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Terra Nitrogen Company L.P. Depositary R Reports Operating Results (10-Q)

August 07, 2012 | About:
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10qk

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Terra Nitrogen Company L.P. Depositary R (TNH) filed Quarterly Report for the period ended 2012-06-30.

Terra Nitrogen Company, L.p. has a market cap of $4.23 billion; its shares were traded at around $234.53 with a P/E ratio of 13.7 and P/S ratio of 5.3. The dividend yield of Terra Nitrogen Company, L.p. stocks is 7%. Terra Nitrogen Company, L.p. had an annual average earning growth of 56.7% over the past 10 years. GuruFocus rated Terra Nitrogen Company, L.p. the business predictability rank of 3-star.

Highlight of Business Operations:

Net earnings for the three months ended June 30, 2012 were $154.8 million on net sales of $195.6 million, compared with net earnings for the three months ended June 30, 2011 of $128.9 million on net sales of $198.6 million. Net earnings per common unit for the three months ended June 30, 2012 were $4.67 compared with $3.95 for the three months ended June 30, 2011.

Net earnings for the six months ended June 30, 2012 were $279.0 million on net sales of $392.5 million, compared with net earnings for the six months ended June 30, 2011 of $249.8 million on net sales of $394.6 million. Net earnings per common unit for the six months ended June 30, 2012 were $8.45 compared with $7.55 for the six months ended June 30, 2011.

Our net sales for the second quarter of 2012 were $195.6 million, a decrease of $3.0 million from the second quarter of 2011 net sales of $198.6 million. The decrease was due to lower ammonia and UAN average sales prices of 4% and 6%, respectively, and lower ammonia sales volume of 7%, offset by higher UAN sales volume of 8%. Selling prices for ammonia decreased from an average of $499 per ton in the three months ended June 30, 2011 to $478 per ton in the three months ended June 30, 2012, while selling prices for UAN decreased from an average of $310 per ton in the three months ended June 30, 2011 to $292 per ton in the three months ended June 30, 2012. The decrease in average ammonia selling prices was primarily due to a change in the mix of customers for our products. During the second quarter of 2012, a greater proportion of our products were sold by CF Industries to industrial customers since certain seasonal agricultural customers had taken delivery of ammonia in the first quarter due to favorable weather for early spring planting. Agricultural pricing for ammonia has been higher than industrial pricing due to the seasonal nature of the purchases and the strong agricultural market due to the large number of planted acres in 2012. The decrease in average UAN selling prices was due to an increased supply in the marketplace compared to the same period in 2011.

Our net sales for the six months ended June 30, 2012 were $392.5 million, a decrease of $2.1 million from the six months ended June 30, 2011 net sales of $394.6 million. The decrease was due to lower ammonia and UAN sales volumes of 10% and 4%, respectively, partially offset by higher ammonia and UAN average selling prices of 9% and 4%, respectively. Selling prices for ammonia increased from an average of $455 per ton in the first half of 2011 to $498 per ton in the first half of 2012, while selling prices for UAN increased from an average of $281 per ton in the first half of 2011 to $292 per ton in the first half of 2012. The increase in fertilizer selling prices in 2012 was due primarily to a favorable agricultural marketplace, which featured strong grain pricing and high planted acres in 2012. These factors led to strong demand for nitrogen products in North America and globally.

Net cash provided by operating activities was $281.0 million for the first six months of 2012 compared to $244.3 million in 2011. The $36.7 million increase in cash provided by operating activities in 2012 was primarily due to a $29.2 million increase in net earnings and a decrease in the amount of cash invested in working capital. Net earnings included noncash depreciation and amortization expense of $9.2 million and $11.6 million during the six months ended June 30, 2012 and 2011, respectively, and a non-cash unrealized (gain) loss on derivatives of $(2.5) million and $2.6 million, respectively.

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