SIOUX CITY, Iowa, July 26 /PRNewswire/ -- Terra Nitrogen Company, L.P.
(TNCLP) (NYSE: TNH) today reported net income of $2.4 million on revenues of
$68.6 million for the second quarter ended June 30, 1999. This compares with
net income of $28.2 million on revenues of $100.8 million for the second
quarter of 1998. Earnings per limited partnership unit were $0.13 for the
second quarter of 1999 compared with $1.09 for the same quarter last year.
Net income for the first half of 1999 was $383,000, or $0.02 per limited
partnership unit, on revenues of $122.6 million. For the comparable period in
1998, net income was $34.0 million, or $1.40 per limited partnership unit, on
revenues of $149.7 million. The amount of net income allocable to the limited
partners' interest is based on the partnership's net income and, since no cash
has been distributed, the proportionate ownership share of the limited
partners and the general partner.
The decline in earnings in the second quarter resulted from lower sales
volumes for all nitrogen products and price pressure on ammonia and urea.
Compared with the second quarter of 1998, ammonia volumes were down 7% with
prices 8% lower; nitrogen solutions volumes were 34% below the second quarter
of last year with flat prices; urea volumes were off 23% and prices declined
almost 30%. For the year to date, ammonia volumes are up 25% offsetting some
of the 17% price decline; solutions volumes were down 18% with prices
remaining flat; and urea volumes declined 15% with prices off 23%. The price
of natural gas was up 4% for the quarter and year to date.
The continuing pressure on prices reflects worldwide overcapacity in the
industry. Volumes declined somewhat this year as a result of a 3% reduction
in the total number of acres planted to corn, the most nitrogen-intensive
crop, and a nearly 5% decline in wheat acreage. Year to date, the increase in
sales volume for ammonia partially offset the volume decline in nitrogen
solutions. Weather this year favored ammonia application whereas last year it
resulted in very strong demand for solutions. Several unplanned production
outages at the Blytheville plant were the major cause of the reduced urea
sales volumes.
TNCLP also announced that there would be no cash distribution for the
quarter ended June 30, 1999. The cash distribution for the second quarter of
1998 was $1.72 per common unit. Factors precluding a distribution were lower
1999 earnings coupled with an $18 million use of cash to fund accounts
receivable as a result of terminating its accounts receivable securitization
program. This program, established in August 1996, converted TNCLP's
receivables to cash, resulting in an accelerated distribution at that time.
Terra Nitrogen Company, L.P. is a leading U.S. manufacturer and marketer
of nitrogen fertilizer products.
Note: Terra Nitrogen's news releases are available by fax at no charge by
calling 800-758-5804, code 106067.
(Tables follow)
TERRA NITROGEN COMPANY, L.P.
Consolidated Statements of Income
($ in Thousands, Except Per Unit Amounts)
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
Product revenues $68,595 $100,522 $122,379 $149,021
Other income (31) 309 258 726
Total revenues 68,564 100,831 122,637 149,747
Cost of goods sold 60,797 66,263 111,326 103,813
Depreciation and amortization 3,242 3,067 6,475 6,112
Total cost of sales 64,039 69,331 117,802 109,926
Total gross profit 4,525 31,501 4,835 39,822
Operating expenses 1,890 3,069 4,107 5,512
Interest expense -- net 214 265 345 342
Net income $2,422 $28,166 $383 $33,967
Earnings per limited
partnership unit $0.13 $1.09 $0.02 $1.40
The amount of net income allocable to the Limited Partners' interest is
based on the Partnership's net income and, since no cash has been distributed,
the proportionate ownership share of the Limited Partners and the General
Partner.
Nitrogen Volumes and Prices 1999 1998
Quarter Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 154 $125 166 $137
Nitrogen Solutions 622 64 942 64
Urea 98 98 127 139
1999 1998
Year To Date Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 285 $115 229 $138
Nitrogen Solutions 1,092 63 1,332 64
Urea 225 94 265 123
TERRA NITROGEN COMPANY, L.P.
Consolidated Balance Sheets
($ in Thousands)
June 30,
1999 1998
ASSETS
Cash and short-term investments $13 $44,329
Accounts receivable 19,322 3,097
Inventories 41,815 24,886
Other current assets 2,219 1,530
Total current assets 63,369 73,842
Property, plant and equipment, net 162,242 168,904
Other assets 7,814 15,179
Total assets $233,425 $257,925
LIABILITIES
Short-term note and current portion
of long-term debt $14,813 $1,095
Accounts payable and accrued liabilities 33,697 26,255
Total current liabilities 48,510 27,350
Long-term debt 461 8,588
Other liabilities 5,316 6,322
Total liabilities 54,286 42,260
PARTNERS' EQUITY 179,138 215,665
Total liabilities and partners' equity $233,425 $257,925
SOURCE Terra Nitrogen Company, L.P.
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Related links:
http://www.terraindustries.com
Company News On-Call:
http://www.prnewswire.com/comp/106067.html or fax,
800-758-5804, ext. 106067
CONTACT:
Paula C. Norton of Terra Nitrogen Company,
L.P., 712-277-5438
NOTE TO EDITORS: Terra Nitrogen's news releases are available by
fax at no charge by calling 800-758-5804, code 106067.
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