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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 23, 1998
TERRA NITROGEN COMPANY, L.P.
(Exact name of registrant as specified in its charter)
Maryland 1-8520 52-1145429
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
Terra Centre
600 Fourth Street
P.O. Box 6000
Sioux City, Iowa 51102-6000
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (712)277-1340
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ITEM 5. Other Events.
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On April 23, 1998, Terra Nitrogen Company, L.P. issued the press release
contained in Exhibit 1 hereto, which is incorporated by reference herein.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TERRA NITROGEN CORPORATION
By: /s/ George H. Valentine
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Vice President and General Counsel
Date: May 5, 1998
2
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EXHIBIT 1
[Terra Logo]
Terra Industries Inc.
600 Fourth Street
P.O. Box 6000
Sioux City, IA 51102-6000
Telephone: (712)277-1340
Telefax: (712)233-3648
For Immediate Release Contact: Paula C. Norton
(712)277-5438
TERRA NITROGEN COMPANY, L.P. REPORTS FIRST QUARTER RESULTS
AND DECLARES NO DISTRIBUTION
Total Distribution for 1998 Projected to be between $2.37 and $2.67
Sioux City, Iowa (April 23, 1998) - Terra Nitrogen Company, L.P. (TNCLP) (NYSE
symbol: TNH) today reported net income of $5.8 million on revenues on $48.9
million for the quarter ended March 31, 1998, compared with net income of $29.8
million on revenues of $74.2 million for the 1997 quarter. Earnings per limited
partnership unit were $0.31 for the first quarter of 1998 compared with $1.44
for the comparable 1997 quarter. The amount of net income allocable to the
limited partners' interest is based on the partnership's net income and the
proportionate share of cash distributed to the limited partners and the general
partner.
Earnings for the first quarter of 1998 were down significantly from the prior
year quarter due primarily to lower nitrogen prices for all partnership
products. Surplus worldwide nitrogen production continued to put pressure on
prices during the 1998 quarter. Ammonia, nitrogen solutions and urea prices
were down 31%, 30% and 37%, respectively, from the first quarter of 1997.
Ammonia sales volumes declined 26% compared with the prior year quarter
primarily due to wet weather in part of our marketing area. Urea sales volumes
increased 20% from the 1997 quarter spurred by lower urea prices, reduced
imports in 1998, and lower dealer inventories at the beginning of 1998. Natural
gas costs were essentially unchanged from the year-ago level.
TNCLP also announced that there would be no cash distribution for the quarter
ended March 31, 1998 due to the low level of net income combined with
investments in working capital during the quarter. Management projects cash
distributions for the remainder of 1998, payable in August and November, will
total between $1.20 and $1.50 per unit. Cash distributions paid in August and
November 1997 totaled $2.67 per unit. The anticipated decline in cash
distributions is primarily due to expectations of continued
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lower selling prices in 1998 than those realized in 1997. Management currently
expects only slight increases in product selling prices and little to no change
in natural gas costs during the next two quarters. Sales volumes are expected to
approximate 1997 levels for ammonia and urea with nitrogen solution sales
volumes projected to increase 16%, or about 180,000 tons. Actual selling prices,
sales volumes and natural gas costs that differ from management's estimates, as
well as unanticipated partnership cash requirements or sources, will result in
cash distributions that are different from projected amounts.
Cash distributions are dependent on TNCLP earnings, which are traditionally
highest in the quarter ending June 30, due to the seasonal demand for
fertilizer. Earnings can also be affected by market prices for nitrogen
products, the cost of natural gas, industry production levels, business cycles
and weather.
TNCLP is one of the largest U.S. manufacturers of nitrogen fertilizer products.
Note: Terra Nitrogen's news releases are available by fax at no charge by
calling 800-758-5804, code 106067.
This news release contains statements that are forward-looking. Such statements
involve risks and uncertainties and should be considered along with the factors
affecting our business as discussed on pages 5, 6 and 7 in our 1997 annual
report to unitholders. Actual results may differ materially from those in the
forward-looking statements.
FINANCIAL TABLES AVAILABLE UPON REQUEST.
