Consolidated selling, general and administrative (SG&A) expenses were $11.4 million for the three months ended June 30, 2012, compared to $8.2 million for the comparable period in the prior year. Current period SG&A expenses were comprised of $7.5 million for the alternative energy business and $3.9 million for the nitrogen fertilizer business, compared to $6.7 million and $1.5 million, respectively, for the prior-year period. The net increase in SG&A expenses for the alternative energy segment was primarily attributable to an increase in non-cash compensation expense of $1.7 million; net cash SG&A expenses declined by $0.9 million. The $2.4 million increase in SG&A expenses for the nitrogen products manufacturing segment was primarily due to costs associated with Rentech Nitrogen having become a publicly traded limited partnership and included an increase in non-cash unit-based compensation expense of $0.7 million.
Research and development (R&D) expenses incurred in the alternative energy segment during the three months ended June 30, 2012 were $4.1 million, compared to $8.0 million for the comparable period in the prior year. The decrease in R&D expenses resulted primarily from a decrease in costs related to the Rentech-ClearFuels gasifier of approximately $5.9 million, which was partially offset by a decrease in reimbursements of costs related to the gasifier from the U.S. Department of Energy (DOE) of approximately $2.7 million.
For Rentech Nitrogen, favorable weather conditions in March allowed farmers in its core market area of the Mid Corn Belt to apply spring ammonia earlier than is typical. This shifted meaningful volumes of ammonia deliveries into the first quarter that had been anticipated to occur in the second quarter of 2012. This also reduced the demand for UAN since more nitrogen was applied as ammonia during this longer ammonia application period. In addition, the hot, dry weather resulted in poor soil and crop conditions which led to reduced UAN application.
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