SIOUX CITY, Iowa, July 22 /PRNewswire/ -- Terra Nitrogen Company, L.P.
(TNCLP) (NYSE: TNH) today reported net income of $28.2 million on revenues of
$100.8 million for the quarter ended June 30, 1998, compared with net income
of $42.9 million on revenues of $105.6 million for the 1997 quarter. Earnings
per limited partnership unit were $1.09 for the second quarter of 1998
compared with $1.24 for the second quarter of 1997. 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.
Earnings for the second quarter of 1998 were down from the prior-year
quarter due to slightly lower revenues and slightly higher natural gas costs.
Lower revenues compared with the prior-year quarter reflect lower nitrogen
prices which were offset by substantial increases to nitrogen solutions (UAN)
sales volumes. Sales prices for ammonia, UAN and urea declined 28%, 32% and
11%, respectively, from the prior-year quarter due to the continued impact of
surplus worldwide nitrogen capacity. However, UAN sales volume increased 69%
from the 1997 quarter, partially offsetting the lower prices. Wet field
conditions in the Midwest and a favorable pricing relationship versus ammonia
caused the increase in demand for this product.
TNCLP also announced a cash distribution for the quarter ended June 30 of
$1.72 per common unit, payable August 28, 1998 to unitholders of record August
6, 1998. Distributions are dependent on TNCLP earnings which are
traditionally highest in the quarter ending June 30, due to the seasonal
demand for fertilizer. Earnings can also be affected by market prices for
nitrogen products, the cost of natural gas, industry production levels,
business cycles and weather.
On April 23, 1998 management projected cash distributions for the
remainder of this year of up to $1.50 per unit. Better manufacturing
efficiencies, higher sales volumes and unanticipated reductions to working
capital balances during the second quarter resulted in a cash distribution
higher than management's earlier estimate.
TNCLP is one of the largest U.S. manufacturers of nitrogen fertilizer
products.
This news release contains statements that may be interpreted as forward-
looking. Such statements involve risks and uncertainties and should be
considered along with the factors affecting our business as discussed on pages
5,6 and 7 in our 1997 annual report to unitholders. Actual results may differ
materially from those in the forward-looking statements.
(Tables follow)
TERRA NITROGEN COMPANY, L.P.
Consolidated Statements of Income
($ in Thousands, Except Per Unit Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues 100,522 105,175 149,021 179,220
Other income 309 426 726 560
Total net revenues 100,831 105,601 149,747 179,780
Cost of goods sold 69,330 60,254 109,925 102,763
Gross profit 31,501 45,347 39,822 77,017
Operating expenses 3,069 3,232 5,512 6,202
Operating income 28,432 42,115 34,310 70,815
Interest expense (734) (584) (1,225) (1,018)
Interest income 468 1,406 882 2,932
Net income 28,166 42,937 33,967 72,729
Net income per limited
partnership unit 1.09 1.24 1.40 2.68
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
Quarter
1998 1997
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 166 137 169 189
UAN 942 64 556 94
Urea 127 139 134 156
Year to Date
1998 1997
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 229 138 254 195
UAN 1,332 64 963 93
Urea 265 123 248 164
TERRA NITROGEN COMPANY, L.P.
Consolidated Balance Sheets
($ in Thousands)
(unaudited)
June 30,
1998 1997
Assets
Cash and short-term investments $44,329 $74,396
Accounts receivable 3,097 1,291
Inventory 24,886 41,524
Prepaid expenses 1,530 1,890
Total current assets 73,842 119,101
Property, plant and equipment, net 168,904 169,873
Other assets 15,179 17,007
Total assets $257,925 $305,981
Liabilities and Partners' Capital
Accounts payable and accrued liabilities $26,255 $39,510
Current portion of long-term debt
and capital lease obligations 1,095 1,047
Total current liabilities 27,350 40,557
Long-term debt and capital lease
obligations 8,588 9,700
Long-term payable to affiliates 5,262 4,103
Other long-term liabilities 1,060 1,060
Total liabilities 42,260 55,420
Partners' capital 215,665 250,561
Total liabilities and partners' capital $257,925 $305,981
SOURCE Terra Nitrogen Company, L.P.
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Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 106067
CONTACT:
Paula C. Norton of Terra Nitrogen,
712-277-5438
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