Natural Resource Partners LP

Hello, everyone. Thank you for joining us and welcome to the Natural Resource Partners LP second quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Tiffany Sammis, Investor Relations. Tiffany, please go ahead.

Thank you and good morning and welcome to the Natural Resource Partners second quarter 2026 conference call. Today's call is being webcast and a replay will be available on our website. Joining me today are Craig Nunez, 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 second 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 $42 million of free cash flow in the second quarter and $163 million of free cash flow over the last 12 months before the $39 million we put to work in our Sodash business back in the first quarter. The world has been noisy recently. Geopolitical conflict, shipping disruptions, tariff fights. I don't know how those will resolve. What I do know is that we paid off our bank revolver last month. and have only $14 million of debt outstanding. Barring something unforeseen, we intend to raise distribution significantly in November. Coal, both metallurgical and thermal, has settled down and shown modest improvement off the lows, although I can't point to any single event that's likely to push prices sharply higher from here. We're not in the business of predicting commodity prices anyway. What matters more is that our mineral rights segment just keeps doing what it's done for years, producing cash, rain or shine. Through every major coal cycle, it has been the most dependable cash generator we've ever owned. On thermal coal, if oil prices remain high, that tends to bring more associated natural gas production along with it, which puts downward pressure on thermal coal prices in North America. Cheaper oil would work the other way. Meanwhile, renewables keep getting more competitive, and that will pose a long-term headwind for thermal coal. Now, so dash. The honest picture is that global supply still exceeds demand, and we don't see a quick fix. The encouraging sign is that international prices, after a long and painful decline, appear to have found the floor. But it's a floor below most producers' cost of production. which tells you the downturn still has room to run. Domestic so dash prices have always traded at a premium to international prices due to transportation costs, trade frictions, and the value domestic customers place on reliable supply. That premium is unusually wide right now, mostly because domestic contracts get set once a year while international prices move with spot market. As a result, Domestic prices haven't caught up with how far international prices have fallen. As contracts for 2027 deliveries get negotiated this year, we expect that gap to close, which means lower domestic prices ahead. We've seen this movie before. The 1999 to 2004 downturn looked a lot like today's market, and it eventually corrected as supply and demand found their way back into balance. We're starting to see hints of that with recent announcements of extended closures amounting to roughly 4% of global capacity. Markets have a way of curing their own excesses given time. So to sum it up, despite challenges for all three of our key commodities, NRP is generating strong free cash flow. We're almost debt free. And barring the unexpected, we plan to raise distribution significantly starting in November. So with that, I'll turn it over to Chris.