SIOUX CITY, Iowa, April 25 /PRNewswire-FirstCall/ --
Terra Nitrogen Company, L.P. (NYSE: TNH) (TNCLP) today reported net income
of $2.2 million, or $.12 per limited partnership unit, on revenues of
$57.4 million for the first quarter ended March 31, 2002. This compares with
net income of $1.6 million, or $.08 per unit, on revenues of $65.6 million for
the 2001 first quarter. The net income increase was due to lower natural gas
costs and higher sales volumes partially offset by lower selling prices.
TNCLP's natural gas costs, including about $2.7 million from forward
purchase contracts, were 60 percent lower than in the 2001 first quarter.
Higher sales volumes were achieved primarily because 2001 first quarter
production was curtailed in response to unprecedented natural gas prices.
Nitrogen solutions, ammonia and urea selling prices as compared to the 2001
first quarter were 52, 57 and 50 percent lower, respectively. Lower prices
reflected higher industry-wide inventories, contrasted to the year-earlier
period when serious supply concerns were created by widespread production
curtailments driven by natural gas prices.
TNCLP's forward purchase contracts at March 31, 2002, fixed prices for
approximately 17 percent of its next 12 months' natural gas needs at
$4.4 million below the published forward market prices at that date. In
addition, TNCLP had contracts at March 31, 2002, which would reduce, assuming
no decrease in the forward natural gas prices at that date, the purchase price
of about 8 percent of its next 12 months' natural gas requirements by
$1.8 million.
TNCLP announced that there would be no cash distribution for the quarter
ended March 31, 2002. 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)
(in thousands, except per unit amounts) Three Months Ended
March 31,
2002 2001
Product revenues $57,109 $65,541
Other income 291 90
Total revenues 57,400 65,631
Cost of goods sold 49,798 58,695
Depreciation and amortization 3,268 3,180
Total cost of sales 53,066 61,875
Total gross profits 4,334 3,756
Operating expenses 1,995 2,098
Interest expense - net 103 60
Net income $2,236 $1,598
Earnings per limited partnership unit $0.12 $0.08
The amount of net income allocable to the Limited Partnership's interest
is based on the Partnership's net income and the proportionate share of
cash distributed to the Limited Partners and the General partner.
Sales Volumes and Prices 2002 2001
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 75 $135 19 $314
Nitrogen Solutions 420 63 354 132
Urea 120 104 36 207
TERRA NITROGEN COMPANY, L.P.
Consolidated Balance Sheets
(unaudited)
March 31,
(in thousands)
ASSETS 2002 2001
Cash and short-term investments $10 $10
Accounts receivable 22,774 27,901
Inventories 43,393 59,262
Other current assets 11,030 3,038
Total current assets 77,207 90,211
Property, plant and equipment, net 133,631 145,549
Other assets 5,408 9,115
Total assets $216,246 $244,875
LIABILITIES
Short-term note and current portion of
long-term debt $2,762 $2,387
Accounts payable and accrued liabilities 24,721 44,767
Total current liabilities 27,483 47,154
Long-term debt 8,200 7,481
Other liabilities 5,316 5,316
Total liabilities 40,999 59,951
PARTNERS' EQUITY 175,247 184,924
Total liabilities and partners' equity $216,246 $244,875
SOURCE Terra Nitrogen Company, L.P.
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Related links:
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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