Greetings, and welcome to the CVR Partners, LP Third Quarter 2018 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, Mr. Jay Finks, Vice President of Finance. Thank you. You may begin.

Thank you, Michelle. Good morning, everyone. We appreciate your participation in today’s call. With me today are Mark Pytosh, our Chief Executive Officer; Tracy Jackson, our Chief Financial Officer; and other members of management. Prior to discussing our recent 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 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 2018 third quarter earnings release that we filed with the SEC yesterday after the close 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 thank you for joining us for today’s call. The financial highlights for the 2018 third quarter include a net loss of $13 million, net sales of $80 million, adjusted EBITDA of $19 million, and there is no cash available for distribution this quarter. During the third quarter we had strong operating performance at both facilities. The onstream rates were at Coffeyville the gas supplier and the ammonia unit ran at a 100% and the UAN plant operated at 97% while in East Dubuque the ammonia unit ran at 99% and the UAN units operated at 98%. For the third quarter our combined operations produced approximately 338,000 tons at UAN and 63,000 tons of ammonia available for sale. We sold a total of approximately 310,000 tons of UAN during the third quarter of 2018 at a net back price of $170 per ton which was a 23% increase over the third quarter of 2017. In addition we sold a total of approximately 38,000 tons of ammonia during the third quarter of 2018 at a net back price of $297 per ton which was a 39% increase over the third quarter of 2017. The ammonia volume sold in the third quarter of 2018 represent a normal seasonal selling pattern. In 2017 we had poor spring ammonia application conditions in the northern plains and downtime of the Coffeyville UAN plant in the second quarter of '17. This caused ammonia inventories to be much higher than normal at the end of the second quarter of 2017, so we sold significantly more tonnage in the summer ammonia fill season making our third quarter of 2017 sales volumes unusually high. This year we expect ammonia sales volumes to be much higher in the fourth quarter compared to the third quarter as we enter the fall ammonia application period. I will now turn the call over to Tracy to discuss our financial results.

Thanks Mark. We reported a net loss of $13 million or $0.12 per common unit and adjusted EBITDA of $19 million in the third quarter of 2018. This is compared to a net loss of $32 million or $0.28 per common unit and adjusted EBITDA of $5 million for the third quarter of 2017. Net sales for the period were $80 million as compared to $69 million in the prior year period. The increase was primarily due to higher UAN net back prices partially offset by lower ammonia sales volumes. The decrease in ammonia sales volumes was primarily attributable to less inventory available for sale at the beginning of the third quarter of 2018 as compared to last year's due to the reasons that Mark just discussed. Direct operating expenses for the third quarter of 2018 decreased to $35 million from $40 million in the prior year period. The decrease year-over-year was mainly due to third quarter 2017 turnaround at the East Dubuque facility which resulted in turnaround expenses of 2.5 million coupled with decreases in repairs and maintenance cost and personal cost as a result of turnaround activity. Turning to capital spending. During the third quarter 2018, we spent $6 million on capital projects, including $5 million for maintenance CapEx. In 2018, we expect our combined spending to be approximately $20 million to $25 million of which $17 million to $20 million is for maintenance CapEx at our two facilities. Looking at the balance sheet as of September 30, we had approximately $61 million of cash including 25 million related to customer prepayments for future delivery of product and availability under our ABL facility of $50 million. We feel our total liquidity position of approximately $86 million at the end of the quarter is sufficient going forward. Our long term gross debt, including current portion, remains unchanged. In the rising at no available cash for distribution we had cash need of 15 million for debt service, 5 million for environmental and maintenance capital expenditures and a release of previously established reserves of 1 million. We are a variable distribution MLP we will review our remaining previously established reserves and evaluate future anticipated cash needs. We may also reserve amounts for other future cash needs as determined by the board. As a result our distribution, if any, will vary from quarter-to-quarter due to several factors including but not limited to operating performance, fluctuation in the prices received for finished products, maintenance capital expenditures and cash reserves deemed necessary or appropriate by the Board of Directors of our general partner. With that I'll turn the call back over to Mark.

Thanks, Tracy. This year's corn harvest is approximately 50% complete slightly ahead of the five year average, however the soybean harvest is at 53%, 16% behind the five year average. In the past week the weather has improved and it appears that momentum is growing to complete harvest. The USDA is estimating a year of approximately 180 bushels per acre for the 2018 season which would be a record yield for corn in the U.S. Even with the larger crop the carryout is expected to drop to approximately 12% in 2018; given the current relative economics of planting corn versus soybeans many industry analysts believe the planted corn acres will be higher in 2019 versus 2018, increasing the overall demand for nitrogen fertilizer. Also planted wheat acres are projected to increase 15% to 20% in 2019 the first increase in five years. As we stated on the last earnings call summer ammonia and UAN fill prices were significantly higher in 2018 compared to 2017. Since that call urea, ammonia and UAN prices have risen by a further 25% and are at levels last seen in 2015. Urea demand has been strong in all regions of the world since the summer; even with the price increases in urea we have not seen an uptick in exports out of China and Iranian exports for fall shipment have shown restraint due to the potential for US sanctions. Additionally high natural gas prices outside of the US are favoring US production and making nitrogen fertilizer imports into the US less competitive. These higher fall prices were not reflected in our third quarter results, but are currently expected to increase our netbacks as we go through the fourth quarter and into the spring. While we did not sell as many UAN or ammonia tons in the summer fill in 2018 we currently expect our fourth quarter results to reflect these improved netbacks. Domestic trade flows are continuing to mature and we believe our customers are increasingly comfortable with the market being largely supplied by domestic production; we continue to focus on maximizing the value of our logistics capability to provide product to customers with low-cost logistics. As the nitrogen market recovers we will focus on maximizing free cash flow by safely operating our plants reliability and at high onstream rates, prudently managing our costs, being judicious with our capital and maximizing our marketing and logistics activities. We expect that the improving market conditions may give us the opportunity to return to making cash distributions in the future. With that we are ready to answer any questions. Michelle?

Thank you. We’ll now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Adam Samuelson with Goldman Sachs. Please proceed with your question.

Mark maybe just continuing on some of discussions you had about market commentary and fall pricing today being comparably higher than where it was in the summer any way to calibrate how much left to the summer fill program has to flow through the fourth quarter results just trying to make sure we’re thinking about the price utilization appropriately given kind of how stark -- the differences in price today versus where it was in July?

We don’t typically quantify how much were sold or at what time but what I would just say generally Adam is that last year we sold in the fill -- we sold a lot of tonnage and it went through largely through the end of the year so that continued through the end of the year and this year we did not do that, and so you’ll see in the fourth quarter a blending of the higher pricing because we still have tons to sell, we had tons to sell, we've been selling it and so you’ll see a blending of that in the fourth quarter and then in the first quarter will be -- we’ve sold some tonnage there but not a lot but that’ll be really kind of current market for the first quarter so it’ll be a transitional quarter but you’ll see an uptick in the fourth versus the third because prices were rising during the quarter.

And then just coming back to the point about plant distributions in the future I mean is it fair to look at the third quarter level of profitability as kind of -- from here if things continued with the 19 million of EBITDA, less the debt service, less the maintenance CapEx that kind of gets you to about breakeven distributable cash flow from here if we’re confident the price stays around near or at these levels or above through the spring what would cause you not to pay distribution?

I think that the risk factor without getting quantitative with you the risk factor would be if we had production issues significant production issues but remember that the issue in the third quarter is third quarter seasonally lower than the fourth, the fourth is seasonally higher because we have the fall ammonia run, so the fourth quarter has the benefit of seasonality and so just irrespective of pricing assuming the points ran the same, the fourth quarter seasonally would be higher than the third from the volume perspective. So that would just give you a sense of directionally where we’re headed but fourth-quarter is usually from a volume perspective a great quarter for us as is the second.

Right, just like the 20 million of EBITDA or 19 million that covers your fixed charges basically between the interest and the maintenance CapEx?

That’s a fair assessment.

Yes.

And then just as we look at I mean any color just on the market broadly kind of import competition as we’ve seen it progressed evolve here it was early to really be seeing UAN imports into the US but just how you’re seeing that product move and as the UAN market in particular moves away from the barge market, how you’re seeing customers kind of act differently or just the domestic distribution channel change?

What I would say is this that only UAN that we’ve seen coming into the states from a import perspective is either the East Coast or the West Coast, it’s not coming through Nova anymore so we don’t generally see any import of product coming through Nova up in Mississippi it would enter the eastern corn belt from the East Coast or the Pacific Northwest in California from the West Coast so that’s really the only imported UAN product and the customers with the new capacity basically all running at full rate, the customers are drawing from those points where the logistics are the best. So all the new capacity is has sorted itself out and that moves based on where your plant is and what logistics you’ve generally the combination of rail, barge and truck but the customers have got comfortable that at this point this plant is a good draw for at that point and that’s how our plants have settled out where they come to the plant say Coffeyville it touches these points we're the most competitive and East Dubuque the same way. So all the plants have sorted themselves out and the customers are used to that. The other thing about the customer buying pattern is that I would say the customers are buying more ratably than they’ve in the past because they don’t have the time lag of imported products so they could draw from the plants and so it actually leased a more ratable buying and the buying pattern since the summer fill has been almost a ratable pretty regular people come and go in the markets and buy product every week or every couple weeks and so we’ve seen kind of a regular flow from the customers during -- since the fill season so they didn’t buy as much in the fill so they’ve been buying as we go and the prices reflected that the demand has been consistent between the summer and now, even at the higher prices demand stayed consistent.

And then just around East Dubuque I mean any specific commentary around pace of harvest and then that kind of more northern kind of corn belt in Northwest Illinois, kind of Northeast Iowa, Wisconsin, just as you think about and risk of missing a fall window from a weather perspective the grounds too wet or temperature gets too cold quickly just any thoughts there?

It was a little slow I’d say more on the Iowa side, the Illinois side is actually ahead, from normal, the Iowa side's been wet but that we’ve seen some dryness in the last week and a lot of progress made and I don’t -- we don’t -- we’re not normally in the market at this point we’re normally a week or two from now so I don’t see anything that’s going to necessarily barring unforeseen lots of rain I see it being relatively normal, it’s been cooler out there, so the slow temperatures in a good place and if they can get corn and beans out in the field I think they’ll come in right behind that and so I expect that to be kicking off so I think it’ll be normal from a seasonal perspective.

Okay, that's all very helpful color, I appreciate the time.

Thank you. Our next question comes from the line of Charles Neivert with Cowen. Please proceed with your question.

If we were to look at you guys sold 310 of UAN and had 338 of production and you obviously didn’t sell as much ammonia. If we look at the fourth quarter as it stands now would we expect 4Q to you guys to be are you already largely sold out on 4Q volume assuming you can run -- you run your business you’re full out, therefore the numbers for sales and tons should be bigger than production in fourth quarter if that’s what we’re looking at in 4Q, so we undersell the third quarter but we should in fact oversell the fourth?

I would say that it’s a little early to make that call; it’s only the third week of October. The demand has been there and there’s always -- we’re waiting for the ammonia run and we will see what we send out there, but I expect a pretty normal sowing pattern there, we’ll largely sell out, we usually sell all our UAN in the fourth quarter subject to shipping schedule from the like so I think it will be pretty normal there and then just waiting for the fall ammonia run. But we’ve got a good book on by now, but it’s developed over the course of the third quarter. So it was a -- we didn't price it in the fill, we priced it over time, that’ll all be -- that product will be delivered here in the fourth quarter and then obviously anything that doesn’t get delivered will be into the first.

Do you have any scheduled turnarounds in the next couple quarters or you’re going to be able to wait until everything wait until after the spring application?

Yes we’re -- our next scheduled turnaround would be in the fall of next year. So nothing…

If you look at your areas at two places that you guys have production I mean how much soybean is in the area that’s likely little bit of corn I mean that should be a benefit that’s probably going to be more pulled locally or are you just really so much into corn areas or are there areas that there’s not going to be much change in terms of your customer breakdown or customer distribution. Do you expect some of it?

I would say it two different ways because there’re really two different markets, up and around East Dubuque I would say there’s going to be some conversion of beans to corn there that’s a -- it’s not just our view there’s a talk in the customers there’s a pretty much a consensus view that there’d be some transfer of acres from corn -- from beans to corn. So we would expect to see some more roll out of -- and that’ll have a bearing on the fall ammonia run because if the acreage is really going to be up there’s going to be more pullout of East Dubuque and the ammonia run so we’ll be able to test that period here in the coming month or so. At Coffeyville because of its footprint all over the western United States, the biggest issue actually that will benefit Coffeyville it looks like there’s going to be a better wheat run this year then there’s been in five years. And Coffeyville locally is -- it gets a good draw out of the wheat market in Kansas and Oklahoma so I think this year we may see more pull out of the wheat side then we’ve seen in the few years and that would benefit Coffeyville that you don’t see wheat up around East Dubuque but you’ve see it around Coffeyville.

I mean if you see a wheat increase in acres just giving is it taking it from -- what’s it taking it from?

If you talk to wheat guys, there Milo and sorghum I mean they just not -- it’s been a difficult market those are -- Kansas is not a bean market they don’t go corn to bean or wheat to bean so some of it’s corn but I think it’s just taking away from I’d say kind of downgraded product but we’re going to see more -- we’re definitely going to see more wheat acres that’s a consensus view of the customer base.

Is the pricing generally in wheat strong enough that you’re also going to get probably with any luck assuming the pricing generally hold the benefit of things like cider season and all of those things that as they come through you got winter and then the winter wheat coming out will go in and come out in the spring and then spring wheat goes in I mean that whole cycle is a benefit right?

Well the issue is that we’ve had couple really rough weather years in Kansas it’s been really dry and hard to get that rotation but this year it’s good moisture in the soil and we’re starting to see a pull and interest in the first quarter in the wheat run so we’re starting to see indications that’s too early to for a big call there, but there’s indications that there’s going to be pull for the wheat run in the first quarter and we’ve seen pretty light wheat run in the last several years out of Coffeyville.

I think that -- you guys haven’t said how much what your commitment is for 4Q again assuming production at reasonably high rates you’re not certain at what -- or how much have you committed already to sale and what sort of left that you’ve that could be sold at whatever prices that come through assuming you’re going to sell it out I mean how much is left?

Well we don’t like flagging to our competitors what we’re planning to do so we don’t tend to like to talk about that. We’re comfortable where we stand, we’ve tons to sell but we’re comfortable where we stand and the market demand is there but I don’t want to quantify that because I don’t want to flag where we stand on our books.

Okay. When you guys were dealing with third quarter I mean I assume is it did you guys made that conscious decision to back down the amount of product you make available to the fill programs, that was -- or it wasn’t that the demand wasn't there, the demand was there, you just decided to cut it off at a certain level and then let it go to a more normal market pricing is that the way I would to classify it?

We decided to not sell as much and I think others did too, we weren’t the only ones there, but we all saw the demand there and we knew most of the customers told us that they didn't buy a full book either so we -- our assumption was and that’s why I was describing as ratable buy they bought a block in July that was smaller than last year and but we -- our expect -- everyone expectation is they’d be back in September for another around and that's continued on in September October and so the demand has been steady but when you’ve domestic production now they can buy that way without the risk of boy are the barges going to make it before the river closes things like that so we don’t have those variables anymore and that makes the customers comfortable because they could steadily buy.

When does the river close or is it -- when do you guys.

Part of it is has been off and on here because of the rains that there parts of the -- we go all the way north that’s created some variables in the urea market which were not in but there was some river closings up there due to flooding but we’re not far from the beginning of the river closing.

Thank you. Our next question comes from the line of Lin Shen with Hite. Please proceed with your question.

Quickly I think the pet coke feedstock prices were higher than usual given final running light do you see the cost going to stay here or do you see some improvement in 2019?

I think as we get into ’19 the cost that we’re going to see there might be slightly higher but all of the refineries are running lighter crude these days and we’ve taken that into account in our 2019 planning and sourcing and so we expect to be able to manage the costs effectively. We have a group of refineries that are close to Coffeyville and we’re going to work on our draw from those different refineries that feed the pet coke so this year we had to go onto the market more than normal just because there's more lighter crude going through the Coffeyville refinery but -- and as we plan for ‘19 we have various avenues that we can pursue and work -- and we’re doing that, I feel comfortable we will end up in a good economic spot price of pet coke for 2019.

Thank you. We’ve reached the end of our question-and-answer session. I would like to turn the call back over to management for any closing remarks.

Again I’d like to thank all of you for your interest in CVR Partners. Additionally I’d like to thank all of our employees for their hard work and commitment toward the safe reliable and environmentally responsible operation. We look forward to reviewing our fourth-quarter results during our next call in the New Year. Thank you very much.

Thank you. This concludes today’s teleconference, you may disconnect your lines at this time, thank you for your participation and have a wonderful day.