Greetings and welcome to CVR Partners LP Second Quarter 2017 Conference Call. At this time, all participants are in a listen-only mode. A brief question- and- answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. And now I would like to turn the conference over to Jay Finks, Vice President of Finance. Thank you, please go ahead.

Thank you Brenda, good morning everyone. We appreciate your participation in today's call. With me today are Mark Pytosh, our Chief Executive Officer and Susan Ball, our Chief Financial Officer. Prior to discussing our 2017 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. Without limiting the foregoing the words outlook, believes, anticipates, plans, expects, and similar expressions are intended to identify forward-looking statements. You're cautioned that these statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission 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 2017 second quarter earnings release that we filed with the SEC this morning, prior to open of the market. With that said, I'll turn the call over to Mark Pytosh, our Chief Executive Officer, Mark?

Thank you Jay. Good morning everyone and thanks for joining us on today's call. To summarize financial highlights for the 2017 second quarter included net sales of $ 97.9 million, adjusted EBITDA of $ 32.3 million and a net loss of $ 3.5 million. During the second quarter, East Dubuque facility had its best quarterly operational performance in its history. The Coffeyville facility also ran well despite the UAN plant experiencing 11 days of downtime, due to issues related to the Linde air separation plant. The on-stream rates were at Coffeyville, the gasifier ran at 98.8%, the ammonia unit operated at 98.2%, and the UAN plant ran at 87.3%. While at East Dubuque the ammonia unit ran at 100% and the UAN units operated at 99.4%. For the second quarter, our combined operations produced approximately 215,000 tons of ammonia. We converted the majority of the produced ammonia into approximately 314,000 tons of UAN. This left approximately 78,000 tons of ammonia available for sale. We sold a combined total of approximately 331,000 tons of UAN during the 2017 second quarter at a product price at gate of $174 per ton versus $199 per ton in the 2016 second quarter and $160 per ton in the 2017 first quarter. For ammonia, we sold a combined total of approximately 75,000 tons during the 2017 second quarter at a product pricing gate of $333 per ton as compared to $ 417 per ton in the 2016 second quarter and $308 per ton in the 2017 first quarter. Heavy spring rainfall, particularly in the upper Midwest resulted in difficult application conditions for ammonia. This led to lower-than-normal sales volumes in the corn belt and cost prices to weaken during the quarter. As a result, the contribution from ammonia sales was lower and inventory levels were…

Thank you Mark and good morning everyone. Net sales for the period for the second quarter 2017 were $97.9 million as compared to a $119.8 million in the prior year period. The decrease was primarily attributable to the lower UAN and ammonia sales prices. The decrease in cost to materials and other for the 2017 second quarter to $22.1 million as compared to $36 million in the prior year period was primarily attributable to expense recorded in the second quarter of 2016 associated with the purchase accounting adjustments of the recording of the East Dubuque's inventory to fair value of $18.3 million, which was partially offset by an increase in natural gas costs of $3.4 million. Direct operating expenses for the 2017 second quarter decreased to $37.8 million from $54.2 million in the prior year period. The decrease was primarily due to the impacts associated with the second quarter 2016 turnaround of East Dubuque as well as other decrease inventory costs associated with [indiscernible] unsold. Selling, general, administrative expenses for the 2017 second quarter were $5.8 million compared to $8.3 million for the second quarter of 2016. The $2.5 million decrease is primarily due to decreases in expenses associated with the East Dubuque merger of $1.2 million and $900,000 of decreased personnel costs. Finally, we recorded a net loss of $3.5 million or $0.03 per common unit in the 2017 second quarter. This is compared to a net loss of $17 million or $0.15 per common unit for the second quarter of 2016. Now turning to capital spending during the 2017 second quarter, we spent $4.5 million on capital projects including $4.4 million for maintenance CapEx and the remainder for growth capital. For the 2017 full year, we expect combined spending for the maintenance CapEx at our two facilities to be approximately $15 million. Looking at the balance sheet, as of June 30, we had approximately $52 million of cash and cash equivalents and approximately $647 million of total debt. Finally, on our website, you will find a brief presentation of certain selective financial information, including adjusted EBITDA for the 12 months ended June 30, 2017 of approximately $ 89 million. With that I will turn the call back over to Mark.

Thanks Susan. With this year's spring season virtually finished, the industry is now focused on weather conditions for the remainder of the summer to see where corn yields will end up for harvest. A few weeks ago, the USDA announced that planed corn acreages spring in the U.S. was approximately 90.8 million acres, which is slightly higher than prior forecast. Since the April earnings call, nitrogen fertilizer prices have drifted lower as the product trade flows are rapidly adjusting to the new domestic production. The import barge activity for all nitrogen products has been declining significantly year over year. From June 30, 2016 through the estimated August 31 imports, the re-imports are expected to be down approximately 2.1 million tons. UAN imports are expected to be down approximately 0.5 million tons and ammonia imports are expected to be down about 700,000 tons. The last major expansion in the U.S. coke seen at Oklahoma new urea plant is expected to begin production in about a month and reach full production later this fall. Balancing some of the new global nitrogen production has been a further reduction of Chinese urea production and exports with estimates of a decline of 4 million tons from calendar year 2016 to 2017, and a total decline of 8.8 million tons since calendar year 2015. The impact of changing global product trade flows led to U.S. urea prices being $20 to $30 per ton below global prices for the past several months. In the coming months, we expect this price spread to narrow as the new U.S. production should be at full rate, and the new product trade flows to be more firmly established. We expect this year's UAN fill season to conclude soon and have seen participation in the fill from the new weaver Iowa facility, which was the last new UAN production plant to come on stream in the U.S. While pricing will likely be somewhat lower than last year, product inventory levels for customers are very low and with lower imported tons and higher export tons from CF, the market should comfortably absorb the new production. As the nitrogen market begins to move towards recovery, we will remain focused on what we can control, including operating our plants with high on stream rates, prudently managing our cost, being judicious with our capital, maximizing our marketing logistics activities. We continue to manage the business for cash flow and are comfortable that we can live within our means until the market recovers. With that we're ready to take any questions. Brenda?

[Operator Instruction] First question comes from the line of Adam Samuelson with Goldman Sachs. Please go ahead with your question.

Maybe Mark, first a question just on market condition today, you gave some color on the summer sale. But I mean one of the question we get posted often from investors is kind of how does the Midwest premium look now that you've got all these things around capacity, up river at Wever and at Port Neal and then sharing some of the same logistics once. You talked about how you think your own OpEx might be adjusting or might change going forward as you have more up river capacity and CF has to direct more [indiscernible] times to export?

Sure, what we're seeing to spring and it's probably early to make the call that indications on the fill exactly, but we're seeing I would say a pretty traditional spread between the Midwest and Nova. It might narrow a little bit in a fill season by a few dollars of ton, but I think the premiums going to be pretty consistent with historical levels.

And can you talk -- I know CF only posted their fill prices in the last day or two, but any sense of buyer engagement in terms of actually wanting to step forward and commit to times today versus last year where it seemed like everybody was sitting on their hands for the better part of the summer?

I don't want to get in front of our marketing team there too much, but I think the engagement is pretty good and what I heard I was at the Southwest conference last week, meet with all our major customers. I think that the customer generally think that this is a good absolute price kind of where UAN is. They thought it was last year too by the way. So I actually expect it to be pretty engaging in terms of the activity as we go through the next week or so to clean that up. So I expect a pretty good fill season that should -- the system as effectively I call empty, we've been selling product past the season. The people were ordering just in time, but the system was empty and so there is a desire to get the refill process going. So I think it'll be pretty good. In terms of volume, I think it will be a pretty good fill season.

And then on the second quarter on the ammonia side, any way to characterize or quantify kind of how much ammonia you think you didn't end up shipping in the spring when the volumes came in a little bit late versus our forecast?

Yes as I said the weather up north has a very difficult spring conditions and so it was dry then it was wet and so we never really had a great ammonia run. We had little stretches of that. So we were pretty decently involved last year and then in the southern plains we had a [indiscernible] were late coming on and so they were making a lot of ammonia and not upgrading and there have been significant issues with the Magellan pipe, which kept product from moving up to the Midwest and so the southern plain was heavy. So we were heavy and then the third issue is that when our UAN plant was down in June, our ammonia plant continued to run, so we made more ammonia than we normally would. So we were heavy in both plants. So there are millions of dollars on the balance sheet of inventory. And as I said I expect all of that to move off in the second half and we'd be pretty normal by the end of the calendar year. So there will be a pickup of selling off that inventory here in the second half and move them at along.

And then my final question just going through, I don't think you don't give the full financial statement but if I look at your net income $3.5 million plus -- negative $3.5 million, plus the DNA, there's a pretty wide gap between and the reported cash from ops, is that just the deferred revenue balance reverse thing or is there something else there?

Yes, it is. And it's the other inventory we put it on the balance sheet. So that will come back to us in the second half.

Our next question comes from line of Richard Kus with Jefferies. Please go ahead with your question.

So for me just a little bit additional color on pricing if you would. In the second quarter your prices obviously moved for UAN any way in a different directions and did the market over the course of the quarter, although it appears that that's largely because you guys pre-sold a lot of volume there. Can we expect more normal movement with respect to the market as you look at Q3?

Yes, I'm not sure what you mean in your first statement there about. If we were selling during the quarter pretty much regularly so the prices that we received were pretty much the market pricing during the quarter. We didn't sell a lot of that in the second. We saw a little bit coming into the quarter prices declined during the quarter into the end of June 30, planting year. So that's reflective of what -- we will sell forward as part of the fill season a bunch in the third quarter and so we'll establish pricing that will carry certainly to the third and partially into the fourth quarter. That will come up here during the third.

Okay, I got it. Thank you. And then secondly from me, can you give us a sense of how much you anticipate that turnaround it used to due to cost in EBITDA this quarter?

I think the cost itself was probably around $ 3 million, our costs to execute and then it'll probably be another few million dollars in lost product production.

[Operator Instructions] Our next question comes from Lin Shen with HITE. Please go ahead with your question.

I just want to ask about, you have a $ 52 million of cash on balance sheet and the cost of the turnaround is [$ 3] million and also another couple of million dollar loss EBITDA. So how should we think about the MLP description policy? What should we expect in the next two quarters?

First of all we don't provide guidance -- forward guidance on distributions or EBITDA, but with the turnaround coming through in the third quarter and with the seasonal -- and with the current pricing conditions, management and the board felt like it would be prudent to hold back the excess cash we produced in the second quarter to see how conditions play out. To the extent the conditions are stronger than we expect. We can always come back and distribute some of that -- some or all of that cash later, but we just felt like given the current market conditions it was prudent to hold back cash back going into the second half of this year.

Great. Do you think that there -- I guess you need to keep doing this for the next two quarters or I mean if the market condition is unchanged?

Well, like crystal ball was that good and I can see what the next two quarters were, I can to answer that, but we -- our policy has been the board has discretion to decide whether distribution is prudent or not and I think our board thought that with conditions being seasonally and otherwise softer in the second half it was prudent hold back cash. Again if the condition strengthen here in the second half and we continue to generate cash then obviously that would be available for future distribution if the board decided they want to do that.

Okay, great. Thank you, I appreciate it.

Our next question comes from Nathan Schubert with JP Morgan. Please go ahead with your question.

So, my question is -- is there a way that you guys can sort of reconcile where inventory levels are? I guess across sort of North American producers that if you've got any insight there, just sort of what you're seeing internally, like how much more inventory is in the system right now than -- I guess what's kind of normal and I guess how short are customers, because you have said earlier that, it looks like inventories are down at customers?

Yes, so this is going to be a little anecdotal, because this is not the published information, but again I met with all the major customers and we talked about their inventories and producer inventories -- I have been here, this is my fourth season at the company and I would say the inventory level this year were the lowest that they have been since I came to the company. So in the four years the customer inventory -- the customer would have the buying pattern and I think this is -- it's going to be more like this going forward as the customers were buying product ratably during the quarter, more just in time, and so they kept that inventories generally lower and as we got towards June 30, customers kind of went through what little inventory they had left, and they kept ordering just in time past June into July, and so they took the system down and most -- like I look at our system, we were -- we had the ammonia sitting in our system, but otherwise our inventories were generally very low and I know that other producers were also active in the market. I think the industry generally has a very low inventory number right now, and that's why I think the fill season is going to be quite active because the system -- it takes time to replenish all that volume and I think that customers are going to be looking to get started on that -- for that rebuild process takes months. So I think that both producer and customer inventories are at very low levels as we speak.

And then just a quick question on the OCI Wever facility -- the last I heard was that facility was not producing on spac material, is that still the case or is that now worked itself out?

I think that the times produced on spac, they have to go on a big run where they were producing full -- for as I understand, a full production, they have sold small tonnages during the last three or four months, but the fill season is over a longer period in the second half and it's our understanding and we've seen them in the market here recently, that they are selling, I can't quantify it, but they are selling into the fill season, so they're obviously anticipating full production at that plant, going into the fall. So they are selling tonnage in the fill season. So this is really the first time coming in that they've been as active in the marketplace and so it's actually helpful in many ways that they are selling, so that the market can adjust to where they're going to sell their times and their geographic advantages versus the rest of us. So that's really kind of getting the market settling in on the new trade flows that are here domestically, so we're seeing that play out in real time now.

Thank you this concludes our question-and-answer session, I would like to turn the floor back to management for closing comments.