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Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings of $149.3 million on sales of $215.4 million for the quarter ended June 30, 2013. This compares to net earnings of $154.8 million on sales of $195.6 million for the 2012 second quarter. Net income allocable to common units was $84.0 million ($4.54 per common unit) and $86.5 million ($4.67 per common unit) for the 2013 and 2012 second quarters, respectively.
Results for the second quarter of 2013 included an unrealized mark-to-market loss on natural gas derivatives of $2.9 million compared to a gain of $13.8 million in the second quarter of 2012.
For the first six months of 2013, TNCLP reported net earnings of $316.1 million on net sales of $439.5 million. This compares to net earnings of $279.0 million on net sales of $392.5 million for the first six months of 2012. Net earnings allocable to common units was $176.2 million ($9.52 per common unit) and $156.4 million ($8.45 per common unit) for the first six months of 2013 and 2012, respectively. Results for the first six months of 2013 included a $0.8 million unrealized mark-to-market gain on natural gas derivatives compared to a gain of $2.5 million for the first six months of 2012.
Analysis of Results
Net sales for the 2013 second quarter totaled $215.4 million, compared to sales of $195.6 million for the 2012 second quarter. This increase was due to higher average selling prices, which were offset partially by lower sales volume. The increase in overall prices was due to strong demand resulting from a large number of acres of corn planted in 2013, while ammonia prices also increased due to a higher proportion of agricultural sales and UAN prices increased due to favorable weather compared to the second quarter of 2012 when drought conditions in certain markets resulted in lower average selling prices. Sales volume for both products declined in the second quarter of 2013 due to lower production, while UAN volume declined due also to delayed application caused by unfavorable weather earlier in the quarter that pushed some shipments into July.