Terra Nitrogen Company, L.P. Reports Fourth Quarter 2013 Results

  Terra Nitrogen Company, L.P. Reports Fourth Quarter 2013 Results

Business Wire

DEERFIELD, Ill. -- February 18, 2014

Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings
of $113.6 million on sales of $168.3 million for the quarter ended December
31, 2013. This compares to net earnings of $150.0 million on sales of $206.5
million for the 2012 fourth quarter. Net income allocable to Common Units was
$69.0million ($3.73 per Common Unit) and $85.3million ($4.61 per Common
Unit) for the 2013 and 2012 fourth quarters, respectively.

For the full year 2013, TNCLP reported net earnings of $502.4 million on sales
of $736.2million. This compares to net earnings of $560.8 million on sales of
$780.1million in 2012. Net income allocable to Common Units was $291.8
million ($15.77 per Common Unit) and $315.6 million ($17.06 per Common Unit)
in 2013 and 2012, respectively.

Results for the fourth quarter of 2013 included an unrealized mark-to-market
gain on natural gas derivatives of $9.3 million compared to a gain of $1.0
million in the fourth quarter of 2012. For the full year 2013, TNCLP had a
mark-to-market gain on natural gas derivatives of $9.1 million compared to a
gain of $10.6 million in 2012.

Analysis of Results

Sales for the 2013 fourth quarter totaled $168.3 million, compared to sales of
$206.5 million for the 2012 fourth quarter. This decrease was due to lower
ammonia and urea ammonium nitrate solution (UAN) average selling prices and
lower ammonia sales volume, which was partially offset by higher UAN sales
volume. Ammonia average selling price decreased compared to the prior year due
to high industry-wide inventory and UAN average selling price decreased due to
weaker global nitrogen market conditions compared to the prior year period.
Ammonia sales volume decreased due to a shorter fall ammonia application
season compared to 2012, while UAN sales volume increased due to customers
rebuilding their inventory levels.

Comparing the fourth quarter 2013 to 2012, TNCLP’s:

  *Ammonia average selling prices decreased by 34 percent and UAN average
    selling prices decreased by 15 percent;
  *Ammonia sales volume decreased by 4 percent and UAN sales volumes
    increased by 7 percent; and
  *Realized natural gas cost per MMBtu decreased by 1 percent.

Sales for the full year totaled $736.2 million, compared to sales of $780.1
million in 2012. This decrease was due to lower sales volume which was
partially offset by higher ammonia selling prices. The sales volume decline
was due primarily to planned plant turnaround activities completed during the
third quarter. UAN average selling price was unchanged from last year, while
the ammonia average selling price increased due to higher selling prices in
the first half of 2013 as compared to the first half of 2012.

Comparing the full year 2013 to 2012, TNCLP’s:

  *Ammonia average selling price increased by 1 percent and UAN average
    selling price was unchanged;
  *Ammonia and UAN sales volumes decreased by 14 and 3 percent, respectively;
    and
  *Realized natural gas cost per MMBtu increased by 8 percent.

Cash Distribution

Cash distributions depend on TNCLP's earnings as well as cash requirements for
working capital needs and capital expenditures. In 2013, capital expenditures
were $99.6 million as compared to $47.8 million in 2012. In 2013, the capital
program included a rail yard expansion, new ammonia and UAN storage tanks, and
control and electrical system upgrades. Some of these projects are extending
beyond 2013. In 2014, TNCLP is expected to have capital expenditures in the
range of $75 million to $125 million for projects, including a turnaround of
approximately 50% of the plant that is anticipated to occur in the second half
of the year.

TNCLP reported on February 10, 2014 the declaration of a cash distribution for
the quarter ended December 31, 2013, of $2.10 per common limited partnership
unit payable February 28, 2014, to holders of record as of February 21, 2014.

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;

• 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      Twelve months ended
                                   December 31,            December 31,
                                   2013        2012        2013        2012
                                   (in millions, except per unit amounts)
Net sales:
Product sales to an Affiliate      $ 168.0     $ 204.6     $  734.8    $ 776.7
of the General Partner
Other income from an Affiliate       0.1         0.1          0.6        0.6
of the General Partner
Other income                        0.2       1.8         0.8       2.8
Total                                168.3       206.5        736.2      780.1
                                                                       
Cost of goods sold:
Materials, supplies and              45.2        46.9         191.7      180.4
services
Services provided by the            5.7       5.8         24.7      21.9
General Partner and Affiliates
Gross margin                         117.4       153.8        519.8      577.8
Selling, general and
administrative services
provided by the General              3.9         3.7          15.3       15.0
Partner and Affiliates
Other general and                   (0.1  )    0.1         2.1       2.0
administrative expenses
                                                                       
Earnings from operations            113.6     150.0       502.4     560.8
                                                                       
Net earnings                       $ 113.6    $ 150.0     $  502.4    $ 560.8
                                                                       
Allocation of net earnings:
General Partner                    $ 43.5      $ 63.2      $  205.7    $ 239.7
Class B Common Units                 1.1         1.5          4.9        5.5
Common Units                        69.0      85.3        291.8     315.6
Net earnings                       $ 113.6    $ 150.0     $  502.4    $ 560.8
                                                                       
Net earnings per common unit       $ 3.73     $ 4.61      $  15.77    $ 17.06
                                                                         

TERRA NITROGEN COMPANY, L.P.
CONSOLIDATED BALANCE SHEETS
                                           
                                              December 31,     December 31,
                                               2013               2012
                                               (in millions, except for units)
ASSETS
Current assets:
Cash and cash equivalents                      $     86.9         $    149.4
Demand deposits with General Partner                 -                 5.4
Affiliates
Due from affiliates of the General Partner           29.0              -
Accounts receivable                                  1.0               0.6
Inventories                                          5.9               5.8
Prepaid expenses and other current assets           7.8              1.6
Total current assets                                 130.6             162.8
                                                                  
Property, plant and equipment, net                   214.1             128.1
Other assets                                        5.1              7.7
Total assets                                   $     349.8        $    298.6
                                                                  
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued liabilities       $     27.9         $    24.3
Due to affiliates of the General Partner             3.7               -
Other current liabilities                           8.0              1.0
Total current liabilities                           39.6             25.3
                                                                  
Noncurrent liabilities                               1.2               1.5
                                                                  
Partners' capital:
Limited partners' interests, 18,501,576
Common Units
authorized, issued and outstanding                   264.5             238.3
Limited partners' interests, 184,072 Class
B Common Units
authorized, issued and outstanding                   1.5               1.2
General partner's interest                          43.0             32.3
Total partners' capital                             309.0            271.8
Total liabilities and partners' capital        $     349.8        $    298.6
                                                                       

TERRA NITROGEN COMPANY, L.P.
SUMMARIZED OPERATING INFORMATION

                                  Three months ended   Twelve months ended
                                    December 31,           December 31,
                                    2013      2012       2013      2012
Sales volumes by product (tons
in thousands)
Ammonia                                94         98         319         371
UAN ^(1)                               509        475        1,944       1,999
                                                                       
Average selling prices (dollars
per ton)
Ammonia                             $  445      $ 676      $ 556       $ 550
UAN                                    246        289        286         286
                                                                       
Natural gas costs/MMBtu ^(2)        $  3.53     $ 3.55     $ 3.58      $ 3.31

^(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.

Contact:

Terra Nitrogen Company, L.P.
Dan Swenson
Senior Director, Investor Relations & Corporate Communications
847/405-2515
dswenson@cfindustries.com
 
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