Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings of $128.9 million on net sales of $198.6 million for the second quarter ended June 30, 2011. This compares to net earnings of $66.7 million on net sales of $166.9 million for the 2010 second quarter. Net earnings allocable to common units was $73.1 million ($3.95 per common unit) and $41.1 million ($2.22 per common unit) for the 2011 and 2010 second quarters, respectively.

Results for the second quarter of 2011 included an unrealized non-cash mark-to-market loss on natural gas derivatives of $3.8 million. No gain or loss was reported in the second quarter of 2010.

For the first six months of 2011, TNCLP reported net earnings of $249.8 million on net sales of $394.6 million. This compares to net earnings of $100.6 million on net sales of $285.7 million for the first six months of 2010. Net earnings allocable to common units was $139.7 million ($7.55 per common unit) and $74.0 million ($4.00 per common unit) for the first six months of 2011 and 2010, respectively.

Analysis of Results

Net sales for the 2011 second quarter totaled $198.6 million, compared to net sales of $166.9 million for the 2010 second quarter. This increase was due to higher ammonia and urea ammonium nitrate solutions (UAN) selling prices, offset partially by lower volumes. The increase in prices resulted from an improved global supply/demand balance for nitrogen products and higher crop plantings in North America. The decrease in UAN volume reflected primarily weather-related logistical problems that affected shipments and caused a short-term increase in product inventory.

From the 2010 to the 2011 second quarter, TNCLP’s:
  • UAN and ammonia selling prices increased by 48 and 47 percent, respectively.
  • UAN and ammonia sales volumes decreased by 11 and 5 percent, respectively.
  • Realized natural gas unit costs decreased by 4 percent.

Cash Distribution

TNCLP reported today that its Board of Directors has declared a cash distribution for the quarter ended June 30, 2011, of $3.75 per common limited partnership unit payable August 29, 2011, to holders of record as of August 15, 2011.

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