years to 2029. We remain steadfast in our commitment to delever and de-risk the partnership, which we believe is the best way to maximize intrinsic value per unit. We have paid off over $1.3 billion of financial obligations over the last 10 years, and currently have only $142 million of debt remaining. Metallurgical and thermal coal prices dropped by half last year from the highs seen in 2023. We do not expect coal prices to rebound in the near term due to soft global steel demand, low priced North American natural gas, and high coal inventory levels at electric generating facilities. Over the long term, we believe limited investment in new coal supply increased production costs, labor shortages, and ongoing secular demand trends for steel should provide support for metallurgical coal prices at higher levels when compared to long-term historical norms. Thermal coal prices should also benefit from limited new investment, increased production costs, and labor shortages. However, we expect these factors to be more than offset by the continued long-term secular decline in North American thermal demand. Turning to soda ash, we received $39 million in cash distributions from Shishijam, Wyoming in 2024, a decrease of $43 million from the previous year. Global soda ash prices fell roughly 60% from the record highs of 2023 as the market was flooded with new production capacity and demand for flat glass waned primarily due to slowing construction activity in China. These macroeconomic factors have created the most difficult market for soda ash producers in decades, with sales prices currently below production costs for many producers. We believe it will take several years for the market to fully absorb excess capacity and drive prices materially higher. Shishajam, Wyoming is not immune to these challenges, and we expect distributions paid to us to remain below historical levels for the next several years. As one of the world's lowest cost producers, we believe we are well positioned to manage through this environment. Regarding our carbon neutral initiatives, we continue to explore opportunities to lease our mineral and surface assets for permanent underground carbon dioxide sequestration, forest carbon sequestration, lithium production, and the generation of electricity using geothermal, wind, and solar energy. Geothermal and lithium leasing activity has picked up recently, but CO2 sequestration activity remains lackluster. Furthermore, Exxon has notified us that they will not be renewing their carbon dioxide sequestration lease in 2022 on our, executed in 2022, on our Baldwin County, Alabama acreage. While we believe potential significant upside exists with our carbon neutral assets in general and our CO2 sequestration pore space specifically, Political, regulatory, and market uncertainty continues to pose a challenge for developers contemplating large capital investments. 2025 is shaping up to be a difficult year for our three key commodities. Lower prices will lead to lower free cash flow generation compared to recent years. But due to the dramatic strides made to de-lever the business, the NRP finds itself in a more attractive financial position today than at any time in over a decade. We are conservatively financed, generating large amounts of free cash flow relative to our remaining debt, with the potential for noteworthy increases in cash available for common unit holders as debt is paid off next year. And with that, I'll turn it over to Chris for our financials.