CVR Partners

Greetings and welcome to the CDR Partners LP first quarter 2020 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Jay Sinks, Vice President of Finance and Treasurer. Thank you. You may begin.

Thank you, Michelle. Good morning, everyone. We appreciate your participation in today's call. With me today are Mark Pytosh, our Chief Executive Officer, Tracy Jackson, our Chief Financial Officer, and other members of management. Prior to discussing our 2020 first quarter results, let me remind you that we are a variable distribution MLP. We will review our previous established reserves, current cash usage, evaluate future anticipated cash needs, and may reserve amounts for other future cash needs as determined by our General Partners Board. As a result, our distribution, if any, will vary from quarter to quarter due to several factors, including, but not limited to, operating performance, fluctuations in prices received for finished goods, capital expenditures, and cash reserves deemed necessary or appropriate by the Board of Directors of a General Partner. Let me also remind you that this conference call may contain forward-looking statements. as that term is defined under federal securities laws. For this purpose, any statements made during this call that are not statements of historical facts may be deemed to be forward-looking statements. Without limiting the foregoing, the words outlooks, believes, anticipates, plans, expects, and similar expressions are intended to identify forward-looking statements. Your caution that these statements may be affected by important factors set forth in our findings with the Securities and Exchange Commission and in our latest earnings release. As a result, actual operations or results may differ materially from the results discussed in the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except to the extent required by law. This call also includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures, including reconciliation to the most directly comparable GAAP financial measures, are included in our 2020 Thank you, Jay.

Good morning, everyone, and thank you for joining us for today's call. The summarized financial highlights for the first quarter of 2020 included net sales of $75 million, a net loss of $21 million, EBITDA of $11 million, and there's no cash available for distribution this quarter. During the first quarter of 2020, we experienced third-party outages at the Coffeyville facility that led to approximately 10 days of unplanned downtime. During the downtime at Coffeyville, we proactively completed maintenance work at the facility that allows us to move its planned turnaround from the fall of 2020 to the summer of 2021. Aside from these third-party issues, Coffeyville operated as expected in the quarter. The ammonia plant operated at 86% utilization. below the first quarter of 2019 at 96%. The unplanned downtime from the third party outages impacted Coffee Bell's utilization rate by approximately 9%. We had strong utilization at the East Dubuque facility following the completion of its planned turnaround last fall. At East Dubuque, the ammonia plant operated at 101% utilization compared to utilization of 69% in the prior year period. As a reminder, The fall of 2018 was severely impacted by wet weather which caused additional ammonia inventory at East Dubuque to be carried into the first quarter of 2019. We managed our storage capacity levels by reducing ammonia utilization during that period last year. Our combined operations produced approximately 201,000 gross tons of ammonia and 78,000 net tons of ammonia available for sale for the first quarter of 2020. This compares to production of 179,000 gross tons of ammonia and 41,000 net tons of ammonia available for sale in the prior year period. We produced 317,000 tons of UAN in the first quarter of 2020 compared to 335,000 tons of UAN last year. We sold approximately 284,000 tons of UAN during the first quarter of 2020 at an average price of $166 per ton. In addition, we sold approximately 54,000 tons of ammonia during the first quarter of 2020 at an average price of $264 per ton. Year-over-year pricing remained soft for UAN and ammonia, which were down 25% and 28% respectively. UAN pricing continued to be impacted by additional imports into the U.S. from Russia and Trinidad as a result of the EU tariffs. The ammonia market also remained well-supplied, with customers having carried over inventories after the for fall application season, which put pressure on pricing. Natural gas pricing was lower as well, helping to offset some of the ULA price weakness. In the first quarter, we saw normal activity from our customer base as they prepared for the spring planting season. So far, spring application has been robust, and we continue to expect a healthy increase of planted corn acreage compared to last year, which I will discuss further in my closing remarks. I will now turn the call over to Tracy to discuss our financial results.