Natural Resource Partners L.P. (NYSE:NRP) today reported third quarter 2024 results as follows:

Highlights:

• Generated $54.8 million of free cash flow in the third quarter of 2024
• Redeemed $31.7 million of preferred units at par with cash; Zero of original $250 million preferred units remain outstanding
• Executed five-year $200 million credit facility in October, maturing 2029
• Paid second quarter 2024 common unit distribution of $0.75 per unit
• Declares third quarter 2024 common unit distribution of $0.75 per unit

"NRP generated $55 million of free cash flow in the third quarter of 2024 and $263 million of free cash flow over the last twelve months," said Craig Nunez, NRP's president and chief operating officer. "While pricing for coal and soda ash remain weak, we continue to make progress toward our goal of paying off all financial obligations. In the third quarter we paid off all outstanding preferreds, leaving just under $200 million of debt remaining to reach our goal.”

Mr. Nunez continued, “While we believe relatively weak coal and soda ash prices will persist for at least the next year, we expect the partnership to continue generating sufficient cash to achieve our deleveraging goals. We remain steadfast in our belief this is the best strategy to maximize the intrinsic value of the partnership and we look forward to the day common unitholders will have no competing stakeholder claims on free cash flow generated by the partnership.”

NRP announced today that the board of directors of its general partner declared a third quarter 2024 cash distribution of $0.75 per common unit to be paid on November 26, 2024, to unitholders of record on November 19, 2024. 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 third quarter of 2024 decreased $20.4 million as compared to the prior year period. Mineral Rights operating cash flow and free cash flow each decreased $7.3 million as compared to the prior year period. These decreases were primarily due to lower metallurgical coal sales prices as well as lower thermal coal sales prices and volumes as compared to the prior year period. Approximately 75% of coal royalty revenues and approximately 55% of coal royalty sales volumes were derived from metallurgical coal in the third quarter of 2024.

Metallurgical coal prices continued to decline in the third quarter of 2024 primarily driven by muted steel demand resulting from sluggish construction activity in China and Europe as well as weak manufacturing demand globally. NRP expects pricing to remain relatively soft for both metallurgical and thermal coal as muted global steel demand impacts metallurgical coal and mild weather, low natural gas prices, and high inventory levels impact thermal coal. However, continued price support above historical norms is expected due to limited access to capital for operators, qualified labor shortages, and input cost inflation.

NRP continues to explore carbon neutral revenue opportunities across its ownership footprint. While the timing and likelihood of additional cash flows from these activities is uncertain, NRP believes its large ownership 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, lithium production, and the generation of electricity using geothermal, solar, and wind energy.

Soda Ash

Soda Ash net income in the third quarter of 2024 decreased $4.3 million as compared to the prior year period primarily due to significantly lower sales prices driven by increased global production capacity, primarily from China, and weaker demand for flat glass due to a slowdown in global construction activity and weakness in demand for automobiles. Operating cash flow and free cash flow in the third quarter of 2024 decreased $16.7 million as compared to the prior year period due to a lower cash distribution received from Sisecam Wyoming in the third quarter of 2024.

NRP believes it will take several years for the world to absorb the additional soda ash supply recently introduced into the market and allow prices to rise back to historically normal equilibrium levels. The timing of this absorption will be highly dependent on China, which currently produces and consumes roughly 50% of global soda ash.

Corporate and Financing

Corporate and Financing net income decreased $0.6 million in the third quarter of 2024 as compared to the prior year period. Operating cash flow and free cash flow each decreased $0.8 million in the third quarter of 2024 as compared to the prior year period. These decreases were primarily due to higher interest expense and cash paid for interest as a result of increased borrowings on the credit facility in 2024 used to permanently retire the preferred units and warrants.

NRP redeemed the remainder of the outstanding $31.7 million of preferred units during the third quarter of 2024. NRP has now retired all $250 million of its originally issued preferred units.

In October 2024, NRP amended its $200 million credit facility and extended its maturity two years, now due October 2029. This amendment and extension provide greater flexibility and security for the partnership in the coming years.

Regarding distributions, in August 2024, NRP declared and paid a second quarter 2024 cash distribution of $0.75 per common unit and a $0.95 million cash distribution on its preferred units. Today, NRP declared a third quarter 2024 cash distribution of $0.75 per common unit.

NRP's available liquidity was $76.2 million at September 30, 2024, consisting of $30.9 million of cash and $45.3 million of borrowing capacity available under its revolving credit facility.

NRP's consolidated leverage ratio was 0.8x at September 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/Q4I154484. 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-