Natural Resource Partners L.P. (NYSE:NRP) Q1 2023 Earnings Conference Call May 4, 2023 9:00 AM ET

Company Participants

Tiffany Sammis - IR

Craig Nunez - President and COO

Chris Zolas - CFO

Operator

Thank you for standing by. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Natural Resource Partners LP First Quarter 2023 Earnings Conference Call. [Operator Instructions] Thank you.

Tiffany Sammis, you may begin your conference.

Tiffany Sammis

Thank you. Good morning and welcome to the Natural Resource Partners First Quarter 2023 Conference Call. Today's call is being webcast, and a replay will be available on our website. Joining me today are Craig Nunez, President and Chief Operating Officer; Chris Zolas, Chief Financial Officer; and Kevin Craig, Executive Vice President.

Some of our comments today may include forward-looking statements, reflecting NRP's views about future events. These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward-looking statements. These risks are discussed in NRP's Form 10-K and other Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP measures are included in our first quarter press release, which can be found on our website.

I would like to remind everyone that we do not intend to discuss the operations or outlook for any particular coal lessee or detailed market fundamentals. In addition, I refer you to Sisecam Resources' public disclosures and commentary for specific questions regarding our soda ash business segment.

Now I would like to turn the call over to Craig Nunez, our President and Chief Operating Officer. Craig?

Craig Nunez

Thank you, Tiffany, and good morning, everyone. NRP generated $73 million of free cash flow in the first quarter, which is one of the best quarterly performances in the history of the partnership. Performance over the last 12 months has been equally impressive, with our business generating $290 million of free cash flow. We continue to take advantage of this strong financial performance to make significant progress toward our goal of becoming debt-free and redeeming all of our preferred equity which will, in turn, maximize future free cash flow available for common unitholders.

We redeemed $47.5 million of our 12% preferred equity in February, and our leverage ratio ended the first quarter at 0.5x, down from 4.5x just 24 months ago. We have about $440 million of obligations remaining to be settled, consisting of $174 million of debt, $202 million of preferred equity and warrants convertible into common units with a current settlement value of approximately $63 million.