Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings of $128.4 million on net sales of $203.3 million for the three months ended September 30, 2011. This compares to net earnings of $35.2 million on net sales of $136.0 million for the three months ended September 30, 2010. Net earnings allocable to common units were $72.4 million ($3.91 per common unit) and $25.9 million ($1.40 per common unit) for the 2011 and 2010 third quarters, respectively.

Results for the third quarter of 2011 included an unrealized non-cash mark-to-market loss on natural gas derivatives of $1.8 million compared to a loss of $7.2 million in the third quarter of 2010.

For the first nine months of 2011, TNCLP reported net earnings of $378.2 million on net sales of $597.9 million. This compares to net earnings of $135.8 million on net sales of $421.7 million for the first nine months of 2010. Net earnings allocable to common units were $212.1 million ($11.46 per common unit) and $99.9 million ($5.40 per common unit) for the first nine months of 2011 and 2010, respectively.

Analysis of Results

Net sales for the 2011 third quarter totaled $203.3 million, compared to net sales of $136.0 million for the 2010 third quarter. This increase was due to higher ammonia and urea ammonium nitrate solutions (UAN) selling prices and sales volumes. The increase in prices resulted from an improved supply/demand balance for nitrogen products in North America and globally. The increase in sales volume reflected higher production.

From the 2010 to the 2011 third quarter, TNCLP’s:
  • UAN and ammonia selling prices increased by 63 and 24 percent, respectively;
  • UAN and ammonia sales volumes increased by 8 and 11 percent, respectively; and
  • Realized natural gas unit costs increased by 5 percent.

Cash Distribution

TNCLP reported today that its Board of Directors has declared a cash distribution for the quarter ended September 30, 2011, of $3.96 per common limited partnership unit payable November 29, 2011, to holders of record as of November 14, 2011.

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