Interest expense was $5.7 million for the six months ended June 30, 2013, compared to $0.1 million for the prior-year period. The increase was attributable to debt incurred for the purchase of the Pasadena Facility and expansion projects at the East Dubuque and Pasadena Facilities.

Rentech Nitrogen realized a non-cash gain of $4.6 million for the six months ended June 30, 2013 as a result of a decrease in the potential earn-out consideration related to the acquisition of Agrifos. The decrease in fair value was primarily due to lower results and expectations in 2013 caused by a delayed and abbreviated spring application season and higher levels of urea exports from China suppressing prices.

Net income was $43.7 million or $1.12 per basic unit, for the current period. Excluding loss on debt extinguishment of $6.0 million and the gain on fair value adjustment to earn-out consideration of $4.6 million, net income allocated to common unit holders for the current period was $44.9 million or $1.16 per basic unit. This compares to net income of $60.6 million or $1.58 per basic unit for the same period last year.


The Partnership believes the outlook for nitrogen remains fundamentally healthy. Nitrogen fertilizer must be applied annually and given the forecasted pricing ranges of corn and nitrogen, the Partnership believes that farmers will continue to be incentivized to plant corn and apply nitrogen to maximize yields. Despite high anticipated ending corn inventories, forecasters continue to expect that 90-plus million acres of corn will be planted across the nation in the coming years, which should support good nitrogen demand.

Even with positive expectations for nitrogen fertilizer demand, the market has been experiencing price weakness. Significant offshore urea offered at aggressive prices has been driving down nitrogen prices across the board. Higher than anticipated producer inventory levels of nitrogen fertilizer due to lower demand during the excessively wet spring is placing additional pressure on nitrogen prices.

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