Financial Performance - NRP reported a net income of $42.772 million for Q4 2024 and $183.644 million for the full year 2024[2]. - Total revenues and other income for Q4 2024 were $65,726, a decrease of 29.5% from $93,163 in Q4 2023[26]. - Net income for Q4 2024 was $42,772, down 34.1% from $64,980 in Q4 2023[26]. - For the year ended December 31, 2024, total revenues and other income amounted to $268,007,000, a decrease of 27.8% compared to $370,009,000 in 2023[39]. - Net income for the year ended December 31, 2024, was $183,644,000, down from $278,435,000 in 2023, representing a decline of 34.1%[39]. - Basic net income per common unit for Q4 2024 was $3.21, a decrease from $4.87 in Q4 2023[26]. - The company reported a comprehensive income of $42,058 for Q4 2024, down from $59,613 in Q4 2023, a decline of 29.5%[26]. - Adjusted EBITDA for 2024 was $235,466,000, compared to $319,664,000 in 2023, reflecting a decrease of 26.4%[39]. Cash Flow and Liquidity - The company generated $251 million of free cash flow in 2024, with total distributions of $5.44 per common unit[5]. - NRP's liquidity was $116.7 million at the end of 2024, consisting of $30.4 million in cash and $86.3 million in borrowing capacity[4]. - Cash flows from operating activities for the year ended December 31, 2024, were $248,493, down 20.1% from $310,978 in 2023[28]. - The net cash provided by operating activities for the year ended December 31, 2024, was $248,493, a decrease from $310,978 in 2023, representing a decline of approximately 20%[50]. - The distributable cash flow for the year ended December 31, 2024, was $256,004, compared to $316,394 in 2023, indicating a decrease of about 19%[50]. - The free cash flow for the year ended December 31, 2024, was $251,158, down from $313,431 in 2023, reflecting a reduction of approximately 20%[50]. - The net cash provided by (used in) operating activities for the three months ended December 31, 2024, was $66,220, down from $77,786 in the same period of 2023, a decrease of approximately 15%[48]. Segment Performance - Mineral Rights segment net income decreased by $10.7 million in Q4 and $39.1 million for the full year compared to the prior year, primarily due to lower coal pricing[6]. - Soda Ash segment net income decreased by $13.9 million in Q4 and $55.2 million for the full year, driven by lower international sales prices[9]. - The company expects soda ash prices to remain low due to increased global capacity and weak demand[10]. - Total coal sales volumes for the three months ended December 31, 2024, were 6,244 thousand tons, a decrease of 30.6% compared to 8,980 thousand tons in the same period of 2023[42]. - Coal royalty revenue per ton in the Northern Appalachia region for the three months ended December 31, 2024, was $4.50, significantly up from $2.18 in the same period of 2023[42]. - Total coal royalty revenues for the year ended December 31, 2024, were $159,033 thousand, down from $218,011 thousand in 2023, reflecting a decrease of 27%[42]. Capital Management - NRP redeemed $72 million of preferred units and repurchased 1.54 million warrants for $65.7 million cash and 287,826 common units[5]. - The balance at December 31, 2024, showed total partners' capital of $551,108,000, an increase from $477,457,000 at December 31, 2022[33]. - The total distributions from unconsolidated investments for the year ended December 31, 2024, were $38,781 thousand, compared to $81,478 thousand in 2023, indicating a decline of 52.4%[46]. Debt and Leverage - The consolidated leverage ratio was 0.6x at December 31, 2024[13]. - The leverage ratio at December 31, 2024, was 0.6x, an increase from 0.5x in 2023, indicating a rise in debt relative to EBITDA[52]. Other Financial Metrics - Operating expenses for Q4 2024 totaled $19,430, a decrease of 19.1% compared to $24,262 in Q4 2023[26]. - Cash and cash equivalents at the end of Q4 2024 were $30,444, an increase from $11,989 at the end of Q4 2023[30]. - Total assets decreased to $772,907 in Q4 2024 from $797,876 in Q4 2023, reflecting a decline of 3.1%[30]. - Total current liabilities decreased to $31,865 in Q4 2024 from $49,840 in Q4 2023, a reduction of 36.0%[30]. - The company recognized a gain on asset sales and disposals of $4,845,000 for the year ended December 31, 2024, compared to $2,956,000 in 2023[39].

Natural Resource Partners L.P. (NRP) has reported its second-quarter 2024 financial results, revealing mixed performances across its segments. While NRP faced considerable headwinds in the reported quarter due to declining coal and soda ash prices, the partnership's strategic focus on deleveraging and exploring revenue opportunities positions it to weather ongoing market volatility. Here is a detailed breakdown of the key metrics and management commentary that investors should consider. Q2 Results Natural R ...

Financial Performance - The company reported a net income of $46.1 million for Q2 2024, compared to $231.1 million in the same period last year[1]. - Total revenues and other income for the three months ended June 30, 2024, were $65,540,000, a decrease of 28.1% compared to $91,260,000 for the same period in 2023[19]. - Net income for the three months ended June 30, 2024, was $46,064,000, down 34.5% from $70,334,000 in the same quarter of 2023[19]. - Net income attributable to common unitholders for the six months ended June 30, 2024, was $52,982,000, a decrease of 36.4% compared to $83,318,000 for the same period in 2023[19]. - Comprehensive income for the three months ended June 30, 2024, was $47,303,000, down from $71,245,000 in the same quarter of 2023, reflecting a decline of 33.7%[19]. - Net income for the three months ended June 30, 2024, was $46,064,000, compared to $70,334,000 for the same period in 2023, representing a decrease of approximately 34.5%[20]. - Net income for the six months ended June 30, 2024, was $102,277, down from $149,609 in the same period of 2023, representing a decline of approximately 32%[30]. Cash Flow and Liquidity - Natural Resource Partners L.P. generated $57.3 million of free cash flow in Q2 2024, totaling $287 million over the last twelve months[2]. - Operating cash flow for Q2 2024 was $56.6 million, down from $284.9 million year-over-year[1]. - Cash flows from operating activities provided $56,629,000 for the three months ended June 30, 2024, down from $81,350,000 in the previous year, a decline of about 30.4%[20]. - Free cash flow for the three months ended June 30, 2024, was $57,288, down from $81,952 in the same period of 2023, indicating a decrease of about 30%[28]. - The company reported a net cash used in financing activities of $40,581,000 for the three months ended June 30, 2024, compared to $88,882,000 in the previous year, a decrease of approximately 54.4%[20]. - The net cash provided by operating activities for the six months ended June 30, 2024, was $128,128, slightly lower than $154,250 for the same period in 2023[36]. - NRP's available liquidity was $64.7 million as of June 30, 2024, consisting of $32.3 million in cash and $32.3 million in borrowing capacity[8]. Revenue and Sales - Soda Ash net income decreased by $23.3 million in Q2 2024 due to lower sales prices driven by new supply from China[6]. - Transportation and processing services revenue for the three months ended June 30, 2024, was $2,661,000, a decrease of 18.6% from $3,270,000 in the same quarter of 2023[19]. - Total coal sales volumes for Appalachia reached 4,294 tons in June 2024, a slight decrease from 4,435 tons in March 2024[32]. - Coal royalty revenue per ton in the Northern Appalachia segment was $4.74 for June 2024, down from $6.87 in March 2024, indicating a 31% decline[32]. - Total coal royalty revenues amounted to $39,685,000 for June 2024, down from $47,960,000 in March 2024, representing a 17% decrease[32]. - Other revenues increased to $14,906,000 for June 2024, compared to $13,047,000 in March 2024, marking a 14% growth[32]. Expenses and Liabilities - Operating expenses for the three months ended June 30, 2024, totaled $15,127,000, a decrease of 13.2% from $17,434,000 in the same period of 2023[19]. - Long-term debt increased to $196,112,000 in 2024 from $124,273,000 in 2023, marking a significant rise of about 58%[21]. - The total liabilities increased to $270,304,000 in 2024 from $219,641,000 in 2023, representing an increase of about 23%[21]. - The company reported asset impairments totaling $4,464,000 for the last twelve months, with significant impairments recorded in the last quarter[40]. Strategic Initiatives - The company continues to explore carbon neutral revenue opportunities, including carbon sequestration and renewable energy generation[5]. - The company plans to continue focusing on market expansion and new product development to enhance revenue streams in the upcoming quarters[32].

Revenue Performance - For the three months ended March 31, 2024, total revenues decreased by $22.8 million, or 23%, to $76.4 million compared to $99.2 million in the prior year period[116] - Mineral Rights segment revenues decreased by $9.0 million, or 11%, primarily due to lower metallurgical coal sales prices[111] - Soda Ash segment revenues decreased by $13.8 million, or 72%, due to lower sales prices and volumes driven by new supply from China[114] - Revenues from the Soda Ash segment decreased by $13.8 million in Q1 2024 compared to the prior year quarter due to lower sales prices[119] - Coal royalty revenues decreased by 19% to $46.818 million in Q1 2024 from $58.023 million in Q1 2023, primarily due to lower metallurgical coal sales prices[118] - Coal royalty revenue per ton decreased by 26% to $6.12 in Q1 2024 from $8.26 in Q1 2023[117] Cash Flow and Distributions - Operating cash flow for the quarter was $71.5 million, while free cash flow was $72.1 million[107] - The company paid a cash distribution of $0.75 per common unit and a special cash distribution of $2.44 per common unit in March 2024[110] - The company received a higher distribution from Sisecam Wyoming in Q1 2024, contributing to an increase in cash flow despite lower revenues in the Soda Ash segment[114] - Distributable cash flow (DCF) decreased by $1.3 million to $72.311 million in Q1 2024 compared to $73.597 million in Q1 2023[125] - Free cash flow (FCF) decreased by $1.4 million to $72.146 million in Q1 2024 from $73.496 million in Q1 2023[125] - Operating cash flow decreased by $1.4 million from $72.9 million in Q1 2023 to $71.5 million in Q1 2024, primarily due to lower cash flow in the Mineral Rights segment[127] Financial Position and Debt - As of March 31, 2024, the company had a leverage ratio of 0.6x[107] - Total debt as of March 31, 2024, was $188.8 million, an increase from $155.1 million as of December 31, 2023[128] - The leverage ratio as of March 31, 2024, was 0.6x, indicating a stable financial position[126] - The company has been in compliance with the financial covenants in its debt agreements[128] - There were no off-balance sheet arrangements or risks to liquidity from unconsolidated entities[129] Operating Performance - Adjusted EBITDA decreased by $4.6 million to $73.114 million in Q1 2024 from $77.737 million in Q1 2023, driven by lower revenues in the Mineral Rights segment[123] - Operating expenses decreased by 2% to $16.714 million in Q1 2024 from $17.091 million in Q1 2023, mainly due to reduced operating and maintenance expenses[120] - Operating cash flow, DCF, and FCF in the Mineral Rights segment decreased by $4.1 million due to lower metallurgical coal sales prices[126] - Operating cash flow, DCF, and FCF in the Soda Ash segment increased by $3.5 million due to higher distributions from Sisecam Wyoming[126] Market Outlook - The company expects continued price volatility in metallurgical and thermal coal due to global demand fluctuations and production limitations[112] - The company continues to explore carbon neutral revenue opportunities, including carbon sequestration and renewable energy generation[113] - If interest rates increase by 1%, annual interest expense would rise by approximately $1.5 million based on $146.2 million in borrowings under the Opco Credit Facility[137] - The company does not expect the adoption of ASU 2023-07 to materially affect its consolidated financial statements[133] Liquidity - Total liquidity as of March 31, 2024, was $64.8 million, consisting of $11.0 million in cash and cash equivalents and $53.8 million in borrowing capacity[126]

Financial Data and Key Metrics Changes - In Q1 2024, the company generated $72 million of free cash flow and $312 million over the last 12 months, with total remaining obligations at approximately $240 million, a 45% decrease from the previous year [8][9] - Operating cash flow for Q1 2024 was $71 million, with net income of $56 million despite market weaknesses [20] - The diluted net income per common unit increased by 11% compared to the prior year quarter, while basic earnings per unit decreased by 6% [29] Business Line Data and Key Metrics Changes - The mineral rights segment generated $70 million of operating cash flow and $61 million of net income in Q1 2024, with net income and operating cash flow decreasing by $8 million and $4 million respectively compared to the prior year due to lower metallurgical coal prices [21] - The soda ash business saw a $14 million decrease in net income compared to the prior year due to increased supply from China, resulting in lower international and domestic sales prices [23] Market Data and Key Metrics Changes - Metallurgical coal prices declined in Q1 2024 but remained at or above historical norms, with metallurgical coal making up approximately 75% of coal royalty revenues [12][23] - Thermal coal prices experienced significant volatility due to high inventory levels and low natural gas prices, with expectations that prices will not rebound to previous record highs [13][14] - The soda ash market remains oversupplied, leading to downward pressure on prices, a trend that began in the second half of the previous year [16] Company Strategy and Development Direction - The company continues to focus on eliminating financial obligations, having settled 100% of outstanding warrants and paid off nearly 90% of its debt since 2015 [9] - The long-term outlook for the soda ash investment remains positive, driven by urbanization and renewable energy trends, despite current market challenges [17] - The company is exploring opportunities in carbon storage, lithium production, and renewable energy generation, with potential significant upside requiring no capital investment [18] Management's Comments on Operating Environment and Future Outlook - Management expects free cash flow to decline from record levels due to market pressures but believes the capital structure is solid and will continue to generate robust cash flow [11] - The company anticipates that the domestic thermal market will continue its long-term decline, while international demand should provide price support [14] Other Important Information - The company utilized the accordion feature on its credit facility to increase borrowing capacity by 54% from the previous year, reaching a total of $200 million [27] - In Q1 2024, the company settled 1.2 million warrants with $56 million in cash and issued common units, with no warrants remaining outstanding after April settlements [26][28] Q&A Session Summary Question: Any updates on carbon storage agreements? - Management stated that there are no updates available on the permitting process or existing agreements related to carbon storage [34][35]

Natural Resource Partners L.P. Reports First Quarter 2024 Results and Declares First Quarter 2024 Distribution of $0.75 per Common Unit HOUSTON, May 7, 2024 - Natural Resource Partners L.P. (NYSE:NRP) today reported first quarter 2024 results as follows: Exhibit 99.1 Natural Resource Partners L.P. 1415 Louisiana St., Suite 3325, Houston, TX 77002 NEWS RELEASE | | For the Three Months | | Last Twelve Months | | | --- | --- | --- | --- | --- | | | Ended | | Ended | | | (In thousands) (Unaudited) | March 31, 2 ...

Revenue and Production - Total revenues for 2023 amounted to $370,009,000, with the Mineral Rights segment contributing 80% ($296,612,000) and the Soda Ash segment contributing 20% ($73,397,000)[30]. - The company’s coal production for 2023 included 16,397,000 tons of thermal coal and 15,530,000 tons of metallurgical coal, totaling 31,927,000 tons[40]. - The majority of revenues from the Mineral Rights segment are derived from coal royalties, primarily from properties in the Appalachia Basin, Illinois Basin, and Northern Powder River Basin[32]. - In 2023, the company recorded $14.9 million in revenue from coal transportation and processing assets[57]. - The company received $7.4 million in oil and gas royalty revenues and $2.9 million in aggregates royalty revenues during 2023[59]. - Sisecam Wyoming generated total revenues of $86.1 million in 2023 from significant customer Alpha and $60.5 million from Foresight and its subsidiaries[77]. Assets and Liabilities - As of December 31, 2023, the Partnership's mineral rights, net totaled $394 million[274]. - The Partnership's investment in Sisecam Wyoming is stated at $277 million as of December 31, 2023, down from $306 million in 2022[268]. - Total assets decreased from $877,131,000 in 2022 to $797,876,000 in 2023, a decline of approximately 9.0%[294]. - Cash and cash equivalents dropped significantly from $39,091,000 in 2022 to $11,989,000 in 2023, representing a decrease of about 69.3%[294]. - Total current liabilities reduced from $60,229,000 in 2022 to $49,840,000 in 2023, a decrease of approximately 17.3%[294]. - Total liabilities decreased from $235,087,000 in 2022 to $219,641,000 in 2023, a decline of approximately 6.5%[294]. - Long-term debt net decreased from $129,205,000 in 2022 to $124,273,000 in 2023, a decline of approximately 3.7%[294]. Properties and Investments - The Alpha-CAPP (VA) property, a significant asset, had a book value of $46.3 million as of December 31, 2023, and is leased to Alpha Metallurgical Resources Inc.[43]. - The Williamson property, located in Illinois, had a book value of $37.0 million as of December 31, 2023, and is leased to Foresight Energy Resources LLC[49]. - The Hillsboro property, also in Illinois, had a book value of $209.3 million as of December 31, 2023, and is under lease to Hillsboro Energy, a subsidiary of Foresight[52]. - The company has approximately 140,000 acres of pore space under lease for carbon sequestration with an estimated storage capacity of 800 million metric tons of CO2[63]. Regulatory and Compliance Issues - Compliance with environmental regulations has significantly increased the cost of coal mining for domestic producers, impacting overall profitability[83]. - The Clean Air Act and related regulations impose permitting requirements that could increase operational costs for coal-fired power plants, affecting demand for coal[86]. - The company’s coal lessees are contractually obligated to comply with all federal, state, and local laws, including the Surface Mining Control and Reclamation Act[102]. - The company may incur substantial compliance costs or fines due to ongoing lawsuits related to discharges of pollutants from reclaimed mining sites[98]. - The company is subject to stringent health and safety standards imposed by federal legislation, which have resulted in increased operating costs[100]. Financial Performance and Debt - As of December 31, 2023, the company and its subsidiaries had approximately $155.5 million in total indebtedness[110]. - The partnership agreement requires a consolidated leverage ratio of less than 3.25x to make quarterly distributions on common units exceeding $0.45 per unit[109]. - Cash distributions are not guaranteed and may fluctuate based on performance and financial reserves[109]. - The company has significant debt service obligations and obligations to pay cash distributions on preferred units[109]. - The company faces increased competition from natural gas and renewable energy sources, impacting thermal coal prices[115]. Market and Competitive Landscape - Significant competition exists in the coal industry, affecting pricing and market share due to various regional producers[78]. - The company faces competition from larger soda ash producers in the U.S., Europe, and Asia, which may have greater financial and production resources[79]. - The company is exposed to market risks, including commodity price volatility, which could negatively impact future financial results[255]. - The company anticipates that future regulations on emissions could further reduce coal consumption and adversely affect coal-related revenues[124]. Environmental Initiatives - The company is involved in carbon neutral initiatives, including the sale of carbon offset credits and potential geothermal energy generation[32]. - The company executed its first carbon neutral project in Q4 2021, selling 1.1 million carbon offset credits for $13.8 million[61]. - In 2023, the company executed a new solar lease as part of its renewable energy initiatives[64]. Operational Risks - The company anticipates a continued decline in thermal coal production due to a shift towards natural gas and alternative energy sources, while metallurgical coal remains a strong revenue driver[39]. - Transportation costs significantly impact the competitiveness of coal and minerals, with disruptions potentially leading to decreased royalty revenues[138]. - Lessees' failure to manage operations effectively could lead to decreased production volumes and royalty revenues[133]. Tax and Financial Reporting - Tax treatment as a partnership is crucial; if treated as a corporation, cash available for distribution to unitholders would be substantially reduced[159]. - Proposed changes to U.S. federal income tax laws could eliminate key tax preferences related to coal exploration and development, impacting taxable income for unitholders[164]. - Audit adjustments by the IRS could lead to substantial tax liabilities, further reducing cash available for unitholders[169].

Financial Performance - Natural Resource Partners L.P. reported a record free cash flow of $313 million for the full year 2023, driven by increased distributions from the soda ash business and strong metallurgical coal prices[3]. - Net income for 2023 was $278,435, compared to $268,492 in 2022, indicating an increase of about 3.5%[40]. - Adjusted EBITDA for 2023 was $319,664, slightly up from $317,247 in 2022, reflecting a growth of approximately 0.8%[40]. - Total revenues and other income for Q4 2023 were $93.163 million, a decrease of 4% from $97.055 million in Q4 2022[28]. - Net income for Q4 2023 was $64.980 million, compared to $63.218 million in Q4 2022, reflecting a growth of 2.8%[28]. - Net income attributable to common unitholders for the year ended 2023 was $196.771 million, down from $233.722 million in 2022, representing a decline of 15.8%[28]. - Cash flows from operating activities for Q4 2023 were $77.786 million, an increase of 12.5% from $68.888 million in Q4 2022[30]. - The company reported a comprehensive income of $59.613 million in Q4 2023, compared to $79.903 million in Q4 2022, reflecting a decrease of 25.4%[28]. - For the year ended December 31, 2023, total revenues and other income reached $370,009, a decrease from $388,962 in 2022, representing a decline of approximately 4.5%[40]. - Distributable cash flow for the year ended December 31, 2023, was $316,394,000, compared to $269,526,000 in 2022, indicating a significant increase[52]. Cash Flow and Liquidity - The company's liquidity stood at $71.2 million as of December 31, 2023, consisting of $12 million in cash and $59.2 million in available borrowing capacity[3]. - Cash flow from operating activities for 2023 was $310,978, compared to $266,838 in 2022, marking an increase of about 16.6%[40]. - Free cash flow for 2023 was $313,431, up from $268,443 in 2022, indicating a growth of approximately 16.7%[40]. - The company reported net cash used in financing activities of $86.843 million for Q4 2023, compared to $91.644 million in Q4 2022, indicating a decrease of 5.5%[30]. - The total cash flow provided by financing activities in 2023 was $(343,496), compared to $(365,955) in 2022, showing an improvement of approximately 6.2%[40]. - Free cash flow for the three months ended December 31, 2023, was $78,419,000, an increase from $69,414,000 in the same period of 2022[49]. Segment Performance - Mineral Rights segment net income for the full year 2023 decreased by $21.9 million compared to the prior year, primarily due to lower metallurgical coal pricing and oil and gas royalty revenues[7]. - Soda Ash segment net income increased by $13.5 million for the full year 2023, attributed to higher sales prices driven by strong domestic demand[10]. - Revenues for the mineral rights segment were $76,398,000 in Q4 2023, a decrease of 5.7% from $80,913,000 in Q4 2022[38]. - Total coal royalty revenues for 2023 were $218,011, a decrease from $226,956 in 2022, representing a decline of approximately 3.9%[43]. Debt and Equity - NRP redeemed $178 million of preferred units at par and repurchased 1.46 million warrants for $56.1 million in cash during 2023[5]. - The company reported a total partners' capital of $531,054,000 as of December 31, 2023, up from $477,457,000 in 2022, an increase of 11.2%[34]. - The current portion of long-term debt decreased to $30,785,000 in 2023 from $39,076,000 in 2022, a reduction of 21.0%[32]. - The leverage ratio as of December 31, 2023, was 0.5x, unchanged from the previous year[54]. Special Distributions and Future Outlook - The company declared a special cash distribution of $2.44 per common unit to be paid on March 26, 2024, to help cover unitholder tax liabilities for 2023[4]. - NRP continues to explore carbon neutral revenue sources, including carbon sequestration and renewable energy activities, leveraging its extensive asset portfolio[9]. - Metallurgical and thermal coal prices showed variability in 2023 but are expected to remain supported in 2024 due to labor shortages and inflationary pressures[8].

Financial Performance - For the nine months ended September 30, 2023, total revenues and other income were $276.8 million, with mineral rights generating $218.2 million and soda ash contributing $58.6 million[114]. - Net income for the same period was $213.5 million, with mineral rights net income at $182.4 million and soda ash at $58.4 million, while corporate financing incurred a loss of $27.4 million[114]. - Adjusted EBITDA for the nine months was $243.7 million, with mineral rights contributing $195.0 million and soda ash $65.9 million[114]. - Total revenues for the third quarter of 2023 decreased by 16% to $86,367,000 compared to $102,258,000 in the same period of 2022[124]. - Net income for the nine months ended September 30, 2023, was $213.5 million, a decrease of $8.2 million compared to the prior year period, primarily due to lower revenues and other income[142]. - Adjusted EBITDA for the same period was $243.7 million, a decrease of $1.8 million, driven by a $27.0 million decrease in the Mineral Rights segment[142]. Cash Flow and Liquidity - Operating cash flow for the nine months was $233.2 million, and free cash flow was $235.0 million, with liquidity at $45.4 million as of September 30, 2023[115]. - Distributable cash flow for the nine months was $236.0 million, reflecting strong operational performance despite a decrease in revenues from mineral rights[114][119]. - Operating cash flow increased by $35.2 million to $233.2 million, primarily due to increased cash flow in the Soda Ash and Corporate and Financing segments[148]. - Distributable Cash Flow (DCF) for the nine months ended September 30, 2023, was $235.973 million, an increase of $36.2 million compared to the prior year[144]. - Free Cash Flow (FCF) for the same period was $235.012 million, reflecting an increase of $36.0 million year-over-year[144]. - Total liquidity as of September 30, 2023, was $45.4 million, consisting of $18.4 million in cash and cash equivalents and $27.0 million in borrowing capacity[145]. Revenue Segments - Revenues from the mineral rights segment decreased by $29.7 million, or 12%, primarily due to lower metallurgical coal sales prices and reduced oil and gas royalties[119]. - Soda ash revenues increased by $14.6 million, or 33%, driven by higher sales prices despite lower production and sales volumes[122]. - The Mineral Rights segment reported a revenue decline of $29.7 million, or 12%, primarily due to lower natural gas production and prices, as well as decreased cash flow from carbon neutral initiatives[134]. - The Soda Ash segment experienced a revenue increase of $14.6 million, or 33%, driven by higher sales prices due to strong demand in both domestic and international markets[137]. - The Soda Ash segment saw an increase in operating cash flow of $32.0 million due to higher distributions from Sisecam Wyoming[146]. Operating Expenses and Financial Ratios - Operating expenses decreased by 7% to $18,684,000, driven by a reduction in depreciation, depletion, and amortization expenses[128]. - Interest expense decreased by 25% to $3,837,000, reflecting a reduction in outstanding debt[128]. - Total debt as of September 30, 2023, was $207.5 million, an increase from $168.3 million as of December 31, 2022[149]. - The leverage ratio as of September 30, 2023, was 0.7x, indicating a strong capacity to service debt[115]. - The leverage ratio as of September 30, 2023, was 0.7x, indicating a stable financial position[147]. Market Conditions and Risks - Company revenues, operating results, and financial condition are significantly dependent on prevailing commodity prices, particularly coal, which has historically been volatile[156]. - Substantially lower coal prices could lead to reduced revenues and potential impairment of coal properties or violations of financial debt covenants[156]. - The effective marketing of coal by lessees is crucial, as difficulties in extending contracts may adversely affect lessees' operations and future financial results[157]. - The market price of soda ash and energy costs directly impacts the profitability of Sisecam Wyoming's operations, with historical volatility expected to continue[158]. - A 1% increase in interest rates would result in an approximate $1.3 million increase in annual interest expense, assuming the same principal amount remains outstanding[159].

Financial Data and Key Metrics Changes - The company generated $81 million of operating cash flow and $70 million of net income during the second quarter of 2023 [8] - Free cash flow for the second quarter was $82 million, with a total of $308 million over the last year [33] - The total obligations, including debt, preferred equity, and warrants, decreased over 10% since the last earnings call, down to about $385 million [14] Business Segment Data and Key Metrics Changes - The Mineral Rights segment generated $55 million in operating cash flow, $56 million in free cash flow, and $53 million in net income for Q2 2023, with net income and free cash flow decreasing by $17 million and $15 million respectively compared to the prior year due to lower metallurgical sales prices [37] - The Soda Ash business segment reported net income of $27 million in Q2 2023, up from $15 million in the prior year, driven by strong demand and higher sales prices [9] - The Corporate and Financing segment saw costs decrease to $9 million from $17 million in the prior year, primarily due to lower interest expenses [19] Market Data and Key Metrics Changes - Metallurgical coal prices declined during the second quarter but remained relatively strong compared to historical norms, with metallurgical coal making up 70% of coal royalty revenues [18] - Thermal coal prices weakened due to mild winter weather and increased inventories at coal-fired power stations, with expectations of continued long-term decline [34] Company Strategy and Development Direction - The company is focused on deleveraging and derisking its balance sheet to maximize future free cash flow available for common unitholders [26] - There is an ongoing exploration of carbon-neutral initiatives, including CO2 sequestration and renewable energy projects, which could provide significant long-term cash flows without requiring capital investment [7] Management's Comments on Operating Environment and Future Outlook - Management believes the supply-demand balance for metallurgical coal will remain supported due to long-term demand trends and lack of new supply investment [5] - The company acknowledges near-term pricing pressures in the soda ash market due to softening demand and new capacity from China but maintains a favorable long-term outlook for the industry [16] Other Important Information - The company permanently retired $81 million of its preferred equity in Q2 2023, bringing total preferred equity redemptions for the year to $128 million [14] - The second quarter distribution of $0.75 per common unit was announced, consistent with the previous quarter [10] Q&A Session Summary Question: What are the priorities for paying down preferred securities? - The company intends to continue paying down preferred and debt as rapidly as possible, especially if it can borrow at a lower cost than the 12% on preferreds [23] Question: Can you explain the non-cash charge related to the paydown of preferred securities? - The non-cash charge reflects the difference between the par value paid for preferred units and their book value, with no impact on the income statement [43] Question: Is there a reason why the company can't reinstate a more full payout ratio in early 2024? - The company plans to clean up its capital structure before evaluating capital deployment strategies, indicating that early 2024 is too soon for reinstating a full payout ratio [53] Question: What is the expected revenue from CO2 sequestration deals? - The company cannot provide specific guidance on potential revenue from CO2 sequestration as it depends on the industry's development [70]