CVR Partners LP (UAN) Q2 2012 Earnings Call August 2, 2012 9:30 AM ET Executives Wes Harris – VP, IR Byron Kelley – President and CEO Frank Pici – CFO and Treasurer Analysts Ted Drangula – Morgan Stanley Presentation Operator
So with that, I’ll turn the call over to Byron Kelley, our Chief Executive Officer. Byron?Byron Kelley Well, thank you, Wes, and let me add my welcome to you this morning we’re very pleased that you could join us. Before I get in the presentation, I may be want to apologize upfront a little bit for my voice, that may deteriorate only, I like a lot of people in Houston have been fighting broncos cold issue, seem like it’s an epidemic around Houston. So I do have a lingering cough pretends to come in every now and then and so my apologies, if I have to cough a little bit and stop and drink water through appetizers, but we certainly want to cover the bases today, and I am going to give you a quick review of the second quarter and talk a little bit about our current business, Frank, will then discuss the financial results and I’ll conclude our opening remark for discussion concerning some industry trends and then our outlook. And then after that Frank, Stan, and I will all be available to answer questions that you may have this morning. We posted another period of very solid financial results for the second quarter of 2012, including a net income of $35.1 million on net sales of $81.4 million. This is compared to 2011 second quarter with the net income of $38.2 million on net sales of $80.7 million. 2012 second quarter adjusted EBITDA, which as you recall represents net income adjusted for depreciation and amortization, interest expense and income as well as financing costs, income tax expenses and any share-based compensation that adjusted EBITDA was $44.1 million for the second quarter of this year, compared to $45 million in the prior year. Driven by our strong financial performance in this year’s second quarter. Last week, we announced a distribution of $0.60 per common unit and this distribution will be paid on August of 14 to unitholders of record on August 7.
Let’s look more little more to our operations. From our last earnings call, you may remember that in late February, we began to see a decline in production output, and made a financial decision to take the plan out of service to implement some unscheduled maintenance work. This work was successful and we continue to make up a loss production, we think we’ll make it up before the year is over.But with that work behind us, we’re seeing a much improved runtimes for our facilities from the first quarter into the second quarter. During the second quarter the gasifier was on-stream 99% of the time, ammonia synthesis loop which own 98% and the urea ammonium nitrate plant was on-stream 97% of the time. In 2012, second quarter we produced 108,900 tons of ammonia of this amount, we converted 74,000 tons into 180,000 tons of UAN leaving a balance of 34,900 net tons of ammonia available for sale for the second quarter. This compared to the second quarter of 2011, when we produced 102,300 tons of ammonia of which 74,100 tons were converted into a 179,400 tons UAN, that left us a balance for last year in the second quarter of 28,200 net tons available for ammonia sales. During this year, second quarter, we were a net receiver of hydrogen under our feedstock and shared services agreement with CVR entities adjacent refinery. As such we did not report hydrogen revenue sales in this quarter and this is compared to 2011 second quarter, when we elected to sell $6.1 million of hydrogen to the refinery under our keep-whole pricing arrangement. The amount of hydrogen sold during that period remember we’re again referring the second quarter of last year was equivalent to producing 9,400 tons of ammonia. Read the rest of this transcript for free on seekingalpha.com