SIOUX CITY, Iowa, Oct. 30 /PRNewswire-FirstCall/ -- Terra Nitrogen
Company, L.P. (TNCLP) (NYSE: TNH) today reported a net loss of $1.0 million,
or $0.05 per limited partnership unit, on revenues of $86.4 million for the
third quarter ended Sept. 30, 2003. This compares with net income of $2.0
million, or $.11 per unit, on revenues of $76.2 million for the 2002 third
quarter. For the first three quarters of 2003 the net loss was $52.8 million,
or $2.80 per unit, on revenues of $275.5 million. This compares to net income
of $7.3 million, or $.39 per unit, on revenues of $238.5 million in the first
three quarters of 2002.
Results for the first three quarters of 2003 include a $40.7 million
charge for the impairment of TNCLP's Blytheville, Ark. long-lived assets. The
impairment charge represents the carrying value of the Blytheville facility's
long-lived assets that may not be realized from ongoing operations. TNCLP
suspended production at the Blytheville facility in the 2003 third quarter; it
resumed production on Sept. 29, 2003 in response to higher urea selling prices
and strong seasonal demand. TNCLP expects Blytheville's production to continue
through at least April 2004. TNCLP's general partner continues to evaluate how
the Blytheville facility might be operated over the next few years.
TNCLP's natural gas unit costs for the 2003 third quarter, including about
$1.7 million of cost increases due to forward purchasing contracts, were 73
percent higher than those incurred in the 2002 third quarter. This increase
was due to lower industry-wide natural gas inventories. TNCLP's third quarter
ammonia, nitrogen solutions and urea sales selling prices for the 2003 third
quarter were 68, 37 and 40 percent higher, respectively, than 2002 third
quarter prices. The higher prices reflect lower ammonia and other nitrogen
product supplies in response to higher gas costs. Ammonia, nitrogen solutions
and urea sales volumes as compared to the 2002 third quarter were 13, 4 and 68
percent lower, respectively.
TNCLP's forward purchase contracts at Sept. 30, 2003, fixed prices for
about 32 percent of its next 12 months' natural gas requirements at about $5.5
million above the published forward market prices at that date.
Except for the $40.7 million impairment charge, the reasons for the
changes between TNCLP's 2003 and 2002 first three quarters' net income are
essentially the same as those for the respective third quarters. Natural gas
unit costs, net of about $2.2 million of cost reductions realized from forward
purchasing contracts, were 83 percent higher. Ammonia, nitrogen solutions and
urea selling prices were 61, 39 and 45 percent higher, respectively. Ammonia,
nitrogen solutions and urea sales volumes were 29, 10 and 21 percent lower,
respectively.
TNCLP announced that there would be no cash distribution for the quarter
ended Sept. 30, 2003. Cash distributions depend on TNCLP's earnings, which
are driven primarily by product selling prices, sales volumes, natural gas
costs and production levels, as well as 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 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 Nine Months Ended
September 30 September 30
2003 2002 2003 2002
Product revenues $86,202 $76,001 $275,033 $237,639
Other income 223 163 477 818
Total revenues 86,425 76,164 275,510 238,457
Cost of goods sold 82,277 68,318 271,509 214,035
Depreciation and amortization 2,588 3,277 9,207 9,824
Total cost of sales 84,865 71,595 280,716 223,859
Total gross profit (loss) 1,560 4,569 (5,206) 14,598
Operating expenses 2,330 2,598 6,824 7,242
Impairment of long-lived assets - - 40,655 -
Interest expenses -- net 189 (39) 123 84
Net income (loss) $(959) $2,010 $(52,808) $7,272
Earnings (loss) per limited
partnership unit $(0.05) $0.11 $(2.80) $0.39
The amount of net income allocable to the Limited Partners' interest is
based on the Partnership's net income and the proportionate share of cash
distributed to the Limited Partners and the General Partner.
Nitrogen Volumes and Prices
2003 2002
Sales Average Sales Average
Quarter to Date Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 72 232 83 138
UAN 571 96 594 70
Urea 32 171 100 122
2003 2002
Sales Average Sales Average
Year to Date Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
Ammonia 204 237 287 147
UAN 1,647 96 1,839 69
Urea 269 164 342 113
Terra Nitrogen Company, L.P.
Consolidated Balance Sheets
(in thousands)
September 30
2003 2002
ASSETS
Cash and short-term investments $2,281 $14,462
Accounts receivable 22,398 27,090
Inventories 22,019 18,516
Other current assets 2,271 9,491
Total current assets 48,969 69,559
Property, plant and equipment, net 86,918 127,800
Other assets 10,390 7,696
Total assets $146,277 $205,055
LIABILITIES
Short-term note and current of portion
long-term debt $56 $53
Accounts payable and accrued liabilities 28,013 16,667
Total current liabilities 28,069 16,720
Long-term debt 8,290 8,347
Other liabilities 5,714 5,316
Total liabilities 42,073 30,383
PARTNERS' EQUITY 104,204 174,672
Total liabilities and partners' equity $146,277 $205,055
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/437906.html
CONTACT:
Mark Rosenbury for Terra Nitrogen Company,
L.P., +1-712-279-8756, mrosenbury@terraindustries.com
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