CVR Partners

Greetings and welcome to the CVR Partners LP second 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 the 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. Richard Roberts, Investor Relations Manager. Thank you, sir. 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 second quarter results, let me 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. You were cautioned that these statements may be affected by important factors set forth in our filings for 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. Disclosures related to such non-GAAP measures including reconciliation to the most directly comparable GAAP financial measures are included in our 2020 second quarter earnings release that we filed with the SEC yesterday after the close of the market. Let me also remind you that we are a variable distribution MLP. We will review our previously established reserves, current cash usage, evaluate future anticipated cash needs, and their reserve amounts for other future cash needs as determined by our General Partners Board. As a result, our distributions, if any, will vary from quarter to quarter due to several factors, including, but not limited to, operating performance, fluctuations in the prices received for finished products, capital expenditures, and cash reserves deemed necessary or appropriate by the Board of Directors of our general partner. With that said, I'll turn the call over to Mark Pytosh, our Chief Executive Officer. Mark?

Thank you, Richard. Good morning, everyone, and thank you for joining us for today's call. The summarized financial highlights for the second quarter of 2020 included net sales of $105 million, a net loss of $42 million, EBITDA of negative $2 million, which included a non-cash goodwill impairment of $41 million. We repurchased approximately 890,000 CVR Partners common units for approximately $1 million, and there's no cash available for distribution this quarter. During the second quarter of 2020, we had strong utilization at both facilities. At Coffeyville, the ammonia plant operated at 98% utilization above the second quarter of 2019 at 97%. At East Dubuque, the ammonia plant operated at 101% utilization compared to 98% in the prior year period. Our combined operations produced approximately 216,000 gross tons of ammonia of which 79,000 net tons were available for sale for the second quarter of 2020. This compares to the production of 211,000 gross tons of ammonia of which 71,000 net tons were available for sale in the prior year period. We produced 321,000 tons of UAN in the second quarter of 2020 as compared to 316,000 tons in the prior year period. We sold approximately 337,000 tons of UAN during the second quarter of 2020 at an average price of $165 per ton. In addition, we sold approximately 111,000 tons of ammonia during the second quarter of 2020 at an average price of $332 per ton. Year-over-year pricing softened for UAN and ammonia, which were down 24% and 27% respectively. Natural gas pricing was lower as well, helping to offset some of the UAN and ammonia price weakness. For the first time in several years, we saw normal weather conditions for spring fertilizer application, resulting in approximately 92 million acres of corn planted, an increase of over 2 million acres versus last year. Nitrogen fertilizer prices have remained soft, however, as producers take advantage of the low natural gas price environment and continue running at high utilization. We have a good order book for the coming months following the summer fill and fall prepay for UAN and ammonia. which I will discuss further in my closing remarks. I will now turn the call over to Tracy to discuss our financial results. Thank you, Mark.