SIOUX CITY, Iowa, Jan. 31 /PRNewswire-FirstCall/ --
Terra Nitrogen Company, L.P. (NYSE: TNH) (TNCLP) today reported net income
of $902,000, or $.05 per limited partnership unit, on revenues of
$82.7 million for the fourth quarter ended December 31, 2001, compared with
net income of $416,000, or $.02 per unit, on revenues of $79.9 million for the
2000 fourth quarter. TNCLP reported a net loss for the year ended
December 31, 2001 of $9.8 million, or $.52 per unit, on revenues of
$305.8 million compared to net income of $20.2 million, or $1.07 per unit, on
revenues of $321.0 million for 2000.
TNCLP's 2001 fourth quarter results as compared to those of the 2000
fourth quarter reflect higher sales volumes and lower natural gas costs offset
by substantially lower selling prices. Higher industry-wide UAN inventories
caused in part by record levels of imported UAN had an adverse effect on
selling prices. The 2001 fourth quarter sales volumes approximated normal
levels while 2000 sales volumes were adversely impacted by significant
production curtailments caused by unprecedented natural gas cost increases.
Natural gas unit costs for the 2001 fourth quarter were 31 percent lower than
those incurred in the 2000 fourth quarter.
Forward pricing contracts increased fourth quarter 2001 natural gas costs
by $2.4 million. As of December 31, 2001, 20 percent of TNCLP's expected 2002
natural gas requirements had been priced at about $1.4 million above published
market prices at that date. TNCLP's 2001 fourth quarter selling prices, while
significantly below those realized in 2000, exceeded the prices realized in
the 1999 and 1998 fourth quarters. The 2000 fourth quarter selling prices
reflected concerns that industry-wide nitrogen fertilizer supplies would not
be adequate.
TNCLP's 2001 results as compared to 2000 reflect lower sales volumes and
higher natural gas offset partially by higher selling prices. The decline in
sales volumes was due to production curtailments caused by natural gas costs,
which were 37% higher than for 2000. As a result, TNCLP lost market share in
2001 to imported fertilizer. The higher selling prices were due to concerns
about industry-wide nitrogen fertilizer supplies.
TNCLP announced that there would be no cash distribution for the quarter
ended December 31, 2001. Cash distributions are dependent on TNCLP's
earnings, which are driven primarily by product selling prices, sales volumes,
natural gas costs and 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.
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 , and by fax at no charge by calling
800-758-5804, code 437906.
TERRA NITROGEN COMPANY, L.P.
Consolidated Statements of Income
(unaudited)
Three Months Ended Year Ended
(in thousands, except per December 31, December 31,
unit amounts) 2001 2000 2001 2000
Product revenues $82,286 $79,868 $304,872 $320,239
Other income 406 196 953 744
Total revenues 82,692 80,064 305,825 320,983
Cost of goods sold 75,026 73,071 291,781 275,762
Depreciation and amortization 3,258 3,167 12,867 12,706
Total cost of sales 78,284 76,238 304,648 288,468
Total gross profit (loss) 4,408 3,826 1,177 32,515
Operating expenses 3,198 3,786 10,074 11,493
Interest expense - net 308 (376) 922 813
Net income (loss) $902 $416 $(9,819) $20,209
Earnings (loss) per
limited partnership unit $0.05 $0.02 $(0.52) $1.07
Sales Volumes and Prices 2001 2000
Sales Average Sales Average
Quarter Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 114 152 56 198
UAN 619 67 547 91
Urea 119 109 67 148
2001 2000
Sales Average Sales Average
Year Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 259 210 373 156
UAN 1,942 93 2,409 78
Urea 290 134 282 134
TERRA NITROGEN COMPANY, L.P.
Consolidated Balance Sheets
(in thousands, unaudited)
December 31,
2001 2000
ASSETS
Cash and short-term investments $10 $17,941
Accounts receivable 32,311 24,739
Inventories 28,420 19,381
Other current assets 7,447 3,117
Total current assets 68,188 65,178
Property, plant and equipment, net 136,335 147,597
Other assets 5,895 11,260
Total assets $210,418 $224,035
LIABILITIES
Short-term note and current portion of
long-term debt $14,512 $1,000
Accounts payable and accrued liabilities 15,109 22,757
Total current liabilities 29,621 23,757
Long-term debt 7,981 8,250
Other liabilities 5,316 5,316
Total liabilities 42,918 37,323
PARTNERS' EQUITY 167,500 186,712
Total liabilities and partners' equity $210,418 $224,035
SOURCE Terra Nitrogen Company, L.P.
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http://www.terranitrogen.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/106067.html
CONTACT:
Mark Rosenbury for Terra Nitrogen Company,
L.P., +1-712-279-8756
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