SIOUX CITY, Iowa, Oct. 21 /PRNewswire/ -- Terra Nitrogen Company, L.P.
(TNCLP) (NYSE: TNH) today reported net income of $18.7 million on revenues of
$77.1 million for the quarter ended September 30, 1997, compared with net
income of $35.9 million on revenues of $82.3 million for the third quarter of
1996. Earnings per limited partnership unit were $0.78 for the third quarter
of 1997 compared with $1.31 for the comparable 1996 quarter. 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.
Third quarter earnings for 1997 were down 48% from the prior year quarter
as lower revenues combined with higher natural gas costs to reduce margins.
Revenues for the quarter decreased due to lower prices for nitrogen solutions
(UAN) and urea, down 14% and 24%, respectively, from the 1996 quarter.
Earnings were also negatively impacted by an 18% increase in natural gas costs
during the 1997 quarter. Lower worldwide demand for urea during 1997,
especially in China, has caused urea pricing to fall from prior-year levels.
Additionally, last year substantial sales carried over from the second to the
third quarter, due to a late planting season.
TNCLP also announced a cash distribution for the quarter ended
September 30, 1997 of $0.29 per common unit, payable November 28, 1997 to
unitholders of record as of November 3, 1997. The distribution for the 1997
third quarter declined from last year's third quarter distribution of $1.77
due, in part, to the impact of TNCLP's participation in an accounts receivable
securitization facility in the 1996 period which resulted in an additional
distribution of $0.61 per unit. In addition, available cash for the 1997
period was reduced by lower earnings and higher working capital requirements.
Cash distributions are dependent on TNCLP earnings, working capital
requirements and capital expenditures, among other factors. TNCLP earnings
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.
TNCLP is one of the largest U.S. manufacturers of nitrogen fertilizer
products.
Terra Nitrogen Company, L.P.
Consolidated Statements of Income
(in thousands, except per Unit amounts)
Three Months Ended
September 30,
1997 1996
Revenues $76,732 $81,961
Other income 388 296
Total net revenues 77,120 82,257
Cost of goods sold 54,993 44,572
Gross profit 22,127 37,685
Operating expenses 3,192 2,799
Operating income 18,935 34,886
Interest expense (553) (465)
Interest income 337 1,462
Net income $18,719 $35,883
Net income per limited partnership unit: $0.78 $1.31
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.
Prior year amounts have been reclassified to conform to current year
presentation.
Nitrogen Volumes and Prices 1997 1996
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) (ton) (000 tons) (ton)
Ammonia 122 $175 104 $164
UAN 562 73 585 85
Urea 116 122 94 160
Terra Nitrogen Company, L.P.
Consolidated Statements of Income
(in thousands, except per Unit amounts)
Nine Months Ended
September 30,
1997 1996
Revenues $255,952 $277,463
Other income 948 480
Total net revenues 256,900 277,943
Cost of goods sold 157,756 129,495
Gross profit 99,144 148,448
Operating expenses 9,394 9,156
Operating income 89,750 139,292
Interest expense (1,571) (711)
Interest income 3,269 4,982
Net income $91,448 $143,563
Net income per limited partnership unit: $3.46 $5.03
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.
Prior year amounts have been reclassified to conform to current year
presentation.
Nitrogen Volumes and Prices 1997 1996
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) (ton) (000 tons) (ton)
Ammonia 375 $189 311 $183
UAN 1,525 85 1,731 95
Urea 364 150 312 180
Terra Nitrogen Company, L.P.
Consolidated Balance Sheets
(in thousands)
September 30,
1997 1996
Assets
Cash and cash equivalents $8,120 $54,546
Accounts receivable 8,028 8,546
Inventory 43,106 29,085
Prepaid expenses 2,409 3,643
Total current assets 61,663 95,820
Property, plant and equipment, net 170,986 172,827
Distribution reserve fund 0 18,480
Other assets 15,306 14,285
Total assets $247,955 $301,412
Liabilities and partners' capital
Accounts payable and accrued liabilities $37,749 $36,858
Current portion of long-term debt and
capital lease obligations 1,059 1,285
Total current liabilities 38,808 38,143
Long-term debt and capital lease obligations 9,527 3,585
Other long-term liabilities 1,060 1,060
Partners' capital 198,560 258,624
Total liabilities and partners' capital $247,955 $301,412
SOURCE Terra Nitrogen Company, L.P.
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CONTACT:
Linda Clark of Terra Industries Inc.,
712-279-8778
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