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Terra Nitrogen Company, L.P. Reports Fourth Quarter
DEERFIELD, IL (February 17, 2016)—Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings of $79.2 million on net sales of $151.3 million for the quarter ended December 31, 2015. This compares to net earnings of $95.0 million on net sales of $168.0 million for the 2014 fourth quarter. Net earnings allocable to common units was $46.2 million ($2.49 per common unit) and $56.5 million ($3.05 per common unit) for the 2015 and 2014 fourth quarters, respectively. Results for the fourth quarter of 2015 included an unrealized net mark-to-market loss on natural gas derivatives of $12.6 million compared to a loss of $5.5 million in the fourth quarter of 2014.
For the full year 2015, TNCLP reported net earnings of $306.9 million on net sales of $581.7 million. This compares to net earnings of $370.0 million on net sales of $648.3 million for 2014. Net earnings allocable to common units was $186.2 million ($10.06 per common unit) and $223.3 million ($12.07 per common unit) in 2015 and 2014, respectively. Results for the full year 2015 included a $23.1 million unrealized net mark-to-market loss on natural gas derivatives compared to a loss of $12.6 million for 2014. The derivative portfolio at December 31, 2015 includes natural gas derivatives that hedge a portion of 2016, 2017 and 2018 natural gas purchases.
Analysis of Results
Net sales for the fourth quarter of 2015 totaled $151.3 million, compared to $168.0 million for the fourth quarter of 2014, with lower realized selling prices in ammonia and UAN and lower sales volumes in UAN being partially offset by increased ammonia sales volumes. Ammonia and UAN selling prices were lower in the fourth quarter due to softer global ammonia demand from industrial users including phosphate production, and increased global supply availability for both products. UAN sales volume decreased 10 percent and ammonia sales volume increased 31 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. The increase in ammonia sales volumes was driven by greater supply availability resulting from unplanned UAN downtime compared to the prior year period.
Comparing the fourth quarter of 2015 to 2014, TNCLP’s:
Ammonia average selling prices decreased by 8 percent and UAN average selling prices decreased by 13 percent;
Ammonia sales volume increased by 31 percent and UAN sales volume decreased by 10 percent; and
Realized natural gas cost per MMBtu decreased by 35 percent.
Cash distributions depend on TNCLP’s earnings as well as cash requirements for working capital needs and capital expenditures. For the full year 2015, capital expenditures were $87.8 million as compared to $67.1 million in 2014, with the increase primarily due to plant turnaround activities. For the full year 2016, TNCLP is expected to have capital expenditures in the range of $45 million to $55 million.
TNCLP reported on February 8, 2016, the declaration of a cash distribution for the quarter ended December 31, 2015, of $2.88 per common limited partnership unit payable February 29, 2016 to holders of record as of February 18, 2016.
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.
The following information was filed by Terra Nitrogen Co L P De (TNH) on Wednesday, February 17, 2016 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.