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| Statement |
|---|
| These improvements are primarily driven due to a noncash loss on early extinguishment of debt recognized in 2022 and full year results also benefited from less interest expense because of less debt outstanding in 2023 |
| Metallurgical coal prices improved during the fourth quarter and remained strong compared to historical norms, although below the record highs seen during 2022 |
| We are one of the world's lowest-cost producers of a product that has favorable long-term fundamentals, driven by urbanization, the megatrends for renewable energy and the electrification of the global auto free fleet |
| These results are a testament to our success in executing on the strategy we set out in 2015 to delever and derisk the partnership |
| As Craig mentioned, our strong 2023 free cash flow generation enabled us to make significant progress in permanently retiring outstanding preferred warrants -- preferred units and warrants |
| The business is generating robust levels of free cash flow, the capital structure is solid and our financial outlook is much improved |
| So far, it has been quite successful, and the outlook looks good and it's due in large part to all of you |
| This result was driven by record high sales prices, both domestic and export during the first half of the year |
| NRP generated a record $313 million of free cash flow in 2023, a 17% increase over our previous record set in 2022 |
| Costs for the fourth quarter and full year of 2023 improved $3 million and $18 million, respectively |
| We received $81 million in cash distributions from Sisecam Wyoming in 2023, which is the highest annual amount of regular distributions we've ever received |
| Over the near term, we believe underinvestment in new sources of thermal coal production, coupled with continued international thermal coal demand, will provide price support at levels that are competitive when compared to historical norms |
| While the carbon neutral economy is in an early stage of development and requires significant investment and changes in the regulatory environment to become fully viable, we believe the potential upside from our carbon-neutral initiatives could be significant, all while requiring no capital investment by NRP |
| These increases were also driven by higher sales prices, resulting in higher cash distributions from Sisecam Wyoming in 2023 |
| Net income in 2023 increased $14 million as compared to the prior year, primarily due to higher sales prices in the first half of 2023 |
| Victor Ho And congratulations on continuing very strong results |
| Our Corporate and Financing segment free cash flow for the fourth quarter and full year of 2023 improved $3 million and $11 million, respectively, as compared to the prior year periods due to lower cash paid for interest because of less debt outstanding in 2023 |
| We continue to add additional bank revolver capacity that will provide financial flexibility to settle warrants with cash and accelerate redemptions of preferreds |
| In 2023, we increased our borrowing capacity $25 million and added another $45 million earlier this year, resulting in our borrowing capacity increasing from $130 million 1 year ago to the $200 million as of today |
| So thank you for your support, and have a great day |
| Years of hard work and persistence are paying off |
| We think there needs to be further improvements in technology, further development in the permitting process and likely also some regulatory changes to make projects viable, not just projects on NRP, but projects in the COT sequestration space in general, large-scale projects in general |
| Free cash flow from this segment in the fourth quarter and full year of 2023 increased as compared to the prior year period's $5 million and $37 million, respectively |
| Thermal coal prices appear to have stabilized after several quarters of downward pressure resulting from elevated coal and natural gas inventories |
| Thank you for your continued support of NRP |
| As a result of these redemptions, we saved over $20 million annually in preferred unit cash distributions |
| The borrowing capacity of our revolver currently stands at $200 million, an increase of $70 million from 1 year ago |
| Thank you, Craig, and good morning, everyone |
| Craig Nunez Thank you, Tiffany, and good morning, everyone |
| But if you continue it anywhere near the current rate of free cash flow generation, then you're going to be able to pay down both the preferred and the debt in pretty short order here |
| Statement |
|---|
| Longer term, however, we believe the domestic thermal market will continue its long-term secular decline |
| We expect 2024 to be a challenging year as global soda ash markets absorb significant new production volumes, a process that we believe will take several years to complete |
| When compared to the prior year, our Mineral Rights segment net income decreased $22 million primarily due to lower metallurgical coal and natural gas prices, lower transportation and processing revenues and certain carbon neutral initiative transactions that we entered into in the prior year |
| Unfortunately, global soda ash export prices fell significantly in the back half of the year as new low-cost soda ash supply came online in China, Turkey and the United States |
| Global supply demand for metallurgical coal remains in reasonable balance, and we believe it will stay that way for the foreseeable future due to long-term demand trends and continued muted investment in new supply |
| We have stuck to this strategy through good times and bad, never wavering in our commitment to do exactly what we told you we were going to do |
| Cash distributions to NRP will adjust accordingly as profit margins compress due to the combination of lower sales prices and inflation-driven cost increases |
| While we will not comment specifically directly on our view of intrinsic value, I will say that it was our inability to answer yes to the liquidity question that caused us to issue units to settle a portion of the warrant exercises early this year |
| If we were in that theoretical situation where we had excess cash today, they are not on the horizon overly attractive opportunities to deploy capital |
| I can tell you at this point in time, we don't see opportunities in the market |
| We actually don't believe that any of the subsurface carbon sequestration projects are actually economically viable in this environment |
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