Executive Summary

Q2 2025 delivered resilient cash generation amid cyclical troughs: Total revenues and other income of $50.1M, net income of $34.2M, operating cash flow of $45.6M, and free cash flow of $46.3M; quarterly distribution maintained at $0.75 per unit .
Macro headwinds persisted: weaker metallurgical and thermal coal prices and oversupplied soda ash pressured volumes/pricing and segment earnings year-over-year; Mineral Rights and Soda Ash segment results declined vs Q2 2024, primarily on lower commodity pricing .
Balance sheet momentum continued: leverage ratio fell to 0.5x; liquidity stood at $157.5M (cash $30.3M; revolver availability $127.1M); debt at quarter-end was $101.5M .
Management reiterated an explicit deleveraging-to-cash-returns roadmap: on track to pay off substantially all debt by mid next year and “significantly” increase distributions starting next August, a potential stock catalyst once debt inflects to near-zero .
Street estimates: S&P Global consensus for Q2 2025 EPS/Revenue was not available (NRP is lightly covered), so beat/miss vs consensus cannot be assessed; comparisons provided versus prior quarter and prior year [Values retrieved from S&P Global].

What Went Well and What Went Wrong

What Went Well
- Robust free cash flow through the downturn: “NRP generated $46 million of free cash flow in the second quarter of 2025 and $203 million over the last twelve months,” underscoring structurally improved cash conversion despite low commodity prices .
- Rapid deleveraging progress and lower interest: leverage to 0.5x; corporate/financing net income and cash flow improved due to less debt and lower cash interest .
- Clear capital return path post-debt: “on track to pay off substantially all debt by the middle of next year and be in a position to substantially increase unitholder distributions starting next August” .
What Went Wrong
- Year-over-year top-line and segment pressure: Total revenues and other income down to $50.1M from $65.5M in Q2 2024; Mineral Rights and Soda Ash results lower on commodity pricing weakness .
- Coal and soda ash markets at or below cost economics: management described coal markets as in downturn with excess supply/soft demand and soda ash prices “at or below” cost for many producers; expect muted prices to persist .
- Carbon-neutral monetization stalled: “No meaningful developments” in carbon-neutral initiatives this quarter; market uncertainty continues to hinder developer activity .

Financial Results

P&L and cash flow vs prior periods

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenues and Other Income ($USD Millions)	$65.5	$60.5	$50.1
Net Income ($USD Millions)	$46.1	$40.3	$34.2
Diluted EPS ($)	$2.29	$2.97	$2.52
Operating Cash Flow ($USD Millions)	$56.6	$34.4	$45.6
Free Cash Flow ($USD Millions)	$57.3	$35.1	$46.3
Distribution per common unit ($)	—	$0.75	$0.75 (declared)
Leverage Ratio (x)	0.7x (LTM at 6/30/24)	0.7x (at 3/31/25)	0.5x (at 6/30/25)

Margins (S&P Global methodology; uses “Revenues” excluding equity income and gains)

Margin Metric	Q2 2024	Q1 2025	Q2 2025
EBITDA Margin %	79.38%*	75.56%*	79.17%*
Net Income Margin %	79.38%*	70.85%*	71.57%*

Values retrieved from S&P Global.
Note: S&P Global margin calculations use “Revenues” (Royalty and other mineral rights + Transportation and processing services), which for Q2 2025 equals $46.85M versus company “Total revenues and other income” of $50.10M .

Segment performance (Total revenues/other income and Adjusted EBITDA)

Segment	Q2 2024	Q1 2025	Q2 2025
Mineral Rights – Total rev & other income ($M)	$61.9	$55.9	$47.6
Mineral Rights – Adjusted EBITDA ($M)	$56.0	$49.2	$43.4
Soda Ash – Equity in earnings ($M)	$3.65	$4.61	$2.53
Soda Ash – Adjusted EBITDA ($M)	$7.56	$2.88	$4.88
Corporate & Financing – Adjusted EBITDA ($M)	$(5.93)	$(6.83)	$(5.60)

Key KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Coal sales volumes (k tons)	6,638	8,221	6,114
Combined avg coal royalty revenue/ton ($)	$5.98	$4.36	$5.17
Met coal mix (% of royalty revenue / % of volumes)	—	~55% / ~40%	~70% / ~55%
Liquidity ($M)	—	$120.5 (as of 3/31/25)	$157.5 (as of 6/30/25)
Cash & Equivalents ($M)	—	$30.9 (as of 3/31/25)	$30.3 (as of 6/30/25)
Revolver Availability ($M)	—	$89.6 (as of 3/31/25)	$127.1 (as of 6/30/25)

Guidance Changes

Metric	Period	Previous Guidance/Commentary	Current Guidance/Commentary	Change
Distribution per common unit	Quarterly	Maintained at $0.75 (Q1 2025)	Declared $0.75 for Q2 2025	Maintained
Deleveraging timeline	Through mid-2026	“Prospect of freeing up cash for significant increases in distributions as debt is paid off next year” (Q1 call/PR)	“On track to pay off substantially all debt by the middle of next year”	Clarified timeline
Distribution outlook post-debt	Starting next August	Directional: significant increases anticipated post pay-down	“Be in a position to substantially increase unitholder distributions starting next August”	More explicit
Coal pricing outlook	2025	Muted pricing expected amid soft steel demand and elevated thermal inventories	Muted pricing to persist; coal markets at downturn with thin margins for operators	Maintained (negative)
Soda ash outlook	2025–2026	Prices weak on oversupply; distributions to remain below historical levels	Oversupply persists; in some regions prices at/below variable cost; distributions may remain at historically low levels, possibly zero	Worse tone

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Coal markets/pricing	Prices halved in 2024; near-term rebound not expected; secular support for met longer-term	Markets under pressure; excess supply/soft demand; many operators at cost; potential supply rationalization ahead	Negative but stable outlook
Soda ash oversupply	Global capacity additions and weaker flat glass demand; expect several years to rebalance; distributions below historical levels	Prices at/below cost for many; may take years to rebalance; distributions likely at low levels, potentially zero	Negative, tone more cautious
Deleveraging and capital returns	Only ~$142–$139M debt; extended revolver; roadmap to higher distributions post-debt	Leverage 0.5x; ~$101.5M debt; explicit timing: pay down by mid next year; raise distributions next August	Positive; timeline more specific
Carbon-neutral initiatives	Exploring CO2 sequestration, forest carbon, lithium, renewables; activity uneven; some projects not renewed	“No meaningful developments”; market for C&I stagnant due to political/regulatory uncertainty	Stalled
Capital allocation priorities post-debt	Focus on deleveraging; distributions maintained; special tax distribution in Q1	Priorities post-fortress balance sheet: 1) Distributions, 2) Buybacks at discounts, 3) Opportunistic acquisitions	Clearer capital return playbook

Management Commentary

Strategy and cycle-resilience: “With prices for coal and soda ash trading at cyclical lows... we are quite pleased with the partnership’s ability to generate robust levels of free cash flow.”
Path to higher cash returns: “Based on our current free cash flow run rate, we are on track to pay off substantially all debt by the middle of next year and be in a position to substantially increase unitholder distributions starting next August.”
Market backdrop: “The collective market for our three key commodities is as negative as it’s ever been. Despite this, the partnership continues to generate robust levels of free cash flow that are being used to pay down debt.”
Segment mix: “Metallurgical coal made up approximately 70% of our coal royalty revenues and 55% of our coal royalty sales volumes” in Q2 2025, highlighting portfolio tilt to met .
Carbon-neutral activities: “No meaningful developments” in the quarter; uncertainties continue to hinder project activity .

Q&A Highlights

Capital allocation priorities after deleveraging: Management’s three priorities post “fortress balance sheet” are 1) unit-holder distributions, 2) unit repurchases at material discounts to intrinsic value, and 3) opportunistic acquisitions within the circle of competence .
M&A optionality: Market for mineral rights is fragmented with limited trading; could pursue one-off bargains post-debt if prices are attractive .
Debt target: When asked about timing/treatment of the Opco credit facility, management affirmed the intent to drive it to zero as part of the deleveraging plan .

Estimates Context

S&P Global consensus for Q2 2025 EPS and revenue was not available; therefore, we cannot assess beat/miss vs Street. NRP is thinly covered. [Values retrieved from S&P Global]
Implication: In absence of consensus, we anchor on sequential and YoY trajectories—Q2 showed declines vs Q2 2024 but improved FCF sequentially vs Q1, with balance sheet strengthening (lower leverage, higher liquidity) .

Key Takeaways for Investors

Distribution growth catalyst is credible and time-bound: management guided to near-zero debt by mid next year and “substantial” distribution increases starting next August—set up for income re-rating once leverage approaches zero .
Through-cycle cash machine: Even with commodity prices at/near operator cost, NRP produced $46.3M FCF in Q2 and $203.1M LTM; deleveraging accelerates equity optionality .
Macro remains a headwind: coal and soda ash pricing weak with limited near-term catalysts; watch for supply rationalization (coal) and capacity rationalization (soda ash) as potential price stabilizers .
Mix and volume dynamics: Q2 combined avg royalty/ton improved sequentially ($5.17 vs $4.36), but total volumes fell; met share of royalties remains high (~70%), keeping leverage to steel cycles elevated .
Carbon-neutral optionality is deferred, not gone: no progress this quarter; future upside remains but timing is uncertain amid regulatory/political overhang .
Trading setup: Into H2/H1 next year, catalysts include visible debt inflection and a potential distribution reset; absent commodity price improvements, fundamental EPS may grind but FCF support and capital return inflection can drive unit performance .

Additional detail and cross-references

Declared Q2 2025 distribution of $0.75 per unit; Q1 2025 distribution of $0.75 was paid in May .
Liquidity at quarter-end: $157.5M comprised of $30.3M cash and $127.1M revolver capacity .
Debt and leverage: debt $101.5M; leverage ratio 0.5x at 6/30/25 (vs 0.7x at 3/31/25) .
Segment details Q2 vs prior year: Mineral Rights net income down $13M YoY on lower met/thermal pricing; Soda Ash net income down $1.1M, with lower distributions from Sisecam; corporate/financing improved on lower interest costs .

Footnote on S&P Global data:
Values marked with an asterisk (*) are retrieved from S&P Global.

NATURAL RESOURCE PARTNERS LP (NRP)·Q2 2025 Earnings Summary