Financial Data and Key Metrics Changes - In Q4 2025, the company generated $31 million of net income, $45 million of operating cash flow, and $46 million of free cash flow. For the full year 2025, net income was $136 million, operating cash flow was $166 million, and free cash flow was $169 million [10] - The Mineral Rights segment reported a decrease in net income, operating cash flow, and free cash flow by $13 million in Q4 and $41 million in net income for the full year compared to the previous year [11] - The Corporate and Financing segment saw improvements in net income, operating cash flow, and free cash flow by $3 million in Q4 and $9 million for the full year compared to the prior year [13] Business Line Data and Key Metrics Changes - The Mineral Rights segment accounted for approximately 70% of coal royalty revenues and 45% of coal royalty sales volumes in Q4 2025, with a decline in performance attributed to weaker metallurgical coal markets [11] - The Soda Ash segment experienced a decrease in net income by $3 million in Q4 and $15 million for the full year compared to the prior year, primarily due to lower international sales prices and weak demand [12] Market Data and Key Metrics Changes - Metallurgical and thermal coal prices are at cyclically low levels, while soda ash prices are at generational lows, with no immediate catalysts expected to improve this outlook [4][5] - The company noted that the global soda ash market is facing significant challenges, with expectations that 2026 will be worse than 2025 due to excess capacity and low demand [5][6] Company Strategy and Development Direction - The company is focused on managing its operations under the assumption that demand for North American thermal coal is in long-term decline, while also working on carbon-neutral initiatives and exploring geothermal, solar, and lithium opportunities [5][8] - The company aims to retire all outstanding debt and increase unitholder distributions, although the recent $39 million investment in Sisecam Wyoming may delay this timeline [9] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the prolonged downturn in the soda ash market and the potential for further pressure on financial performance, indicating that rebalancing global supply and demand could take several years [6][8] - The management remains cautious about the thermal coal market, despite some positive sentiment due to projected electricity demand from data centers [5] Other Important Information - The company paid a distribution of $0.75 per common unit for Q4 2025 and announced a special distribution of $0.12 per common unit to cover unitholder tax liabilities [14] Q&A Session Summary Question: Clarification on capital contribution to Soda Ash JV and outstanding bank debt - The JV has over $50 million of debt remaining after the contribution [17] Question: Plans for further contributions to pay down remaining debt - There are no current plans for additional contributions, but management acknowledged the possibility if market conditions worsen [18][19] Question: Anticipation of substantial distribution increases in May quarter - Management indicated that substantial increases are not expected in May, with a more likely timeline in November [28][30] Question: Reason for not participating in mineral rights auction - The company prefers to acquire passive interests in natural resource assets at attractive prices and does not find auctions to be favorable opportunities [33]

Financial Data and Key Metrics Changes - In Q4 2025, the company generated $31 million of net income, $45 million of operating cash flow, and $46 million of free cash flow. For the full year 2025, net income was $136 million, operating cash flow was $166 million, and free cash flow was $169 million [10] - The company generated $46 million of free cash flow in Q4 and $169 million for the full year 2025, with a total of $109 million of debt retired during the year, finishing with $33 million of debt [4][9] Business Line Data and Key Metrics Changes - The Mineral Rights segment generated $40 million of net income in Q4 2025, down $13 million from the prior year, and $166 million for the full year, a decline of $41 million [11] - The Soda Ash segment saw a decrease in net income of $3 million in Q4 and $15 million for the full year compared to the previous year, primarily due to lower international sales prices [12] - The Corporate and Financing segment improved net income by $3 million in Q4 and $9 million for the full year, attributed to lower interest costs from reduced debt [13] Market Data and Key Metrics Changes - Metallurgical coal and thermal coal prices are at cyclically low levels, with soda ash prices at generational lows, reflecting a challenging market environment [4][5] - The company noted that the demand for North American thermal coal is in long-term secular decline, and the soda ash market is expected to worsen in 2026 [5][6] Company Strategy and Development Direction - The company is focused on managing its operations under the assumption of continued low demand for its key commodities and is prioritizing debt reduction and unitholder distributions [5][9] - The company is exploring geothermal, solar, and lithium opportunities, although progress has been slow and no material updates were provided [8] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the prolonged downturn in the soda ash market and the potential for further pressure on financial performance, indicating that rebalancing supply and demand could take several years [6][8] - The management remains cautious about the timing of future distribution increases, suggesting that the current bear market could delay plans [9][30] Other Important Information - The company announced a special distribution of $0.12 per common unit to cover unitholder tax liabilities for 2025 [15] - The joint venture with Sisecam Wyoming has not provided distributions for the last two quarters, and no resumption is expected until market conditions improve [12][13] Q&A Session Summary Question: Clarification on capital contribution to the Soda Ash JV and its debt status - The JV has over $50 million of debt remaining after the recent contribution [17] Question: Plans for further contributions to pay down remaining debt - There are currently no plans for additional contributions, but management acknowledged the possibility if market conditions worsen [18][19] Question: Anticipation of substantial distribution increases in May - Management indicated that substantial increases are not expected in May, with a more likely timeline in November due to ongoing market conditions [28][30] Question: Reason for not bidding on mineral rights at auction - The company prefers to acquire passive interests in natural resource assets at attractive prices and does not typically participate in auctions [33]

Financial Data and Key Metrics Changes - In Q4 2025, the company generated $31 million of net income, $45 million of operating cash flow, and $46 million of free cash flow. For the full year 2025, net income was $136 million, operating cash flow was $166 million, and free cash flow was $169 million [10] - The Mineral Rights segment reported a decrease in net income, operating cash flow, and free cash flow by $13 million in Q4 and $41 million for the full year compared to the prior year [11] - The Soda Ash segment's net income decreased by $3 million in Q4 and $15 million for the full year compared to the prior year periods [12] Business Line Data and Key Metrics Changes - The Mineral Rights segment accounted for approximately 70% of coal royalty revenues and 45% of coal royalty sales volumes in Q4 2025, with a similar mix for the full year [11] - The Soda Ash segment faced challenges due to lower international sales prices and weak demand, leading to a decrease in operating and free cash flow by $11 million in Q4 and $31 million for the full year compared to the prior year [12] Market Data and Key Metrics Changes - Metallurgical and thermal coal prices are at cyclically low levels, while soda ash prices are at generational lows, with no immediate catalysts expected to improve this outlook [4][5] - The company noted that the global soda ash market is experiencing a downturn that may last several years, with international prices below production costs for most producers [6] Company Strategy and Development Direction - The company is focused on managing the partnership under the assumption that demand for North American thermal coal is in long-term decline, while also investing in safety and operational integrity [5][6] - The company plans to retire all outstanding debt and increase unitholder distributions, although the recent $39 million investment in Sisecam Wyoming may delay this timeline [9] Management Comments on Operating Environment and Future Outlook - Management expressed concerns about the prolonged downturn in the soda ash market, indicating that the extent and duration of the downturn have exceeded expectations [5][6] - The company remains disciplined in its capital allocation decisions, prioritizing intrinsic value maximization while navigating a challenging market environment [7] Other Important Information - The company retired $109 million of debt in 2025, finishing the year with $33 million of debt and no other financial obligations [9] - A special distribution of $0.12 per common unit was announced to help cover unitholder tax liabilities associated with owning NRP's common units in 2025 [14] Q&A Session Summary Question: Is the joint venture now debt-free following the capital contribution? - The joint venture has over $50 million of debt remaining after the contribution [16] Question: Are there plans to continue making contributions to pay down the remaining debt? - Currently, there are no plans to make further contributions, but it remains a possibility if market conditions worsen [18] Question: Will distributions be substantially increased in the May quarter? - No, the timing for potential distribution increases is likely pushed back to November due to the ongoing bear market and the recent capital contribution [27][29] Question: Why did the company not bid at the recent mineral rights auction? - The company typically does not find attractive opportunities at auctions and is focused on de-leveraging before returning capital to unitholders [32]

Financial Data and Key Metrics Changes - In Q3 2025, the company generated $31 million of net income, $41 million of operating cash flow, and $42 million of free cash flow [12] - Over the last 12 months, free cash flow totaled $190 million, indicating strong cash generation despite market challenges [4] - The company has retired nearly $130 million of debt over the past 12 months, with only $70 million remaining as of the end of the quarter [10] Business Line Data and Key Metrics Changes - The mineral rights segment generated $41 million of net income, with operating and free cash flow each decreasing by $9 million compared to the prior year due to weaker metallurgical coal markets [12] - The soda ash segment saw a net income decrease of $11 million, with operating and free cash flow each down by $6 million, primarily due to lower international sales prices and weakened demand [13] - The corporate and financing segment improved net income by $3 million, with operating cash flow and free cash flow each improving by $2 million due to reduced debt and lower interest costs [14] Market Data and Key Metrics Changes - Metallurgical coal markets are facing challenges from slowing global growth and soft steel demand, while thermal coal markets are struggling with muted demand due to mild weather and competition from natural gas [4][5] - The soda ash market remains oversupplied, with international prices below cash production costs for most producers, indicating a generational bear market [6][9] Company Strategy and Development Direction - The company continues to manage its operations with a conservative approach, focusing on maintaining a robust free cash flow and improving its capital structure [6][10] - There is an emphasis on long-term sustainability in the soda ash market, with expectations that producers will eventually rationalize supply [7] - The company aims to increase unit holder distributions in the future, contingent on market conditions improving [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the significant headwinds in coal and soda ash markets, with no near-term catalysts for improvement [9][10] - The company believes that most coal operators are struggling to make profits, with many operating at razor-thin margins [5] - The outlook for thermal coal remains cautious, with a belief that North American thermal coal is in long-term secular decline until evidence suggests otherwise [5] Other Important Information - The company did not receive a distribution from Shishajam, Wyoming, in Q3 2025, and does not expect distributions to resume until market conditions improve [8][13] - The carbon-neutral industry continues to face challenges, with significant barriers to CO2 sequestration operations [9] Q&A Session Summary Question: Inquiry about lithium mining leasing in the Smackover region - The company is active in leasing acreage for lithium production in the Smackover formation, with varied activity levels over the years [16][17] Question: Clarification on operating and maintenance expenses - Operating and maintenance expenses include salaries, corporate costs, property taxes, and royalty expenses, with a focus on cost management [19][20][21] Question: Opportunities in natural gas production - The majority of the company's mineral rights are in the Haynesville basin, which is currently active, but oil and gas revenues are not material to the partnership [28] Question: Criteria for unit repurchases - The company aims for a "fortress balance sheet" before considering unit repurchases, prioritizing unit holder distributions and opportunistic acquisitions [34][35] Question: Thermal coal infrastructure capacity for increased demand - Increased power demand from data centers may require significant capital investment in thermal coal infrastructure, but specifics are uncertain [40]

Core Viewpoint - Natural Resource Partners L.P. (NRP) has been upgraded to "Neutral" due to its improving balance sheet and consistent cash flow, which are mitigating the impacts of weak commodity pricing [1][8]. Financial Performance - NRP reported $34 million in net income and $46 million of free cash flow in Q2 2025, leading to a trailing 12-month free cash flow exceeding $200 million [1]. - The partnership's leverage has been reduced to 0.5X EBITDA, with plans to retire all debt by mid-2026, enhancing its financial position and reducing interest costs [2]. Market Conditions - Despite improvements in financial structure, NRP faces significant market headwinds, with coal revenues declining sharply due to falling pricing and volumes, particularly in metallurgical coal linked to weak global steel demand [3]. - The soda ash market is also under pressure from global oversupply and sluggish demand in construction and automotive sectors, leading to reduced income from Sisecam Wyoming [4]. Strategic Positioning - NRP's financial strengthening allows for a refocus on capital returns, with future cash directed towards increased unitholder distributions, opportunistic repurchases of common units, and selective acquisitions if market conditions are favorable [6]. - The partnership has maintained quarterly distributions at 75 cents per unit, reflecting management's confidence in cash flow despite current market challenges [7]. Rating Rationale - The upgrade to "Neutral" reflects a balance between ongoing commodity price challenges and a significantly improved financial position, with deleveraging enhancing liquidity and providing a clearer path for capital returns [8][9].