Natural Resource Partners L.P. Reports Second Quarter 2024 Results and Declares Second Quarter 2024 Distribution of $0.75 per Common Unit

Rhea-AI Summary

Natural Resource Partners L.P. (NYSE:NRP) reported its second quarter 2024 results, generating $57.3 million in free cash flow. The company declared a Q2 2024 distribution of $0.75 per common unit. Key highlights include:

- Net income: $46,064,000
- Operating cash flow: $56,629,000
- Free cash flow: $57,288,000

NRP retired all remaining warrants and redeemed $40 million of preferred units. Despite lower coal and soda ash prices in 2024, the company continues to generate robust free cash flow. NRP aims to eliminate all financial obligations, with approximately $240 million of debt and preferred equity remaining.

Positive

• Generated $57.3 million of free cash flow in Q2 2024 and $287 million over the last twelve months
• Retired all 4 million outstanding warrants
• Redeemed $40 million of preferred units, reducing outstanding amount to $31.7 million
• Declared Q2 2024 distribution of $0.75 per common unit
• Strong progress towards eliminating all financial obligations

Negative

• Lower coal and soda ash prices in 2024 compared to 2022 and 2023 highs
• Soda Ash net income decreased $23.3 million compared to prior year period
• Global soda ash prices expected to remain lower throughout the year and into next year
• Increased Corporate and Financing costs due to higher interest on credit facility borrowings

Insights

Financial Analyst

Natural Resource Partners L.P. (NRP) has reported a solid financial performance for Q2 2024, demonstrating resilience in a challenging market environment. The company generated $57.3 million in free cash flow, which is impressive given the lower coal and soda ash prices compared to previous years. This robust cash generation has allowed NRP to make significant progress in its deleveraging efforts.

Key financial highlights include:

• Net income of $46.1 million
• Operating cash flow of $56.6 million
• Free cash flow of $57.3 million

The company's strategic focus on debt reduction is evident, with the retirement of all outstanding warrants and the redemption of $40 million of preferred units. This leaves only $31.7 million of the original $250 million preferred units outstanding, significantly improving the company's capital structure.

The declared distribution of $0.75 per common unit suggests management's confidence in the company's financial stability. However, investors should note that future distributions will be determined quarterly based on various factors, including market conditions and cash reserves needed for operations.

Market Research Analyst

The market dynamics for NRP's key commodities present a mixed outlook. Coal prices, particularly metallurgical coal, have declined due to weakened steel demand in China and Europe. However, they remain elevated compared to historical norms. Factors supporting coal prices include:

• production increases due to capital and labor constraints
• Inflationary pressures
• Ongoing volatility in global steel demand

The soda ash market is experiencing significant pressure from new Chinese supply, leading to lower prices. This trend is expected to continue into next year as the market absorbs the additional supply. Despite these challenges, NRP's diversified portfolio and exploration of carbon-neutral revenue opportunities provide potential for value creation.

Investors should monitor global economic recovery, particularly in construction and manufacturing sectors, as these will directly impact demand for NRP's commodities. The company's ability to capitalize on emerging opportunities in carbon sequestration and renewable energy could provide additional value streams in the future.

HOUSTON--(BUSINESS WIRE)-- Natural Resource Partners L.P. (NYSE:NRP) today reported second quarter 2024 results as follows:

		For the Three Months Ended				Last Twelve Months Ended
(In thousands) (Unaudited)		June 30, 2024
Net income		$	46,064			$	231,103
Operating cash flow			56,629				284,856
Free cash flow (1)			57,288				287,417

__________________
(1)		See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

Highlights:

• Generated $57.3 million of free cash flow in the second quarter of 2024
• Retired remaining 0.3 million warrants with $10.0 million in cash and 89,059 common units; Zero warrants of original 4 million warrants remain outstanding
• Redeemed $40.0 million of preferred units at par with cash; $31.7 million of original $250 million preferred units remain outstanding
• Paid first quarter 2024 common unit distribution of $0.75 per unit
• Declares second quarter 2024 common unit distribution of $0.75 per unit

"NRP generated $57 million of free cash flow in the second quarter of 2024 and $287 million of free cash flow over the last twelve months," said Craig Nunez, NRP's president and chief operating officer. "Despite lower coal and soda ash prices seen in 2024, we continue to generate robust free cash flow and make significant progress toward our goal of eliminating all of our financial obligations. We no longer have any warrants outstanding and currently have approximately $240 million of debt and preferred equity remaining.”

Mr. Nunez continued, "Coal and soda ash prices in the first half of the year were significantly lower than the highs seen in 2022 and 2023 and we expect this trend to continue. However, we remain on track to eliminate all preferred equity and debt from our balance sheet, after which our common unitholders will have no competing claims on free cash flow generated by the partnership. We are steadfast in our belief that this strategy is the best way to maximize intrinsic value and unitholder returns.”

NRP announced today that the board of directors of its general partner declared a second quarter 2024 cash distribution of $0.75 per common unit to be paid on August 27, 2024, to unitholders of record on August 20, 2024. In addition, the board declared a $0.95 million cash distribution on NRP's outstanding preferred units. Future distributions on NRP's common and preferred units will be determined on a quarterly basis by the board of directors. The board of directors considers numerous factors each quarter in determining cash distributions including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability, and the level of cash reserves that the board determines is necessary for future operating and capital needs.

Segment Performance

Mineral Rights

Mineral Rights net income for the second quarter of 2024 was relatively flat as compared to the prior year period. Lower coal sales prices and volumes were offset by non-recurring items that included a $4.6 million gain on asset sales primarily related to a coal property condemnation and a $2.1 million carbon neutral initiative transaction. Mineral Rights operating cash flow and free cash flow each increased $1.2 million as compared to the prior year period primarily due to the timing of cash collections and the carbon neutral initiative transaction identified above, partially offset by weaker coal sales prices and volumes. Approximately 75% of coal royalty revenues and approximately 60% of coal royalty sales volumes were derived from metallurgical coal in the second quarter of 2024.

Metallurgical coal prices continued to decline during the second quarter of 2024 due to weakened steel demand primarily as a result of the decline in China's construction industry and slower than expected recovery of the construction market in Europe. While metallurgical prices were significantly lower than the record highs seen in 2022, they remain elevated as compared to historical norms. NRP expects ongoing price volatility for both metallurgical and thermal coal as global steel demand impacts metallurgical coal while weather, natural gas prices, inventory levels, and scheduled shutdowns of coal plants impact thermal coal. Limitations on operators' ability to increase production due to limited access to capital and labor shortages, as well as inflationary pressures, are expected to provide ongoing price support above historical norms.

NRP continues to explore carbon neutral revenue opportunities across its large asset portfolio. While the timing and likelihood of additional cash flows from these activities is uncertain, NRP believes its large ownership footprint throughout the United States provides additional opportunities to create value in this regard with minimal capital investment by NRP. NRP's carbon neutral revenue opportunities include the sequestration of carbon dioxide underground and in standing forests, the generation of electricity using geothermal, solar, and wind energy, and lithium production.

Soda Ash

Soda Ash net income in the second quarter of 2024 decreased $23.3 million as compared to the prior year period primarily due to lower sales prices driven by new supply from China. Operating cash flow and free cash flow in the second quarter of 2024 decreased $24.8 million as compared to the prior year period due to a lower cash distribution received from Sisecam Wyoming in the second quarter of 2024.

Global soda ash prices continue to be significantly lower than the record setting prices seen in the previous year due to an influx of new supply. NRP believes lower soda ash prices will remain throughout the year and into next year as the market absorbs the additional supply.

Corporate and Financing

Corporate and Financing costs increased $1.1 million in the second quarter of 2024 as compared to the prior year period primarily due to higher interest costs as a result of increased borrowings on the credit facility used to accelerate the redemption of preferred units and settlement of warrants in 2024.

NRP retired the remainder of the outstanding 0.3 million warrants for $10.0 million in cash and 89,059 common units during the second quarter of 2024. NRP has now retired all 4.0 million of its previously issued warrants. NRP also redeemed $40.0 million preferred units at par with cash during the second quarter of 2024. Of the originally issued $250 million preferred units, only $31.7 million preferred units remain outstanding.

In May 2024, NRP declared and paid a first quarter 2024 cash distribution of $0.75 per common unit and a $2.15 million cash distribution on its preferred units. Today, NRP declared a second quarter 2024 cash distribution of $0.75 per common unit and a $0.95 million cash distribution on its outstanding preferred units.

NRP's available liquidity was $64.7 million at June 30, 2024, consisting of $32.3 million of cash and $32.3 million of borrowing capacity available under its revolving credit facility.

NRP's consolidated leverage ratio was 0.7x at June 30, 2024.

Conference Call

A conference call will be held today at 9:00 a.m. ET. To register for the conference call, please use this link: https://registrations.events/direct/Q4I1544883. After registering a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, however, to ensure you are connected for the full conference call we suggest registering at minimum 10 minutes prior to the start of the call. Investors may also listen to the call via the Investor Relations section of the NRP website at www.nrplp.com. To access the replay, please visit the Investor Relations section of NRP’s website.

Withholding Information for Foreign Investors

Concurrent with this announcement, we are providing qualified notice to brokers and nominees that hold NRP units on behalf of non-U.S. investors under Treasury Regulation Section 1.1446-4(b) and (d) and Treasury Regulation Section 1.1446(f)-4(c)(2)(iii). Brokers and nominees should treat one hundred percent (100%) of NRP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. In addition, brokers and nominees should treat one hundred percent (100%) of the distribution as being in excess of cumulative net income for purposes of determining the amount to withhold. Accordingly, NRP's distributions to non-U.S. investors are subject to federal income tax withholding at a rate equal to the sum of the highest applicable rate plus ten percent (10%).

Company Profile

Natural Resource Partners L.P., a master limited partnership headquartered in Houston, TX, is a diversified natural resource company that owns, manages and leases a diversified portfolio of properties in the United States including coal, industrial minerals and other natural resources, as well as rights to conduct carbon sequestration and renewable energy activities. NRP also owns an equity investment in Sisecam Wyoming LLC, one of the world’s lowest-cost producers of soda ash.

For additional information, please contact Tiffany Sammis at 713-751-7515 or tsammis@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com.

Forward-Looking Statements

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Partnership based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership. These risks include, among other things, statements regarding: future distributions on the Partnership’s common and preferred units; the Partnership's business strategy; its liquidity and access to capital and financing sources; its financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by the Partnership's lessees; Sisecam Wyoming LLC’s trona mining and soda ash refinery operations; distributions from the soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving the Partnership, and of scheduled or potential regulatory or legal changes; global and U.S. economic conditions; and other factors detailed in Natural Resource Partners’ Securities and Exchange Commission filings. Natural Resource Partners L.P. has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

"Adjusted EBITDA" is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis.

“Distributable cash flow” or "DCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, distributable cash flow is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. Distributable cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

“Free cash flow” or "FCF" is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. Free cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. Free cash flow may not be calculated the same for us as for other companies. Free cash flow is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt.

"Leverage ratio" represents the outstanding principal of NRP's debt at the end of the period divided by the last twelve months' Adjusted EBITDA as defined above. NRP believes that leverage ratio is a useful measure to management and investors to evaluate and monitor the indebtedness of NRP relative to its ability to generate income to service such debt and in understanding trends in NRP’s overall financial condition. Leverage ratio may not be calculated the same for NRP as for other companies and is not a substitute for, and should not be used in conjunction with, GAAP financial ratios.

-Financial Tables and Reconciliation of Non-GAAP Measures Follow-

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Comprehensive Income

		For the Three Months Ended												For the Six Months Ended
		June 30,								March 31,				June 30,
(In thousands, except per unit data)		2024				2023				2024				2024				2023
Revenues and other income
Royalty and other mineral rights		$	54,591			$	61,007			$	67,372			$	121,963			$	137,278
Transportation and processing services			2,661				3,270				3,427				6,088				6,868
Equity in earnings of Sisecam Wyoming			3,645				26,978				5,450				9,095				46,232
Gain on asset sales and disposals			4,643				5				165				4,808				101
Total revenues and other income		$	65,540			$	91,260			$	76,414			$	141,954			$	190,479
Operating expenses
Operating and maintenance expenses		$	5,872			$	7,930			$	5,733			$	11,605			$	15,093
Depreciation, depletion and amortization			3,324				3,792				4,654				7,978				7,875
General and administrative expenses			5,931				5,643				6,327				12,258				11,488
Asset impairments			—				69				—				—				69
Total operating expenses		$	15,127			$	17,434			$	16,714			$	31,841			$	34,525
Income from operations		$	50,413			$	73,826			$	59,700			$	110,113			$	155,954
Interest expense, net		$	(4,349	)		$	(3,492	)		$	(3,487	)		$	(7,836	)		$	(6,345	)
Net income		$	46,064			$	70,334			$	56,213			$	102,277			$	149,609
Less: income attributable to preferred unitholders			(1,443	)			(4,971	)			(2,150	)			(3,593	)			(11,632	)
Less: redemption of preferred units			(13,666	)			(27,618	)			—				(13,666	)			(43,846	)
Net income attributable to common unitholders and the general partner		$	30,955			$	37,745			$	54,063			$	85,018			$	94,131
Net income attributable to common unitholders		$	30,336			$	36,990			$	52,982			$	83,318			$	92,948
Net income attributable to the general partner			619				755				1,081				1,700				1,883
Net income per common unit
Basic		$	2.33			$	2.93			$	4.13			$	6.44			$	7.32
Diluted			2.29				2.49				3.83				6.17				5.96
Net income		$	46,064			$	70,334			$	56,213			$	102,277			$	149,609
Comprehensive income (loss) from unconsolidated investment and other			1,239				911				845				2,084				(18,672	)
Comprehensive income		$	47,303			$	71,245			$	57,058			$	104,361			$	130,937

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Cash Flows

		For the Three Months Ended												For the Six Months Ended
		June 30,								March 31,				June 30,
(In thousands)		2024				2023				2024				2024				2023
Cash flows from operating activities
Net income		$	46,064			$	70,334			$	56,213			$	102,277			$	149,609
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization			3,324				3,792				4,654				7,978				7,875
Distributions from unconsolidated investment			7,584				32,350				14,210				21,794				43,130
Equity earnings from unconsolidated investment			(3,645	)			(26,978	)			(5,450	)			(9,095	)			(46,232	)
Gain on asset sales and disposals			(4,643	)			(5	)			(165	)			(4,808	)			(101	)
Asset impairments			—				69				—				—				69
Bad debt expense			293				(198	)			(813	)			(520	)			(808	)
Unit-based compensation expense			2,912				2,646				2,964				5,876				5,137
Amortization of debt issuance costs and other			(199	)			541				(749	)			(948	)			566
Change in operating assets and liabilities:
Accounts receivable			2,918				(361	)			9,433				12,351				6,700
Accounts payable			(580	)			72				629				49				(469	)
Accrued liabilities			1,916				2,019				(8,225	)			(6,309	)			(6,786	)
Accrued interest			(677	)			(627	)			412				(265	)			(364	)
Deferred revenue			899				(2,646	)			1,028				1,927				(2,800	)
Other items, net			463				342				(2,642	)			(2,179	)			(1,276	)
Net cash provided by operating activities		$	56,629			$	81,350			$	71,499			$	128,128			$	154,250
Cash flows from investing activities
Proceeds from asset sales and disposals		$	4,643			$	5			$	165			$	4,808			$	106
Return of long-term contract receivable			659				610				647				1,306				1,208
Capital expenditures			—				(8	)			—				—				(10	)
Net cash provided by investing activities		$	5,302			$	607			$	812			$	6,114			$	1,304
Cash flows from financing activities
Debt borrowings		$	40,493			$	70,834			$	89,357			$	129,850			$	165,034
Debt repayments			(19,000	)			(61,365	)			(55,696	)			(74,696	)			(151,061	)
Distributions to common unitholders and the general partner			(9,987	)			(9,669	)			(42,186	)			(52,173	)			(50,569	)
Distributions to preferred unitholders			(2,643	)			(7,396	)			(2,150	)			(4,793	)			(15,482	)
Redemption of preferred units			(40,000	)			(80,834	)			—				(40,000	)			(128,333	)
Warrant settlements			(10,000	)			—				(55,689	)			(65,689	)			—
Other items, net			556				(452	)			(6,946	)			(6,390	)			(3,504	)
Net cash used in financing activities		$	(40,581	)		$	(88,882	)		$	(73,310	)		$	(113,891	)		$	(183,915	)
Net increase (decrease) in cash and cash equivalents		$	21,350			$	(6,925	)		$	(999	)		$	20,351			$	(28,361	)
Cash and cash equivalents at beginning of period			10,990				17,655				11,989				11,989				39,091
Cash and cash equivalents at end of period		$	32,340			$	10,730			$	10,990			$	32,340			$	10,730
Supplemental cash flow information:
Cash paid for interest		$	4,823			$	3,960			$	2,843			$	7,666			$	6,434

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Balance Sheets

		June 30,				December 31,
		2024				2023
(In thousands, except unit data)		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	32,340			$	11,989
Accounts receivable, net			30,624				41,086
Other current assets, net			3,114				2,218
Total current assets		$	66,078			$	55,293
Land			24,008				24,008
Mineral rights, net			387,053				394,483
Intangible assets, net			13,143				13,682
Equity in unconsolidated investment			265,935				276,549
Long-term contract receivable, net			24,929				26,321
Other long-term assets, net			8,412				7,540
Total assets		$	789,558			$	797,876
LIABILITIES AND CAPITAL
Current liabilities
Accounts payable		$	933			$	885
Accrued liabilities			7,225				12,987
Accrued interest			319				584
Current portion of deferred revenue			4,449				4,599
Current portion of long-term debt, net			14,214				30,785
Total current liabilities		$	27,140			$	49,840
Deferred revenue			40,433				38,356
Long-term debt, net			196,112				124,273
Other non-current liabilities			6,619				7,172
Total liabilities		$	270,304			$	219,641
Commitments and contingencies
Class A Convertible Preferred Units (31,666 and 71,666 units issued and outstanding at June 30, 2024 and December 31, 2023, respectively, at $1,000 par value per unit; liquidation preference of $1,850 per unit at June 30, 2024 and December 31, 2023)		$	20,847			$	47,181
Partners’ capital
Common unitholders’ interest (13,049,123 and 12,634,642 units issued and outstanding at June 30, 2024 and December 31, 2023, respectively)		$	490,877			$	503,076
General partner’s interest			8,568				8,005
Warrant holders’ interest			—				23,095
Accumulated other comprehensive loss			(1,038	)			(3,122	)
Total partners’ capital		$	498,407			$	531,054
Total liabilities and partners' capital		$	789,558			$	797,876

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Consolidated Statements of Partners' Capital

																		Accumulated
																		Other				Total
		Common Unitholders								General				Warrant				Comprehensive				Partners'
(In thousands)		Units				Amounts				Partner				Holders				Loss				Capital
Balance at December 31, 2023			12,635			$	503,076			$	8,005			$	23,095			$	(3,122	)		$	531,054
Net income (1)			—				55,089				1,124				—				—				56,213
Distributions to common unitholders and the general partner			—				(41,342	)			(844	)			—				—				(42,186	)
Distributions to preferred unitholders			—				(2,107	)			(43	)			—				—				(2,150	)
Issuance of unit-based awards			126				—				—				—				—				—
Unit-based awards amortization and vesting, net			—				(3,971	)			—				—				—				(3,971	)
Capital contribution			—				—				227				—				—				227
Warrant settlements			199				(36,650	)			(748	)			(18,291	)			—				(55,689	)
Comprehensive income from unconsolidated investment and other			—				—				—				—				845				845
Balance at March 31, 2024			12,960			$	474,095			$	7,721			$	4,804			$	(2,277	)		$	484,343
Net income (2)			—				45,142				922				—				—				46,064
Redemption of preferred units			—				(13,393	)			(273	)			—				—				(13,666	)
Distributions to common unitholders and the general partner			—				(9,787	)			(200	)			—				—				(9,987	)
Distributions to preferred unitholders			—				(2,590	)			(53	)			—				—				(2,643	)
Unit-based awards amortization and vesting			—				2,502				—				—				—				2,502
Capital contribution			—				—				555				—				—				555
Warrant settlements			89				(5,092	)			(104	)			(4,804	)			—				(10,000	)
Comprehensive income from unconsolidated investment and other			—				—				—				—				1,239				1,239
Balance at June 30, 2024			13,049			$	490,877			$	8,568			$	—			$	(1,038	)		$	498,407

___________________
(1)	Net income includes $2.15 million of income attributable to preferred unitholders that accumulated during the period, of which $2.11 million is allocated to the common unitholders and $0.04 million is allocated to the general partner.
(2)	Net income includes $1.44 million of income attributable to preferred unitholders that accumulated during the period, of which $1.41 million is allocated to the common unitholders and $0.03 million is allocated to the general partner.

																		Accumulated
																		Other				Total
		Common Unitholders								General				Warrant				Comprehensive				Partners'
(In thousands)		Units				Amounts				Partner				Holders				Income (Loss)				Capital
Balance at December 31, 2022			12,506			$	404,799			$	5,977			$	47,964			$	18,717			$	477,457
Net income (1)			—				77,690				1,585				—				—				79,275
Redemption of preferred units			—				(15,904	)			(324	)			—				—				(16,228	)
Distributions to common unitholders and the general partner			—				(40,082	)			(818	)			—				—				(40,900	)
Distributions to preferred unitholders			—				(7,924	)			(162	)			—				—				(8,086	)
Issuance of unit-based awards			129				—				—				—				—				—
Unit-based awards amortization and vesting, net			—				(1,178	)			—				—				—				(1,178	)
Capital contribution			—				—				142				—				—				142
Comprehensive loss from unconsolidated investment and other			—				—				—				—				(19,583	)			(19,583	)
Balance at March 31, 2023			12,635			$	417,401			$	6,400			$	47,964			$	(866	)		$	470,899
Net income (2)			—				68,927				1,407				—				—				70,334
Redemption of preferred units			—				(27,065	)			(553	)			—				—				(27,618	)
Distributions to common unitholders and the general partner			—				(9,476	)			(193	)			—				—				(9,669	)
Distributions to preferred unitholders			—				(7,248	)			(148	)			—				—				(7,396	)
Unit-based awards amortization and vesting			—				2,299				—				—				—				2,299
Comprehensive income from unconsolidated investment and other			—				—				—				—				911				911
Balance at June 30, 2023			12,635			$	444,838			$	6,913			$	47,964			$	45			$	499,760

____________________
(1)	Net income includes $6.66 million of income attributable to preferred unitholders that accumulated during the period, of which $6.53 million is allocated to the common unitholders and $0.13 million is allocated to the general partner.
(2)	Net income includes $4.97 million of income attributable to preferred unitholders that accumulated during the period, of which $4.87 million is allocated to the common unitholders and $0.10 million is allocated to the general partner.

Natural Resource Partners L.P.
Financial Tables
(Unaudited)
The following table presents NRP's unaudited business results by segment for the three months ended June 30, 2024 and 2023 and March 31, 2024:
		Operating Segments
		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Three Months Ended June 30, 2024
Revenues		$	57,252			$	—			$	—			$	57,252
Equity in earnings of Sisecam Wyoming			—				3,645				—				3,645
Gain on asset sales and disposals			4,643				—				—				4,643
Total revenues and other income		$	61,895			$	3,645			$	—			$	65,540
Asset impairments		$	—			$	—			$	—			$	—
Net income (loss)		$	52,729			$	3,619			$	(10,284	)		$	46,064
Adjusted EBITDA (1)		$	56,049			$	7,558			$	(5,931	)		$	57,676
Cash flow provided by (used in) continuing operations:
Operating activities		$	56,234			$	7,557			$	(7,162	)		$	56,629
Investing activities		$	5,302			$	—			$	—			$	5,302
Financing activities		$	—			$	—			$	(40,581	)		$	(40,581	)
Distributable cash flow (1)		$	61,536			$	7,557			$	(7,162	)		$	61,931
Free cash flow (1)		$	56,893			$	7,557			$	(7,162	)		$	57,288
For the Three Months Ended June 30, 2023
Revenues		$	64,277			$	—			$	—			$	64,277
Equity in earnings of Sisecam Wyoming			—				26,978				—				26,978
Gain on asset sales and disposals			5				—				—				5
Total revenues and other income		$	64,282			$	26,978			$	—			$	91,260
Asset impairments		$	69			$	—			$	—			$	69
Net income (loss)		$	52,510			$	26,964			$	(9,140	)		$	70,334
Adjusted EBITDA (1)		$	56,366			$	32,336			$	(5,643	)		$	83,059
Cash flow provided by (used in) continuing operations:
Operating activities		$	55,040			$	32,326			$	(6,016	)		$	81,350
Investing activities		$	615			$	—			$	(8	)		$	607
Financing activities		$	—			$	—			$	(88,882	)		$	(88,882	)
Distributable cash flow (1)		$	55,655			$	32,326			$	(6,024	)		$	81,957
Free cash flow (1)		$	55,650			$	32,326			$	(6,024	)		$	81,952
For the Three Months Ended March 31, 2024
Revenues		$	70,799			$	—			$	—			$	70,799
Equity in earnings of Sisecam Wyoming			—				5,450				—				5,450
Gain on asset sales and disposals			165				—				—				165
Total revenues and other income		$	70,964			$	5,450			$	—			$	76,414
Asset impairments		$	—			$	—			$	—			$	—
Net income (loss)		$	60,644			$	5,388			$	(9,819	)		$	56,213
Adjusted EBITDA (1)		$	65,293			$	14,148			$	(6,327	)		$	73,114
Cash flow provided by (used in) continuing operations:
Operating activities		$	69,749			$	14,148			$	(12,398	)		$	71,499
Investing activities		$	812			$	—			$	—			$	812
Financing activities		$	(1,086	)		$	—			$	(72,224	)		$	(73,310	)
Distributable cash flow (1)		$	70,561			$	14,148			$	(12,398	)		$	72,311
Free cash flow (1)		$	70,396			$	14,148			$	(12,398	)		$	72,146

___________________
(1)		See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

Natural Resource Partners L.P.
Financial Tables
(Unaudited)
The following table presents NRP's unaudited business results by segment for the six months ended June 30, 2024 and 2023:
		Operating Segments
		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Six Months Ended June 30, 2024
Revenues		$	128,051			$	—			$	—			$	128,051
Equity in earnings of Sisecam Wyoming			—				9,095				—				9,095
Gain on asset sales and disposals			4,808				—				—				4,808
Total revenues and other income		$	132,859			$	9,095			$	—			$	141,954
Asset impairments		$	—			$	—			$	—			$	—
Net income (loss)		$	113,373			$	9,007			$	(20,103	)		$	102,277
Adjusted EBITDA (1)		$	121,342			$	21,706			$	(12,258	)		$	130,790
Cash flow provided by (used in) continuing operations:
Operating activities		$	125,983			$	21,705			$	(19,560	)		$	128,128
Investing activities		$	6,114			$	—			$	—			$	6,114
Financing activities		$	(1,086	)		$	—			$	(112,805	)		$	(113,891	)
Distributable cash flow (1)		$	132,097			$	21,705			$	(19,560	)		$	134,242
Free cash flow (1)		$	127,289			$	21,705			$	(19,560	)		$	129,434
For the Six Months Ended June 30, 2023
Revenues		$	144,146			$	—			$	—			$	144,146
Equity in earnings of Sisecam Wyoming			—				46,232				—				46,232
Gain on asset sales and disposals			101				—				—				101
Total revenues and other income		$	144,247			$	46,232			$	—			$	190,479
Asset impairments		$	69			$	—			$	—			$	69
Net income (loss)		$	121,391			$	46,060			$	(17,842	)		$	149,609
Adjusted EBITDA (1)		$	129,326			$	42,958			$	(11,488	)		$	160,796
Cash flow provided by (used in) continuing operations:
Operating activities		$	128,898			$	42,943			$	(17,591	)		$	154,250
Investing activities		$	1,314			$	—			$	(10	)		$	1,304
Financing activities		$	(583	)		$	—			$	(183,332	)		$	(183,915	)
Distributable cash flow (1)		$	130,212			$	42,943			$	(17,601	)		$	155,554
Free cash flow (1)		$	130,106			$	42,943			$	(17,601	)		$	155,448

__________________
(1)		See "Non-GAAP Financial Measures" and reconciliation tables at the end of this release.

Natural Resource Partners L.P.

Financial Tables

(Unaudited)

Operating Statistics - Mineral Rights

		For the Three Months Ended												For the Six Months Ended
		June 30,								March 31,				June 30,
(In thousands, except per ton data)		2024				2023				2024				2024				2023
Coal sales volumes (tons)
Appalachia
Northern			129				390				117				246				769
Central			3,456				3,352				3,714				7,170				6,961
Southern			709				693				570				1,279				1,275
Total Appalachia			4,294				4,435				4,401				8,695				9,005
Illinois Basin			1,342				1,631				2,033				3,375				2,941
Northern Powder River Basin			567				881				949				1,516				1,966
Gulf Coast			435				139				265				700				197
Total coal sales volumes			6,638				7,086				7,648				14,286				14,109
Coal royalty revenue per ton
Appalachia
Northern		$	4.74			$	6.87			$	1.86			$	3.37			$	8.35
Central			7.34				8.49				8.08				7.72				9.23
Southern			10.19				10.85				11.58				10.81				12.72
Illinois Basin			2.47				3.15				2.56				2.53				3.34
Northern Powder River Basin			4.99				4.62				4.85				4.90				4.65
Gulf Coast			0.77				0.71				0.75				0.77				0.66
Combined average coal royalty revenue per ton			5.98				6.77				6.12				6.06				7.51
Coal royalty revenues
Appalachia
Northern		$	612			$	2,681			$	218			$	830			$	6,418
Central			25,378				28,445				29,992				55,370				64,251
Southern			7,226				7,521				6,602				13,828				16,218
Total Appalachia			33,216				38,647				36,812				70,028				86,887
Illinois Basin			3,312				5,141				5,211				8,523				9,816
Northern Powder River Basin			2,831				4,066				4,599				7,430				9,141
Gulf Coast			336				98				200				536				131
Unadjusted coal royalty revenues			39,695				47,952				46,822				86,517				105,975
Coal royalty adjustment for minimum leases			(10	)			8				(4	)			(14	)			8
Total coal royalty revenues		$	39,685			$	47,960			$	46,818			$	86,503			$	105,983
Other revenues
Production lease minimum revenues		$	412			$	562			$	924			$	1,336			$	1,175
Minimum lease straight-line revenues			4,126				4,447				4,171				8,297				8,950
Carbon neutral initiative revenues			2,200				115				2,161				4,361				2,233
Wheelage revenues			2,338				3,284				2,672				5,010				7,153
Property tax revenues			1,545				1,470				1,892				3,437				2,940
Coal overriding royalty revenues			668				150				1,169				1,837				338
Lease amendment revenues			712				848				702				1,414				1,699
Aggregates royalty revenues			730				686				772				1,502				1,439
Oil and gas royalty revenues			1,999				1,214				3,640				5,639				4,802
Other revenues			176				271				2,451				2,627				566
Total other revenues		$	14,906			$	13,047			$	20,554			$	35,460			$	31,295
Royalty and other mineral rights		$	54,591			$	61,007			$	67,372			$	121,963			$	137,278
Transportation and processing services revenues			2,661				3,270				3,427				6,088				6,868
Gain on asset sales and disposals			4,643				5				165				4,808				101
Total Mineral Rights segment revenues and other income		$	61,895			$	64,282			$	70,964			$	132,859			$	144,247

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

Adjusted EBITDA

		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Three Months Ended June 30, 2024
Net income (loss)		$	52,729			$	3,619			$	(10,284	)		$	46,064
Less: equity earnings from unconsolidated investment			—				(3,645	)			—				(3,645	)
Add: total distributions from unconsolidated investment			—				7,584				—				7,584
Add: interest expense, net			—				—				4,349				4,349
Add: depreciation, depletion and amortization			3,320				—				4				3,324
Add: asset impairments			—				—				—				—
Adjusted EBITDA		$	56,049			$	7,558			$	(5,931	)		$	57,676
For the Three Months Ended June 30, 2023
Net income (loss)		$	52,510			$	26,964			$	(9,140	)		$	70,334
Less: equity earnings from unconsolidated investment			—				(26,978	)			—				(26,978	)
Add: total distributions from unconsolidated investment			—				32,350				—				32,350
Add: interest expense, net			—				—				3,492				3,492
Add: depreciation, depletion and amortization			3,787				—				5				3,792
Add: asset impairments			69				—				—				69
Adjusted EBITDA		$	56,366			$	32,336			$	(5,643	)		$	83,059
For the Three Months Ended March 31, 2024
Net income (loss)		$	60,644			$	5,388			$	(9,819	)		$	56,213
Less: equity earnings from unconsolidated investment			—				(5,450	)			—				(5,450	)
Add: total distributions from unconsolidated investment			—				14,210				—				14,210
Add: interest expense, net			—				—				3,487				3,487
Add: depreciation, depletion and amortization			4,649				—				5				4,654
Add: asset impairments			—				—				—				—
Adjusted EBITDA		$	65,293			$	14,148			$	(6,327	)		$	73,114

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

Adjusted EBITDA

		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Six Months Ended June 30, 2024
Net income (loss)		$	113,373			$	9,007			$	(20,103	)		$	102,277
Less: equity earnings from unconsolidated investment			—				(9,095	)			—				(9,095	)
Add: total distributions from unconsolidated investment			—				21,794				—				21,794
Add: interest expense, net			—				—				7,836				7,836
Add: depreciation, depletion and amortization			7,969				—				9				7,978
Add: asset impairments			—				—				—				—
Adjusted EBITDA		$	121,342			$	21,706			$	(12,258	)		$	130,790
For the Six Months Ended June 30, 2023
Net income (loss)		$	121,391			$	46,060			$	(17,842	)		$	149,609
Less: equity earnings from unconsolidated investment			—				(46,232	)			—				(46,232	)
Add: total distributions from unconsolidated investment			—				43,130				—				43,130
Add: interest expense, net			—				—				6,345				6,345
Add: depreciation, depletion and amortization			7,866				—				9				7,875
Add: asset impairments			69				—				—				69
Adjusted EBITDA		$	129,326			$	42,958			$	(11,488	)		$	160,796

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

Distributable Cash Flow and Free Cash Flow

		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Three Months Ended June 30, 2024
Net cash provided by (used in) operating activities		$	56,234			$	7,557			$	(7,162	)		$	56,629
Add: proceeds from asset sales and disposals			4,643				—				—				4,643
Add: return of long-term contract receivable			659				—				—				659
Less: maintenance capital expenditures			—				—				—				—
Distributable cash flow		$	61,536			$	7,557			$	(7,162	)		$	61,931
Less: proceeds from asset sales and disposals			(4,643	)			—				—				(4,643	)
Free cash flow		$	56,893			$	7,557			$	(7,162	)		$	57,288
Net cash provided by investing activities		$	5,302			$	—			$	—			$	5,302
Net cash used in financing activities		$	—			$	—			$	(40,581	)		$	(40,581	)
For the Three Months Ended June 30, 2023
Net cash provided by (used in) operating activities		$	55,040			$	32,326			$	(6,016	)		$	81,350
Add: proceeds from asset sales and disposals			5				—				—				5
Add: return of long-term contract receivable			610				—				—				610
Less: maintenance capital expenditures			—				—				(8	)			(8	)
Distributable cash flow		$	55,655			$	32,326			$	(6,024	)		$	81,957
Less: proceeds from asset sales and disposals			(5	)			—				—				(5	)
Free cash flow		$	55,650			$	32,326			$	(6,024	)		$	81,952
Net cash provided by (used in) investing activities		$	615			$	—			$	(8	)		$	607
Net cash used in financing activities		$	—			$	—			$	(88,882	)		$	(88,882	)
For the Three Months Ended March 31, 2024
Net cash provided by (used in) operating activities		$	69,749			$	14,148			$	(12,398	)		$	71,499
Add: proceeds from asset sales and disposals			165				—				—				165
Add: return of long-term contract receivable			647				—				—				647
Less: maintenance capital expenditures			—				—				—				—
Distributable cash flow		$	70,561			$	14,148			$	(12,398	)		$	72,311
Less: proceeds from asset sales and disposals			(165	)			—				—				(165	)
Free cash flow		$	70,396			$	14,148			$	(12,398	)		$	72,146
Net cash provided by investing activities		$	812			$	—			$	—			$	812
Net cash used in financing activities		$	(1,086	)		$	—			$	(72,224	)		$	(73,310	)

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

Distributable Cash Flow and Free Cash Flow

		Mineral								Corporate and
(In thousands)		Rights				Soda Ash				Financing				Total
For the Six Months Ended June 30, 2024
Net cash provided by (used in) operating activities		$	125,983			$	21,705			$	(19,560	)		$	128,128
Add: proceeds from asset sales and disposals			4,808				—				—				4,808
Add: return of long-term contract receivable			1,306				—				—				1,306
Less: maintenance capital expenditures			—				—				—				—
Distributable cash flow		$	132,097			$	21,705			$	(19,560	)		$	134,242
Less: proceeds from asset sales and disposals			(4,808	)			—				—				(4,808	)
Free cash flow		$	127,289			$	21,705			$	(19,560	)		$	129,434
Net cash provided by investing activities		$	6,114			$	—			$	—			$	6,114
Net cash used in financing activities		$	(1,086	)		$	—			$	(112,805	)		$	(113,891	)
For the Six Months Ended June 30, 2023
Net cash provided by (used in) operating activities		$	128,898			$	42,943			$	(17,591	)		$	154,250
Add: proceeds from asset sales and disposals			106				—				—				106
Add: return of long-term contract receivable			1,208				—				—				1,208
Less: maintenance capital expenditures			—				—				(10	)			(10	)
Distributable cash flow		$	130,212			$	42,943			$	(17,601	)		$	155,554
Less: proceeds from asset sales and disposals			(106	)			—				—				(106	)
Free cash flow		$	130,106			$	42,943			$	(17,601	)		$	155,448
Net cash provided by (used in) investing activities		$	1,314			$	—			$	(10	)		$	1,304
Net cash used in financing activities		$	(583	)		$	—			$	(183,332	)		$	(183,915	)

Natural Resource Partners L.P.

Reconciliation of Non-GAAP Measures

(Unaudited)

Last Twelve Months (LTM) Free Cash Flow

		For the Three Months Ended
(In thousands)		September 30, 2023				December 31, 2023				March 31, 2024				June 30, 2024				Last 12 Months
Net cash provided by operating activities		$	78,942			$	77,786			$	71,499			$	56,629			$	284,856
Add: proceeds from asset sales and disposals			855				2,002				165				4,643				7,665
Add: return of long-term contract receivable			622				633				647				659				2,561
Distributable cash flow		$	80,419			$	80,421			$	72,311			$	61,931			$	295,082
Less: proceeds from asset sales and disposals			(855	)			(2,002	)			(165	)			(4,643	)			(7,665	)
Free cash flow		$	79,564			$	78,419			$	72,146			$	57,288			$	287,417

Leverage Ratio

		For the Three Months Ended
(In thousands)		September 30, 2023				December 31, 2023				March 31, 2024				June 30, 2024				Last 12 Months
Net income		$	63,846			$	64,980			$	56,213			$	46,064			$	231,103
Less: equity earnings from unconsolidated investment			(12,401	)			(14,764	)			(5,450	)			(3,645	)			(36,260	)
Add: total distributions from unconsolidated investment			23,010				15,338				14,210				7,584				60,142
Add: interest expense, net			3,837				3,921				3,487				4,349				15,594
Add: depreciation, depletion and amortization			4,594				6,020				4,654				3,324				18,592
Add: asset impairments			63				424				—				—				487
Adjusted EBITDA		$	82,949			$	75,919			$	73,114			$	57,676			$	289,658
Debt—at June 30, 2024																		$	210,678
Leverage Ratio																		0.7 x

		For the Three Months Ended
(In thousands)		September 30, 2022				December 31, 2022				March 31, 2023				June 30, 2023				Last 12 Months
Net income		$	74,555			$	63,218			$	79,275			$	70,334			$	287,382
Less: equity earnings from unconsolidated investment			(14,556	)			(15,759	)			(19,254	)			(26,978	)			(76,547	)
Add: total distributions from unconsolidated investment			10,339				10,780				10,780				32,350				64,249
Add: interest expense, net			5,141				3,638				2,853				3,492				15,124
Add: loss on extinguishment of debt			2,484				3,933				—				—				6,417
Add: depreciation, depletion and amortization			6,850				5,954				4,083				3,792				20,679
Add: asset impairments			812				3,583				—				69				4,464
Adjusted EBITDA		$	85,625			$	75,347			$	77,737			$	83,059			$	321,768
Debt—at June 30, 2023																		$	183,059
Leverage Ratio																		0.6 x

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240807029111/en/

Tiffany Sammis

713.751.7515

tsammis@nrplp.com

Source: Natural Resource Partners L.P.

FAQ

What was NRP's free cash flow in Q2 2024?

Natural Resource Partners L.P. (NRP) generated $57.3 million of free cash flow in the second quarter of 2024.

How much is NRP's Q2 2024 distribution per common unit?

NRP declared a second quarter 2024 cash distribution of $0.75 per common unit.

How much preferred equity does NRP have outstanding after recent redemptions?

After redeeming $40 million of preferred units in Q2 2024, NRP has $31.7 million of preferred units remaining outstanding from the original $250 million.

What factors are affecting NRP's coal and soda ash business in 2024?

NRP is experiencing lower coal and soda ash prices in 2024 compared to the highs seen in 2022 and 2023, primarily due to weakened steel demand and new supply from China in the soda ash market.

What is NRP's strategy for maximizing unitholder returns?

NRP's strategy is to eliminate all preferred equity and debt from its balance sheet, which will result in common unitholders having no competing claims on free cash flow generated by the partnership.