CVR Partners

Greetings and welcome to the CVR Partners LP fourth quarter 2021 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, Richard Roberts, VP of FP&A and IR. Thank you, Richard. You may begin.

Thank you, Paul. Good morning, everyone. We appreciate your participation in today's call. With me today are Mark Pytosh, our Chief Executive Officer, Dane Newman, our Chief Financial Officer, and other members of management. Prior to discussing our 2021 fourth quarter and four-year 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 are cautioned that these statements may be affected by important factors set forth in our filings 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. Let me also remind you that CVR Partners completed a 1 for 10 reverse split of its common units on November 23, 2020. Any per unit references made on this call are on a split adjusted basis. 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 2021 fourth 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 may 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 full year 2021 included net sales of $533 million, net income of $78 million, EBITDA of $213 million. We repurchased over 24,000 CDR Partners common units, and the Board of Directors declared total cash distributions for the full year 2021 of $9.89 per common unit. Looking more specifically at the 2021 fourth quarter, we reported net sales of 189 million, net income of 61 million, EBITDA of 93 million, and the Board of Directors declared a fourth quarter distribution of $5.24 per common unit, which will be paid on March 14, 2022, to unit holders of record at the close of the market on March 7, 2022. We saw significant improvement in the nitrogen fertilizer market in 2021, which drove strong earnings and cash distributions for CVR partners. In addition to the improved market fundamentals, we continued our focus on safe and reliable operations. We are proud to report continued improvement in our environmental health and safety metrics, including a 67% year-over-year reduction in environmental events. We're providing more ESG disclosures and published our first internal ESG report for 2020. Work is progressing on the 2021 report that we plan to release publicly later this year. During the fourth quarter of 2021, we operated the plant safely and reliably with consolidated ammonia plant utilization of 90%. We experienced approximately 10 days of downtime at the Coffeyville facility due to two separate outages at the third-party air separation plant and approximately seven days of downtime for turnaround work in October when we made the tie-ins for the urea upgrade project. We also experienced approximately 11 days of downtime at the East Dubuque facility. A major part of our 2022 turnaround plan at East Dubuque should address the issues that resulted in the downtime during the fourth quarter. Our combined operations produced approximately 197,000 gross tons of ammonia, of which 70,000 net tons were available for sale for the fourth quarter of 2021. This compares to production of 220,000 gross tons of ammonia of which 75,000 net tons were available for sale in the prior year period. We produced 288,000 tons of UAN in the fourth quarter of 2021 as compared to 335,000 tons in the prior year period. In addition to the downtime that I mentioned, we also elected to maximize ammonia production available for sale at East Dubuque at times in the quarter due to the strong pricing and demand environment. During the fourth quarter of 2021, we sold approximately 265,000 tons of UAN at an average realized price of $347 per ton, and approximately 105,000 tons of ammonia at an average realized price of $745 per ton. Year-over-year pricing increased significantly for UAN and ammonia, which were up 150% and 179% respectively. The tightness in the nitrogen fertilizer market that began in early 2021 persisted through the fourth quarter, with the energy crunch in Europe and Asia adding to the supply concerns and driving pricing for ammonia and UAN higher. We had a good fall harvest in the U.S., and the weather was favorable for a strong ammonia application. The outlook for spring plantings and demand for crop inputs remain strong. We have a good order book for the spring, and fertilizer pricing has remained firm, but volatile in urea, which I will discuss further in my closing remarks. I will now turn the call over to Dane to discuss our financial results.