DEERFIELD, Ill.--(BUSINESS WIRE)--Feb. 19, 2013--
Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net
earnings of $150.0 million on sales of $206.5 million for the quarter
ended December 31, 2012. This compares to net earnings of $129.8 million
on sales of $201.0 million for the 2011 fourth quarter. Net income
allocable to Common Units was $85.3 million ($4.61 per Common Unit) and
$71.5 million ($3.87 per Common Unit) for the 2012 and 2011 fourth
quarters, respectively.
Results for the fourth quarter of 2012 included an unrealized
mark-to-market gain on natural gas derivatives of $1.0 million compared
to a loss of $7.5 million in the fourth quarter of 2011.
For the full year 2012, TNCLP reported net earnings of $560.8 million on
sales of $780.1 million. This compares to net earnings of $508.0 million
on sales of $798.9 million in 2011. Net income allocable to Common Units
was $315.6 million ($17.06 per Common Unit) and $283.6 million ($15.33
per Common Unit) in 2012 and 2011, respectively. The company had very
strong operating results during 2012 and set a new ammonia production
record.
Analysis of Results
Sales for the 2012 fourth quarter totaled $206.5 million, compared to
sales of $201.0 million for the 2011 fourth quarter. This increase was
due to higher ammonia and urea ammonium nitrate solution (UAN) product
volumes and higher average ammonia selling prices.
Comparing the 2012 to the 2011 fourth quarter, TNCLP’s:
-
Ammonia average selling prices increased by 28 percent and UAN average
selling prices decreased by 16 percent;
-
Ammonia and UAN sales volumes increased by 17 and 5 percent,
respectively; and
-
Realized natural gas cost per MMBtu decreased by 16 percent.
Sales for the full year totaled $780.1 million, compared to sales of
$798.9 million in 2011. This decrease was due to lower ammonia and UAN
volumes and a lower UAN average selling price. The volume decline was
due primarily to the timing impact of the implementation of a new
Services and Offtake Agreement with CF Industries on January 1, 2011,
which resulted in a one-time increase in sales volume recognized upon
adoption of the agreement.
Comparing the full year 2012 to 2011, TNCLP’s:
-
Ammonia average selling price increased by 16 percent and UAN average
selling price decreased by 4 percent;
-
Ammonia and UAN sales volumes decreased by 4 and 2 percent,
respectively; and
-
Realized natural gas cost per MMBtu decreased by 23 percent.
Cash Distribution
TNCLP reported on February 8, 2013 the declaration of a cash
distribution for the quarter ended December 31, 2012, of $3.63 per
common limited partnership unit payable February 28, 2013, to holders of
record as of February 19, 2013.
Cash distributions depend on TNCLP's earnings, which can be affected by
nitrogen fertilizer selling prices, natural gas costs, seasonal demand
factors, production levels and weather, as well as cash requirements for
working capital needs and capital expenditures. In 2012, capital
expenditures were $46.7 million as compared to $8.7 million in 2011. In
2013, TNCLP is expected to have capital expenditures in the range of $75
million to $100 million. The capital program includes a rail yard
expansion, new ammonia and UAN storage tanks, and control and electrical
system upgrades. Some of these projects may extend beyond 2013. Cash
distributions per limited partnership unit also vary based on increasing
amounts allocable to the General Partner when cumulative distributions
exceed targeted levels. With this distribution, TNCLP cumulative
distributions continue to exceed targeted levels.
This release serves as a qualified notice to nominees and brokers as
provided for under Treasury Regulation Section 1.1446-4(b). Please note
that 100 percent of the Partnership's distributions to foreign investors
are attributable to income that is effectively connected with a United
States trade or business. Accordingly, the Partnership's distributions
to foreign investors are subject to federal income tax withholding at
the highest effective tax rate.
About TNCLP
Terra Nitrogen Company, L.P. is a leading manufacturer of nitrogen
fertilizer products.
TNCLP is the sole limited partner of Terra Nitrogen, Limited Partnership
(TNLP), owner of the Verdigris, Oklahoma manufacturing facility and
related assets. Terra Nitrogen GP Inc., an indirect, wholly-owned
subsidiary of CF Industries Holdings, Inc., is the General Partner of
TNCLP and exercises full control over all of TNCLP’s business affairs.
Forward-Looking Statements
All statements in this communication, other than those relating to
historical facts, are forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to a
number of assumptions, risks and uncertainties, many of which are beyond
TNCLP’s control, which could cause actual results to differ materially
from such statements. Important factors that could cause actual results
to differ materially from expectations include, among others:
-
risks related to TNCLP’s reliance on one production facility;
-
the cyclical nature of TNCLP’s business;
-
the global commodity nature of TNCLP’s fertilizer products, the impact
of global supply and demand on TNCLP’s selling prices, and the intense
global competition from other fertilizer producers;
-
conditions in the U.S. agricultural industry;
-
the volatility of natural gas prices in North America;
-
reliance on third party transportation providers;
-
weather conditions;
-
potential liabilities and expenditures related to environmental and
health and safety laws and regulations;
-
future regulatory restrictions and requirements related to greenhouse
gas emissions, climate change or other environmental requirements;
-
CF Industries’ ability to implement a new enterprise resource planning
system and the risks associated with cyber security;
-
TNCLP’s inability to predict seasonal demand for its products
accurately;
-
risks involving derivatives and the effectiveness of TNCLP’s risk
measurement and hedging activities;
-
limited access to capital;
-
acts of terrorism and regulations to combat terrorism;
-
risks related to TNCLP’s dependence on and relationships with CF
Industries;
-
deterioration of global market and economic conditions;
-
control of TNCLP’s General Partner by CF Industries;
-
the conflicts of interest that may be faced by the executive officers
of TNCLP’s General Partner, who operate both TNCLP and CF Industries;
and
-
changes in TNCLP’s treatment as a partnership for U.S. or state income
tax purposes.
More detailed information about factors that may affect TNCLP’s
performance may be found in its filings with the Securities and Exchange
Commission, including its most recent periodic reports filed on Form
10-K and Form 10-Q, which are available through CF Industries’ Web site.
Forward-looking statements are given only as of the date of this release
and TNCLP disclaims any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Terra Nitrogen Company, L.P. news announcements are also available on
CF Industries’ Web site, www.cfindustries.com.
|
|
|
|
|
|
|
|
|
|
TERRA NITROGEN COMPANY, L.P.
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
(in millions, except per unit amounts)
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
Product sales to an Affiliate of the General Partner
|
|
$
|
204.6
|
|
$
|
200.8
|
|
|
$
|
776.7
|
|
$
|
797.9
|
|
|
Other income from an Affiliate of the General Partner
|
|
|
0.1
|
|
|
0.1
|
|
|
|
0.6
|
|
|
0.6
|
|
|
Other income
|
|
|
1.8
|
|
|
0.1
|
|
|
|
2.8
|
|
|
0.4
|
|
|
Total
|
|
|
206.5
|
|
|
201.0
|
|
|
|
780.1
|
|
|
798.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
Materials, supplies and services
|
|
|
46.9
|
|
|
61.2
|
|
|
|
180.4
|
|
|
253.8
|
|
|
Services provided by the General Partner and Affiliates
|
|
|
5.8
|
|
|
6.1
|
|
|
|
21.9
|
|
|
20.6
|
|
|
Gross margin
|
|
|
153.8
|
|
|
133.7
|
|
|
|
577.8
|
|
|
524.5
|
|
|
Selling, general and administrative services provided by the
General Partner and Affiliates
|
|
|
3.7
|
|
|
3.8
|
|
|
|
15.0
|
|
|
14.5
|
|
|
Other general and administrative expenses
|
|
|
0.1
|
|
|
0.2
|
|
|
|
2.0
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations
|
|
|
150.0
|
|
|
129.7
|
|
|
|
560.8
|
|
|
507.9
|
|
|
Interest expense (income) - net
|
|
|
-
|
|
|
(0.1
|
)
|
|
|
-
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
150.0
|
|
$
|
129.8
|
|
|
$
|
560.8
|
|
$
|
508.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net earnings:
|
|
|
|
|
|
|
|
|
|
General Partner
|
|
$
|
63.2
|
|
$
|
56.9
|
|
|
$
|
239.7
|
|
$
|
219.4
|
|
|
Class B Common Units
|
|
|
1.5
|
|
|
1.4
|
|
|
|
5.5
|
|
|
5.0
|
|
|
Common Units
|
|
|
85.3
|
|
|
71.5
|
|
|
|
315.6
|
|
|
283.6
|
|
|
Net earnings
|
|
$
|
150.0
|
|
$
|
129.8
|
|
|
$
|
560.8
|
|
$
|
508.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common unit
|
|
$
|
4.61
|
|
$
|
3.87
|
|
|
$
|
17.06
|
|
$
|
15.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TERRA NITROGEN COMPANY, L.P.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
(in millions, except for units)
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
149.4
|
|
$
|
179.8
|
|
Demand deposits with General Partner Affiliates
|
|
|
5.4
|
|
|
8.6
|
|
Accounts receivable, net
|
|
|
0.6
|
|
|
0.6
|
|
Inventories, net
|
|
|
16.9
|
|
|
17.3
|
|
Prepaid expenses and other current assets
|
|
|
1.6
|
|
|
-
|
|
Total current assets
|
|
|
173.9
|
|
|
206.3
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
117.0
|
|
|
87.8
|
|
Other assets
|
|
|
7.7
|
|
|
6.6
|
|
Total assets
|
|
$
|
298.6
|
|
$
|
300.7
|
|
|
|
|
|
|
|
LIABILITIES AND PARTNERS' CAPITAL
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
24.3
|
|
$
|
18.4
|
|
Other current liabilities
|
|
|
1.0
|
|
|
12.0
|
|
Total current liabilities
|
|
|
25.3
|
|
|
30.4
|
|
|
|
|
|
|
|
Noncurrent liabilities
|
|
|
1.5
|
|
|
1.0
|
|
|
|
|
|
|
|
Partners' capital:
|
|
|
|
|
|
Limited partners' interests, 18,501,576 Common Units authorized,
issued and outstanding
|
|
|
238.3
|
|
|
234.8
|
|
Limited partners' interests, 184,072 Class B Common Units
authorized, issued and outstanding
|
|
|
1.2
|
|
|
1.1
|
|
General partner's interest
|
|
|
32.3
|
|
|
33.4
|
|
Total partners' capital
|
|
|
271.8
|
|
|
269.3
|
|
Total liabilities and partners' capital
|
|
$
|
298.6
|
|
$
|
300.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TERRA NITROGEN COMPANY, L.P.
|
|
SUMMARIZED OPERATING INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
Sales
|
|
Average
|
|
Sales
|
|
Average
|
|
Three months ended
|
|
|
Volumes
|
|
Price
|
|
Volumes
|
|
Price
|
|
December 31,
|
|
|
(000 tons)
|
|
($/ton)
|
|
(000 tons)
|
|
($/ton)
|
|
Ammonia
|
|
|
|
98
|
|
$
|
676
|
|
|
84
|
|
$
|
530
|
|
UAN1
|
|
|
|
475
|
|
$
|
289
|
|
|
454
|
|
$
|
343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
Sales
|
|
Average
|
|
Sales
|
|
Average
|
|
Twelve months ended
|
|
|
Volumes
|
|
Unit Price
|
|
Volumes
|
|
Unit Price
|
|
December 31,
|
|
|
(000 tons)
|
|
($/ton)
|
|
(000 tons)
|
|
($/ton)
|
|
Ammonia
|
|
|
|
371
|
|
$
|
550
|
|
|
385
|
|
$
|
473
|
|
UAN1
|
|
|
|
1,999
|
|
$
|
286
|
|
|
2,047
|
|
$
|
299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Natural Gas Costs/MMBtu2
|
|
|
$
|
3.55
|
|
$
|
4.22
|
|
$
|
3.31
|
|
$
|
4.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
The nitrogen content of UAN is 32% by weight.
|
|
|
|
|
2
|
|
Includes the cost of natural gas purchases and realized gains and
losses on natural gas derivatives.
|
Source: Terra Nitrogen Company, L.P.
Terra Nitrogen Company, L.P.
Dan Swenson
Senior Director,
Investor Relations & Corporate Communications
847/405-2515
dswenson@cfindustries.com
View printer-friendly version