Hello, everyone. Thank you for joining us, and welcome to the CVR Partners, LP Third Quarter 2026 Earnings Conference Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Richard Roberts, Interim CFO and VP of FP&A and Investor Relations. Richard, please go ahead.
Thank you. Good morning, everyone. We appreciate your participation in today's call. With me today are Dane Neumann, our Chief Executive Officer, Mike Wright, our Chief Operating Officer, and other members of management. Prior to discussing our 2026 third 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 reconciliations to the most directly comparable GAAP financial measures, are included in our 2026 third 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 Dane Neumann, our Chief Executive Officer. Dane?
Thank you, Richard. Good morning, everyone, and thank you for joining us for today's call. The summarized financial highlights for the third quarter of 2026 include net sales of $146 million, net loss of $11 million, EBITDA of $20 million, and the board of directors of CVR Partners general partner declared a third quarter distribution of $1.79 per common unit, which will be paid on November 23rd to unitholders of record at the close of the market on November 16th. For the third quarter of 2026, our ammonia plant utilization was 80%, which was impacted by the planned turnaround at East Dubuque that began in late August and was completed in October. Apart from the turnaround, our facilities ran well during the quarter, and we continued to see steady demand across the system after the summer price reset.
Since the summer, prices have steadily increased for both ammonia and UAN, and we have a good order book for the remainder of 2026 and into 2027, which I will discuss further in my closing remarks. I will now turn the call over to Richard to discuss our financial results.
Thank you, Dane. Turning to our results, for the third quarter of 2026, we reported net sales of $146 million and an operating loss of $4 million. Net losses for the quarter were $11 million, or $1.02 per common unit, and EBITDA was $20 million. Relative to the third quarter of 2025, the decrease in EBITDA was primarily due to turnaround expenses incurred in the quarter, along with lower UAN sales prices and a slight decline in sales volumes. Total ammonia production for the third quarter was 175,000 gross tons, of which 46,000 net tons were available for sale, and UAN production was 294,000 tons. During the quarter, we sold approximately 327,000 tons of UAN at an average price of $309 per ton and approximately 36,000 tons of ammonia at an average price of $637 per ton.
Relative to the third quarter of 2025, total sales volumes were down slightly, primarily due to reduced production volumes as a result of the East Dubuque turnaround. Third quarter prices for UAN decreased by approximately 11%, and ammonia prices increased approximately 20% relative to the prior year period. Direct operating expenses for the third quarter of 2026 were $90 million, including turnaround expenses of approximately $27 million. Excluding inventory and turnaround impacts, direct operating expenses increased by approximately $1 million relative to the third quarter of 2025, primarily due to higher labor costs, partially offset by lower electricity and natural gas consumption. Capital spending for the third quarter was $35 million, of which $21 million was maintenance capital. We estimate total capital spending for 2026 to be approximately $95 million-$104 million, of which $55 million-$63 million is expected to be maintenance capital.
We anticipate a significant portion of the profit and growth capital spending planned for 2026 will be funded through cash reserves taken over the past few years. At the end of the quarter, the total liquidity is $203 million, which consisted of $158 million in cash and availability under the ABL facility of $45 million. Within our cash balance of $158 million, we had approximately $43 million related to customer prepayments for the future delivery of product. In assessing our cash available for distribution, we generated EBITDA of approximately $20 million and had net cash needs of approximately $1 million for interest costs, maintenance CapEx, and other reserves, which includes the release of approximately $42 million of previous reserves.
As a result, we have $19 million of cash available for distribution, and the board of directors of our general partner declared a distribution of $1.79 per common unit. Looking ahead to the fourth quarter of 2026, we estimate our ammonia utilization rate to be between 88% and 93%, which will be impacted by the completion of the East Dubuque turnaround in October. We estimate direct operating expenses, excluding inventory and turnaround impacts , to be between $58 million and $63 million, turnaround expenses to be between $4 million and $6 million, and total capital spending to be between $26 million and $34 million. With that, I'll turn the call back over to Dane.
Thanks, Richard. In summary, the third quarter was another strong one for our operations, apart from the planned turnaround at East Dubuque. The turnaround started a few weeks later than originally planned due to some equipment delays and was completed in October in line with the revised schedule. The next turnaround is currently planned for 2028 at Coffeyville, and we look forward to two years ahead with no planned turnaround activity. Fall ammonia application is getting underway in the Corn Belt region as the harvest progresses, and activity is expected to pick up in the Southern Plains over the next few weeks. Demand for ammonia has been strong, and limited terminal availability in the Corn Belt has pushed fall pricing to the highest levels of the season. Offshore prices are firming ahead of the November Tampa settlement, although the gap between inland and seaborne ammonia prices remains wide.
For UAN, the market firmed through the third quarter after the summer fill reset. Local supply remains tight, and the first spring 2027 prices were posted in early October. We have continued to build our book of business for the fourth quarter and into the first quarter of 2027 at attractive pricing. The ongoing conflicts in Russia, Ukraine, and the Middle East continue to affect global nitrogen supply, including shipping through the Strait of Hormuz. Global supply remains a key variable. Chinese exports have been elevated, and Middle East volumes are recovering gradually. However, continued attacks on shipping highlight the persistent geopolitical risks impacting fertilizer availability and pricing. Our focus remains on safely and reliably running our plants at high utilization rates to meet our customers' needs. Natural gas prices in Europe have risen further since our last call to over $30 per MMBTU.
That keeps ammonia production costs in Europe well above the current import prices and has led to some production curtailments. Meanwhile, U.S. natural gas prices remain near $3 per MMBTU. We continue to believe this structural gap favors U.S. producers with access to low-cost, secure feedstock. Nitrogen fertilizer prices have recovered from their summer lows, while corn prices have eased from their recent highs. Although affordability is currently somewhat less favorable than it was in late summer, we believe the combination of tight local supply, a constructive global balance, and a solid forward book positions us well heading into the spring. During the East Dubuque turnaround, we completed the brownfield capacity expansion, and we intend to test the ability to sustainably operate at the increased capacity level during the fourth quarter. We also completed the work on the water quality upgrade project.
At the Coffeyville facility, we have a similar water system upgrade planned along with the expansion of our DEF production and load-out capacity. The goal of these projects is to improve reliability and production rates, supporting our target of operating the plants at utilization rates above 95% of nameplate capacity, excluding the impact of turnarounds. We are in the final phases of completing detailed engineering and cost estimates for the feedstock optionality project at Coffeyville, and with approval by the board of directors of our general partner, we expect to proceed with construction in 2027. If completed, this initiative would make the Coffeyville facility the only nitrogen fertilizer facility in the United States with dual feedstock flexibility, providing us the ability to choose the optimal mix of natural gas and third-party pet coke, depending on prevailing prices.
The funds needed for these projects and other initiatives are coming from the reserves taken over the last few years, and the board elected to continue reserving capital in the third quarter. While the board looks at reserves every quarter, I would expect them to continue to elect to reserve some capital, and we anticipate holding higher levels of cash related to these investments in the near term as we ramp up execution and spending. We believe unit holders will see the benefits of these investments in the coming years as these projects are completed and brought online. In closing, I would like to thank our employees for all their hard work during the East Dubuque turnaround and continuing to deliver on our marketing and logistics plans, resulting in a distribution of $1.79 per common unit for the third quarter.
With that, we are ready to answer any questions. Operator?
We will now begin the question-and-answer section. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we poll for questions. We have no questions at this time. I will now call back to Dane Neumann for closing remarks.
Again, I would like to thank you all for your interest in CVR Partners and our employees for their hard work and commitment towards safe, reliable, and environmentally responsible operations. We look forward to reviewing our fourth quarter 2026 results during our next earnings call. Have a safe day.
This concludes today's call. Thank you for attending. You may now disconnect.