Greetings, and welcome to the CVR Partners LP Second Quarter 2023 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. It is now my pleasure to introduce your host, Richard Roberts, Vice President of FP&A and IR. Thank you, Mr. Roberts. You may begin.

Thank you, Camila. 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 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 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. The disclosures related to such non-GAAP measures, including reconciliation to the most directly comparable GAAP financial measures, are included in our 2023 second 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. 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. To summarize financial highlights for the second quarter of 2023, include net sales of $183 million, net income of $60 million, EBITDA of $87 million, and the Board of Directors declared a second quarter distribution of $4.14 per common unit, which will be paid on August 21 to unitholders of record at the close of the market on August 14. Our facilities ran well during the second quarter of 2023, and despite five days of downtime due to outages at the third-party air separation plant at Coffeyville, we achieved consolidated ammonia plant utilization of 100%. We also achieved new records for monthly ammonia production and daily ammonia shipments at East Dubuque in the quarter. Combined ammonia production for the second quarter of 2023 was 219,000 gross tons, of which 70,000 net tons were available for sale, and UAN production was 339,000 tons. During the quarter, we sold approximately 329,000 tons of UAN at an average price of $316 per ton, and approximately 79,000 tons of ammonia at an average price of $707 per ton. Relative to the second 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 second quarter declined from the second quarter of last year, with ammonia prices falling 40% and UAN prices falling 43%. While nitrogen fertilizer prices continued to decline through the second quarter, we sold more than 40% of our second quarter volumes in the first quarter at higher prices. Looking ahead, we believe we have seen the recent bottom in nitrogen fertilizer prices and expect to see prices increasing into the fall 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 second quarter of 2023, we reported net sales of $183 million and operating income of $67 million. Net income for the quarter was $60 million or $5.66 per common unit and EBITDA was $87 million. Relative to the second quarter of 2022, the decline in EBITDA was primarily due to lower prices for UAN and ammonia, offset somewhat by higher production and sales volumes. Direct operating expenses for the second quarter of 2023 were $56 million. Excluding inventory impacts, direct operating expenses decreased by approximately $6 million relative to the second quarter of 2022, primarily driven by lower natural gas and electricity costs, offset somewhat by higher stock-based compensation expense. During the second quarter of 2023, we spent $6 million on capital projects, which was primarily maintenance capital. We estimate total capital spending for 2023 to be approximately $33 million to $35 million, of which $31 million to $32 million is expected to be maintenance capital. We ended the quarter with total liquidity of $104 million, which consisted of $69 million in cash and availability under the ABL facility of $35 million. Within our cash balance of $69 million, we had less than $1 million related to customer prepayments for the future delivery of product. In assessing our cash available for distribution, we generated EBITDA of $87 million and had net cash needs of $43 million for interest costs, maintenance CapEx and other reserves. Within that total is a cash reserve of $20 million for expected working capital needs that could be released in the future, if appropriate, along with $8 million of reserves for future turnarounds and planned capital projects. As a result, there was $44 million of cash available for distribution and the Board of Directors of our general partner declared a distribution of $4.14 per common unit. Looking ahead to the third 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 $14 million and $16 million. With that, I'll turn the call back over to Mark.

Thanks, Dane. In summary, we were very pleased with our second quarter results. We had another quarter of strong production from our facilities, along with great execution from our marketing and logistics team where we sold forward a significant portion of our second quarter production volumes in the first quarter. The spring planting season went well with favorable weather and strong demand for nitrogen. While demand was strong overall, we did not think that the level of demand was consistent with the USDA estimates of 94 million planted corn acres in the spring of 2023, which is a 6% increase compared to 88.6 million acres in 2022. The USDA estimated planted soybean acres to be 83 million, which is down 5% from the 2022 level of 87 million. And grain inventory carryout levels are estimated to be approximately 15% for corn and 6% for soybeans, resulting in corn inventories near the 10-year average and at the low end of the range for soybeans. Given the significant drought conditions in the Midwest, we think there is a risk to the USDA's most recent yield estimates for both corn and soybeans. Grain prices remained strong with December corn at $5.15 per bushel and November soybeans at $13.30 per bushel. Strong grain prices coupled with lower fertilizer prices support attractive farmer economics, which should bode well for nitrogen fertilizer demand for the fall application season. We believe that the length of this upward demand cycle will, in large part, be driven by grain prices staying at elevated levels, and we see fundamentals for grains remaining strong. We think that spring nitrogen demand was lower than the amount implied by an estimated 94 million planted corn acres in the U.S., as we think the additional acres of corn were in fringe areas where yields…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. And our first question is from Rob McGuire with Granite Research. Please proceed with your question.

Good morning, Mark, Dane and Richard. Congratulations on your strong operational performance.

Thanks Rob. Good morning.

Hey, Mark, in your opinion, what are the leading drivers behind nitrogen prices stabilizing over the last month?

I think there were a confluence of factors. I think there were a number of -- while there were planned turnarounds globally there were operating difficulties. And we've seen in certain parts of the world that natural gas has been shifted from nitrogen production to power generation. So there's a shortage of gas in certain markets. And I would just say that fundamentally, if you look at cost to produce, with natural gas prices where the market was, I think that there was -- in the low inventories, I think that really pushed demand. And so we were probably disproportionately low from an inventory perspective, and that kind of snapped back the other way, I'd say, reach maybe back to equilibrium. So we've seen a large increase in pricing in the last month. And I think it's all been really demand-driven. There's been consistent demand even as prices have been rising. And I think that's because the market was fundamentally eating through their inventories through the spring.

Got it. And then, so is your summer fill program for ammonia and UAN over at this point?

Yes, it is.

Yeah, and can you give us an idea of the fourth quarter production that you presold at summer fill prices? Is that volume in line with historic averages?

The volume was lower than historic average in terms of selling forward. We sold -- the market was buying in shorter increments. I said that in my comments, the people are buying and they used to buy in sort of, call it, four to six month increments in the summer fill. That's more like two to three months now. So I would say the buying patterns shifted. And as I said, I think the biggest factor there is cost of money, cost to carry inventory. And so the customers don't want to carry inventory as long, and so they're buying in shorter periods. And so we didn't sell as long as we typically do in the summer fill, which has been helpful because prices have risen since then.

So the farmer is still a little stuck in just in time mode?

I would say that what happened was when the market reset, that also reset all the way to the farm level. And so the retail price for nitrogen is a lot lower than it was even in the spring. And so we're seeing the buy going all the way through to the farmer level. And so we've seen good take up, not just from the customer base, but also the farm. The reset in pricing makes it very attractive for farmers to step in there. So it's been, I'd say, all the way through the supply chain, good demand down to the farmer level.

Got it. And then shifting gears, should we expect pet coke prices to remain around the $75 ton level for the second half of the year?

Yes. We're in longer-term contracts for most of that for the longer term being through the end of the year. And I would expect with natural gas being this low that next year should reset lower for that contract. It's a series of contracts.

Got it. And then can you kind of give us an idea of where you're seeing fall prices for UAN right now versus relative to the lows you saw in the summer?

Right now the current pricing is about up about 20% from the summer fill.

Would that be for fall pricing that you're charging right now? Or would that be--?

Yes. That would be sort of, I'd call it, October, November pricing versus July -- yes, third quarter pricing.

Got it. Okay, appreciate that. Those were all my questions. Thank you very much.

Fire up [ph]. Thank you.

Thank you. There are no further questions at this time. I would like to turn the floor back over to management for closing comments.

Again, want to thank everybody for participating in the call today, and we look forward to sharing with you our third quarter results in late October, early November. Thanks again for participating.

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