SIOUX CITY, Iowa, Jan. 27 /PRNewswire/ -- Terra Nitrogen Company, L.P.
(TNCLP) (NYSE symbol: TNH) today reported net income of $34.1 million on
revenues of $85.2 million for the quarter ended December 31, 1996. For the
1995 fourth quarter, net income was $41.8 million on revenues of
$94.3 million. For the year ended December 31, 1996, net income was
$177.6 million on revenues of $363.1 million compared with net income of
$172.5 million on revenues of $374.0 million for 1995. Earnings per Limited
Partnership Unit were $1.32 and $1.41 for the quarter ended December 31, 1996
and 1995, respectively, and $6.35 and $6.55 for the years ended December 31,
1996 and 1995, respectively. 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.
Fourth quarter earnings for 1996 were down 19% from the prior year quarter
due primarily to lower ammonia sales volumes. Earnings were also reduced by
lower sales prices for UAN and urea during the fourth quarter of 1996,
partially offset by higher ammonia sales prices. Ammonia sales volumes
declined in the 1996 quarter as cold weather reduced fall applications, while
the fourth quarter of 1995 experienced favorable weather conditions for
ammonia application. In addition, the late corn harvest in 1996 precluded
fall ammonia application before the onset of cold weather. Natural gas costs
were slightly higher during the fourth quarter of 1996 compared with the 1995
quarter as cold weather caused natural gas spot market prices to spike upward
toward the end of the year.
As a result of the end of the preference period on December 31, 1996,
Senior Preference Units (SPUs) are no longer entitled to participate in
quarterly cash distributions in excess of $.605 per unit. Holders of SPUs
must convert their SPUs to Common Units by March 31, 1997 in order to
participate in any cash distributions above this level. Therefore, TNCLP
announced today that the cash distribution for the fourth quarter of 1996 will
be paid in two parts: 1) a cash distribution of $.605 per unit to be paid
February 28, 1997 to holders of SPUs and Common Unitholders of record as of
February 7, 1997, and 2) a cash distribution of at least $.885 per Common Unit
(representing the remainder of Available Cash for the fourth quarter of 1996)
will be paid April 30, 1997 to Common Unitholders of record as of April 18,
1997 (including those holders of SPUs who have converted to Common Units).
Current holders of SPUs must convert their units to Common Units and must be
holders of record of such Common Units on April 18, 1997 to be entitled to the
distribution payable on April 30.
Distributions are dependent on TNCLP earnings which 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 and marketers of nitrogen
fertilizer products.
Terra Nitrogen Company, L.P.
Consolidated Statements of Income
(in thousands, except per Unit amounts)
Three Months Ended
December 31,
1996 1995
Revenues $ 85,267 $ 94,014
Other income (72) 239
Total net revenues 85,195 94,253
Cost of goods sold 48,007 50,089
Gross profit 37,188 44,164
Operating expenses (3,879) (3,236)
Operating income 33,309 40,928
Interest expense (499) (146)
Interest income 1,260 1,024
Net Income $ 34,070 $ 41,806
Net income per limited partnership unit: $ 1.32 $ 1.41
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 1996 1995
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) (ton) (000 tons) (ton)
Ammonia 83 $195 124 $178
UAN 593 84 610 87
Urea 107 177 97 192
Terra Nitrogen Company, L.P.
Consolidated Statements of Income
(in thousands, except per Unit amounts)
Year Ended
December 31, 1996
1996 1995
Revenues $362,730 $373,325
Other income 408 650
Total net revenues 363,138 373,975
Cost of goods sold 177,502 187,615
Gross profit 185,636 186,360
Operating expenses (13,035) (16,840)
Operating income 172,601 169,520
Interest expense (1,210) (1,748)
Interest income 6,242 4,696
Net Income $177,633 $172,468
Net income per limited partnership unit: $ 6.35 $ 6.55
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 1996 1995
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) (ton) (000 tons) (ton)
Ammonia 394 $186 451 $199
UAN 2,324 92 2,133 93
Urea 419 179 455 187
Terra Nitrogen Company, L.P.
Consolidated Balance Sheets
(in thousands)
December 31,
1996 1995
Assets
Cash and cash equivalents $ 65,242 $ 71,490
Accounts receivable 3,453 28,426
Inventory 32,962 22,083
Prepaid expenses 2,353 6,001
Total current assets 104,010 128,000
Property, plant and equipment, net 172,771 177,358
Distribution reserve fund 0 18,480
Other assets 22,286 14,285
Total assets $ 299,067 $ 338,123
Liabilities and partners' capital
Accounts payable and accrued liabilities $ 50,065 $ 45,005
Current portion of long-term debt and
capital lease obligations 1,162 1,504
Total current liabilities 51,227 46,509
Long-term debt and capital lease obligations 3,036 4,198
Other long-term liabilities 1,060 1,060
Partners' capital 243,744 286,356
Total liabilities and partners' capital $299,067 $338,123
SOURCE Terra Nitrogen Company, L.P.
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CONTACT:
Paula Norton of Terra Nitrogen, 712-277-5438
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