SIOUX CITY, Iowa, Jan. 26 /PRNewswire/ -- Terra Nitrogen Company, L.P.
(NYSE: TNH) (TNCLP) today reported net income of $136,000 on revenues of
$67.4 million for the fourth quarter ended December 31, 1998. This compares
with net income of $13.7 million on revenues of $78.4 million for the fourth
quarter of 1997. The partnership posted net income of $136,00, or $0.01 per
limited partnership unit for the fourth quarter compared with net income of
$0.71 per unit for the same quarter in the prior year.
Net income for the year ended December 31, 1998 was $38.8 million, or
$1.60 per limited partnership unit, on revenues of $250.8 million. In 1997
net income was $105.1 million, or $4.17 per limited partnership unit, on
revenues of $335.3 million. The amount of net income allocable to the limited
partners' interest is based on the partnership's net income and the
proportionate share of cash distributed to the limited partners and the
general partner.
The breakeven results for the fourth quarter reflected the continuing
deterioration in nitrogen fertilizer markets. Although ammonia sales volumes
were up 55% compared with the 1997 fourth quarter, sales volumes for nitrogen
solutions were down 4% and for urea, down 14%. Prices for all products
declined in the quarter: down 32% for ammonia, 12% for solutions, and 18% for
urea.
For the year the partnership's revenues declined 25%, and operating income
was down 62%. The downward pressure on prices and volumes results from
worldwide oversupply of nitrogen fertilizers. Prices for nitrogen solutions,
the partnership's primary product, dropped 19% and volumes decreased 4% during
1998. Urea and ammonia prices declined 17% and 30%, respectively, and sales
volumes were down 9% and 4%, respectively. Although a slight drop in natural
gas costs had a positive impact of $4.9 million on operating income, it was
not enough to offset the negative effects of declining prices and sales
volumes.
TNCLP also announced that there would be no cash distribution for the
quarter ended December 31, 1998. The cash distribution for the fourth quarter
of 1997 was $1.17 per common unit. Cash distributions are dependent on TNCLP
earnings, working capital requirements and capital expenditures, among other
factors. TNCLP earnings are traditionally highest in the quarter ending June
30, due to the seasonal demand for fertilizer. Earnings can also be affected
by market prices for nitrogen products, the cost of natural gas, industry
production levels, business cycles and weather.
TNCLP is one of the largest U.S. manufacturers of nitrogen fertilizer
products.
Note: Terra Nitrogen's news releases are available by fax at no charge by
calling 800-758-5804, code 106067.
This news release contains statements that may be interpreted as forward-
looking. Such statements involve risks and uncertainties and should be
considered along with the factors affecting our business as discussed on pages
5, 6 and 7 in our 1997 annual report to unitholders. Actual results may
differ materially from those in the forward-looking statements.
(Tables to follow)
TERRA NITROGEN COMPANY, L.P.
Consolidated Statements of Income
($ in Thousands, Except Per Unit Amounts)
Three Months Ended Year Ended
December 31, December 31,
1998 1997 1998 1997
Revenues $67,108 $78,007 $249,434 $333,959
Other Income 297 405 1,325 1,353
Total Net Revenues 67,404 78,412 250,760 335,312
Cost of Goods Sold 65,205 61,730 201,981 219,486
Gross Profit 2,199 16,682 48,779 115,826
Operating Expenses 1,543 2,753 9,179 12,147
Operating Income 656 13,929 39,600 103,679
Interest Expense (641) (630) (2,288) (2,201)
Interest Income 120 391 1,464 3,660
Net Income $136 $ 13,690 $ 38,775 105,138
Net Income per Limited
Partnership Unit $0.01 $0.71 $1.60 $4.17
The amount of net income allocable to the Limited Partners' interest is
based on the Partnership's net income and the proportionate share of cash
distributed to the Limited Partners and the General Partner.
Nitrogen Volumes 1998 1997
and Prices Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
Quarter (000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 155 108 100 159
UAN 696 58 723 66
Urea 114 88 132 107
Year to Date
Ammonia 456 129 475 183
UAN 2,151 64 2,249 79
Urea 453 115 496 139
TERRA NITROGEN COMPANY, L.P.
Consolidated Balance Sheets
($ in Thousands)
December 31,
1998 1997
Assets
Cash and Cash Equivalents 1,094 31,268
Accounts Receivable 6,663 4,007
Inventory 50,456 32,998
Prepaid Expenses and
Other Current Assets 2,440 2,311
Total Current Assets 60,652 70,584
Property, Plant and
Equipment, Net 164,689 169,533
Other Assets 10,736 13,711
Total Assets 236,077 253,828
Liabilities and Partners' Capital
Accounts Payable and
Accrued Liabilities 48,357 35,957
Current Portion of
Capital Lease Obligations 1,119 1,070
Total Current Liabilities 49,476 37,027
Long-term Debt
and Capital Lease Obligations 7,847 8,966
Other Long-Term Liabilities 0 1,060
Partners' Capital 178,754 206,775
Total Liabilities
and Partners' Capital 236,077 253,828
SOURCE Terra Nitrogen Company, L.P.
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Company News On-Call:
http://www.prnewswire.com/comp/106067.html or fax,
800-758-5804, ext. 106067
CONTACT:
Paula C. Norton of Terra Nitrogen Company,
712-277-5438
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