Rentech Nitrogen Announces Results for Fourth Quarter and Full Year 2012; Issues 2013 Guidance

  Rentech Nitrogen Announces Results for Fourth Quarter and Full Year 2012;
  Issues 2013 Guidance

Business Wire

LOS ANGELES -- March 19, 2013

Rentech Nitrogen Partners, L.P. (NYSE: RNF), which manufactures and sells
nitrogen fertilizer products including ammonia, urea ammonium nitrate solution
(UAN) and ammonium sulfate, today announced its results for the three and
twelve months ended December 31, 2012 and provided guidance for 2013.

Commenting on the results for the period, D. Hunt Ramsbottom, CEO of Rentech
Nitrogen GP, LLC, stated, “2012 was a successful year for Rentech Nitrogen. We
delivered strong results, and completed a major accretive acquisition and our
urea/DEF expansion at the East Dubuque Facility.”

Mr. Ramsbottom continued, “Although we expect 2013 cash distributions to total
approximately $2.60 per unit due to planned and unplanned downtime, we look
forward to a very strong 2014, with three expansions scheduled for full
production that are expected to add significantly to 2014 cash distributions
and EBITDA.”

Financial Highlights

The financial statements for the periods ended December 31, 2012 include
results of the Pasadena Facility from the date of the closing of the
acquisition of Agrifos LLC on November 1, 2012.

Three months ended December 31, 2012

Revenues for the three months ended December 31, 2012 were $92.4 million,
compared to $63.0 million for the comparable period in the prior year. The
increase was due to the contribution of $37.4 million of revenues from the
Pasadena Facility, which was partially offset by decreased sales prices and
volumes for most products at the East Dubuque Facility. Ammonia and UAN sales
volumes declined in the current period as a result of production lost during
plant outages at the East Dubuque Facility that occurred in the fourth quarter
of 2012. This delayed UAN shipments scheduled for the fourth quarter of 2012
into the first quarter of 2013.

During the three months ended December 31, 2012, Rentech Nitrogen generated
operating income of $21.3 million compared to $22.6 million during the
comparable period in the prior year. Operating income in the current period
was reduced by $4.1 million of acquisition costs for the Pasadena Facility.

Net income was $17.6 million or $0.44 per unit, for the current period, which
included a $2.1 million loss on debt extinguishment. This compares to net
income of $10.5 million for the same period last year, which included $10.3
million of loss on debt extinguishment. Rentech Nitrogen generated net income
subsequent to its initial public offering (November 9, 2011 through December
31, 2011) of $11.3 million or $0.30 per common unit.

EBITDA for the three months ended December 31, 2012 was $24.3 million,
compared to $25.9 million in the corresponding period in 2011. EBITDA for the
current period, excluding Partnership level expenses and acquisition costs
related to the Pasadena Facility, totaled $28.6 million. The East Dubuque
Facility and the Pasadena Facility contributed $30.3 million and ($1.7)
million in EBITDA, respectively, during the three months ended December 31,
2012. As part of purchase accounting adjustments related to the acquisition of
Agrifos, the value of inventory was increased to fair value as of the closing
date, which resulted in an approximately $3.4 million increase in the cost of
product sold by the Pasadena Facility during the two-month period ended
December 31, 2012. Further explanation of EBITDA, a non-GAAP financial measure
has been included below in this press release.

Gross margins for the three months ended December 31, 2012 were 31%, compared
to 41% for the same period last year due to the absorption of fixed costs on
lower volumes resulting from plant outages in the fourth quarter of 2012,
lower prices for most products at the East Dubuque Facility and the
contribution of gross profits from the Pasadena Facility, which were lower
gross margin sales than those from the East Dubuque Facility. Average natural
gas costs in cost of sales for the East Dubuque Facility were $3.44 per MMBtu
for the three months ended December 31, 2012, compared to $4.75 per MMBtu for
the prior-year period. Average ammonia and sulfur costs in cost of sales for
the Pasadena Facility were $658 per ton and $154 per ton, respectively for the
current period.

Selling, general and administrative (SG&A) expenses were $6.4 million for the
three months ended December 31, 2012, compared to $3.3 million for the
prior-year period. The increase was primarily due to business development
expenses of approximately $2.4 million, including $2.3 million related to the
acquisition of the Pasadena Facility. In addition, non-cash unit-based
compensation was approximately $0.4 million higher in the current period than
in the prior-year period. Current period expenses also include $0.4 million in
SG&A expenses at the Pasadena Facility. Partially offsetting the increase in
SG&A expenses was a $1.1 million reduction in audit and tax fees which were
higher in the prior-year period due to the additional audit and tax work
required for the initial public offering (IPO) and change in fiscal year.

Twelve months ended December 31, 2012

Revenues for the twelve months ended December 31, 2012 were $261.6 million,
compared to $199.9 million for the prior year. The increase was primarily due
to the contribution of $37.4 million of revenues from the Pasadena Facility,
increased sales prices for all products from the East Dubuque Facility and
higher sales volume for ammonia at the East Dubuque Facility. UAN sales volume
declined in the current year as a result of production lost during plant
outages at the East Dubuque Facility that occurred in the fourth quarter of
2012. This delayed UAN shipments scheduled for the fourth quarter of 2012 into
the first quarter of 2013.

During the twelve months ended December 31, 2012, Rentech Nitrogen generated
operating income of $111.6 million, compared to $77.9 million in the prior
year.

For the twelve months ended December 31, 2012, net income was $107.0 million
or $2.78 per unit, which included $2.1 million of loss on debt extinguishment.
This compares to net income of $31.1 million for last year, which included
$19.5 million of loss on debt extinguishment. Rentech Nitrogen generated net
income subsequent to its IPO (November 9, 2011 through December 31, 2011) of
$11.3 million or $0.30 per common unit.

EBITDA for twelve months ended December 31, 2012 was $124.0 million, compared
to $88.6 million in 2011. EBITDA for the current period, excluding Partnership
level expenses and acquisition costs related to the Pasadena Facility, totaled
$135.8 million. The East Dubuque Facility and the Pasadena Facility
contributed $137.5 million and ($1.7) million in EBITDA, respectively, during
the twelve months ended December 31, 2012. As part of purchase accounting
adjustments related to the acquisition of Agrifos, the value of inventory was
increased to fair value as of the closing date, which resulted in an
approximately $3.4 million increase in the cost of product sold by the
Pasadena Facility during the two-month period ended December 31, 2012. Further
explanation of EBITDA, a non-GAAP financial measure, and a reconciliation of
Rentech Nitrogen's EBITDA to net income have been included below in this press
release.

Gross margins for the twelve months ended December 31, 2012 were 50%, compared
to 43% last year. The increase in gross margins was primarily attributable to
an increase in product pricing and lower natural gas costs. Average natural
gas costs in cost of sales for the East Dubuque Facility were $3.59 per MMBtu
for the twelve months ended December 31, 2012, compared to $4.76 per MMBtu for
the prior year. Average ammonia and sulfur costs in cost of sales for the
Pasadena Facility were $658 per ton and $154 per ton, respectively for the
current period.

SG&A expenses were $18.4 million for the twelve months ended December 31,
2012, compared to $7.7 million for the prior year. The increase was primarily
due to business development expenses of approximately $4.5 million, including
approximately $4.1 million for the Agrifos acquisition. In addition, Rentech
Nitrogen was a publicly traded limited partnership for twelve full months in
2012 as compared to 52 days in 2011, which resulted in increases in non-cash
unit-based compensation of approximately $2.6 million, payroll costs of
approximately $1.3 million, approximately $1.0 million in professional and
other fees related to being a publicly-traded partnership, and $0.7 million of
fees on the unused credit facility. Current period expenses also include $0.4
million in SG&A expenses at the Pasadena Facility. The increase in SG&A
expenses was partially offset by a $0.7 million reduction in audit and tax
fees due to additional audit and tax work in 2011 required for the IPO and
change in fiscal year.

2013 Outlook

Rentech Nitrogen expects 2013 to benefit from strong nitrogen market dynamics.
The Partnership expects 2013 planted corn acres to exceed 96 million. With
drought conditions moderating, Rentech Nitrogen anticipates yields in the
range of 155 – 160 bushels per acre and a multi-year recovery of corn
inventories from last year’s drought. For these reasons, the Partnership
expects corn prices to remain strong, incentivizing farmers to plant corn and
apply nitrogen to maximize yields and profits. With farm income remaining very
strong and fertilizer costs as a percentage of corn revenues at historical
lows, farmers are well positioned to purchase nitrogen.

Rentech Nitrogen expects 2013 cash available for distribution to be
approximately $101 million, or $2.60 per unit. The 2013 guidance includes the
impact of two scheduled outages at its facilities during the year, as
described below. Excluding the effects of these outages and approximately $6.0
million in lost profits in 2013 due to the unscheduled December 2012 outage at
the East Dubuque Facility, 2013 consolidated cash available for distribution
would have been approximately $0.65 per unit higher. The calculation of
forecasted cash available for distribution has been included below in this
press release.

Rentech Nitrogen expects 2013 EBITDA to be approximately $129 million.
Excluding Partnership level expenses, 2013 EBITDA for the East Dubuque
Facility and Pasadena Facility are expected to be $114 million and $24
million, respectively. The Partnership’s 2013 EBITDA guidance for the Pasadena
Facility is consistent with the guidance previously provided at the time of
the acquisition in late 2012. The calculation of forecasted EBITDA, a non-GAAP
financial measure, and a reconciliation of EBITDA to net income have been
included below in this press release.

Assuming product and input prices equal to those expected in 2013, Rentech
Nitrogen noted that the annual incremental contribution from increased
production from its expansion projects scheduled to come online by the end of
2013 would be expected to add approximately $0.90 per unit of cash
distributions and approximately $41 million of EBITDA.

The Partnership provided guidance for the following additional key operating
metrics, progress against its guidance and projected benefits of its expansion
projects scheduled to be online by the end of 2013:

                                     
                                                                     2013 Pro
                                                                    Forma
                                                                     Increase
                                                                    as if
                                                                     Current
                                                                    Expansion
                                            Impacts      Projects
                                                    of              were
                                                      Downtime        On-line
                                     Locked-in       Included        at
                                      or              in 2013         Beginning
                       2013           Delivered       Guidance        of 2013^1
                       Guidance       (as of
                                      2/28/13)
East Dubuque
Facility
                                                                      
Deliveries
Ammonia                              
Tons                   119,000        46,000 or
                                      39%
Average Price                         $744
                                                                      
UAN                                   
Tons                   285,000        117,000
                                      or 41%
Average Price                         $329
                                      
Natural Gas in                       
Cost of Sales
(million               10.1           3.7 or
MMBtus)                               37%
Average Cost
Per million                           
MMBtus
(including
transportation                        $3.87
costs)
                                                                      
EBITDA (in             $114,300                       ($21,500)       $34,200
thousands)
                                                                      
Cash
Distribution           $2.71                          ($0.54)         $0.75
per Unit
                                                                      
Pasadena
Facility
                                                                      
Deliveries
(Tons)
Ammonium               544,000
Sulfate
Sulfuric Acid          200,000
Ammonium               60,000
Thiosulfate
                                                                      
Ammonia used
in Cost of             143,000
Sales (Tons)
                                                                      
Sulfur used in
Cost of Sales          210,000
(Tons)
                                                                      
EBITDA (in             $24,300                        ($4,300)        $6,400
thousands)
                                                                      
Cash
Distribution           $0.44                          ($0.11)         $0.15
per Unit
                                                                      
Partnership
Level
                                                                      
EBITDA (in             ($9,700)
thousands)
                                                                      
Cash
Distribution           ($0.55)
per Unit
                                                                      
                                                                      
Consolidated
                                                                      
Total EBITDA           $128,900                       ($25,800)       $40,600
(in thousands)
                                                                      
Total Cash
Distribution           $2.60                          ($0.65)         $0.90
per Unit

^1Pro forma increases to cash distribution per unit are illustrative and
derived using the same assumptions underlying the 2013 guidance other than
those for production and including those of commodity prices. The expansion
projects are anticipated to begin contributing to cash distributions in 2014.
The pro forma calculations of cash distributions are not meant to serve as
guidance for 2014.

Rentech Nitrogen has secured 81% of its spring 2013 forward sales book for
ammonia and UAN, at strong product prices of $769 per ton and $361 per ton,
respectively. The Partnership has secured 37% of the natural gas required to
produce the products forecasted to be delivered during 2013, at an average
price of $3.87, including transportation costs.

Scheduled Facility Outages

The East Dubuque Facility will undergo its scheduled bi-annual turnaround
during the fourth quarter of 2013. The turnaround is anticipated to take up to
four weeks, which is longer than the typical 18 to 25 days, due to the
installation of the final tie-ins for the ammonia capacity expansion. During
the turnaround, the facility’s ammonia and UAN units will be off-line so
production and sales volumes for these products during 2013 are expected to be
lower than in 2012. The impact of the turnaround on 2013 cash distributions is
anticipated to be approximately $0.40 per unit. Included in this impact are
approximately $4 million of costs for work related to the turnaround which are
anticipated to be included in cost of sales in the fourth quarter of 2013.

The Pasadena Facility is scheduled to be down for approximately 14 days in the
fourth quarter of 2013 due to work related to the ammonium sulfate
debottlenecking project, as described below. The impact of the scheduled
outage to 2013 cash distributions is anticipated to be approximately $0.11 per
unit.

Expansion Projects

East Dubuque Facility

Urea/DEF: At the end of 2012, Rentech Nitrogen completed the urea/DEF
expansion project to increase urea production capacity by approximately 15%,
or 21,900 tons annually. The additional urea tons are being converted into and
sold as diesel exhaust fluid (DEF) to Yara North America Inc. or as additional
urea liquor sales. The sales are expected to increase Rentech Nitrogen’s cash
available for distribution beginning this year. The total cost of the
expansion project is $6.5 million.

Ammonia: The ammonia expansion project at the East Dubuque Facility is
progressing on schedule and within budget. The project is designed to increase
production of ammonia for sale or upgrade to other products by approximately
23%, or 70,000 tons annually, and to increase on-site ammonia storage capacity
by 20,000 tons. The estimated $100 million expansion project, which is being
financed by a multiple-draw capital expenditure loan facility, is scheduled to
be completed by the end of 2013, after the scheduled bi-annual turnaround. The
Partnership expects the additional 70,000 tons of ammonia production to
contribute to per unit cash distributions beginning in 2014. Using the same
assumptions underlying the 2013 guidance, including those regarding commodity
prices, Rentech Nitrogen calculated that the increased production associated
with this expansion project could increase cash available for distribution by
$0.75 per unit.

Nitric Acid: In the third quarter of 2013, Rentech Nitrogen intends to
commence construction of an efficiency improvement project that is designed to
increase nitric acid production at the East Dubuque Facility by approximately
1,200 tons annually, without consuming additional feedstock. This project is
also expected to reduce the amount of ammonia required for nitric acid
production by about 350 tons annually. The additional nitric acid will be sold
as a standalone product or used to increase the production of UAN. The project
is expected to be completed during the first quarter of 2014 at a cost of
approximately $2 million, with approximately $1.6 million expected to be
expended in 2013.

Pasadena Facility

Ammonium Sulfate: Rentech Nitrogen is accelerating the previously announced
debottlenecking project at its Pasadena Facility. The project, which is
anticipated to increase ammonium sulfate production capacity by approximately
20%, or 115,000 tons annually, is now expected to be completed in the fourth
quarter of 2013, sooner than the previously anticipated completion of
mid-2014. As part of this project, Rentech Nitrogen expects to make process
improvements to the ammonium sulfate plant at the facility during a 14-day
planned outage in November 2013. During the outage, Rentech Nitrogen expects
that sulfuric acid and ammonium thiosulfate production will be uninterrupted,
while ammonium sulfate production will cease. The additional ammonium sulfate
production is expected to begin contributing to per unit cash distributions in
December 2013. The project is expected to cost approximately $6 million and
will be funded from an existing capital expenditures facility. Using the same
assumptions underlying the 2013 guidance, including those regarding commodity
prices, Rentech Nitrogen calculated that the increased production associated
with this expansion project could increase cash available for distribution by
$0.15 per unit.

Power Generation: Rentech Nitrogen has commenced plans and engineering for a
15 megawatt electrical power generation project at the Pasadena Facility. The
Partnership intends to install a steam turbine/generator set that would use
excess steam now produced from the sulfuric acid plant at the facility to
produce electrical power. It is expected that a portion of the power will be
used in the Pasadena Facility, reducing electricity expenses, and the
remaining power will be sold in the deregulated Texas power market, creating
an additional revenue stream. Rentech Nitrogen expects that this project could
cost approximately $30 million and would be completed in the fall of 2014. The
project is expected to be funded under the 2012 credit agreement which
provides for a $35 million incremental term loan facility allowing the
Partnership, at any time on or before October 31, 2014, to borrow additional
funds under the terms of the 2012 credit agreement, if lenders agree to lend
such amount.

Cash Distributions

Rentech Nitrogen declared its fourth quarter 2012 cash distribution of $0.75
per unit, paid on February 14, 2013 to unit holders of record as of February
7, 2013. The cumulative cash distributions paid from cash generated during the
twelve months ended December 31, 2012 was $3.30 per unit, which exceeded the
Partnership’s previous guidance of $3.27 per unit (as described in its press
release dated December 17, 2012). The calculation of cash available for
distribution has been included below in this press release.

Conference Call with Management

Rentech Nitrogen will hold a conference call today, March 19, 2013, at 9:00
a.m. PST, during which time senior management will review the Partnership’s
financial results for this period and provide an update on the business.
Callers may listen to the live presentation, which will be followed by a
question and answer segment, by dialing 800-697-5978 or 630-691-2750 and the
audience passcode 6179090#. An audio webcast of the call will be available at
www.rentechnitrogen.com within the Investor Relations portion of the site
under the Presentations section. A replay will be available by audio webcast
and teleconference from 11:00 a.m. PST on March 19 through 11:00 a.m. PST on
March 26. The replay teleconference will be available by dialing 888-843-7419
or 630-652-3042 and the audience passcode 6179090#.

Note: The financial statements and key operating metrics below and on
subsequent pages for the periods ended December 31, 2012 include results of
the Pasadena Facility from the date of the closing of the acquisition of
Agrifos LLC, which was November 1, 2012.

Rentech Nitrogen Partners, L.P.

Consolidated Statements of Income

(Stated in Thousands, Except per Unit Data)
                                                                    
                         For the Three Months                    For the Year
                         Ended December 31,                      Ended December 31,
                           2012             2011              2012               2011     
                                                                                     
                         (unaudited)                                                 (unaudited)^1
Total Revenues           $  92,407           $ 63,014            $ 261,635           $  199,909
                                                                                     
Cost of Sales              63,821           37,460            129,796            113,911  
                                                                                     
Gross Profit                28,586             25,554              131,839              85,998
                                                                                     
Selling, general
and                         6,394              3,336               18,376               7,690
administrative
expense
Depreciation                665                77                  1,390                374
(Gain) loss on
disposal of                225              (507    )          510                16       
property, plant
and equipment
Operating                  7,284            2,906             20,276             8,080    
Expenses
                                                                                     
Operating Income            21,302             22,648              111,563              77,918
Other Income
(Expense), Net
Interest expense            (1,289 )           (1,947  )           (1,469  )            (12,788  )
Loss on debt                (2,114 )           (10,263 )           (2,114  )            (19,486  )
extinguishment
Loss on interest            (44    )           -                   (951    )            -
rate swaps
Other income,              2                17                277                56       
net
Total Other                (3,445 )          (12,193 )          (4,257  )           (32,218  )
Expenses, Net
                                                                                     
Income Before               17,857             10,455              107,306              45,700
Income Taxes
                                                                                     
Income tax                  303                -                   303                  14,643
expense
                                                                                  
Net Income               $  17,554          $ 10,455           $ 107,003          $  31,057   
                                                                                     
Net income
subsequent to
initial public
offering
                                             $ 11,331                                $  11,331
(November 9,
2011 through
December 31,
2011)
                                                                                     
Net Income per
Common Unit -            $  0.44             $ 0.30              $ 2.78              $  0.30
Basic
Net Income per
Common Unit -            $  0.44             $ 0.30              $ 2.78              $  0.30
Diluted
                                                                                     
Weighted-Average
Units:
Basic                      38,634           38,250            38,350             38,250   
Diluted                    38,651           38,255            38,352             38,255   

^1Due to a change in fiscal year, three months of the period presented are
unaudited, but were included in a longer audited period. As a result of our
change in fiscal year-end from September 30 to December 31 in 2011, the
Partnership’s independent accountants audited the period from October 1, 2011
through December 31, 2011. The unaudited amounts presented for the calendar
year ended December 31, 2011 were derived by subtracting the unaudited results
for the 3 months ended December 31, 2010 from the audited results for the
fiscal year ended September 30, 2011, and adding the audited results of the
three months ended December 31, 2011.

Rentech Nitrogen Partners, L.P.

Statements of Income by Business Segment

(Stated in Thousands, Except per Unit Data)
                                                               
                       For the Three Months                 For the Year
                       Ended December 31,                   Ended December 31,
                         2012             2011            2012                2011
                                                                                
                       (unaudited)                                              (unaudited)^1
Revenues
East Dubuque           $  54,977           $ 63,014         $ 224,205           $   199,909
Pasadena                 37,430           -               37,430              -
Total Revenues         $  92,407           $ 63,014         $ 261,635           $   199,909
                                                                                
Gross Profit
(Loss)
East Dubuque           $  30,290           $ 25,554         $ 133,543           $   85,998
Pasadena                 (1,704 )          -               (1,704  )            -
Total Gross            $  28,586           $ 25,554         $ 131,839           $   85,998
Profit
                                                                                
Operating
Income (Loss)
East Dubuque           $  28,221           $ 22,648         $ 125,984           $   77,918
Pasadena                 (2,648 )          -               (2,648  )            -
Total
Operating              $  25,573           $ 22,648         $ 123,336           $   77,918
Income
                                                                                
Net Income
(Loss)
East Dubuque           $  26,094           $ 10,455         $ 123,721           $   31,057
Pasadena                 (2,648 )          -               (2,648  )            -
Total Net              $  23,446           $ 10,455         $ 121,073           $   31,057
Income
                                                                                
Reconciliation
of Segment Net
Income
to
Consolidated
Net Income
Segment Net            $  23,446           $ 10,455         $ 121,073           $   31,057
Income
Partnership
and                       (4,573 )           -                (11,844 )             -
Unallocated
Expenses
Unallocated
Interest
Expense and
Loss on                  (1,319 )          -               (2,226  )            -
Interest

Rate Swaps
Consolidated           $  17,554          $ 10,455         $ 107,003          $   31,057
Net Income

^1Due to a change in fiscal year, three months of the period presented are
unaudited, but were included in a longer audited period. As a result of our
change in fiscal year-end from September 30 to December 31 in 2011, the
Partnership’s independent accountants audited the period from October 1, 2011
through December 31, 2011. The unaudited amounts presented for the calendar
year ended December 31, 2011 were derived by subtracting the unaudited results
for the 3 months ended December 31, 2010 from the audited results for the
fiscal year ended September 30, 2011, and adding the audited results of the
three months ended December 31, 2011.

Rentech Nitrogen Partners, L.P.

Balance Sheet Data

(Stated in Thousands)
                                                   
                                 As of                       As of
                                 December 31, 2012           December 31, 2011
Cash and Cash                    $     55,799                $     44,836
Equivalents
Working Capital                        23,218                      31,645
Construction in Progress               61,147                      7,062
Total Assets                           376,645                     130,443
Debt                                   193,290                     -
Total Long-Term                        192,961                     277
Liabilities
Total Partners' Capital/               109,404                     99,191
Stockholders’ Equity
                                                             

Key
Operating                                 
Statistics:
                                                  
                    Three Months Ended            Twelve Months Ended
                    December 31,                  December 31,
                     2012      2011         2012            2011 
                                                                       
Production
Tons (in
thousands)
East
Dubuque
Facility:
Ammonia               62             63             293                  261
Ammonia
Available
for Sale
                      31             30             142                  119
(included
in line
above)
UAN                   63             68             301                  294
Other
Products              57             61             284                  264
(excludes
CO[2])
                                                                       
Pasadena
Facility:
Ammonium              88             -              88                   -
Sulfate
Sulfuric              69             -              69                   -
Acid
Ammonium              9              -              9                    -
Thiosulfate
                                                                       
Delivered
Tons (in
thousands)
East
Dubuque
Facility:
Ammonia               48             55             149                  135
UAN                   54             65             291                  301
Other
Products              10             10             49                   44
(excludes
CO[2])
                                                                       
Pasadena
Facility:
Ammonium              115            -              115                  -
Sulfate
Sulfuric              27             -              27                   -
Acid
Ammonium                                            -
Thiosulfate           -              -              </t*Broken
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