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Rentech Nitrogen Announces Results For Third Quarter 2012

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. The Partnership calculates cash available for distribution as EBITDA plus non-cash compensation expense, return of cash reserves for working capital and less maintenance capital expenditures, net cash interest expense and other financing costs paid and cash reserves for working capital. The Partnership presents EBITDA because it is a material component in its 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 its financial statements, such as investors and commercial banks, to assess:

  • the financial performance of the Partnership’s assets without regard to financing methods, capital structure or historical cost basis; and
  • Rentech Nitrogen’s 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 Rentech Nitrogen’s costs and operations. In addition, EBITDA and cash available for distribution presented by other companies may not be comparable to Rentech Nitrogen’s presentation, since each company may define these terms differently.

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

      Three Months Ended,       Nine Months Ended,
September 30, September 30,
2012       2011 2012       2011
 
Net income $ 28,848 $ 3,312 $ 89,448 $ 20,602
Add:
Interest income (14 ) (12 ) (43 ) (39 )
Interest expense 39 4,522 181 10,841
Loss on debt extinguishment - - - 9,223
Loss on interest rate swaps 327 - 907 -
Income tax expense - 2,553 - 14,643
Depreciation and amortization 3,679 2,514 9,456 7,419
Other   -     1     (232 )   -  
EBITDA $ 32,879   $ 12,890   $ 99,717   $ 62,689  
 

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

          July 1, 2012 -
September 30, 2012
EBITDA $ 32,879
Plus: Non-cash compensation expense 1,124
Plus: Return of cash reserves for working capital 733
Less: Maintenance capital expenditures (1,726 )
Less: Net interest expense and other financing costs   (30 )
Cash available for distribution $ 32,980  
Cash available for distribution, per unit $ 0.85  
Common units outstanding 38,800
 

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 $

116,100

Add:
Net interest expense

1,000

Depreciation and amortization 12,700
Other  

700

 
EBITDA, in excess of $ 130,500
Plus: Non-cash compensation expense $ 2,000
Less: Maintenance capital expenditures (9,000 )
Less: Net cash interest expense and other financing costs (1,000 )
Plus: Distribution of cash reserves for working capital 1   5,400  
Cash available for distribution, in excess of $ 127,900  
Cash available for distribution, per unit, in excess of $ 3.30  
Common units outstanding 2 38,800
 

1 Approximately $3.8 million is expected to be distributed in the fourth quarter.

2 Includes 538,793 units issued in connection with the acquisition of the Pasadena facility.

 

The table below reconciles the Pasadena facility’s 2013 forecasted EBITDA to operating income for the twelve months ending December 31, 2013, excluding one-time costs associated with transition and integration (stated in millions).

Operating Income           $ 20
Plus: Depreciation   5
2013 Estimated Plant EBITDA $ 25

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 two fertilizer production facilities owned by its operating subsidiaries. Rentech Nitrogen East Dubuque is located in the northwestern corner of Illinois, and uses natural gas as a feedstock to produce primarily anhydrous ammonia and urea ammonium nitrate solution for sale to customers in the Mid Corn Belt. Rentech Nitrogen Pasadena is located in Pasadena, Texas along the Houston Ship Channel. Rentech Nitrogen Pasadena is the largest producer of synthetic granulated ammonium sulfate fertilizer in North America, with sales in the United States and South America. The Pasadena facility’s other products, which are sold domestically, include ammonium thiosulfate fertilizer and sulfuric acid. The facility uses ammonia and sulfur as its primary feedstocks.

Forward Looking Statements

This press release contains forward-looking statements about matters such as: our forecasted EBITDA and cash available for distribution for the twelve months ending December 31, 2012; the outlook for our nitrogen fertilizer business; and the projected financial impact of the Agrifos acquisition, including accretion, projected EBITDA and growth opportunities for the Pasadena facility. 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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