SIOUX CITY, Iowa, July 29 /PRNewswire-FirstCall/ -- Terra Nitrogen
Company, L.P. (TNCLP) (NYSE: TNH) today reported net income of $14.6 million,
or $0.77 per limited partnership unit, on revenues of $129.0 million for the
second quarter ended June 30, 2004. This compares with a net loss of
$44.8 million, or $2.37 per unit, on revenues of $118.1 million for the 2003
second quarter. For the first six months of 2004 TNCLP's net income was
$26.6 million, or $1.41 per unit, on revenues of $237.3 million. This compares
to a net loss of $51.8 million, or $2.75 per unit, on revenues of
$189.1 million in the 2003 first half.
TNCLP also announced a cash distribution for the quarter ended June 30,
2004, of $.75 per limited partnership unit payable August 25, 2004, to holders
of record as of August 9, 2004.
TNCLP's 2003 second quarter and first half results include a $40.7 million
charge for the impairment of TNCLP's Blytheville, Ark. long-term assets. The
Blytheville facility permanently ceased production on May 27, 2004; TNCLP
continues to operate the Blytheville storage and distribution assets.
Excluding the Blytheville impairment charge, TNCLP's 2004 second quarter
income was $18.8 million higher than 2003 second quarter results. This
improvement was primarily due to higher selling prices. Ammonia, nitrogen
solutions and urea selling prices for the 2004 second quarter were 4, 20 and 5
percent higher, respectively, than 2003 second quarter prices. The higher
prices reflect lower industry-wide inventories.
TNCLP's second quarter 2004 ammonia sales volumes were 43 percent higher
than those of the 2003 second quarter, while nitrogen solutions and urea sales
volumes were 8 and 33 percent lower, respectively. The lower sales volumes
were primarily due to reduced quantities available for sale. TNCLP's natural
gas unit costs for the 2004 second quarter, net of about $2.9 million of cost
reductions due to forward purchasing contracts, were 2 percent higher than
those incurred in the 2003 second quarter.
TNCLP's forward purchase contracts at July 1, 2004, fixed prices for about
24 percent of its next 12 months' natural gas requirements at about
$0.1 million below the published forward market prices at that date.
Excluding the Blytheville impairment charge, TNCLP's 2004 first half
income was $37.8 million higher than that of the 2003 first half. This
improvement was due primarily to higher selling prices, reflecting lower
industry-wide inventories. Natural gas unit costs for the 2004 first half, net
of about $6.1 million of cost reductions realized from forward purchasing
contracts, were about 2 percent lower than those incurred in the 2003 first
half.
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)
Three Months Ended Six Months Ended
June 30 June 30
2004 2003 2004 2003
Product revenues $128,714 $117,977 $236,927 $188,832
Other income 299 172 370 254
Total revenues 129,013 118,149 237,297 189,086
Cost of goods sold 109,595 116,571 201,565 189,231
Depreciation and amortization 2,340 3,319 4,678 6,620
Total cost of sales 111,935 119,890 206,243 195,851
Total gross profit 17,078 (1,741) 31,054 (6,765)
Operating expenses 2,662 2,476 4,835 4,495
Impairment of long-lived
assets - 40,655 - 40,655
Interest expenses - net (181) (56) (380) (66)
Net income (loss) $14,597 $(44,816) $26,599 $(51,849)
Earnings per limited
partnership unit $.77 $(2.37) $1.41 $(2.75)
The amount of net income allocable to the Limited Partners' interest is
based on the Partnership's net income and the proportionate share of cash
distributed to the Limited Partners and the General Partner.
Nitrogen Volumes and Prices
2004 2003
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
Quarter (000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 117 263 82 253
UAN 590 122 638 102
Urea 90 180 135 171
2004 2003
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
First half (000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 198 266 132 240
UAN 1,093 117 1,076 95
Urea 212 181 237 163
Terra Nitrogen Company, L.P.
Consolidated Balance Sheets
(in thousands)
June 30
2004 2003
ASSETS
Cash and short-term investments $28,475 $10
Accounts receivable 30,661 30,519
Inventories 15,820 24,520
Other current assets 4,033 2,282
Total current assets 78,989 57,331
Property, plant and equipment, net 81,295 95,495
Other assets 7,515 5,144
Total assets $167,799 $157,970
LIABILITIES
Short-term note and current of portion
long-term debt $61 $7,096
Accounts payable and accrued liabilities 13,618 32,910
Total current liabilities 13,679 40,006
Long-term debt 8,244 8,304
Other liabilities 1,600 1,500
Total liabilities 23,523 49,810
PARTNERS' EQUITY 144,276 108,160
Total liabilities and partners' equity $167,799 $157,970
SOURCE Terra Nitrogen Company, L.P.
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Related links:
http://www.terraindustries.com
http://www.terranitrogen.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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