SIOUX CITY, Iowa, Jan. 30 /PRNewswire-FirstCall/ -- Terra Nitrogen
Company, L.P. (TNCLP) (NYSE: TNH) today reported a net loss of $1.1 million,
or $.06 per limited partnership unit, on revenues of $88.5 million for the
fourth quarter ended December 31, 2002. This compares with a net income of
$.9 million, or $.05 per unit, on revenues of $82.7 million for the 2001
fourth quarter. Net income for the year ended December 31, 2002, was
$6.2 million, or $.33 per unit, on revenues of $326.9 million compared to a
net loss of $9.8 million, or $.52 per unit, on revenues of $305.8 million for
2001.
TNCLP also announced a cash distribution for the quarter ended
December 31, 2002, of $.25 per limited partnership unit payable February 27,
2003, to holders of record as of February 7. 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.
TNCLP's 2002 fourth quarter results as compared to those of the 2001
fourth quarter reflect similar sales volumes and higher selling prices, offset
by significantly higher natural gas costs. Unit selling prices for ammonia,
nitrogen solutions and urea increased by 13, 9 and 16 percent, respectively,
over fourth quarter 2001 prices.
TNCLP's natural gas unit costs in the 2002 fourth quarter were 47 percent
higher than in the comparable 2001 period. Forward pricing contracts decreased
TNCLP's fourth quarter 2002 natural gas costs by $3.4 million. As of
December 31, 2002, 12 percent of TNCLP's expected 2003 natural gas
requirements had been priced at about $1.3 million below published market
prices at that date.
TNCLP's 2002 results as compared to those of 2001 reflect significantly
improved sales volumes and reduced natural gas costs, partially offset by
lower selling prices. The improved sales volumes were due to TNCLP's operating
its manufacturing facilities with no market-related shutdowns in 2002. In
2001, unprecedented high natural gas costs had prompted production
curtailments that resulted in market share lost to imported products. Selling
prices were driven up in early 2001 by production curtailments in late 2000
and 2001 caused by the unusually high natural gas prices.
TNCLP's natural gas unit costs in 2002 were 27 percent lower than in 2001.
Natural gas hedging activities reduced TNCLP's 2002 natural gas costs by
$7.1 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.
Note: Terra Industries' news announcements are also available on its web
site, http://www.terraindustries.com .
Terra Nitrogen Company, L.P.
Consolidated Statements of Income
(in thousands except per unit amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
Product revenues $88,280 $82,286 $325,919 $304,872
Other income 185 406 1,003 953
Total revenues $88,465 $82,692 $326,922 $305,825
Cost of goods sold 83,851 75,026 297,886 291,781
Depreciation and
amortization 3,283 3,258 13,107 12,867
Total cost of sales 87,134 78,284 310,993 304,648
Total gross profit 1,331 4,408 15,929 1,177
Operating expenses 2,197 3,198 9,439 10,074
Interest expense - net 226 308 310 922
Net income (loss) $(1,092) $902 $6,180 $(9,819)
Earnings (loss) per limited
Partnership unit $(0.06) $0.05 $0.33 $(0.52)
The amount of net income allocable to the Limited Partners' interest is
based on the Partnership's net income and the proportionate share of cash
distributed to the Limited Partners and the General Partner.
Nitrogen Volumes and Prices
2002 2001
Quarter Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 107 172 114 152
UAN 636 73 619 67
Urea 108 126 119 109
2002 2001
Year Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 394 153 259 210
UAN 2,475 70 1,942 93
Urea 450 116 290 134
Terra Nitrogen Company, L.P.
Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31,
Assets 2002 2001
Cash and short-term investments $35,738 $10
Accounts receivable, net 26,760 32,311
Inventories 20,103 28,420
Other current assets 6,659 3,939
Total current assets 89,260 64,680
Property, plant and equipment, net 126,056 136,335
Other assets 10,708 9,402
Total assets $226,024 $210,417
Liabilities
Short-term note and current portion of
long-term debt $53 $14,293
Accounts payable and accrued liabilities 42,834 15,108
Total current liabilities 42,887 29,401
Long-term debt 8,333 8,200
Other liabilities 5,316 5,316
Total liabilities 56,536 42,917
Partners' equity 169,488 167,500
Total liabilities and partners' equity $226,024 $210,417
SOURCE Terra Nitrogen Company, L.P.
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Related links:
http://www.terranitrogen.com
Company News On-Call:
http://www.prnewswire.com/comp/437906.html
CONTACT:
Mark Rosenbury of Terra Industries Inc.,
+1-712-279-8756, mrosenbury@terraindustries.com
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