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Terra Nitrogen Company, L.P. Reports First Quarter 2012 Results And Announces Cash Distribution

Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings of $124.2 million on sales of $196.9 million for the first quarter ended March 31, 2012. This compares to net earnings of $120.9 million on sales of $196.0 million for the 2011 first quarter. Net income allocable to Common Units was $69.9 million ($3.78 per Common Unit) and $66.6 million ($3.60 per Common Unit) for the 2012 and 2011 first quarters, respectively.

Results for the first quarter of 2012 included an unrealized mark-to-market loss on natural gas derivatives of $11.3 million compared to a gain of $1.2 million in the first quarter of 2011.

Analysis of Results

Net sales for the 2012 first quarter totaled $196.9 million, compared to sales of $196.0 million for the 2011 first quarter. This slight increase was due to higher ammonia and UAN average selling prices, which were partially offset by lower sales volumes. The increase in selling prices resulted from a tight supply/demand balance for nitrogen products and higher expected crop plantings in North America. The decrease in volumes was due primarily to the impact of the implementation of a product offtake agreement with CF Industries, which resulted in a one-time acceleration of sales in the first quarter of 2011, and modestly lower production during the first quarter of 2012.

Comparing the 2011 to the 2012 first quarter, TNCLP’s:

  • Ammonia and UAN average selling prices increased by 25 and 13 percent, respectively.
  • Ammonia and UAN sales volumes decreased by 12 and 13 percent, respectively.
  • Realized natural gas unit costs decreased by 22 percent.

Cash Distribution

TNCLP reported today the declaration of a cash distribution for the quarter ended March 31, 2012, of $4.00 per common limited partnership unit payable May 30, 2012, to holders of record as of May 15, 2012.

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