NATURAL RESOURCE PARTNERS L.P. The following review of operations for the three month periods endedMarch 31, 2023 and 2022 should be read in conjunction with our Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in this Form 10-Q and with the Consolidated Financial Statements, Notes to Consolidated Financial Statements and Management's Discussion and Analysis included in theNatural Resource Partners L.P. Annual Report on Form 10-K for the year endedDecember 31, 2022 . As used herein, unless the context otherwise requires: "we," "our," "us" and the "Partnership" refer toNatural Resource Partners L.P. and, where the context requires, our subsidiaries. References to "NRP" and "Natural Resource Partners " refer toNatural Resource Partners L.P. only, and not toNRP (Operating) LLC or any ofNatural Resource Partners L.P.'s subsidiaries. References to "Opco" refer toNRP (Operating) LLC , a wholly owned subsidiary of NRP, and its subsidiaries.NRP Finance Corporation ("NRP Finance") is a wholly owned subsidiary of NRP and was a co-issuer with NRP on the 9.125% senior notes due 2025 (the "2025 Senior Notes").
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Statements included in this 10-Q may constitute forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are also forward-looking statements. Such forward-looking statements include, among other things, statements regarding: the effects of the global COVID-19 pandemic; future distributions on our common and preferred units; our business strategy; our liquidity and access to capital and financing sources; our financial strategy; prices of and demand for coal, trona and soda ash, and other natural resources; estimated revenues, expenses and results of operations; projected future performance by our lessees;Sisecam Wyoming LLC's ("Sisecam Wyoming's") trona mining and soda ash refinery operations; distributions from our soda ash joint venture; the impact of governmental policies, laws and regulations, as well as regulatory and legal proceedings involving us, and of scheduled or potential regulatory or legal changes; and global andU.S. economic conditions. These forward-looking statements speak only as of the date hereof and are made based upon our current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. You should not put undue reliance on any forward-looking statements. See " Item 1A. Risk Factors " included in this Form 10-Q and in our Annual Report on Form 10-K for the year endedDecember 31, 2022 for important factors that could cause our actual results of operations or our actual financial condition to differ. NON-GAAP FINANCIAL MEASURES Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) less equity earnings from unconsolidated investment; plus total distributions from unconsolidated investment, interest expense, net, debt modification expense, loss on extinguishment of debt, depreciation, depletion and amortization and asset impairments. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income or loss, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations. There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring items that materially affect our net income, the lack of comparability of results of operations of different companies and the different methods of calculating Adjusted EBITDA reported by different companies. In addition, Adjusted EBITDA presented below is not calculated or presented on the same basis as Consolidated EBITDA as defined in our partnership agreement or Consolidated EBITDDA as defined in Opco's debt agreements. For a description of Opco's debt agreements, see Note 9. Debt, Net in the Notes to Consolidated Financial Statements included herein as well as in "Item 8. Financial Statements and Supplementary Data-Note 11. Debt, Net" in our Annual Report on Form 10-K for the year endedDecember 31, 2022 . Adjusted EBITDA is a supplemental performance measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis. Distributable Cash Flow Distributable cash flow ("DCF") represents net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings, proceeds from asset sales and disposals, including sales of discontinued operations, and return of long-term contract receivable; less maintenance capital expenditures. DCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. DCF may not be calculated the same for us as for other companies. In addition, DCF presented below is not calculated or presented on the same basis as distributable cash flow as defined in our partnership agreement, which is used as a metric to determine whether we are able to increase quarterly distributions to our common unitholders. DCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. Free Cash Flow Free cash flow ("FCF") represents net cash provided by (used in) operating activities plus distributions from unconsolidated investment in excess of cumulative earnings and return of long-term contract receivable; less maintenance and expansion capital expenditures and cash flow used in acquisition costs classified as investing or financing activities. FCF is calculated before mandatory debt repayments. FCF is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities. FCF may not be calculated the same for us as for other companies. FCF is a supplemental liquidity measure used by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess our ability to make cash distributions and repay debt. Leverage Ratio Leverage ratio represents the outstanding principal of our debt at the end of the period divided by the last twelve months' Adjusted EBITDA as defined above. We believe that leverage ratio is a useful measure to management and investors to evaluate and monitor our indebtedness relative to our ability to generate income to service such debt and in understanding trends in our overall financial condition. Leverage ratio may not be calculated the same for us as for other companies and is not a substitute for, and should not be used in conjunction with, GAAP financial ratios. 17
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Table of Contents Introduction
The following discussion and analysis presents management's view of our business, financial condition and overall performance. Our discussion and analysis consists of the following subjects:
• Executive Overview • Results of Operations • Liquidity and Capital Resources • Off-Balance Sheet Transactions • Related Party Transactions • Summary of Critical Accounting Estimates • Recent Accounting Standards Executive Overview We are a diversified natural resource company engaged principally in the business of owning, managing and leasing a diversified portfolio of mineral properties inthe United States , including interests in coal and other natural resources and own a non-controlling 49% interest in Sisecam Wyoming, a trona ore mining and soda ash production business. Our common units trade on theNew York Stock Exchange under the symbol "NRP." Our business is organized into two operating segments: Mineral Rights-consists of approximately 13 million acres of mineral interests and other subsurface rights acrossthe United States . If combined in a single tract, our ownership would cover roughly 20,000 square miles. Our ownership provides critical inputs for the manufacturing of steel, electricity and basic building materials, as well as opportunities for carbon sequestration and renewable energy. We are working to strategically redefine our business as a key player in the transitional energy economy in the years to come. Soda Ash-consists of our 49% non-controlling equity interest in Sisecam Wyoming, a trona ore mining and soda ash production business located in theGreen River Basin ofWyoming . Sisecam Wyoming mines the trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries. Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment. Our financial results by segment for the three months endedMarch 31, 2023 are as follows: Operating Segments Corporate and (In thousands) Mineral Rights Soda Ash Financing Total Revenues and other income $ 79,965$ 19,254 $ -$ 99,219 Net income (loss) $ 68,881$ 19,096 $ (8,702 ) $ 79,275 Adjusted EBITDA (1) $ 72,960$ 10,622 $ (5,845 ) $ 77,737 Cash flow provided by (used in) continuing operations Operating activities $ 73,858$ 10,617 $ (11,575 ) $ 72,900 Investing activities $ 699 $ -$ (2 ) $ 697 Financing activities $ (583 ) $ -$ (94,450 ) $ (95,033 ) Distributable cash flow (1) $ 74,557$ 10,617 $ (11,577 ) $ 73,597 Free cash flow (1) $ 74,456$ 10,617 $ (11,577 ) $ 73,496
(1) See "-Results of Operations" below for reconciliations to the most comparable
GAAP financial measures.
Current Results/Market Commentary
Financial Results and Quarterly Distributions
We generated$72.9 million of operating cash flow and$73.5 million of free cash flow during the three months endedMarch 31, 2023 , and ended the quarter with$56.5 million of liquidity consisting of$17.7 million of cash and cash equivalents and$38.8 million of borrowing capacity under our Opco Credit Facility. As ofMarch 31, 2023 our leverage ratio was 0.5 x. InFebruary 2023 , we declared and paid a cash distribution of$0.75 per common unit of NRP with respect to the fourth quarter of 2022 as well as a$7.5 million cash distribution on the preferred units with respect to the fourth quarter of 2022. InMarch 2023 , we declared and paid a special cash distribution of$2.43 per common unit to help cover unitholder tax liabilities associated with owning NRP's common units during 2022. Future distributions on our common and preferred units will be determined on a quarterly basis by the Board of Directors. The Board of Directors considers numerous factors each quarter in determining cash distributions, including profitability, cash flow, debt service obligations, market conditions and outlook, estimated unitholder income tax liability and the level of cash reserves that the Board determines is necessary for future operating and capital needs. InFebruary 2023 , we received a notice from holders of our Class A Preferred Units exercising their right to either convert or redeem, at the election of NRP, an aggregate of 47,499 Class A Preferred Units. We chose to redeem the preferred units for$47.5 million in cash rather than issuing common units. Of the originally issued 250,000 Class A Preferred Units, 202,501 Class A Preferred Units remain outstanding. 18
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Mineral Rights Business Segment
Revenues and other income in the first quarter of 2023 increased$5.1 million , or 7%, as compared to the prior year period primarily due to increased metallurgical coal sales volumes and revenue from carbon neutral initiatives. Cash provided by operating activities and free cash flow increased$25.7 million and$26.3 million , respectively, compared to the prior year quarter primarily due to the timing of minimum and royalty payments and prior year recoupments. Metallurgical coal prices remain strong relative to historical norms, although pricing has declined from the record highs seen in 2022. Continued support for pricing is expected as operators are limited in their ability to increase production due to ongoing labor shortages, transportation and logistics challenges, difficulty of new mine permitting, and limited access to capital. While metallurgical prices have pulled back from the peaks reached last year, we continue to believe met prices will remain well-supported for the foreseeable future. Thermal coal prices also reached record highs in 2022, but have declined significantly in recent months due to unusually warm weather inEurope andNorth America as well as lower natural gas prices. While we do not expect to see thermal prices rebound to last year's levels, many of the factors that provided support to prices over the last year still exist. Boycotts of Russian coal continue to force European buyers to source coal from other regions, including theU.S. Operators will continue to be burdened by labor shortages, pressure from governments, regulators, activists, and capital providers, which will limit ability to increase thermal production to meet demand.China appears to be relaxing its three-year ban on Australian coal imports with the recent approvals for several Chinese companies to buy Australian coal. Additional demand from a Chinese economy emerging from a zero-COVID policy should provide additional support for prices. We expect these factors to keep thermal prices elevated relative to historical levels for the foreseeable future. We continue to explore and identify carbon neutral revenue opportunities across our large portfolio of land, mineral, and timber assets, including the sequestration of carbon dioxide underground and in standing forests, and the generation of electricity using geothermal, solar, and wind energy. In the first quarter of 2023, we executed a new solar lease. Soda Ash Business Segment Revenues and other income in the first quarter of 2023 increased$4.4 million , or 30%, as compared to the prior year period primarily due to increased sales prices. Cash provided by operating activities and free cash flow in the first quarter of 2023 decreased$2.6 million as compared to the prior year period as Sisecam Wyoming paid a higher regular quarterly distribution in the first quarter of 2022 as compared to the first quarter of 2023. International prices remained strong in the first quarter of 2023 reflecting a continued supply constrained market for soda ash. Domestic soda ash prices were also strong during the first quarter of 2023 versus the prior year quarter due to negotiated 2023 domestic prices converging to international soda ash prices. Results of Operations
First Quarter of 2023 and 2022 Compared
Revenues and Other Income
The following table includes our revenues and other income by operating segment:
For the Three Months Ended
March 31, Percentage
Operating Segment (In thousands) 2023 2022 Increase Change
Mineral Rights $ 79,965 $ 74,879 $ 5,086 7 %
Soda Ash 19,254 14,837 4,417 30 %
Total $ 99,219 $ 89,716 $ 9,503 11 %
The changes in revenues and other income are discussed for each of the operating segments below:
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Table of Contents Mineral Rights
The following table presents coal sales volumes, coal royalty revenue per ton and coal royalty revenues by major coal producing region, the significant categories of other revenues and other income:
For the Three Months Ended
March 31, Increase Percentage
(In thousands, except per ton data) 2023 2022 (Decrease) Change
Coal sales volumes (tons)
Appalachia
Northern 379 428 (49 ) (11 )%
Central 3,609 3,251 358 11 %
Southern 582 361 221 61 %
Total Appalachia 4,570 4,040 530 13 %
Illinois Basin 1,310 1,502 (192 ) (13 )%
Northern Powder River Basin 1,085 1,238 (153 ) (12 )%
Gulf Coast 58 69 (11 ) (16 )%
Total coal sales volumes 7,023 6,849 174 3 %
Coal royalty revenue per ton
Appalachia
Northern $ 9.86 $ 10.14 $ (0.28 ) (3 )%
Central 9.92 11.37 (1.45 ) (13 )%
Southern 14.94 17.56 (2.62 ) (15 )%
Illinois Basin 3.57 2.20 1.37 62 %
Northern Powder River Basin 4.68 3.74 0.94 25 %
Gulf Coast 0.57 0.55 0.02 4 %
Combined average coal royalty revenue
per ton 8.26 8.12 0.14 2 %
Coal royalty revenues
Appalachia
Northern $ 3,737 $ 4,341 $ (604 ) (14 )%
Central 35,806 36,980 (1,174 ) (3 )%
Southern 8,697 6,340 2,357 37 %
Total Appalachia 48,240 47,661 579 1 %
Illinois Basin 4,675 3,303 1,372 42 %
Northern Powder River Basin 5,075 4,632 443 10 %
Gulf Coast 33 38 (5 ) (13 )%
Unadjusted coal royalty revenues 58,023 55,634 2,389 4 %
Coal royalty adjustment for minimum
leases - (185 ) 185 100 %
Total coal royalty revenues $ 58,023 $ 55,449 $ 2,574 5 %
Other revenues
Production lease minimum revenues $ 613 $ 1,592 $ (979 ) (61 )%
Minimum lease straight-line revenues 4,503 4,783 (280 ) (6 )%
Carbon neutral initiative revenues 2,118 - 2,118 100 %
Wheelage revenues 3,869 3,717 152 4 %
Property tax revenues 1,470 1,472 (2 ) (0 )%
Coal overriding royalty revenues 188 258 (70 ) (27 )%
Lease amendment revenues 851 880 (29 ) (3 )%
Aggregates royalty revenues 753 770 (17 ) (2 )%
Oil and gas royalty revenues 3,588 1,814 1,774 98 %
Other revenues 295 348 (53 ) (15 )%
Total other revenues $ 18,248 $ 15,634 $ 2,614 17 %
Royalty and other mineral rights $ 76,271 $ 71,083 $ 5,188 7 %
Transportation and processing services
revenues 3,598 3,796 (198 ) (5 )%
Gain on asset sales and disposals 96 - 96 100 %
Total Mineral Rights segment revenues
and other income $ 79,965 $ 74,879 $ 5,086 7 %
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Table of Contents Coal Royalty Revenues Approximately 75% of coal royalty revenues and approximately 55% of coal royalty sales volumes were derived from metallurgical coal during the three months endedMarch 31, 2023 . Total coal royalty revenues increased$2.6 million as compared to the prior year quarter. The discussion by region is as follows:
• Appalachia: Coal royalty revenues were essentially flat period-over-period as
increased sales volumes more than offset the decrease in sales prices in the
Southern Appalachia region.
•
increased sales prices during the three months ended March 31, 2023 , as
compared to the prior year quarter.
Other Revenues
Total other revenues increased $2.6 million during the three months ended March
31, 2023 , as compared to the prior year quarter primarily due to a $2.1 million
increase in carbon neutral initiative revenues. Carbon neutral initiative
revenues recognized in 2023 primarily related to a subsurface CO2 storage
transaction.
Soda Ash
Revenues and other income related to our Soda Ash segment increased
Operating Expenses
The following table presents the significant categories of our consolidated
operating expenses:
For the Three Months Ended
March 31, Increase Percentage
(In thousands) 2023 2022 (Decrease) Change
Operating expenses
Operating and maintenance expenses $ 7,163 $ 8,076 $ (913 ) (11 )%
Depreciation, depletion and amortization 4,083 3,868 215 6 %
General and administrative expenses 5,845 4,467 1,378 31 %
Asset impairments - 19 (19 ) (100 )%
Total operating expenses $ 17,091 $ 16,430 $ 661 4 %
Total operating expenses were essentially flat period-over-period. The $1.4
million increase in general and administrative expenses, primarily related to
increased incentive compensation expense, was partially offset by a $0.9 million
decrease in operating and maintenance expenses, primarily driven by a decrease
in bad debt expense.
Interest Expense, Net
Interest expense, net decreased
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Table of Contents
Adjusted EBITDA (Non-GAAP Financial Measure)
The following table reconciles net income (loss) (the most comparable GAAP financial measure) to Adjusted EBITDA by business segment:
Operating Segments
Corporate
For the Three Months Ended (In and
thousands) Mineral Rights Soda Ash Financing TotalMarch 31, 2023 Net income (loss) $ 68,881$ 19,096 $ (8,702 ) $ 79,275 Less: equity earnings from unconsolidated investment - (19,254 ) - (19,254 ) Add: total distributions from unconsolidated investment - 10,780 - 10,780 Add: interest expense, net - - 2,853 2,853 Add: depreciation, depletion and amortization 4,079 - 4 4,083 Add: asset impairments - - - - Adjusted EBITDA $ 72,960$ 10,622 $ (5,845 ) $ 77,737 March 31, 2022 Net income (loss) $ 62,967$ 14,786 $ (13,854 ) $ 63,899 Less: equity earnings from unconsolidated investment - (14,837 ) - (14,837 ) Add: total distributions from unconsolidated investment - 13,230 - 13,230 Add: interest expense, net - - 9,387 9,387 Add: depreciation, depletion and amortization 3,868 - - 3,868 Add: asset impairments 19 - - 19 Adjusted EBITDA $ 66,854$ 13,179 $ (4,467 ) $ 75,566 Net income increased$15.4 million primarily due to the decrease in interest expense, net and increase in revenues and other income, both discussed above. Adjusted EBITDA increased$2.2 million as compared to the prior year quarter primarily due to a$6.1 million increase in Adjusted EBITDA within our Mineral Rights segment as a result of higher revenues and other income and lower operating and maintenance expenses, both discussed above. The increase in Adjusted EBITDA within our Mineral Rights segment was partially offset by a$2.6 million decrease in Adjusted EBITDA within our Soda Ash segment primarily due to Sisecam Wyoming paying a higher quarterly distribution in the first quarter of 2022 as discussed above and a$1.4 decrease in Adjusted EBITDA within our Corporate and Financing segment due to higher general and administrative expenses as discussed above.
Distributable Cash Flow ("DCF") and Free Cash Flow ("FCF") (Non-GAAP Financial Measures)
The following table presents the three major categories of the statement of cash flows by business segment:
Operating Segments
Corporate
andFor the Three Months Ended (In thousands) Mineral Rights Soda Ash
Financing Total
March 31, 2023
Cash flow provided by (used in)
Operating activities $ 73,858 $ 10,617 $ (11,575 ) $ 72,900
Investing activities 699 - (2 ) 697
Financing activities (583 ) - (94,450 ) (95,033 )
March 31, 2022 Cash flow provided by (used in) Operating activities $ 48,176$ 13,195 $ (9,040 ) $ 52,331 Investing activities - - - - Financing activities (614 ) - (51,647 ) (52,261 ) 22
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The following table reconciles net cash provided by (used in) operating
activities (the most comparable GAAP financial measure) by business segment to
DCF and FCF:
Operating Segments
Corporate
For the Three Months Ended (In and
thousands) Mineral Rights Soda Ash Financing TotalMarch 31, 2023 Net cash provided by (used in) operating activities $ 73,858$ 10,617 $ (11,575 ) $ 72,900 Add: proceeds from asset sales and disposals 101 - - 101 Add: return of long-term contract receivable 598 - - 598 Less: maintenance capital expenditures - - (2 ) (2 ) Distributable cash flow $ 74,557$ 10,617 $ (11,577 ) $ 73,597 Less: proceeds from asset sales and disposals (101 ) - - (101 ) Free cash flow $ 74,456$ 10,617
March 31, 2022 Net cash provided by (used in) operating activities $ 48,176$ 13,195 $ (9,040 ) $ 52,331 Add: proceeds from asset sales and disposals - - - - Add: return of long-term contract receivable - - - - Distributable cash flow $ 48,176$ 13,195 $ (9,040 ) $ 52,331 Less: proceeds from asset sales and disposals - - - - Free cash flow $ 48,176$ 13,195 $ (9,040 ) $ 52,331
Operating cash flow, DCF and FCF increased
• Mineral Rights Segment
• Operating cash flow, DCF and FCF increased
$26.3 million , respectively, primarily due to the timing of minimum and royalty payments and prior year recoupments. • Soda Ash Segment
• Operating cash flow, DCF and FCF decreased
Sisecam Wyoming paying a higher quarterly distribution in the first quarter of
2022 as discussed above.
• Corporate and Financing Segment
• Operating cash flow, DCF and FCF decreased
increased cash paid for incentive compensation in the first quarter of 2023
because of the improved business performance in 2022 and higher cash paid for
interest on credit facility borrowings in 2023.
Liquidity and Capital Resources
Current Liquidity As ofMarch 31, 2023 , we had total liquidity of$56.5 million , consisting of$17.7 million of cash and cash equivalents and$38.8 million of borrowing capacity under our Opco Credit Facility. We have debt service obligations, including approximately$23 million of principal repayments on Opco's senior notes, throughout the remainder of 2023. The following table calculates our leverage ratio as ofMarch 31, 2023 : For the Three Months Ended September December March 31, Last 12 (In thousands) June 30, 2022 30, 2022 31, 2022 2023 Months Net income$ 66,820 $ 74,555 $ 63,218 $ 79,275 $ 283,868 Less: equity earnings from unconsolidated investment (14,643 ) (14,556 ) (15,759 ) (19,254 ) (64,212 ) Add: total distributions from unconsolidated investment 10,486 10,339 10,780 10,780 42,385 Add: interest expense, net 8,108 5,141 3,638 2,853 19,740 Add: loss on extinguishment of debt 4,048 2,484 3,933 - 10,465 Add: depreciation, depletion and amortization 5,847 6,850 5,954 4,083 22,734 Add: asset impairments 43 812 3,583 - 4,438 Adjusted EBITDA$ 80,709 $ 85,625 $ 75,347 $ 77,737 $ 319,418 Debt-at March 31, 2023$ 173,591 Leverage Ratio 0.5 x 23
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Table of Contents Cash Flows Cash flows provided by operating activities increased$20.6 million , from$52.3 million in the three months endedMarch 31, 2022 to$72.9 million in the three months endedMarch 31, 2023 , primarily due to increased cash provided by operating activities within our Mineral Rights segment, partially offset by decreased cash provided by operating activities within our Soda Ash and Corporate and Financing segments, all discussed above.
Cash flows used in financing activities increased
•
the first quarter of 2023;
•
2023; and
•
general partner as a result of increasing our quarterly cash distribution to
$0.75 /unit beginning in the second quarter of 2022 in addition to the special distribution paid in the first quarter of 2023. These increases in cash flow used were partially offset by$94.2 million of borrowings on our Opco Credit Facility in the first quarter of 2023 and$19.6 million of cash used to redeem the preferred units paid-in-kind during the first quarter of 2022.
Capital Resources and Obligations
Debt, Net We had the following debt outstanding as ofMarch 31, 2023 andDecember 31, 2022 : March 31, December 31, (In thousands) 2023 2022 Current portion of long-term debt, net$ 39,055 $ 39,076 Long-term debt, net 133,821 129,205 Total debt, net$ 172,876 $ 168,281 We have been and continue to be in compliance with the terms of the financial covenants contained in our debt agreements. For additional information regarding our debt and the agreements governing our debt, including the covenants contained therein, see Note 9. Debt, Net to the Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Off-Balance Sheet Transactions
We do not have any off-balance sheet arrangements with unconsolidated entities or related parties and accordingly, there are no off-balance sheet risks to our liquidity and capital resources from unconsolidated entities. Related Party Transactions
The information required set forth under Note 11. Related Party Transactions to the Consolidated Financial Statements is incorporated herein by reference.
Summary of Critical Accounting Estimates
The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles inthe United States of America requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year endedDecember 31, 2022 . Recent Accounting Standards
We do not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
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