CVR Partners

Greetings, and welcome to the CVR Partners First Quarter 2022 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. Vice President of Financial Planning and Analysis and Investor Relations. Thank you, sir. You may begin.

Thank you, Christine. 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 2022 first 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 are cautioned that these statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and the Notarized 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 remind you that CBR 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 disposures related to such non-GAAP measures, including reconciliation to the most directly comparable GAAP financial measures, are included in our 2022 first quarter earnings release that we filed with the SEC for the period. Let me also remind you that we are a variable distribution MLP. who 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 first quarter of 2022 include net sales of $223 million, net income of $94 million, EBITDA of $123 million. We repurchased approximately 112,000 CBR Partners common units for $12.4 million, and the Board of Directors declared a first quarter distribution of $2.26 per common unit, which will be paid on May 23rd to unit holders of record at the close of the market on May 13th. During the first quarter of 2022, we operated the plant safely with consolidated ammonia plant utilization of 88%. We experienced approximately three days of downtime at Coffeyville due to an outage at the third-party air separation facility and approximately two days of downtime due to a power outage. At East Dubuque, we experienced approximately 11 days of downtime during the quarter due to a number of different outages. As I mentioned on our last earnings call, a major part of the plan for the upcoming turnaround at East Dubuque should address the issues that resulted in the downtime over the last two quarters. In addition, during the upcoming Coffeyville turnaround, the operator of the third-party air separation facility is planning to complete some work that should significantly improve the reliability of that asset. Our combined operations produced approximately 187,000 gross tons of ammonia, of which 52,000 net tons were available for sale for the first quarter of 2022. This compares to production of 188,000 gross tons of ammonia, of which 70,000 net tons were available for sale in the prior year period. We produced 317,000 tons of UAN in the first quarter of 2022 as compared to 272,000 tons in the prior year period. During the first quarter of 2022, we sold approximately 322,000 tons of UAN at an average price of $496 per ton and approximately 40,000 tons of ammonia at an average price of $1,055 per ton. Relative to the first quarter of 2021, UAN and ammonia sales volumes were higher, driven in part by higher production from Coffeyville where the plant ran at an improved utilization rate during the short turnaround work we completed in the fourth quarter. Year over year, pricing for the quarter was 212% higher for UAN and 252% higher for ammonia. Our first quarter results were reflective of the price increases for nitrogen fertilizers that we witnessed in the fall with the energy crunch that began in Europe and Asia. Fertilizer inventory levels remained tight across the U.S., And globally, the ongoing conflict in Ukraine has caused another wave of supply concerns across the fertilizer and grain markets. We have a good order book for the second quarter and are feeling more optimistic about pricing dynamics for the second half of 2022 and into 2023, which I will discuss further in my closing remarks. I will now turn the call over to Dane to discuss our financial results.