Terra Nitrogen Company, L.P. Reports Fourth Quarter
DEERFIELD, IL (February 14, 2018)—Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings of $49.4 million on net sales of $97.5 million for the quarter ended December 31, 2017. This compares to net earnings of $44.1 million on net sales of $93.4 million for the 2016 fourth quarter. Net earnings allocable to common units was $26.6 million ($1.44 per common unit) and $34.3 million ($1.85 per common unit) for the 2017 and 2016 fourth quarters, respectively. The fourth quarter of 2017 included a gain of $14.3 million on the sale of TNCLP's 50% joint venture interest in Oklahoma CO2 Partnership (OKCO2), which added $0.42 to fourth quarter 2017 earnings per common unit. Results for the fourth quarter of 2017 also included an unrealized net mark-to-market loss on natural gas derivatives of $0.9 million compared to a gain of $13.6 million in the fourth quarter of 2016. The derivative portfolio at December 31, 2017 includes natural gas derivatives that hedge a portion of natural gas purchases through December 2018.
For the full year 2017, TNCLP reported net earnings of $153.9 million on net sales of $397.2 million. This compares to net earnings of $209.3 million on net sales of $418.3 million for the full year 2016. Net earnings allocable to common units was $109.8 million ($5.93 per common unit) and $139.9 million ($7.56 per common unit) for the full year 2017 and 2016, respectively. Results for the full year 2017 included a gain of $14.3 million on the sale of OKCO2, which added $0.55 to the full year 2017 earnings per common unit. Results for the full year 2017 included an unrealized net mark-to-market loss on natural gas derivatives of $10.6 million compared to an unrealized net mark-to-market gain of $35.3 million for the full year 2016.
On February 7, 2018, Terra Nitrogen Company, L.P. announced that, in accordance with Section 17.1 of TNCLP’s First Amended and Restated Agreement of Limited Partnership, as amended (the “Partnership Agreement”), Terra Nitrogen GP Inc., a Delaware corporation and the sole general partner of TNCLP (“TNGP”), has elected to exercise the right, assigned to TNGP by TNCLP, to purchase all of the issued and outstanding common units representing limited partner interests in TNCLP not already owned by TNGP or its affiliates (the “Units”). TNGP will purchase the Units on April 2, 2018 for a cash purchase price of $84.033 per Unit. The purchase price was determined in accordance with Section 17.1 of the Partnership Agreement.
Analysis of Results
Net sales for the fourth quarter of 2017 totaled $97.5 million, compared to $93.4 million for the fourth quarter of 2016, due to higher ammonia sales volumes and higher UAN selling prices that were partially offset by lower ammonia selling prices and lower UAN sales volume.
Comparing the fourth quarter of 2017 to the fourth quarter of 2016, TNCLP’s:
Ammonia sales volume increased by 16 percent and UAN sales volume decreased by 2 percent;
Ammonia average selling prices decreased by 10 percent and UAN average selling prices increased by 7 percent; and
Realized natural gas cost per MMBtu decreased by 8 percent.
On October 2, 2017, TNCLP sold its 50% interest in OKCO2, a joint venture that owns a carbon dioxide liquefaction and purification facility to the joint venture partner. Prior to the sale, TNCLP had accounted for this interest as an equity method investment. TNCLP received proceeds of $16.3 million for the sale and recorded a gain of $14.3 million after the completion of certain customary closing requirements and working capital adjustments in the fourth quarter of 2017.
The following information was filed by Terra Nitrogen Co L P De (TNH) on Thursday, February 15, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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Ticker: TNH CIK: 879575 Form Type:10-K Annual Report Accession Number: 0000879575-18-000006 Submitted to the SEC: Thu Feb 22 2018 12:41:50 PM EST Accepted by the SEC: Thu Feb 22 2018 Period: Sunday, December 31, 2017 Industry: Agricultural Chemicals