SIOUX CITY, Iowa, April 24 /PRNewswire-FirstCall/ -- Terra Nitrogen
Company, L.P. (TNCLP) (NYSE: TNH) today reported a net loss of $7.0 million,
or $.37 per limited partnership unit, on revenues of $70.9 million for the
first quarter ended March 31, 2003. This compares with net income of
$2.2 million, or $.12 per unit, on revenues of $57.4 million for the 2002
first quarter. The profitability decline was due to higher natural gas unit
costs and production curtailments, partially offset by higher selling prices.
TNCLP's natural gas unit costs for the 2003 first quarter, net of about
$4.7 million of cost reductions realized from forward purchase contracts, were
74 percent higher than those incurred in the 2002 first quarter. This
increase was due to colder-than-expected weather and lower industry-wide
natural gas inventories. These high natural gas costs led to first quarter
2003 production curtailments, including the shutdown of the Blytheville, Ark.
facility and one of the two ammonia plants at the Verdigris, Okla. facility in
late February, when spot natural gas prices exceeded $10 per million British
thermal unit. All plants had resumed production by the end of the quarter.
Ammonia, nitrogen solutions and urea selling prices for the 2003 first
quarter were 62, 37 and 47 percent higher, respectively, than 2002 first
quarter selling prices. The higher prices were due mainly to lower global
ammonia and other nitrogen product supplies.
TNCLP's forward purchase contracts at March 31, 2003, fixed prices for
about 14 percent of its next 12 months' natural gas requirements at about
$2.5 million above the published forward market prices at that date.
TNCLP announced that there would be no cash distribution for the quarter
ended March 31, 2003. Cash distributions depend on TNCLP's earnings, which
are driven primarily by product selling prices, sales volumes, natural gas
costs and production levels, as well as 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 Nitrogen Company, L.P. news announcements are also available
on Terra Industries' web site, http://www.terraindustries.com .
Terra Nitrogen Company, L.P.
Consolidated Statements of Income
(in thousands except per unit amounts)
(unaudited)
Three Months Ended
March 31,
2003 2002
Product revenues $70,855 $57,109
Other income 82 291
Total revenues 70,937 57,400
Cost of goods sold 72,660 49,798
Depreciation and amortization 3,301 3,268
Total cost of sales 75,961 53,066
Total gross profit (loss) (5,024) 4,334
Operating expenses 2,019 1,995
Interest expense - net (10) 103
Net income (loss) $(7,033) $2,236
Earnings (loss) per limited partnership unit $(0.37) $ 0.12
The amount of net income allocable to the Limited Partnership's 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
Quarter Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) (per ton) (000 tons) (per ton)
Ammonia 50 $219 75 $135
UAN 438 86 420 63
Urea 102 153 120 104
Terra Nitrogen Company, L.P.
Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31,
Assets 2003 2002
Cash and cash equivalents $13,458 $10
Accounts receivable 18,778 22,774
Inventories 43,863 43,393
Other current assets 2,745 11,030
Total current assets 78,844 77,207
Property, plant and equipment, net 123,616 133,631
Other assets 9,597 5,408
Total assets $212,057 $216,246
Liabilities
Short-term note and current portion of
long-term debt $56 $2,762
Accounts payable and accrued liabilities 45,372 24,721
Total current liabilities 45,428 27,483
Long-term debt 8,319 8,200
Long-term payable to affiliates 5,316 5,316
Total liabilities 59,063 40,999
Partners' equity 152,994 175,247
Total liabilities and partners' equity $212,057 $216,246
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
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