The following is a summary of the Natural Resource Partners L.P. (NRP) Q4 2023 Earnings Call Transcript:

Financial Performance:

• NRP generated a record $313 million of free cash flow in 2023, a 17% increase over its previous record from 2022.

• The Company retired $178 million of preferred equity at par in 2023 with cash and total obligations now stand at approximately $270 million, a 40% decrease year-over-year.

• Mineral Rights business generated $71 million of free cash flow during Q4.

• NRP reported Q4 operating cash flow of $78 million and net income of $65 million. For 2023, the overall operating cash flow and net income were $311 million and $278 million respectively.

• The redeemed $178 million of preferred units in 2023 led to savings of over $20 million annually.

• The soda ash business segment increased its net income by $14 million compared to 2022 due to higher sales prices in H1 2023.

• Metallurgical coal composed approx 70% of their coal royalty revenues in Q4 and across 2023.

Business Progress:

• NRP benefited from an uplift in metallurgical coal prices during Q4 and has remarked on the stabilization of thermal coal prices.

• Soda ash industry might pose tough challenges in 2024 due to significant new production volumes which could potentially compress profit margins.

• NRP has been actively expanding its carbon-neutral initiatives, exploring opportunities in carbon sequestration, lithium production, and electricity generation via renewable sources.

• The company has improved its borrowing capacity from $130 million to $200 million and plans to repay all outstanding preferred units and warrants with these resources.

• NRP announced a special distribution of $2.44 per common unit to cover unit holder tax liabilities.

More details: Natural Resource IR

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