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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Terra Nitrogen Company, L.P. Common Units (delisted) | NYSE:TNH | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 83.96 | 0.00 | 01:00:00 |
|
FORM 10-Q
|
x
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended September 30, 2017
|
||
OR
|
||
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
73-1389684
(I.R.S. Employer
Identification No.)
|
4 Parkway North, Suite 400
Deerfield, Illinois
(Address of principal executive offices)
|
|
60015
(Zip Code)
|
Large accelerated filer
o
|
|
Accelerated filer
x
|
|
Non-accelerated filer
o
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
(unaudited)
|
|
|
||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
(in millions, except for units)
|
||||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
60.8
|
|
|
$
|
39.5
|
|
Due from affiliates of the General Partner
|
16.3
|
|
|
4.0
|
|
||
Accounts receivable
|
0.4
|
|
|
0.6
|
|
||
Inventories
|
6.0
|
|
|
8.6
|
|
||
Prepaid expenses and other current assets
|
0.3
|
|
|
7.9
|
|
||
Total current assets
|
83.8
|
|
|
60.6
|
|
||
Property, plant and equipment—net
|
287.7
|
|
|
301.3
|
|
||
Other assets
|
10.5
|
|
|
11.4
|
|
||
Total assets
|
$
|
382.0
|
|
|
$
|
373.3
|
|
LIABILITIES AND PARTNERS' CAPITAL
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
23.2
|
|
|
$
|
27.8
|
|
Due to affiliates of the General Partner
|
2.9
|
|
|
4.1
|
|
||
Other current liabilities
|
2.2
|
|
|
—
|
|
||
Total current liabilities
|
28.3
|
|
|
31.9
|
|
||
Other liabilities
|
1.2
|
|
|
2.6
|
|
||
Partners' capital:
|
|
|
|
|
|
||
Limited partners' interests, 18,501,576 common units authorized, issued and outstanding
|
299.8
|
|
|
286.7
|
|
||
Limited partners' interests, 184,072 Class B common units authorized, issued and outstanding
|
1.9
|
|
|
1.8
|
|
||
General partner's interest
|
50.8
|
|
|
50.3
|
|
||
Total partners' capital
|
352.5
|
|
|
338.8
|
|
||
Total liabilities and partners' capital
|
$
|
382.0
|
|
|
$
|
373.3
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions, except per unit amounts)
|
||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product sales to affiliates of the General Partner
|
$
|
84.5
|
|
|
$
|
90.1
|
|
|
$
|
299.3
|
|
|
$
|
324.5
|
|
Other income from an affiliate of the General Partner
|
0.1
|
|
|
0.1
|
|
|
0.4
|
|
|
0.4
|
|
||||
Total
|
84.6
|
|
|
90.2
|
|
|
299.7
|
|
|
324.9
|
|
||||
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
||||||
Materials, supplies and services
|
50.5
|
|
|
50.2
|
|
|
161.7
|
|
|
125.0
|
|
||||
Services provided by affiliates of the General Partner
|
6.9
|
|
|
7.2
|
|
|
20.7
|
|
|
21.3
|
|
||||
Gross margin
|
27.2
|
|
|
32.8
|
|
|
117.3
|
|
|
178.6
|
|
||||
Selling, general and administrative services provided by affiliates of the General Partner
|
4.0
|
|
|
4.0
|
|
|
11.9
|
|
|
11.8
|
|
||||
Other general and administrative expenses
|
0.5
|
|
|
—
|
|
|
1.1
|
|
|
1.7
|
|
||||
Earnings from operations
|
22.7
|
|
|
28.8
|
|
|
104.3
|
|
|
165.1
|
|
||||
Interest income
|
0.1
|
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
||||
Net earnings
|
$
|
22.8
|
|
|
$
|
28.8
|
|
|
$
|
104.5
|
|
|
$
|
165.2
|
|
Allocation of net earnings:
|
|
|
|
|
|
|
|
|
|
||||||
General Partner
|
$
|
5.6
|
|
|
$
|
9.3
|
|
|
$
|
20.3
|
|
|
$
|
58.0
|
|
Class B common units
|
0.2
|
|
|
0.3
|
|
|
1.0
|
|
|
1.6
|
|
||||
Common units
|
17.0
|
|
|
19.2
|
|
|
83.2
|
|
|
105.6
|
|
||||
Net earnings
|
$
|
22.8
|
|
|
$
|
28.8
|
|
|
$
|
104.5
|
|
|
$
|
165.2
|
|
Net earnings per common unit
|
$
|
0.92
|
|
|
$
|
1.04
|
|
|
$
|
4.49
|
|
|
$
|
5.71
|
|
|
Common
Units
|
|
Class B
Common
Units
|
|
General
Partner's
Interest
|
|
Total
Partners'
Capital
|
||||||||
|
(in millions)
|
||||||||||||||
Partners' capital as of December 31, 2015
|
$
|
308.5
|
|
|
$
|
2.3
|
|
|
$
|
76.2
|
|
|
$
|
387.0
|
|
Net earnings
|
105.6
|
|
|
1.6
|
|
|
58.0
|
|
|
165.2
|
|
||||
Distributions
|
(129.0
|
)
|
|
(2.0
|
)
|
|
(77.5
|
)
|
|
(208.5
|
)
|
||||
Partners' capital as of September 30, 2016
|
$
|
285.1
|
|
|
$
|
1.9
|
|
|
$
|
56.7
|
|
|
$
|
343.7
|
|
Partners' capital as of December 31, 2016
|
$
|
286.7
|
|
|
$
|
1.8
|
|
|
$
|
50.3
|
|
|
$
|
338.8
|
|
Net earnings
|
83.2
|
|
|
1.0
|
|
|
20.3
|
|
|
104.5
|
|
||||
Distributions
|
(70.1
|
)
|
|
(0.9
|
)
|
|
(19.8
|
)
|
|
(90.8
|
)
|
||||
Partners' capital as of September 30, 2017
|
$
|
299.8
|
|
|
$
|
1.9
|
|
|
$
|
50.8
|
|
|
$
|
352.5
|
|
|
Nine months ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Operating Activities:
|
|
|
|
|
|
||
Net earnings
|
$
|
104.5
|
|
|
$
|
165.2
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
30.0
|
|
|
29.9
|
|
||
Unrealized loss (gain) on derivatives
|
9.7
|
|
|
(21.7
|
)
|
||
Loss on disposal of property, plant and equipment
|
—
|
|
|
0.1
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
0.2
|
|
|
0.3
|
|
||
Inventories
|
2.6
|
|
|
0.6
|
|
||
Accounts payable and accrued expenses
|
(2.5
|
)
|
|
1.7
|
|
||
Due to/from affiliates of the General Partner
|
(13.5
|
)
|
|
1.6
|
|
||
Other assets and liabilities
|
(0.3
|
)
|
|
(2.1
|
)
|
||
Net cash provided by operating activities
|
130.7
|
|
|
175.6
|
|
||
Investing Activities:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(18.6
|
)
|
|
(24.8
|
)
|
||
Net cash used in investing activities
|
(18.6
|
)
|
|
(24.8
|
)
|
||
Financing Activities:
|
|
|
|
|
|
||
Partnership distributions paid
|
(90.8
|
)
|
|
(208.5
|
)
|
||
Net cash used in financing activities
|
(90.8
|
)
|
|
(208.5
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
21.3
|
|
|
(57.7
|
)
|
||
Cash and cash equivalents at beginning of period
|
39.5
|
|
|
106.4
|
|
||
Cash and cash equivalents at end of period
|
$
|
60.8
|
|
|
$
|
48.7
|
|
|
Quarterly Income and Distribution Allocation
|
||||||||||||||||||||||
|
Target
Limit
(per unit)
|
|
Target
Increment
(per unit)
|
|
Distribution
Threshold
(in millions)
(1)
|
|
Common
Units
|
|
Class B
Common
Units
|
|
General
Partner
(2)
|
|
Total
|
||||||||||
Minimum Quarterly Distributions
|
$
|
0.605
|
|
|
$
|
0.605
|
|
|
$
|
11.3
|
|
|
98.990
|
%
|
|
0.985
|
%
|
|
0.025
|
%
|
|
100
|
%
|
First Target
|
0.715
|
|
|
0.110
|
|
|
13.4
|
|
|
98.990
|
%
|
|
0.985
|
%
|
|
0.025
|
%
|
|
100
|
%
|
|||
Second Target
|
0.825
|
|
|
0.110
|
|
|
15.4
|
|
|
85.859
|
%
|
|
0.985
|
%
|
|
13.156
|
%
|
|
100
|
%
|
|||
Third Target
|
1.045
|
|
|
0.220
|
|
|
19.5
|
|
|
75.758
|
%
|
|
0.985
|
%
|
|
23.257
|
%
|
|
100
|
%
|
|||
Final Target and Beyond
|
>1.045
|
|
|
—
|
|
|
>19.5
|
|
|
50.505
|
%
|
|
0.985
|
%
|
|
48.510
|
%
|
|
100
|
%
|
(1)
|
The Distribution Threshold represents the cumulative amount of Available Cash necessary to distribute the Target Limit per unit, as shown in the table above, to all unitholders and the General Partner based on the number of units outstanding as of
September 30, 2017
.
|
(2)
|
Reflects Minimum Quarterly Distributions and incentive distributions to the General Partner. The General Partner has assigned its right to incentive distributions to an affiliate of the General Partner.
|
Distribution
|
|
Common Units
|
|
Class B
Common Units |
|
General Partner
|
|
Total Distributions Declared
|
||||||||||||||||||
Declared in
|
|
Related to
|
|
Total
|
|
Per unit
|
|
Total
|
|
Per unit
|
|
Total
|
|
|||||||||||||
|
|
|
|
(in millions, except per unit amounts)
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
First Quarter 2017
|
|
Fourth Quarter 2016
|
|
$
|
22.6
|
|
|
$
|
1.22
|
|
|
$
|
0.3
|
|
|
$
|
1.52
|
|
|
$
|
5.7
|
|
|
$
|
28.6
|
|
Second Quarter 2017
|
|
First Quarter 2017
|
|
17.9
|
|
|
0.97
|
|
|
0.2
|
|
|
1.04
|
|
|
1.4
|
|
|
19.5
|
|
||||||
Third Quarter 2017
|
|
Second Quarter 2017
|
|
29.6
|
|
|
1.60
|
|
|
0.4
|
|
|
2.26
|
|
|
12.7
|
|
|
42.7
|
|
||||||
Fourth Quarter 2017
|
|
Third Quarter 2017
|
|
25.1
|
|
|
1.36
|
|
|
0.3
|
|
|
1.79
|
|
|
8.4
|
|
|
33.8
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
First Quarter 2016
|
|
Fourth Quarter 2015
|
|
$
|
53.3
|
|
|
$
|
2.88
|
|
|
$
|
0.9
|
|
|
$
|
4.78
|
|
|
$
|
36.0
|
|
|
$
|
90.2
|
|
Second Quarter 2016
|
|
First Quarter 2016
|
|
28.0
|
|
|
1.51
|
|
|
0.4
|
|
|
2.09
|
|
|
11.1
|
|
|
39.5
|
|
||||||
Third Quarter 2016
|
|
Second Quarter 2016
|
|
47.7
|
|
|
2.58
|
|
|
0.7
|
|
|
4.17
|
|
|
30.4
|
|
|
78.8
|
|
||||||
Fourth Quarter 2016
|
|
Third Quarter 2016
|
|
32.7
|
|
|
1.77
|
|
|
0.5
|
|
|
2.60
|
|
|
15.8
|
|
|
49.0
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions, except per unit amounts)
|
||||||||||||||
Basic earnings per common unit:
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
$
|
22.8
|
|
|
$
|
28.8
|
|
|
$
|
104.5
|
|
|
$
|
165.2
|
|
Less distributions declared to:
|
|
|
|
|
|
|
|
||||||||
Common units
|
25.1
|
|
|
32.7
|
|
|
72.6
|
|
|
108.4
|
|
||||
Class B common units
|
0.3
|
|
|
0.5
|
|
|
0.9
|
|
|
1.6
|
|
||||
General partner interest
|
8.4
|
|
|
15.8
|
|
|
22.5
|
|
|
57.3
|
|
||||
(Distributions in excess of earnings) undistributed earnings
|
$
|
(11.0
|
)
|
|
$
|
(20.2
|
)
|
|
$
|
8.5
|
|
|
$
|
(2.1
|
)
|
|
|
|
|
|
|
|
|
||||||||
Allocation of (distributions in excess of earnings) undistributed earnings to
(1)
:
|
|
|
|
|
|
|
|
||||||||
Common units
|
$
|
(8.1
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
10.6
|
|
|
$
|
(2.8
|
)
|
Class B common units
|
(0.1
|
)
|
|
(0.2
|
)
|
|
0.1
|
|
|
—
|
|
||||
General partner interest
|
(2.8
|
)
|
|
(6.5
|
)
|
|
(2.2
|
)
|
|
0.7
|
|
||||
Total (distributions in excess of earnings) undistributed earnings
|
$
|
(11.0
|
)
|
|
$
|
(20.2
|
)
|
|
$
|
8.5
|
|
|
$
|
(2.1
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net earnings allocable to General Partner
(2)
|
$
|
5.6
|
|
|
$
|
9.3
|
|
|
$
|
20.3
|
|
|
$
|
58.0
|
|
Net earnings allocable to Class B common units
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
1.0
|
|
|
$
|
1.6
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings allocable to common units
|
$
|
17.0
|
|
|
$
|
19.2
|
|
|
$
|
83.2
|
|
|
$
|
105.6
|
|
Weighted-average common units outstanding
|
18.5
|
|
|
18.5
|
|
|
18.5
|
|
|
18.5
|
|
||||
Net earnings per common unit
|
$
|
0.92
|
|
|
$
|
1.04
|
|
|
$
|
4.49
|
|
|
$
|
5.71
|
|
(1)
|
In accordance with our agreement of limited partnership, undistributed earnings (distributions in excess of earnings) are allocated in the same percentage that Available Cash for such period was declared among the General Partner (including with respect to the embedded incentive distribution rights) and limited partners. The allocation percentages were as follows:
|
|
Three months ended
September 30, |
||||
|
2017
|
|
2016
|
||
|
|
|
|
||
Allocation percentage for undistributed earnings or distributions in excess of earnings:
|
|
|
|
||
Common units
|
74.39
|
%
|
|
66.81
|
%
|
Class B common units
|
0.97
|
%
|
|
0.97
|
%
|
General partner interest
|
24.64
|
%
|
|
32.22
|
%
|
(2)
|
Net earnings allocable to the General Partner include net earnings allocated to the General Partner and TLPH from the Operating Partnership of
$0.2 million
and
$1.0 million
for the
three and nine
months ended
September 30, 2017
, respectively, and
$0.3 million
and
$1.7 million
for the
three and nine
months ended
September 30, 2016
, respectively.
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
(in millions)
|
||||||
Finished goods
|
$
|
4.4
|
|
|
$
|
6.8
|
|
Raw materials, spare parts and supplies
|
1.6
|
|
|
1.8
|
|
||
Total
|
$
|
6.0
|
|
|
$
|
8.6
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
(in millions)
|
||||||
Derivative Assets
|
|
|
|
||||
Unrealized gains in other current assets
|
$
|
0.2
|
|
|
$
|
7.9
|
|
Unrealized gains in other assets
|
—
|
|
|
1.1
|
|
||
Total derivative assets
|
0.2
|
|
|
9.0
|
|
||
Derivative Liabilities
|
|
|
|
||||
Unrealized losses in other current liabilities
|
(2.2
|
)
|
|
—
|
|
||
Unrealized losses in other liabilities
|
(0.4
|
)
|
|
(1.6
|
)
|
||
Total derivative liabilities
|
(2.6
|
)
|
|
(1.6
|
)
|
||
Net derivative (liabilities) assets
|
$
|
(2.4
|
)
|
|
$
|
7.4
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions)
|
||||||||||||||
Unrealized net mark-to-market gains (losses)
|
$
|
1.1
|
|
|
$
|
(3.3
|
)
|
|
$
|
(9.7
|
)
|
|
$
|
21.7
|
|
Realized net losses
|
(1.4
|
)
|
|
(1.2
|
)
|
|
(1.4
|
)
|
|
(16.2
|
)
|
||||
Net derivative (losses) gains
|
$
|
(0.3
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(11.1
|
)
|
|
$
|
5.5
|
|
|
Gross and net amounts
presented in
consolidated
balance sheets
(1)
|
|
Gross amounts
not offset in consolidated
balance sheets
|
|
|
||||||||||
|
|
Financial
instruments
|
|
Cash
collateral
received
(pledged)
|
|
Net
amount
|
|||||||||
|
(in millions)
|
||||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total derivative assets
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivative liabilities
|
(2.6
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(2.4
|
)
|
||||
Net derivative liabilities
|
$
|
(2.4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2.4
|
)
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total derivative assets
|
$
|
9.0
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
7.4
|
|
Total derivative liabilities
|
(1.6
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
||||
Net derivative assets
|
$
|
7.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.4
|
|
(1)
|
We report the fair values of our derivative assets and liabilities on a gross basis in our consolidated balance sheets. As a result, the gross amounts recognized and net amounts presented herein are the same.
|
|
September 30, 2017
|
||||||||||||||
|
Total
|
|
Quoted
Market Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(in millions)
|
||||||||||||||
Cash equivalents
|
$
|
59.8
|
|
|
$
|
59.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unrealized gains on natural gas derivatives
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
60.0
|
|
|
$
|
59.8
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Unrealized losses on natural gas derivatives
|
$
|
(2.6
|
)
|
|
$
|
—
|
|
|
$
|
(2.6
|
)
|
|
$
|
—
|
|
Total liabilities at fair value
|
$
|
(2.6
|
)
|
|
$
|
—
|
|
|
$
|
(2.6
|
)
|
|
$
|
—
|
|
|
December 31, 2016
|
||||||||||||||
|
Total
|
|
Quoted
Market Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(in millions)
|
||||||||||||||
Cash equivalents
|
$
|
32.0
|
|
|
$
|
32.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unrealized gains on natural gas derivatives
|
9.0
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
41.0
|
|
|
$
|
32.0
|
|
|
$
|
9.0
|
|
|
$
|
—
|
|
Unrealized losses on natural gas derivatives
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
Total liabilities at fair value
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
(in millions)
|
||||||
Land
|
$
|
1.4
|
|
|
$
|
1.4
|
|
Buildings and improvements
|
16.9
|
|
|
16.7
|
|
||
Machinery and equipment
|
566.0
|
|
|
562.3
|
|
||
Construction in progress
|
32.0
|
|
|
21.9
|
|
||
Property, plant and equipment
|
616.3
|
|
|
602.3
|
|
||
Less: Accumulated depreciation and amortization
|
328.6
|
|
|
301.0
|
|
||
Property, plant and equipment—net
|
$
|
287.7
|
|
|
$
|
301.3
|
|
|
Nine months ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Net capitalized turnaround costs:
|
|
|
|
|
|
||
Beginning balance
|
$
|
26.6
|
|
|
$
|
37.8
|
|
Additions
|
1.9
|
|
|
3.5
|
|
||
Depreciation
|
(11.7
|
)
|
|
(11.6
|
)
|
||
Ending balance
|
$
|
16.8
|
|
|
$
|
29.7
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
|
(in millions, except as noted)
|
||||||||||||||||||||||||||||
Net sales
|
$
|
84.6
|
|
|
$
|
90.2
|
|
|
$
|
(5.6
|
)
|
|
(6
|
)%
|
|
$
|
299.7
|
|
|
$
|
324.9
|
|
|
$
|
(25.2
|
)
|
|
(8
|
)%
|
Cost of goods sold
|
57.4
|
|
|
57.4
|
|
|
—
|
|
|
—
|
%
|
|
182.4
|
|
|
146.3
|
|
|
36.1
|
|
|
25
|
%
|
||||||
Gross margin
|
27.2
|
|
|
32.8
|
|
|
(5.6
|
)
|
|
(17
|
)%
|
|
117.3
|
|
|
178.6
|
|
|
(61.3
|
)
|
|
(34
|
)%
|
||||||
Gross margin percentage
|
32.2
|
%
|
|
36.4
|
%
|
|
(4.2
|
)%
|
|
|
|
39.1
|
%
|
|
55.0
|
%
|
|
(15.9
|
)%
|
|
|
|
|||||||
Selling, general and administrative expenses
|
4.5
|
|
|
4.0
|
|
|
0.5
|
|
|
13
|
%
|
|
13.0
|
|
|
13.5
|
|
|
(0.5
|
)
|
|
(4
|
)%
|
||||||
Earnings from operations
|
22.7
|
|
|
28.8
|
|
|
(6.1
|
)
|
|
(21
|
)%
|
|
104.3
|
|
|
165.1
|
|
|
(60.8
|
)
|
|
(37
|
)%
|
||||||
Interest income
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
N/M
|
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
100
|
%
|
||||||
Net earnings
|
$
|
22.8
|
|
|
$
|
28.8
|
|
|
$
|
(6.0
|
)
|
|
(21
|
)%
|
|
$
|
104.5
|
|
|
$
|
165.2
|
|
|
$
|
(60.7
|
)
|
|
(37
|
)%
|
Net earnings allocable to common units
|
$
|
17.0
|
|
|
$
|
19.2
|
|
|
$
|
(2.2
|
)
|
|
(11
|
)%
|
|
$
|
83.2
|
|
|
$
|
105.6
|
|
|
$
|
(22.4
|
)
|
|
(21
|
)%
|
Net earnings per common unit (dollars per common unit)
|
$
|
0.92
|
|
|
$
|
1.04
|
|
|
$
|
(0.12
|
)
|
|
(12
|
)%
|
|
$
|
4.49
|
|
|
$
|
5.71
|
|
|
$
|
(1.22
|
)
|
|
(21
|
)%
|
Sales volume (tons in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ammonia
|
122
|
|
|
103
|
|
|
19
|
|
|
18
|
%
|
|
361
|
|
|
306
|
|
|
55
|
|
|
18
|
%
|
||||||
UAN
(1)
|
454
|
|
|
415
|
|
|
39
|
|
|
9
|
%
|
|
1,393
|
|
|
1,231
|
|
|
162
|
|
|
13
|
%
|
||||||
Total
|
576
|
|
|
518
|
|
|
58
|
|
|
11
|
%
|
|
1,754
|
|
|
1,537
|
|
|
217
|
|
|
14
|
%
|
||||||
Average selling prices (dollars per ton):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ammonia
|
$
|
216
|
|
|
$
|
297
|
|
|
$
|
(81
|
)
|
|
(27
|
)%
|
|
$
|
268
|
|
|
$
|
347
|
|
|
$
|
(79
|
)
|
|
(23
|
)%
|
UAN
(1)
|
$
|
127
|
|
|
$
|
142
|
|
|
$
|
(15
|
)
|
|
(11
|
)%
|
|
$
|
145
|
|
|
$
|
177
|
|
|
$
|
(32
|
)
|
|
(18
|
)%
|
Cost of natural gas (dollars per MMBtu):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Purchased natural gas costs
(2)
|
$
|
2.51
|
|
|
$
|
2.61
|
|
|
$
|
(0.10
|
)
|
|
(4
|
)%
|
|
$
|
2.79
|
|
|
$
|
2.12
|
|
|
$
|
0.67
|
|
|
32
|
%
|
Realized derivatives loss
(3)
|
0.13
|
|
|
0.11
|
|
|
0.02
|
|
|
18
|
%
|
|
0.04
|
|
|
0.54
|
|
|
(0.50
|
)
|
|
(93
|
)%
|
||||||
Cost of natural gas
|
$
|
2.64
|
|
|
$
|
2.72
|
|
|
$
|
(0.08
|
)
|
|
(3
|
)%
|
|
$
|
2.83
|
|
|
$
|
2.66
|
|
|
$
|
0.17
|
|
|
6
|
%
|
Production volume by product (tons in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ammonia
(4)
|
286
|
|
|
292
|
|
|
(6
|
)
|
|
(2
|
)%
|
|
920
|
|
|
804
|
|
|
116
|
|
|
14
|
%
|
||||||
UAN
(1)
|
415
|
|
|
454
|
|
|
(39
|
)
|
|
(9
|
)%
|
|
1,383
|
|
|
1,258
|
|
|
125
|
|
|
10
|
%
|
(1)
|
The nitrogen content of UAN is 32% by weight.
|
(2)
|
Represents the cost of natural gas purchased during the period for use in production.
|
(3)
|
Represents realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives.
|
(4)
|
Gross ammonia production, including amounts subsequently upgraded on-site into UAN.
|
|
Three months ended September 30,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|||||||||
|
(in millions, except per ton amounts)
|
|||||||||||||
Realized natural gas costs
|
$
|
27.1
|
|
|
$
|
28.5
|
|
|
$
|
(1.4
|
)
|
|
(5
|
)%
|
Unrealized mark-to-market (gain) loss on natural gas derivatives
|
(1.1
|
)
|
|
3.3
|
|
|
(4.4
|
)
|
|
N/M
|
|
|||
Payroll-related expenses
|
6.9
|
|
|
7.2
|
|
|
(0.3
|
)
|
|
(4
|
)%
|
|||
Other
|
24.5
|
|
|
18.4
|
|
|
6.1
|
|
|
33
|
%
|
|||
Total cost of goods sold
|
$
|
57.4
|
|
|
$
|
57.4
|
|
|
$
|
—
|
|
|
—
|
%
|
Average cost of goods sold per ton
|
$
|
100
|
|
|
$
|
111
|
|
|
$
|
(11
|
)
|
|
(10
|
)%
|
|
Nine months ended September 30,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|||||||||
|
(in millions, except per ton amounts)
|
|||||||||||||
Realized natural gas costs
|
$
|
91.7
|
|
|
$
|
78.8
|
|
|
$
|
12.9
|
|
|
16
|
%
|
Unrealized mark-to-market loss (gain) on natural gas derivatives
|
9.7
|
|
|
(21.7
|
)
|
|
31.4
|
|
|
N/M
|
|
|||
Payroll-related expenses
|
20.7
|
|
|
21.3
|
|
|
(0.6
|
)
|
|
(3
|
)%
|
|||
Other
|
60.3
|
|
|
67.9
|
|
|
(7.6
|
)
|
|
(11
|
)%
|
|||
Total cost of goods sold
|
$
|
182.4
|
|
|
$
|
146.3
|
|
|
$
|
36.1
|
|
|
25
|
%
|
Average cost of goods sold per ton
|
$
|
104
|
|
|
$
|
95
|
|
|
$
|
9
|
|
|
9
|
%
|
|
Nine months ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Total cash provided by (used in):
|
|
|
|
|
|
||
Operating activities
|
$
|
130.7
|
|
|
$
|
175.6
|
|
Investing activities
|
(18.6
|
)
|
|
(24.8
|
)
|
||
Financing activities
|
(90.8
|
)
|
|
(208.5
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
$
|
21.3
|
|
|
$
|
(57.7
|
)
|
|
Quarterly Income and Distribution Allocation
|
||||||||||||||||||||||
|
Target
Limit
(per unit)
|
|
Target
Increment
(per unit)
|
|
Distribution Threshold
(in millions)
(1)
|
|
Common
Units
|
|
Class B
Common
Units
|
|
General
Partner
(2)
|
|
Total
|
||||||||||
Minimum Quarterly Distributions
|
$
|
0.605
|
|
|
$
|
0.605
|
|
|
$
|
11.3
|
|
|
98.990
|
%
|
|
0.985
|
%
|
|
0.025
|
%
|
|
100
|
%
|
First Target
|
0.715
|
|
|
0.110
|
|
|
13.4
|
|
|
98.990
|
%
|
|
0.985
|
%
|
|
0.025
|
%
|
|
100
|
%
|
|||
Second Target
|
0.825
|
|
|
0.110
|
|
|
15.4
|
|
|
85.859
|
%
|
|
0.985
|
%
|
|
13.156
|
%
|
|
100
|
%
|
|||
Third Target
|
1.045
|
|
|
0.220
|
|
|
19.5
|
|
|
75.758
|
%
|
|
0.985
|
%
|
|
23.257
|
%
|
|
100
|
%
|
|||
Final Target and Beyond
|
>1.045
|
|
|
—
|
|
|
>19.5
|
|
|
50.505
|
%
|
|
0.985
|
%
|
|
48.510
|
%
|
|
100
|
%
|
(1)
|
The Distribution Threshold represents the cumulative amount of Available Cash necessary to distribute the Target Limit per unit, as shown in the table above, to all unitholders and the General Partner based on the number of units outstanding as of
September 30, 2017
.
|
(2)
|
Reflects Minimum Quarterly Distributions and incentive distributions to the General Partner. The General Partner has assigned its right to incentive distributions to an affiliate of the General Partner.
|
•
|
risks related to our reliance on one production facility;
|
•
|
the cyclical nature of our business and the agricultural sector;
|
•
|
the global commodity nature of our fertilizer products, the impact of global supply and demand on our selling prices, and the intense global competition from other fertilizer producers;
|
•
|
conditions in the U.S. agricultural industry;
|
•
|
the volatility of natural gas prices in North America;
|
•
|
difficulties in securing the supply and delivery of raw materials, increases in their costs or delays or interruptions in their delivery;
|
•
|
reliance on third party providers of transportation services and equipment;
|
•
|
the significant risks and hazards involved in producing and handling our products against which we may not be fully insured;
|
•
|
risks associated with cyber security;
|
•
|
weather conditions;
|
•
|
potential liabilities and expenditures related to environmental, health and safety laws and regulations and permitting requirements;
|
•
|
future regulatory restrictions and requirements related to greenhouse gas emissions;
|
•
|
the seasonality of the fertilizer business;
|
•
|
risks involving derivatives and the effectiveness of our risk measurement and hedging activities;
|
•
|
limited access to capital;
|
•
|
acts of terrorism and regulations to combat terrorism;
|
•
|
risks related to our dependence on and relationships with CF Industries;
|
•
|
deterioration of global market and economic conditions;
|
•
|
risks related to our partnership structure and control of the General Partner by CF Industries;
|
•
|
changes in our available cash for distribution to our unitholders, due to, among other things, changes in our earnings, the amount of cash generated by our operations and the amount of cash reserves established by the General Partner for operating, capital and other requirements;
|
•
|
the conflicts of interest that may be faced by the executive officers of the General Partner, who operate both us and CF Industries; and
|
•
|
tax risks to our common unitholders and changes in our treatment as a partnership for U.S. or state income tax purposes.
|
A list of exhibits filed with this report on Form 10-Q (or incorporated by reference to exhibits previously filed or furnished) is provided in the Exhibit Index on page
27
of this report.
|
Exhibit No.
|
Description
|
|
|
||
|
||
|
||
|
||
101
|
|
The following financial information from Terra Nitrogen Company, L.P.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (1) Consolidated Balance Sheets, (2) Consolidated Statements of Operations, (3) Consolidated Statements of Partners' Capital, (4) Consolidated Statements of Cash Flows and (5) the Notes to Unaudited Consolidated Financial Statements
|
|
TERRA NITROGEN COMPANY, L.P.
|
|
|
By:
|
TERRA NITROGEN GP INC.
as General Partner
|
Date: November 2, 2017
|
By:
|
/s/ W. ANTHONY WILL
|
|
|
W. Anthony Will
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date: November 2, 2017
|
By:
|
/s/ DENNIS P. KELLEHER
|
|
|
Dennis P. Kelleher
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
1 Year Terra Nitrogen Company . Chart |
1 Month Terra Nitrogen Company . Chart |
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