Natural Resource Partners LP

If you would like to withdraw your question, just start one again. I would now like to hand the call over to Tiffany Samis. In best relations, you may begin.

Thank you. Good morning, and welcome to the Natural Resource Partners first quarter 2025 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 gap 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 coal lessee 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 35 million dollars of free cash flow in the first quarter of 2025 and 214 million dollars of free cash flow over the last 12 months prices for metallurgical coal thermal coal and soda ash declined precipitously over the last year and negatively impacted our results as you've heard us say for over a year now we expect weak prices for all three of our key commodities to persist for the foreseeable future and provide a drag on our performance. Despite this, we expect to continue generating robust free cash flow, which we will use to pay off remaining debt, which stands at $118 million today. We are now reaping the rewards of the capital allocation decisions made over the last decade. Our capital structure is solid and our financial outlook is bright. We look forward to the prospect of significant increases in unit holder distributions as debt is paid off next year. Our mineral rights business generated $44 million of free cash flow in the first quarter of 2025. Sluggish demand for steel, relatively high inventories at power plants, and an uncertain geopolitical environment have pressured metallurgical and thermal coal prices to levels that we believe are at or near the cost of production for many producers. and there are no clear catalysts in sight to push prices materially higher in the near term. With that being said, operator cost inflation has increased the break-even coal sales prices for our lessees. As a royalty owner, we benefit from higher sales prices without having to bear the burden of our operators' higher costs of production. As a result, we believe the royalty revenue we receive at our operators' break-even levels is higher today than in the past. Turning to soda ash, we received $3 million in cash distribution from Shisha Jam, Wyoming, in the first quarter of 2025, an 80% drop from the previous year quarter. Soda ash prices remain at the lowest levels in decades, with sales prices trading below the cost of production for many producers. We believe we are in the early innings of this soda ash bear market, given the current supply-demand imbalance. and that it will take multiple years for global markets to fully absorb excess supply and stabilize at materially higher price levels. While we have seen some high cost production shut down globally, most notably in the United Kingdom, Poland, and Argentina, the scale has been too small to materially benefit the market so far. We take comfort that Shishajam, Wyoming is one of the world's lowest cost producers. While distributions will likely remain at these lower levels in the near term, our positive long-term view of our SODASH investment has not changed. Regarding carbon neutral initiatives, or CNI, the slowdown that we expected for the general market for most CNI activities has materialized. Leasing interest for underground carbon sequestration remains lackluster, has political, regulatory, and market uncertainties. pose significant hurdles for developers contemplating large capital investments for these types of projects. We are, however, continuing to see activity in the geothermal, solar, and lithium space and are making small-scale progress on several initiatives. While the timing and likelihood of future free cash flow from CNI activities is uncertain, we still believe our vast ownership footprint provides opportunities for carbon-neutral cash flow while requiring minimal capital investment bias. And with that, I will turn the call over to Chris.