SIOUX CITY, Iowa, Jan. 29 /PRNewswire-FirstCall/ -- Terra Nitrogen
Company, L.P. (TNCLP) (NYSE: TNH) today reported net income of $17.5 million,
or $.93 per limited partnership unit, on revenues of $129.8 million for the
fourth quarter ended Dec. 31, 2003. This compares with a net loss of
$1.1 million, or $.06 per unit, on revenues of $88.5 million for the 2002
fourth quarter. The net loss for the year ended Dec. 31, 2003, was
$35.3 million, or $1.87 per unit, on revenues of $405.4 million compared to
net income of $6.2 million, or $.33 per unit, on revenues of $326.9 million
for 2002.
TNCLP also announced a cash distribution for the quarter ended Dec. 31,
2003, of $.25 per limited partnership unit payable Feb. 25, 2004, to holders
of record as of Feb. 9, 2004. Cash distributions depend on TNCLP's earnings,
which are driven primarily by product selling prices, sales volumes, natural
gas costs, production levels, working capital requirements and capital
expenditures. TNCLP's quarterly earnings are usually highest in the quarter
ending June 30 due to the seasonal demand for fertilizer.
Results for the year ended Dec. 31, 2003, include a $40.7 million charge
for the impairment of TNCLP's Blytheville, Ark. long-lived assets. The
impairment charge represents the carrying value of the Blytheville facility's
long-lived assets that may not be realized from ongoing operations. TNCLP
suspended production at the Blytheville facility in the 2003 third quarter; it
resumed production on Sept. 29, 2003, in response to higher urea selling
prices and strong seasonal demand.
TNCLP's 2003 fourth quarter results as compared to those of the 2002
fourth quarter reflect similar sales volumes and higher selling prices,
partially offset by higher natural gas costs. Unit selling prices for ammonia,
nitrogen solutions and urea increased by 45, 40 and 42 percent, respectively,
over fourth quarter 2002 prices.
TNCLP's natural gas unit costs in the 2003 fourth quarter were 32 percent
higher than in the comparable 2002 period. Forward pricing contracts increased
TNCLP's fourth quarter 2003 natural gas costs by $5.2 million. As of Dec. 31,
2003, 33 percent of TNCLP's expected 2004 natural gas requirements had been
priced at about $5.6 million below published market prices at that date.
TNCLP's 2003 results as compared to those of 2002 reflect significantly
higher selling prices, partially offset by higher natural gas costs and lower
sales volumes. Ammonia, nitrogen solutions and urea selling prices for the
year were 58, 39 and 45 percent higher, respectively, than for 2002. The lower
sales volumes reflect a three-month production shutdown during 2003 at TNCLP's
Blytheville facility due to adverse market conditions. TNCLP expects to
operate the Blytheville facility through at least April 2004.
TNCLP's natural gas unit costs in 2003 were 67 percent higher than in
2002. Natural gas hedging activities increased TNCLP's 2003 natural gas costs
by $3.0 million compared to spot prices.
Terra Nitrogen Company, L.P. is a leading manufacturer of nitrogen
fertilizer products.
Information contained in this release, other than historical information,
may be considered forward-looking. Forward-looking information reflects
management's current views of future events and financial performance that
involve a number of risks and uncertainties. The factors that could cause
actual results to differ materially include, but are not limited to, the
following: changes in financial markets, general economic conditions within
the agricultural industry, competitive factors and price changes (principally
nitrogen fertilizer selling prices and natural gas costs), changes in product
mix, changes in the seasonality of demand patterns, changes in weather
conditions, changes in governmental regulations and other risks described in
the "Factors That Affect Operating Performance" section of TNCLP's current
annual report.
(Tables follow)
Terra Nitrogen Company, L.P.
Condensed Consolidated Statements of Income
(in thousands except per-unit amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
Product revenues $129,519 $88,280 $404,552 $325,919
Other income 323 185 800 1,003
Total revenues 129,842 88,465 405,352 326,922
Cost of goods sold 107,588 83,851 379,096 297,886
Depreciation and
amortization 2,358 3,283 11,566 13,107
Total cost of sales 109,946 87,134 390,662 310,993
Total gross profit 19,896 1,331 14,690 15,929
Operating expenses 2,263 2,197 9,087 9,439
Impairment of
long-lived assets - - 40,655 -
Interest expenses-net 93 226 216 311
Net income (loss) $17,540 $(1,092) $(35,268) $6,179
Earnings (loss) per
limited partnership
unit $0.93 $(0.06) $(1.87) $0.33
The amount of net income allocable to the Limited Partners' interest is
based on the Partnership's net income and the proportionate share of cash
distributed to the Limited Partners and the General Partner.
Nitrogen Volumes and Prices
2003 2002
Sales Average Sales Average
Quarter Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 132 249 107 172
Nitrogen Solutions 633 102 636 73
Urea 121 179 108 126
2003 2002
Sales Average Sales Average
Year Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 336 242 394 153
Nitrogen Solutions 2,280 97 2,475 70
Urea 390 168 450 116
Terra Nitrogen Company, L.P.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31,
2003 2002
ASSETS
Cash and short-term investments $39,596 $35,738
Accounts receivable 36,612 26,760
Inventories 19,364 20,103
Other current assets 6,344 6,659
Total current assets 101,916 89,260
Property, plant and equipment, net 84,691 126,056
Other assets 9,631 10,708
Total assets $196,238 $226,024
LIABILITIES
Current portion of long-term debt and
capital lease obligations $58 $53
Accounts payable, accrued liabilities
and pension liabilities 54,028 42,834
Total current liabilities 54,086 42,887
Long-term debt and capital lease obligations 8,275 8,333
Other liabilities 1,600 5,316
Total liabilities 63,961 56,536
PARTNERS' EQUITY 132,277 169,488
Total liabilities and partners' equity $196,238 $226,024
SOURCE Terra Nitrogen Company, L.P.
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Related links:
http://www.terranitrogen.com
http://www.terraindustries.com
Company News On-Call:
http://www.prnewswire.com/comp/106067.html
CONTACT:
Mark Rosenbury of Terra Nitrogen Company,
L.P., +1-712-279-8756, mrosenbury@terraindustries.com
NOTE TO EDITORS: Terra Nitrogen Company, L.P. news announcements
are also available on Terra Industries' web site,
http://www.terraindustries.com .
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