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Rentech Nitrogen Announces Results For Fourth Quarter And Full Year 2012; Issues 2013 Guidance

Stocks in this article: RNF

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 used in this table as EBITDA plus acquisition costs, non-cash compensation expense, and less maintenance capital expenditures to the extent not funded by capital proceeds, net interest expense and debt service and distribution of cash reserves for working capital needs. 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 twelve months ended December 31, 2011 (stated in thousands).

     

Three Months Ended,

     

Twelve Months Ended,

December 31, 2011
 
Net income $ 10,455 $ 31,057
Add:
Interest income (14 ) (53 )
Interest expense 1,947 12,788
Loss on debt extinguishment 10,263 19,486
Loss on interest rate swaps - -
Income tax expense - 14,643
Depreciation and amortization 3,287 10,706
Other   (3 )   (3 )
EBITDA $ 25,935   $ 88,624  
 

The table below reconciles EBITDA to net income and cash available for distribution for the three months ended December 31, 2012 (stated in thousands).

  For the Three Months Ended December 31, 2012
East Dubuque Facility   Pasadena Facility   Partnership Level   Consolidated
Net Income $ 26,094 $ (2,648) $ (5,892)

$ 17,554

Add:
Net interest expense 12 - 1,275

1,287

Income tax expense - - 303

303

Loss on interest rate swaps - - 44

44

Loss on debt extinguishment 2,114 - - 2,114

Depreciation and amortization

2,041 963 - 3,004
EBITDA $ 30,261 $ (1,685) $ (4,270) $ 24,306
Plus: Acquisition costs - - 4,131 4,131
Adjusted EBITDA $ 30,261 $ (1,685) $ (139) $ 28,437

Plus: Non-cash compensationexpense

-

-

556

556

Less: Maintenance capital

expenditures

(2,529)

(587)

-

(3,116)

Less: Net cash interest expenseand debt service

(12)

-

(1,291)

(1,303)

Plus: Distribution of cash reservesfor working capital

-

2,414

2,117

4,531

Cash available for distribution $ 27,720 $ 142 $ 1,243 $ 29,105
Cash available for distribution, per unit

$ 0.75

Common units outstanding 38,839
 

The table below reconciles EBITDA to net income and cash available for distribution for the twelve months ended December 31, 2012 (stated in thousands).

        For the Twelve Months Ended December 31, 2012
East Dubuque Facility       Pasadena Facility       Partnership Level       Consolidated
Net Income $ 123,721 $ (2,648 ) $ (14,070 ) $ 107,003
Add:
Net interest expense 149 - 1,275 1,424
Income tax expense - - 303 303
Loss on interest rate swaps - - 951 951
Loss on debt extinguishment 2,114 - - 2,114
Depreciation and amortization 11,497 963 - 12,460
Other   -     -     (232 )   (232 )
EBITDA $ 137,481 $ (1,685 ) $ (11,773 ) $ 124,023
Plus: Acquisition costs   -     -     4,131     4,131  
Adjusted EBITDA $ 137,481 $ (1,685 ) $ (7,642 ) $ 128,154
Plus: Non-cash compensationexpense

-

-

2,827

2,827

Less: Maintenance capital

expenditures

(7,913

)

(587

)

-

(8,500

)

Less: Net cash interest expenseand debt service

(149

)

-

(1,297

)

(1,446

)

Plus: Distribution of cash reservesfor working capital  

-

   

2,414

   

3,696

   

6,110

 
Cash available for distribution $ 129,419   $ 142   $ (2,416 ) $ 127,145  
Cash available for distribution,per unit

$

3.30

 
Common units outstanding 38,529
 

The table below reconciles forecasted EBITDA and cash available for distribution to forecasted net income for the twelve months ending December 31, 2013. (stated in thousands, except per unit data).

        Forecasted For the Twelve Months Ending December 31, 2013
East Dubuque Facility         Pasadena Facility         Partnership Level         Consolidated
Net Income $ 103,500 $ 19,300 $ (18,100 ) $ 104,700
Add: -
Net Interest Expense 8,100 8,100
Income Tax Expense 300 300
Loss on interest rate swaps -
Loss on debt extinguishment -
Depreciation and amortization   10,800     5,000     -     15,800  
EBITDA $ 114,300 $ 24,300 $ (9,700 ) $ 128,900
Plus: Non-cash compensation expense - - 2,500 2,500
Less: Maintenance capital expenditures 1 (9,100 ) (7,000 ) - (16,100 )
Less: Net cash interest expense and debt

service

-

-

(15,700

)

(15,700

)

Plus: Distribution of cash reserves forworking capital  

-

   

-

   

1,400

   

1,400

 
Cash available for distribution $ 105,200   $ 17,300   $ (21,500 ) $ 101,000  
Cash available for distribution, per unit $ 2.71   $ 0.44   $ (0.55 ) $ 2.60  
Common units outstanding 38,839 38,839 38,839 38,839

1Excludes $10.2 million of maintenance capital expenditures at the Pasadena Facility funded by debt.

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’s East Dubuque Facility 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’s Pasadena Facility is located in Pasadena, Texas along the Houston Ship Channel. Rentech Nitrogen 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, 2013; the outlook for our nitrogen fertilizer businesses; the projected impacts of the expansion projects to cash available for distribution and EBITDA; the timing and costs of such expansion projects and growth opportunities for the facilities. 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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