Greetings and welcome to the CV R partners third quarter, 2024 conference call. At this time, all participants are in a listen-only mode, a brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Richard Roberts of Financial Planning and Analysis and investor relations. Thank you, sir. You may begin.
Richard Roberts
Thank you, Christine. Good morning, everyone. We appreciate your participation in today's call with me today are Mark Pytosh, our Chief Executive Officer, Dan Newman, our Chief Financial Officer and other members of management. Prior to discussing our 2024 3rd 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 will caution 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, public 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 2024 3rd 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.
Mark Pytosh
Thank you, Richard. Good morning, everyone and thank you for joining us for today's third quarter. Call to summarize financial highlights for the third quarter of 2024 include net sales of 125 million net income of 4 million EBD A of 36 million. And the board of directors declared a third quarter distribution of a dollar 19 per common unit which will be paid on November 18th to unit holders of record at the close of the market on November 8th. Our facilities ran well during the third quarter of 2024 with consolidated ammonia plant utilization of 97% combined ammonia production for the third quarter. 2024 was 212,000 gross tons of which 61,000 net tons were available for sale and UAN production was 321,000 tons. During the quarter, we sold approximately 336,000 tons of UAN at an average price of $229 per ton and approximately 62,000 tons of ammonia at an average price of $399 per ton. Relative to the third quarter of 2023 ammonia sales volumes were in line and U AM sales volumes were lower as a result of some unplanned downtime at the upgrading units at both facilities. Prices for the third quarter increased from the third quarter last year with ammonia prices increasing 9% and UAN prices increasing 3%. After the peaks in nitrogen fertilizer pricing. We saw over the past few years, we believe we're currently in a more of a mid cycle type of environment and we were encouraged to see ammonia and UAN prices. For the third quarter. Increasing relative to the third quarter of last year, demand for summer UAN fill and ammonia fall prepay were strong and customer inventory levels have been low ahead of fall. As a result, we have seen prices continue to increase for both ammonia and UAN since summer which I will discuss further in my closing remarks. I will now turn the call over to Dan to discuss our financial results.
Dane Neumann
Thank you, Mark for the third quarter of 2024 we reported net sales of 125 million and operating income of 11 million. Net income for the quarter was 4 million or 36¢ per common unit and Ebida was 36 million relative to the third quarter of 2023. The increase in EBITA was primarily due to a combination of higher market prices for ammonia and UAN and lower feedstock and operating expenses. Direct operating expenses for the third quarter of 2024 were 56 million excluding inventory impacts, direct operating expenses decreased by approximately 3 million relative to the third quarter of 2023 primarily due to lower natural gas and electricity costs. During the third quarter of 2024 we spent 10 million on capital projects which was primarily maintenance capital. We estimate total capital spending for 2024 to be approximately 39 to 42 million of which 31 to 33 million is expected to be maintenance capital. We anticipate a significant portion of the profit and growth capital spending plan for 2024 will be funded through cash reserves taken over the past seven quarters. We ended the quarter with total liquidity of 150 million which consisted of 111 million in cash and availability under the A bl facility of 39 million. Within our cash balance of 111 million. We had 31 million related to customer prepayments for the future delivery of product in assessing our cash available for distribution. We generated a he a dot of 36 million and had net cash needs of 23 million for interest costs, maintenance cap acts and other reserves. As a result, there was 13 million of cash available for distribution and the board of directors of our general partner declared a distribution of $1.19 per common unit. Looking ahead to the fourth quarter of 2024 we estimate our ammonia utilization rate to be between 92 and 97% with some potential downtime at the third party air separation unit at Coffeeville expected in the quarter. We expect direct operating expenses excluding inventory impacts to be be be between 60 and 70 million and total capital spending to be between 19 and 23 million. With that, I will turn the call back over to mark.
Mark Pytosh
Thanks Dane. In summary, we had another good quarter operationally. With ammonia utilization of 97%. And we were pleased to see pricing for the third quarter of 2024 come in higher for both ammonia and UAN N compared to the third quarter of 2023. We saw strong demand for our products over the summer which combined with plant disruptions and natural gas issues in certain global markets has led to fertilizer prices increasing from the levels we saw in early summer harvest is nearing completion and ahead of schedule and corn yields are expected to be the highest in history. The USDA is estimating yields of almost 184 bushels per acre. On 91 million planted acres of corn and inventory carryout levels of approximately 13% soybean yields are estimated to be at 53 bushels per acre on 87 million acres planted with inventory carryout levels also estimated at around 13%. Corn prices have been weaker with the expectation of a large US crop. And December corn prices are currently at $4.15 per bushel. Roughly in line with prices from July. With the early harvest, we believe conditions will be favorable for fall ammonia application and prices for fourth quarter are up approximately $50 per ton for ammonia and $10 per ton for UAN. Compared to the fourth quarter of 2023 geopolitical risk continue to represent a wildcard for the nitrogen fertilizer industry. Given the significant fertilizer production capacity residing in countries across the Middle East, North Africa and Russia. We continue to monitor developments in the Middle East that could impact energy and fertilizer markets. And we expect the remainder of 2024 and 2025 will likely be periods of higher than historical volatility in the business. Natural gas prices in Europe have increased a dollar to $2 since our last earnings call trending around $13 per MM BTU for the fourth quarter. While US prices remain in the $2 to $3 per MM BTU range. Although the cost to produce nitrogen fertilizer in Europe has remained lower than in 2023. It is still at the high end of the global cost curve particularly compared to the US. We continue to believe Europe faces structural natural gas market issues that will likely remain in effect over the next two years at our Coffeeville facility. We're progressing on detailed engineering studies on the potential to utilize natural gas as an alternative feedstock to third party pet Coke. And we expect to have these studies completed later this year. If this project is approved by the board and successfully implemented, you give us the ability to choose the optimal feedstock mix and be the only nitrogen fertilizer plant in the US. With that flexibility. As a reminder, if this project were implemented, we would likely continue to utilize the Pet Coke supplied by the adjacent Coffeeville refinery while the remainder of the feedstock can be flexed between natural gas and pet Coke depending on prevailing prices. With crude oil prices down. We have seen a softening of pet coke prices in the US and expect to see our petco costs decline in 2025. We also began implementing certain de bottlenecking projects at both plants that are expected to improve reliability and production rates. The board elected to continue reserving capital in the third quarter that we expect to spend over the next 2 to 3 years as we focus on improving reliability and redundancy at the two plants in efforts to provide better production rates and lower downtime in the future. We beyond spending capital on these projects in the third quarter, 2024 with funds coming from reserves taken over the last seven quarters. The third quarter continued to demonstrate the benefits of focusing on reliability and performance. In the quarter. We executed on all of the critical elements of our business plan which includes safely and reliably operating our plants with a keen focus on the health and safety of our employees, contractors and communities pertinently managing cost being judicious with capital maximizing our marketing and logistics capabilities and targeting opportunities to reduce our carbon footprint. In closing, I'd like to thank our employees for their excellent execution. Achieving 97% ammonia utilization and solid delivery on our marketing and logistics plans resulting in a distribution of a $19 per common unit for the third quarter. With that, we're ready to take questions, Christine.
Operator
Thank you. And he will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two. If you would like to remove your question from the queue for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please. While we pull for questions. Thank you. Our first question comes from the line of Brian V. DiRubbio with baird. Please proceed with your question.
Question and Answer Session
Good morning. Gentlemen, a couple of questions for me. First off, just with the river rivals on the Mississippi normally low again, is that having a positive impact on corbel prices for Uan and ammonia?
Mark Pytosh
We haven't seen any major impacts on on either of those. You know, a lot of the ammonia is was positioned already and there's a lot of ammonia that moves into the corn belt from a pipeline and same on you. I had a lot of the, what's needed in the corn belts moved by rail. So it hasn't had a big impact on on the marketplace. We're watching it closely more for grain movements. So as harvest is nearing completion, the ability to move grain could be impacted. And so we're following that closely to see, you know how high storage gets and, and the ability to move grain from the Midwest to the Gulf.
Got it. That's helpful. Thank you. And just with the, the Coffeeville Natural Gas project, I know you said you're going to complete some of the, the front end engineering studies this quarter, but any rough guesstimate on how much that would cost and how the company would look to fund that investment.
Mark Pytosh
I'll start with the second question first. We've we've been setting aside reserves for growth capital and, and that, that capital would be taken out of the reserve if it's approved. And we roughly think it's about a $10 million project. It's what we think now, but we've already, that would be part of the reserve that we've set aside for growth projects for the plant.
Got it. I doubt you're going to be able to answer this. But earlier this year, there was a 13 D filing on your sister company CV R Energy potentially about a large owner, evaluating options for CV R partners. Any developments there that you're able to discuss or comment on.
Mark Pytosh
I don't really have anything to report, you know, on that, you know, the A K that was filed and so nothing new, no new news this quarter to report on that. Appreciate all the color. Thank you so much, Brian.
Operator
Thank you. We have reached the end of the question and answer session. I would now like to turn the floor back over to management for closing comments.
Mark Pytosh
Again, thanks everyone for joining our call today and we look forward to reviewing our fourth quarter results in February. So thanks and have a good day.
Operator
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.