SIOUX CITY, Iowa, Oct. 22 /PRNewswire/ -- Terra Nitrogen Company, L.P.
(TNCLP) (NYSE: TNH) today reported net income of $4.7 million on revenues of
$33.6 million for the quarter ended September 30, 1998. This compares with
net income of $18.7 million on revenues of $77.1 million for the third quarter
of 1997. Earnings per limited partnership unit were $0.25 for the third
quarter of 1998 compared with $0.78 per unit for the same quarter a year ago.
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 1998 declined significantly from the prior-year
quarter due primarily to lower sales volumes for all partnership products and
lower prices for ammonia and nitrogen solutions. Lower ammonia demand for
winter wheat acres resulted from drought conditions and the impact of poor
commodity (wheat) prices. Solutions and urea volumes were below the
comparable quarter last year due to customers' delaying purchasing decisions
to fill storage. Excess worldwide capacity continues to put pressure on
margins, as ammonia and solutions prices were down 27% and 12%, respectively
from the prior-year quarter, and urea prices were flat.
TNCLP also announced that there would be no cash distribution for the
quarter ended September 30, 1998. The cash distribution for the third quarter
of 1997 was $0.29 per unit. The decline in cash distributions in 1998 is due
to lower earnings and, to a lesser extent, reduced volumes this year than in
1997.
Cash distributions are dependent on TNCLP earnings, working capital
requirements and capital expenditures, among other factors. TNCLP earnings
are traditionally highest in the quarter ending June 30, due to the seasonal
demand for fertilizer. Earnings can also be affected by market prices for
nitrogen products, the cost of natural gas, industry production levels,
business cycles and weather.
TNCLP is one of the largest U.S. manufacturers of nitrogen fertilizer
products.
Note: Terra Nitrogen's news releases are available by fax at no charge by
calling 800-758-5804, code 106067.
This news release contains statements that may be interpreted as forward-
looking. Such statements involve risks and uncertainties and should be
considered along with the factors affecting our business as discussed on pages
5, 6 and 7 in our 1997 annual report to unitholders. Actual results may
differ materially from those in the forward-looking statements.
TERRA NITROGEN COMPANY, L.P.
Consolidated Statements of Income
($ in Thousands, Except Per Unit Amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues 33,305 76,732 182,327 255,952
Other income 301 388 1,029 948
Total net revenues 33,606 77,120 183,327 256,900
Cost of goods sold 26,849 54,993 136,776 157,756
Gross profit 6,757 22,127 46,580 99,144
Operating expenses 2,123 3,192 7,636 9,394
Operating income 4,634 18,935 38,944 89,750
Interest expense (423) (553) (1,647) (1,571)
Interest income 461 337 1,343 3,269
Net income 4,671 18,719 38,639 91,448
Net income allocable to
limited partners'
interest 4,581 14,394 30,491 64,480
Net income per limited
partnership unit 0.25 0.78 1.65 3.46
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
1998 1997
Quarter Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 83 128 122 175
UAN 207 64 562 73
Urea 77 121 116 122
1998 1997
Year to Date Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 301 141 375 189
UAN 1,455 67 1,525 85
Urea 339 124 364 150
TERRA NITROGEN COMPANY, L.P.
Consolidated Balance Sheets
($ in Thousands)
September 30,
1998 1997
Assets
Cash $16 $8,120
Accounts receivable 1,718 8,028
Inventory 51,642 43,106
Prepaid expenses and
other current assets 1,597 2,409
Total current assets 54,973 61,663
Property, plant and
equipment, net 166,817 170,986
Other assets 13,136 15,306
Total assets $ 234,926 $ 247,955
Liabilities and Partners' Capital
Short term note $18,778 $--
Accounts payable and
accrued liabilities 21,405 37,749
Current portion of long-term
debt and capital
lease obligations 1,105 1,059
Total current liabilities 41,288 38,808
Long-term debt and capital
lease obligations 13,960 9,527
Other long-term liabilities 1,060 1,060
Partners' capital 178,618 198,560
Total liabilities and
partners' capital $ 234,926 $ 247,955
SOURCE Terra Nitrogen Company, L.P.
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Company News On-Call:
http://www.prnewswire.com/comp/106067.html or fax,
800-758-5804, ext. 106067
Related links:
http://www.terraindustries.com
CONTACT:
Paula C. Norton of Terra Industries Inc.,
712-277-5438
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