SIOUX CITY, Iowa, July 25 /PRNewswire-FirstCall/ --
Terra Nitrogen Company, L.P. (NYSE: TNH) (TNCLP) today reported net income
of $3.0 million, or $.16 per limited partnership unit, on revenues of
$104.9 million for the second quarter ended June 30, 2002. This compares with
a net loss of $0.9 million, or $.05 per unit, on revenues of $101.8 million
for the 2001 second quarter. Net income for the 2002 first half was
$5.3 million, or $.28 per unit, on revenues of $162.3 million compared to net
income of $0.7 million, or $.04 per unit, on revenues of $167.4 million for
the 2001 first half. The net income increases were due to substantially
higher sales volumes and lower natural gas costs, partially offset by lower
selling prices.
TNCLP's second quarter 2002 nitrogen solutions, ammonia and urea sales
volumes as compared to the 2001 second quarter were 80, 42 and 14 percent
higher, respectively. Sales volumes in 2002 increased mainly because farmers
planted more corn acres and increased their nitrogen fertilizer application
rates. TNCLP's 2001 sales volumes were unusually low because of production
curtailments in response to unprecedented natural gas prices. TNCLP's natural
gas unit costs for the 2002 second quarter, net of about $4.1 million of cost
reductions realized from forward purchase contracts, were 41 percent lower
than those incurred in the 2001 second quarter. Nitrogen solutions, ammonia
and urea selling prices for the 2002 second quarter were 39, 42 and 21 percent
lower, respectively, than 2001 second quarter prices. The price declines
reflect higher industry-wide inventories at the start of the 2002 spring
season as compared to serious supply concerns in 2001 created by widespread
production curtailments driven by natural gas prices.
TNCLP's forward purchase contracts at June 30, 2002, fixed prices for
about 12 percent of its next 12 months' natural gas requirements at about
$0.5 million below the published forward market prices at that date. In
addition, TNCLP has contracts at June 30, 2002, which would reduce, assuming
no decrease in forward natural gas prices at that date, the cost of about
7 percent of its next 12 months' natural gas requirements by about
$1.4 million.
The reasons for the differences between TNCLP's 2002 and 2001 first half
sales volumes and selling prices are essentially the same as those for the
2002 and 2001 second quarter. Natural gas unit costs for the 2002 first half,
net of about $1.4 million of cost reductions realized from forward purchase
contracts, were 51 percent lower than those incurred in the 2001 first half.
TNCLP also announced a cash distribution for the quarter ended June 30,
2002, of $0.20 per limited partnership unit payable August 26 to holders of
record as of August 5, 2002. Cash distributions depend 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 Six Months Ended
June 30 June 30
(in thousands, except
per unit amounts) 2002 2001 2002 2001
Product revenues $104,529 $101,558 $161,638 $167,099
Other income 364 193 655 283
Total revenues 104,893 101,751 162,293 167,382
Cost of goods sold 95,919 96,688 145,717 155,383
Depreciation and
amortization 3,279 3,192 6,547 6,372
Total cost of sales 99,198 99,880 152,264 161,755
Total gross profit 5,695 1,871 10,029 5,627
Operating expenses 2,649 2,643 4,644 4,741
Interest expense - net 21 149 124 209
Net income (loss) $3,025 $(921) $5,261 $677
Earnings (loss) per
limited Partnership
unit $0.16 $(0.05) $0.28 $0.04
The amount of net income allocable to the Limited Partners' interest is
based on the Partnership's net income and the proportionate share of cash
distributed to the Limited Partners and the General Partner.
Nitrogen Volumes and Prices 2002 2001
Sales Average Sales Average
Quarter To Date Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 129 159 91 276
UAN 825 71 458 117
Urea 122 114 107 144
2002 2001
Sales Average Sales Average
Year To Date Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 204 150 109 282
UAN 1,245 68 812 123
Urea 242 109 143 160
TERRA NITROGEN COMPANY, L.P.
Consolidated Balance Sheets
(in thousands, unaudited)
June 30,
2002 2001
ASSETS
Cash and short-term investments $11,125 $10
Accounts receivable 28,781 26,166
Inventories 21,891 48,688
Other current assets 2,744 2,364
Total current assets 64,541 77,228
Property, plant and equipment, net 130,849 142,202
Other assets 7,593 7,857
Total assets $202,983 $227,287
LIABILITIES
Short-term note and current portion of
long-term debt $53 $20,800
Accounts payable and accrued liabilities 14,872 18,968
Total current liabilities 14,925 39,768
Long-term debt 8,362 7,231
Other liabilities 5,316 5,316
Total liabilities 28,603 52,315
PARTNERS' EQUITY 174,380 174,972
Total liabilities and partners' equity $202,983 $227,287
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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