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Rentech Nitrogen Announces Results For Second Quarter 2012; Raises 2012 Guidance

Disclosure Regarding Non-GAAP Financial Measures

EBITDA is defined as net income plus interest expense and other financing costs, loss on debt extinguishment, loss on interest rate swaps, income tax expense and depreciation and amortization, net of interest income. We calculate cash available for distribution as EBITDA plus non-cash compensation expense, and less maintenance capital expenditures, net cash interest expense and other financing costs paid and cash reserves for working capital. We present EBITDA because it is a material component in our calculation of cash available for distribution. EBITDA and cash available for distribution are used as supplemental financial measures by management and by external users of our financial statements, such as investors and commercial banks, to assess:
  • the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; and
  • our operating performance and return on invested capital compared to those of other publicly traded limited partnerships and other public companies, without regard to financing methods and capital structure.

EBITDA and cash available for distribution should not be considered alternatives to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and cash available for distribution may have material limitations as performance measures because they exclude items that are necessary elements of our costs and operations. In addition, EBITDA and cash available for distribution presented by other companies may not be comparable to our presentation, since each company may define these terms differently.

The table below reconciles EBITDA to net income for the three and six months ended June 30, 2012 and 2011 (stated in thousands).
         

Three Months Ended June 30,
         

Six Months Ended June 30,
  2012               2011     2012               2011  
 
Net Income $ 41,228 $ 13,757 $ 60,601 $ 17,290
Add:
Interest Income (14 ) (10 ) (30 ) (27 )
Interest Expense 42 3,280 142 6,319
Loss on Debt Extinguishment - 9,223 - 9,223
Loss on Interest Rate Swaps 580 - 580 -
Income Tax Expense - 9,620 - 12,090
Depreciation and Amortization 3,312 3,431 5,777 4,905
Other   (232 )   12     (232 )   (1 )
EBITDA $ 44,916   $ 39,313   $ 66,838   $ 49,799  
 

The table below reconciles cash available for distribution to EBITDA for the three months ended June 30, 2012 (stated in thousands, except per unit data).
             

April 1, 2012 - June 30, 2012
EBITDA $ 44,916
Plus: Non-cash compensation expense 701
Less: Maintenance capital expenditures (1,671 )
Less: Net interest expense and other financing costs (28 )
Less: Distribution of cash reserves for working capital   846  
Cash available for distribution $ 44,764  
Cash available for distribution, per unit $ 1.17  
Common units outstanding 38,260
 

The table below reconciles forecasted EBITDA and cash available for distribution to forecasted net income for the twelve months ending December 31, 2012 (stated in thousands, except per unit data).
             

For the Twelve Months Ending

December 31, 2012
Net income, in excess of $ 115,800
Add:
Net interest expense 1,600
Depreciation and amortization 12,700
Other   400  
EBITDA, in excess of $ 130,500
Plus: Non-cash compensation expense $ 1,700
Less: Maintenance capital expenditures (9,900 )
Less: Net cash interest expense and other financing costs (1,500 )

Plus: Distribution of cash reserves for working capital 1
  5,400  
Cash available for distribution, in excess of $ 126,200  
Cash available for distribution, per unit, in excess of $ 3.30  
Common units outstanding 38,260
 

1Approximately $4.5 million is expected to be distributed in the fourth quarter.
 

About Rentech Nitrogen, L.P.

Rentech Nitrogen ( www.rentechnitrogen.com) was formed by Rentech, Inc. to own, operate and expand its nitrogen fertilizer business. Rentech Nitrogen’s assets consist of a nitrogen fertilizer facility located in East Dubuque, Illinois, owned by Rentech Nitrogen, LLC, its operating subsidiary. The facility is located in the Mid Corn Belt in the northwestern corner of Illinois, adjacent to the Iowa and Wisconsin state lines, and produces primarily anhydrous ammonia and urea ammonium nitrate solution, using natural gas as its primary feedstock, for sale to customers in the Mid Corn Belt.

Forward Looking Statements

This press release contains forward-looking statements such as: our forecasted EBITDA and cash available for distribution for the twelve months ending December 31, 2012 and the outlook for our nitrogen fertilizer business. These statements are based on management’s current expectations and actual results may differ materially as a result of various risks and uncertainties. Other factors that could cause actual results to differ from those reflected in the forward-looking statements are set forth in Rentech Nitrogen’s prior press releases and periodic public filings with the Securities and Exchange Commission, which are available via Rentech Nitrogen’s website at www.rentechnitrogen.com. The forward-looking statements in this press release are made as of the date of this press release and Rentech Nitrogen does not undertake to revise or update these forward-looking statements, except to the extent that it is required to do so under applicable law.

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