Greetings, and welcome to the CVR Partners LP First Quarter 2023 Conference Call. [Operator Instructions] It is now my pleasure to introduce your host. Richard Roberts, Vice President of FP&A and Investor Relations. 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 Neumann, our Chief Financial Officer; and other members of management. Prior to discussing our 2023 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 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 a reconciliation to the most directly comparable GAAP financial measures, are included in our 2023 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. 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 partner's 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, everybody, and thanks for joining our call today. The summarized financial highlights for the first quarter of 2023 include net sales of $226 million, net income of $102 million, EBITDA of $124 million. And the Board of Directors declared a first quarter distribution of $10.43 per common unit, which will be paid on May 22 to unitholders of record at the close of the market on May 15. Our facilities ran well during the first quarter of 2023 with the combined plants achieving record production levels in the quarter. Consolidated ammonia plant utilization was 105%. This resulted in combined ammonia production at 224,000 gross tons, of which 62,000 net tons were available for sale and UAN production of 366,000 tons. During the quarter, we sold approximately 359,000 tons of UAN at an average price of $457 per ton and approximately 42,000 tons of ammonia at an average price of $888 per ton. Relative to the first quarter of 2022, UAN and ammonia sales volumes were higher as a result of improved operations following the completion of the planned turnarounds at both facilities in the third quarter of 2022. Prices for the first quarter declined from the first quarter of last year with ammonia prices falling 16% and UAN prices falling 8%. Although first quarter benchmark prices for Corn Belt ammonia and UAN declined by approximately 30% from the fourth quarter, our realized price for UAN increased quarter-over-quarter, and our realized ammonia price was down less than 10% as we sold more than half of our first quarter production in the fourth quarter of 2022 before prices began to decline. Looking ahead, we continue to expect healthy demand for fertilizer in the spring planting season due to strong grain prices and farmer economics, which I will discuss further in my closing remarks. I will now turn the call over to Dane to discuss our financial results.

Thank you, Mark. For the first quarter of 2023, we reported net sales of $226 million and operating income of $109 million. Net income for the quarter was $102 million, or $9.64 per common unit, and EBITDA was $124 million. Relative to the first quarter of 2022, the slight increase in EBITDA was primarily due to higher production and sales volumes and lower operating and SG&A expenses, offsetting the decline in prices. Direct operating expenses for the first quarter of 2023 were $58 million. Excluding inventory impacts, direct operating expenses decreased by approximately $1 million relative to the first quarter of 2022 primarily driven by lower personnel costs related to stock-based compensation partially offset by higher electricity and natural gas costs and increased repair and maintenance expenses in the current period. During the first quarter of 2023, we spent $4 million on capital projects, which was primarily maintenance capital. We estimate total capital spending for 2023 to be approximately $32 million to $35 million, of which $29 million to $31 million is expected to be maintenance capital. We ended the quarter with total liquidity of $156 million, which consisted of cash and availability under the ABL facility of $35 million. Within our cash balance of $121 million, we had approximately $39 million related to customer prepayments for the future delivery of product. In assessing our cash available for distribution, we generated EBITDA of $124 million and received net cash proceeds of $18 million from the closing of the 45Q transaction in January. The Board elected to begin reserving cash for future turnarounds of $3 million, in addition to reserves of $16 million for planned capital projects that Mark will discuss further in his closing remarks. We currently anticipate future quarterly reserves for these projects, subject to further approvals. We also had net cash needs of $13 million for interest costs, maintenance CapEx and other reserves. As a result, there was $110 million of cash available for distribution, and the Board of Directors of our general partner declared a distribution of $10.43 per common unit. Looking ahead to the second quarter of 2023, we estimate our ammonia utilization rate to be between 95% and 100%. We expect direct operating expenses, excluding inventory impacts, to be between $50 million and $55 million and total capital spending to be between $7 million and $12 million. With that, I will turn the call back over to Mark.

Thanks, Dane. In summary, we were very pleased with our first quarter results, driven by record production from our facilities with a combined ammonia utilization rate of 105%. We also executed well on our marketing plan from last fall, where we forward sold a significant portion of our first quarter production in advance of softening prices. Spring pre-plant season is off to a good start, where we saw activity levels pick up in the Southern Plains in late March and the Corn Belt in April. Overall, activity levels seem consistent with the USDA estimates of spring 2023 planted corn acres of 92 million compared to 88.6 million acres in 2022, an increase of 4%. Plant and soybean acres are estimated to be flat with 2022 levels at 87.5 million acres. Inventory carryout levels continue to be estimated at approximately 9% for corn and 5% for soybeans keeping inventories at or below the low end of the 10-year range. As a result, grain prices have remained strong with [$405.85] per bushel and soybeans of $14.30 per bushel. These strong grain prices are continuing to generate attractive pharma economics, which should bode well for nitrogen fertilizer demand for the planting season. We believe that the length of this upper demand cycle will, in large part, be driven by grain prices staying at elevated levels, and we see fundamentals for grains remaining strong. As we discussed on the fourth quarter earnings call, warmer-than-expected weather in Europe and the U.S. starting in December has led to increased natural gas inventories and lower prices in the U.S. and Europe. As a result, spot prices for all nitrogen fertilizer products have fallen from the high levels in the fall. With sustained lower natural gas prices in Europe in the first quarter, we have seen some of…

[Operator Instructions] Our first question is from Rob McGuire with Granite Research.

Mark, Dane and Richard, congratulations on a well-executed quarter.

Thank you.

Would you give us an idea of how much of your second quarter volumes are presold and how much are set up to be sold in spot?

I really don't want to get into the analytics of that. But like we did in the first quarter, we have presold, I'd say, a good chunk in the second quarter, particularly in the ammonia side, which is typical for the industry. We sold that back in the fourth quarter, a good percentage of our ammonia preplant. And we were forward selling into the second quarter during the first quarter. So, we also presold a decent percentage in the second quarter.

And then can you discuss running at 105% utilization coming out of your turnaround? Is that normal? Or is there something unusual that occurred? And then how much longer do you anticipate that run rate to continue?

We talked about it a lot last year. We struggled with some of the performance issues last year with the plants. We had identified what we thought were reliability challenges for us. We thought we had addressed those in the turnaround. And we were very pleased to see the run rates that we had. I won't promise 105% for the forward quarters, but we feel like we've addressed some of the reliability issues. And we -- our target is to operate at 95% to 100% of main plate. And as -- we're already thinking ahead to the next reliability -- sets of reliability projects, which I identified in my comments. We think reliability is everything in -- on the production side of this business. And we got paid for the effort that we put in, and we're basically preparing for the next round of that for the next 2 to 3 years. So, I hope that we can run at high rates. We have in the past at various points in time. And again, we spent -- we had big turnarounds last year, a long stretch of outages, and we dealt with issues that we thought, but we have other opportunities, we think, at the plant to improve. And so, I'm hoping that we'll continue on. We typically run better after the turnaround once the plants are lined out. But again, our focus has been for the last several years, but will continue to be, if anything, more focused on reliability.

Well done. And then you talked about European natural gas and some of the production returning over in Europe, and that's led to lower nitrogen prices. Have you seen any other notable influences behind the continued drop in nitrogen prices?

I would say that probably the one area that we have seen in terms of, I think, causing some of the softness is maybe some of the industrial demand for ammonia overseas has been lighter, and that's created length in the ammonia side. If you look at the -- going back to European natural gas, if you look at the forward curve for the fourth quarter, as we get into the next winter, prices are much higher there. And we think that a window may open like it did last fall for export from the U.S. to Europe again in the summer and the fall because we think that the economics for European production are going to be challenged next winter. And what most of the European producers are saying is that they will only restart if they think they have economics that hold together for a year. And if you look at the gas curve, I think you'd be challenged to assume that you're going to be able to make it a year where you're going to be cost competitive. So, we do think that there's -- there are opportunities for export out of the Gulf to Europe for ammonia for -- either for upgrade production in Europe maybe this summer or fall. So, the good news for us in the U.S. is that our cost to produce is the lowest. We're right at the low end of the cost curve in the world. And so there -- at these prices, there's still very good margin for us -- and with where natural gas has come way down from where it was. But it's still -- the pricing in the marketplace is still much higher than it's been historically in the nitrogen for the last 5 years or 7 years.

I appreciate it. And then last question, if you can just give me your thoughts on, urea has obviously bounced back here, and there are logistical issues out there. Perhaps you could cite if there are other reasons behind that. And do you anticipate any type of price movement for UAN and ammonia due to logistical issues or finishing out the season and trying to get product out to the farmer?

Yes. I think that we're seeing a pretty good -- the preplant, and we think that side dress and top dress season are going to be really strong for nitrogen. And I think that our customers and even down to the farm level have been more reluctant. They're purchasing more just in time, which is hard to imagine just-in-time purchasing in this industry given the logistical challenges, which the flooding in the Mississippi shows you, it's not a good bet to bet on reliable logistics. And I think that part of it isn't for urea as part of it is a demand issue. Part of it is our logistics. We think that the upper Midwest is going to be challenged logistically, which favors producers that have production capacity in the north. And so, we expect demand to be strong in the Northern Plains because there won't be the ability to get product up the river, we think, in time to meet side dress and top dress. So, I think it's a confluence of factors there. And this industry has had a history of when you try to purchase just in time, a lot of times you end up short. You don't purchase enough, and there's not -- you can't quickly relieve market pressure in the spring when it's needed. And the timing of it is critical. And so, you need the fertilizer at the right time in the right location. And so, it needs a lot of preplanning. And this year, I think, people try to play it a little bit too cute with -- the customers did with when they purchased.

There are no further questions at this time. I'd like to hand the floor back over to management for any closing comments.

All right. Well, thank you very much for participating in the call today, and we look forward to reviewing our second quarter results in -- later in July. Thank you very much.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.