Business Services Industry
Terra Nitrogen Company, L.P. Reports First Quarter Results; Declares Cash Distribution
Business Wire, April 28, 2005
SIOUX CITY, Iowa -- Terra Nitrogen Company, L.P. (TNCLP) (NYSE:TNH) today reported net income of $17.2 million, or $.91 per limited partnership unit, on revenues of $105.9 million for the first quarter ended March 31, 2005. This compares with a net income of $12.0 million, or $.64 per unit, on revenues of $108.3 million for the 2004 first quarter. The profitability improvement was due to higher sales volumes and selling prices, partially offset by higher natural gas costs.
TNCLP also announced a cash distribution for the quarter ended March 31, 2005, of $.55 per limited partnership unit payable May 25, 2005, to holders of record as of May 9, 2005.
TNCLP's natural gas unit costs for the 2005 first quarter, net of about $3.9 million of cost increases from forward purchase contracts, were 21 percent higher than those incurred in the 2004 first quarter. Ammonia and nitrogen solutions selling prices for the 2005 first quarter were 10 and 19 percent higher, respectively, than 2004 first quarter selling prices. The higher prices were due mainly to an improved global nitrogen products supply/demand balance.
TNCLP's forward purchase contracts at March 31, 2005, fixed prices for about 29 percent of its next 12 months' natural gas requirements at about $1.0 million below the published forward market prices at that date.
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 on Form 10-K.
Note: Terra Nitrogen Company, L.P. news announcements are also available on Terra Industries' web site, www.terraindustries.com.
Terra Nitrogen Company, L.P.
Condensed Consolidated Statements of Income
(in thousands except per-unit amounts)
(unaudited)
Three Months Ended
March 31,
-------------------
2005 2004
--------- ---------
Product revenues $105,742 $108,213
Other income 161 71
--------- ---------
Total revenues 105,903 108,284
--------- ---------
Cost of goods sold 82,554 91,136
Depreciation and amortization 4,092 3,172
--------- ---------
Total cost of sales 86,646 94,308
--------- ---------
Total gross profit 19,257 13,976
Operating expenses 2,278 2,173
Interest expenses--net (227) (199)
--------- ---------
Net income $17,206 $12,002
========= =========
Earnings per limited partnership unit $0.91 $0.64
========= =========
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
2005 2004
----------------------- -----------------------
Sales Average Sales Average
Quarter Volumes Unit Price Volumes Unit Price
(000 tons) (per ton)(a) (000 tons) (per ton)(a)
---------- ------------ ---------- ------------
Ammonia 87 $300 81 $272
Nitrogen Solutions 535 132 503 111
Urea 122 182
(a) After deducting outbound freight costs.
Terra Nitrogen Company, L.P.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31,
-------------------
2005 2004
--------- ---------
ASSETS
Cash and short-term investments $89,651 $48,480
Accounts receivable 25,715 21,720
Inventories 20,126 27,946
Other current assets 12,391 5,826
--------- ---------
Total current assets 147,883 103,972
Property, plant and equipment, net 79,918 82,706
Other assets 13,550 8,691
--------- ---------
Total assets $241,351 $195,369
========= =========
LIABILITIES
Short-term note and current portion of
long-term debt $59 $58
Accounts payable and accrued liabilities 7,481 10,562
Customer prepayments 70,317 38,241
--------- ---------
Total current liabilities 77,857 48,861
Long-term debt 8,200 8,200
Other liabilities 22 1,659
--------- ---------
Total liabilities 86,079 58,720
PARTNERS' EQUITY 155,272 136,649
--------- ---------
Total liabilities and partners'
equity $241,351 $195,369
========= =========
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