-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IXlAUQLIfcDbtBTBTK8nIqIgZ+Gf/I/OPrqg2hV1ui6NfsL+Fd9ynjW3Fu+6xNqR s8RThkuFWsVlkDpz92+23Q== 0000914760-03-000147.txt : 20030731 0000914760-03-000147.hdr.sgml : 20030731 20030731130118 ACCESSION NUMBER: 0000914760-03-000147 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030731 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA NITROGEN CO L P /DE CENTRAL INDEX KEY: 0000879575 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 731389684 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-43007 FILM NUMBER: 03813875 BUSINESS ADDRESS: STREET 1: TERRA CENTRE 600 FOURTH STREET STREET 2: PO BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 BUSINESS PHONE: 7122771340 MAIL ADDRESS: STREET 1: TERRA CENTER 600 FOURTH STREET STREET 2: PO BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 8-K 1 tn36797_8k73103.txt JULY 31, 2003 FORM 8-K TERRA NITROGEN COMPANY - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): July 31, 2003 TERRA NITROGEN COMPANY, L.P. (Exact name of registrant as specified in its charter) Delaware 1-10877 73-1389684 (State or other jurisdiction of (Commission File (IRS Employer incorporation) Number) Identification No.) Terra Centre 600 Fourth Street, P.O. Box 6000 Sioux City, Iowa 51102-6000 (712) 277-1340 (Address of Principal Executive Offices, including Zip Code) (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits Exhibit Number Description -------------- ----------- 99.1 Press Release dated July 31, 2003 announcing second quarter 2003 earnings by Terra Nitrogen Company, L.P. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On July 31, 2003, Terra Nitrogen Company, L.P. issued a press release setting forth Terra Nitrogen Company, L.P.'s second quarter 2003 earnings. A copy of the press release is filed herewith as Exhibit 99.1 and is hereby incorporated by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA NITROGEN COMPANY, L.P. By: Terra Nitrogen Corporation Its: General Partner /s/ Mark A. Kalafut ------------------------------- Mark A. Kalafut Vice President, General Counsel and Corporate Secretary Date: July 31, 2003 EX-99.1 3 tn36797_x9973103.txt JULY 31, 2003 PRESS RELEASE [Logo] Terra Industries Inc. 600 Fourth Street TERRA P.O. Box 6000 Exhibit 99.1 Sioux City, IA 51102-6000 www.terraindustries.com ================================================================================ NEWS ================================================================================ For immediate release Contact: Mark Rosenbury (712) 279-8756 mrosenbury@terraindustries.com TERRA NITROGEN COMPANY, L.P. REPORTS SECOND QUARTER RESULTS Sioux City, Iowa (July 31, 2003)--Terra Nitrogen Company, L.P. (TNCLP) (NYSE symbol: TNH) today reported a net loss of $44.8 million, or $2.37 per limited partnership unit, on revenues of $118.1 million for the second quarter ended June 30, 2003. This compares with net income of $3.0 million, or $.16 per unit, on revenues of $104.9 million for the 2002 second quarter. For the first six months of 2003 the net loss was $51.8 million, or $2.75 per unit, on revenues of $189.1 million. This compares to net income of $5.3 million, or $.28 per unit, on revenues of $162.3 million in the 2002 first half. The 2003 second quarter and first half results include a $40.7 million charge for the impairment of TNCLP's Blytheville, Ark. long-term assets. TNCLP reported on June 26, 2003, that the Blytheville facility's production would be suspended because of continuing high natural gas costs and the seasonal decline in nitrogen fertilizer demand and prices. TNCLP's general partner subsequently concluded that future market conditions may not justify ongoing investment in the maintenance and replacement capital required to operate the Blytheville facility for its estimated useful life. Consequently, the impairment charge represents the carrying value of the Blytheville facility's long-term assets that may not be realized from on-going operations. TNCLP's general partner continues to evaluate how the Blytheville facility can be operated over the next few years. TNCLP's natural gas unit costs for the 2003 second quarter, net of about $.8 million of cost increases due to forward purchasing contracts, were 73 percent higher than those incurred in the 2002 second quarter. This increase was due to lower industry-wide natural gas inventories. TNCLP's second quarter 2003 nitrogen solutions and ammonia sales volumes as compared to the 2002 second quarter were 23 and 36 percent lower, respectively. Urea sales volumes increased by 11 percent over those of the comparable 2002 period. The lower overall sales volumes were due primarily to the effects weather had on the 2002-2003 fertilizer year as compared to the prior fertilizer year. Nitrogen solutions, ammonia and urea selling prices for the 2003 second quarter were 44, 59 and 50 percent higher, respectively, than 2002 second quarter prices. The higher prices reflect lower ammonia and other nitrogen product supplies in response to higher gas costs. TNCLP's forward purchase contracts at July 1, 2003, fixed prices for about 19 percent of its next 12 months' natural gas requirements at about $2.5 million above the published forward market prices at that date. The reasons for the changes between TNCLP's 2003 and 2002 first half sales volumes and selling prices are essentially the same as those for the respective second quarters. Natural gas unit costs for the 2003 first half, net of about $3.9 million of cost reductions realized from forward purchasing contracts, were 88 percent higher than those incurred in the 2002 first half. TNCLP announced that there would be no cash distribution for the quarter ended June 30, 2003. Cash distributions depend on TNCLP's earnings, which are driven primarily by product selling prices, sales volumes, natural gas costs and production levels, as well as working capital requirements and capital expenditures. TNCLP's quarterly earnings are usually highest in the quarter ending June 30 due to the seasonal demand for fertilizer. Terra Nitrogen Company, L.P. is a leading manufacturer of nitrogen fertilizer products. Information contained in this release, other than historical information, may be considered forward-looking. Forward-looking information reflects management's current views of future events and financial performance that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially include, but are not limited to, the following: changes in financial markets, general economic conditions within the agricultural industry, competitive factors and price changes (principally nitrogen fertilizer selling prices and natural gas costs), changes in product mix, changes in the seasonality of demand patterns, changes in weather conditions, changes in governmental regulations and other risks described in the "Factors That Affect Operating Performance" section of TNCLP's current annual report. # # # Note: Terra Nitrogen Company, L.P. news announcements are also available on Terra Industries' web site, www.terraindustries.com. (Tables follow) TERRA NITROGEN COMPANY, L.P. CONSOLIDATED STATEMENTS OF INCOME (in thousands except per-unit amounts)
Three Months Ended Six Months Ended June 30 June 30 ------------------------------- ----------------------------- 2003 2002 2003 2002 -------------- ---------- ----------- ------------ Product revenues $ 117,977 $ 104,529 $ 188,832 $ 161,638 Other income 172 364 254 655 -------------- ---------- ----------- ------------ Total revenues 118,149 104,893 189,086 162,293 -------------- ---------- ----------- ------------ Cost of goods sold 116,571 95,919 189,231 145,717 Depreciation and amortization 3,319 3,279 6,620 6,547 -------------- ---------- ----------- ------------ Total cost of sales 119,890 99,198 195,851 152,264 -------------- ---------- ----------- ------------ Total gross profit (1,741) 5,695 (6,765) 10,029 Operating expenses 2,476 2,649 4,495 4,644 Impairment of long-lived assets 40,655 -- 40,655 -- Interest expenses--net (56) 21 (66) 124 -------------- ---------- ----------- ------------ Net income (loss) $ (44,816) $ 3,025 $ (51,849) $ 5,261 ============== ========== =========== ============ Earnings per limited partnership unit $ (2.37) $ 0.16 $ (2.75) $ 0.28 ============== ========== =========== ============ The amount of net income allocable to the Limited Partners' interest is based on the Partnership's net income and the proportionate share of cash distributed to the Limited Partners and the General Partner.
NITROGEN VOLUMES AND PRICES 2003 2002 -------------------------- -------------------------- Sales Average Sales Average QUARTER TO DATE Volumes Unit Price Volumes Unit Price (000 tons) ($/ton) (000 tons) ($/ton) ---------- ------- ---------- ------- Ammonia 82 253 129 159 UAN 638 102 825 71 Urea 135 171 122 114 2003 2002 -------------------------- -------------------------- Sales Average Sales Average YEAR TO DATE Volumes Unit Price Volumes Unit Price (000 tons) ($/ton) (000 tons) ($/ton) ---------- ------- ---------- ------- Ammonia 132 240 204 150 UAN 1,076 95 1,245 68 Urea 237 163 242 109 TERRA NITROGEN COMPANY, L.P. CONSOLIDATED BALANCE SHEETS (in thousands)
June 30 ----------- ----------- 2003 2002 ----------- ----------- ASSETS Cash and short-term investments $ 10 $ 11,125 Accounts receivable 30,519 28,781 Inventories 24,520 21,891 Other current assets 2,282 2,744 ----------- ----------- Total current assets 57,331 64,541 Property, plant and equipment, net 95,495 130,850 Other assets 5,144 7,593 ----------- ----------- Total assets $ 157,970 $ 202,983 =========== =========== LIABILITIES Short-term note and current of portion long-term debt $ 7,096 $ 53 Accounts payable and accrued liabilities 27,594 14,873 ----------- ----------- Total current liabilities 34,690 14,925 Long-term debt 8,304 8,362 Other liabilities 6,816 5,316 ----------- ----------- Total liabilities 49,810 28,603 PARTNERS' EQUITY 108,160 174,380 ----------- ----------- Total liabilities and partners' equity $ 157,970 $ 202,983 =========== ===========
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