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8-K - 8-K - East Dubuque Nitrogen Partners, L.P.d582222d8k.htm

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

Rentech Nitrogen Partners, L.P. Announces Results for Second Quarter 2013; Updates

2013 Guidance

LOS ANGELES, CA (August 8, 2013) – Rentech Nitrogen Partners, L.P. (NYSE: RNF), which manufactures and sells nitrogen fertilizer products including ammonia, UAN solution and ammonium sulfate, today announced its results for the three and six months ended June 30, 2013, and updated its 2013 guidance.

Commenting on the results for the period, D. Hunt Ramsbottom, CEO of Rentech Nitrogen GP, LLC, stated, “We reported good results this quarter, considering that demand and product prices were softer than forecasted, with unfavorable spring weather and significant offshore urea supplies affecting the entire industry.” Mr. Ramsbottom continued, “We took advantage of market liquidity and demand during the past month and have locked-in nearly all of the East Dubuque Facility’s forecasted deliveries for the year at competitive prices. We’re also seeing a rebound of product margins at the Pasadena Facility, from the lower levels earlier this summer when product prices had dropped faster than input prices embedded in our cost of sales, and we had to absorb lower margins on some higher cost inventories carried over from the delayed spring season.”

Mr. Ramsbottom added, “While commodity prices can fluctuate, as we’ve recently seen, we believe that the nitrogen market remains fundamentally healthy. Factors such as farmer affordability of nitrogen and the expectation that we’ll continue to see strong planted corn acres next year are expected to result in good nitrogen demand. We also continue to receive premium pricing for our two primary products, ammonia and ammonium sulfate. For these reasons, our expansion projects for these two product lines are still expected to generate strong returns once they are on-stream at the end of this year.”

Financial Highlights

Three months ended June 30, 2013

Revenues for the three months ended June 30, 2013 were $104.0 million, compared to $70.6 million for the comparable period in the prior year. Revenues increased due to the contribution of $42.2 million from the facility in Pasadena, Texas (Pasadena Facility), partially offset by a 13% decline in revenues from the facility in East Dubuque, Illinois (East Dubuque Facility). Product deliveries from both facilities were negatively affected by a wet spring season which resulted in a delayed and abbreviated planting season and less nitrogen demand. Results of the quarter were further affected by significant increases in exports of urea from China that negatively impacted urea and other nitrogen prices. Lower urea prices also prompted some late season switching from UAN to urea due to the relative value of the two fertilizers.

During the three months ended June 30, 2013, Rentech Nitrogen generated operating income of $34.0 million, compared to $41.6 million during the comparable period in the prior year. Operating income in the current period was reduced by lower gross profits as well as higher selling, general and administrative (SG&A) expenses and depreciation and amortization expenses attributable to the addition of the Pasadena Facility.

Adjusted EBITDA for the three months ended June 30, 2013 was $38.4 million, compared to $44.9 million in the corresponding period in 2012. Adjusted EBITDA excluding Partnership level expenses totaled $40.9 million for the current period. The East Dubuque Facility and the Pasadena Facility contributed $38.9 million and $2.0 million in EBITDA, respectively, during the three months ended June 30, 2013. Further explanation of Adjusted EBITDA, a non-GAAP financial measure, has been included below in this press release.

Gross margins for the three months ended June 30, 2013 were 38%, compared to 65% for the same period last year, primarily due to the addition of the Pasadena Facility, which realizes lower gross margins than the East Dubuque Facility, and the effects of allocating fixed costs to lower volumes of delivered products. Gross margins at the East Dubuque Facility were 61% for the current period, compared to 65% for the prior-year period. Gross margins at the Pasadena Facility were 6% for the current period, which reflected inventory write-downs and sales of products that were produced from higher-cost raw materials purchased earlier in the year. During the three months ended June 30, 2013, the Partnership incurred a write-down of ammonium sulfate inventories of approximately $1.8 million for product not shipped due to the reduced application from the prolonged wet weather.

 

Page 1 of 13


SG&A expenses were $4.9 million for the three months ended June 30, 2013, compared to $3.9 million for the prior-year period. The increase was primarily due to the addition of $1.3 million of SG&A expenses from the Pasadena Facility, partially offset by a 28% decline in expenses at the East Dubuque Facility primarily due to lower unused credit facility fees, legal expenses and other professional fees.

Interest expense was $3.9 million for the three months ended June 30, 2013, compared to $0 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 $4.8 million for the three 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 $28.7 million or $0.74 per basic unit, for the current period. Excluding loss on debt extinguishment of $6.0 million and gain on fair value adjustment to earn-out consideration of $4.8 million, net income allocated to common unit holders for the current period was $29.8 million or $0.77 per basic unit. This compares to net income of $41.2 million or $1.08 per basic unit for the same period last year.

Six months ended June 30, 2013

Revenues for the six months ended June 30, 2013 were $163.5 million, compared to $109.1 million for the comparable period in the prior year. Revenues increased due to the contribution of $67.3 million of revenues from the Pasadena Facility, partially offset by a 12% decline in revenues from the East Dubuque Facility. Product deliveries from both facilities were negatively affected by a wet spring which resulted in a delayed and abbreviated planting season and less nitrogen demand. Results of the quarter were further affected by significant increases in exports of urea from China that negatively impacted urea and other nitrogen prices. Lower urea prices also prompted some late season switching from UAN to urea due to the relative value of the two fertilizers.

During the six months ended June 30, 2013, Rentech Nitrogen generated operating income of $51.1 million compared to $61.1 million during the comparable period in the prior year. Operating income in the current period was reduced by lower gross profits as well as higher SG&A expenses and depreciation and amortization expenses attributable to the addition of the Pasadena Facility.

Adjusted EBITDA for the six months ended June 30, 2013 was $59.1 million, compared to $66.8 million in the corresponding period in 2012. Adjusted EBITDA excluding Partnership level expenses, totaled $63.7 million for the current period. The East Dubuque Facility and the Pasadena Facility contributed $58.5 million and $5.2 million in Adjusted EBITDA, respectively, during the six months ended June 30, 2013. Further explanation of Adjusted EBITDA, a non-GAAP financial measure, has been included below in this press release.

Gross margins for the six months ended June 30, 2013 were 38%, compared to 63% for the same period last year, primarily due to the addition of the Pasadena Facility, which realizes lower gross margins than does the East Dubuque Facility, and the effects of allocating fixed costs to lower volumes of delivered products. Gross margins at the East Dubuque Facility were 58% for the current period, compared to 63% for the prior-year period. Gross margins at the Pasadena Facility were 9% for the current period, which reflected certain inventory write-downs and sales of products that were produced from higher-cost raw materials. During the six months ended June 30, 2013, the Partnership incurred write-downs of sulfur and sulfuric acid inventory of approximately $0.5 million and ammonium sulfate inventories of approximately $1.8 million.

SG&A expenses were $9.6 million for the six months ended June 30, 2013, compared to $6.5 million for the prior-year period. The increase was primarily due to the addition of $2.6 million of SG&A expenses and an increase in Partnership level expenses to support the Pasadena Facility, partially offset by a 13% decline in expenses at the East Dubuque Facility primarily due to lower unused credit facility fees, legal expenses and other professional fees.

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.

 

Page 2 of 13


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.

Outlook

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.

As a result of this pricing environment and similar to industry trends, Rentech Nitrogen has updated its guidance for cash available for distribution to a range of $2.05 to $2.20 per common unit for the twelve months ending December 31, 2013. The 2013 guidance includes the impact of two previously announced scheduled outages at its facilities during 2013, and the impact of lost revenue in 2013 due to the unscheduled outage at the East Dubuque Facility in December 2012. The Partnership has included an updated calculation of forecasted cash available for distribution below in this press release.

Rentech Nitrogen has locked-in most of the East Dubuque Facility’s forecasted deliveries for the year. The facility has locked-in or delivered 100% of forecasted UAN deliveries for 2013 at an average price of $293 per ton. The facility has locked-in or delivered 79% of forecasted ammonia deliveries for 2013 at an average price of $655 per ton. The midpoint of the new guidance assumes that the ammonia deliveries this year that are yet to be priced will average near $550 per ton, which is slightly above the current spot posted mid-Corn Belt price for ammonia of $545 per ton and below posted fall prices of $575 per ton. The facility has locked-in or consumed 83% of forecasted natural gas for 2013 in cost of sales at an average price of $4.17 per MMBtu, including transportation costs. The midpoint of the guidance assumes costs of $4.21 for natural gas not yet locked-in, including an average of $0.40 per MMBtu of transportation costs, which is currently above the forward NYMEX strip for this year when transportation costs are added.

For the Pasadena Facility, the midpoint of Rentech Nitrogen’s guidance assumes that weighted average domestic and international ammonium sulfate prices for remaining tons will average $242 per ton, which is consistent with prices at which current business has been booked. Ammonia purchase costs for the Pasadena Facility are derived from a formula that includes the trailing one-month Tampa index. The midpoint of the guidance assumes that Tampa-based ammonia prices will average $470 per metric ton, which is consistent with the current Tampa ammonia price. The midpoint of the guidance also assumes that sulfur prices, which have declined rapidly and significantly in recent weeks due to abundant offshore production, are expected to stay near current levels of $95 per long ton. Based on the product margins implied by these price levels for ammonium sulfate and its raw materials, the Pasadena Facility would have an annualized EBITDA run-rate of greater than $20 million, although the carryover inventory produced with higher-cost raw materials earlier this year will cause 2013 EBITDA to be well below that level.

 

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The Partnership provided guidance for the following additional key operating metrics, and progress against its 2013 guidance:

 

      Locked-in or
Delivered

East Dubuque Facility

  

Deliveries1

  

Ammonia

  

Tons

   101,000 or 79%

Average Price

   $655

UAN

  

Tons

   289,000 or 100%

Average Price

   $293
Natural Gas in Cost of Sales2   

(million MMBtus)

   8.6 or 83%

Average Cost Per million MMBtus

  

(including transportation costs)

   $4.17

Pasadena Facility

  

Deliveries

  

Ammonium Sulfate

  

Tons1

   328,000 or 62%

Average Price3

   $299

Sulfuric Acid2

  

Tons

   80,000 or 45%

Average Price

   $99

Ammonium Thiosulfate2

  

Tons

   40,000 or 62%

Average Price

   $191

 

1 

Through July 31, 2013.

2 

Through June 30, 2013.

3 

Average pricing for 168,000 tons. Although pricing is firm, transportation costs and therefore netbacks for 160,000 tons are to be determined.

Second Quarter Cash Distribution

On July 24, 2013, Rentech Nitrogen declared its second quarter 2013 cash distribution of $0.85 per unit, payable on August 14, 2013 to unit holders of record as of August 7, 2013. The calculation of cash available for distribution has been included below in this press release.

Conference Call with Management

Rentech Nitrogen will hold a conference call today, August 8, 2013 at 1:30 p.m. PDT, during which senior management will review the Partnership’s financial results for this period and provide an update on the business. Callers may listen to the live presentation, which will be followed by a question and answer segment, by dialing 888-390-3983 or 862-255-5354. An audio webcast of the call will be available at www.rentechnitrogen.com within the Investor Relations portion of the site under the Presentations section. A replay will be available by audio webcast and teleconference from 5:30 p.m. PDT on August 8 through 5:30 p.m. PDT on August 18. The replay teleconference will be available by dialing 888-539-4649 or 908-379-8864 and the audience passcode 93570#.

 

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Note: The financial statements and key operating metrics below include results of the Pasadena Facility only for the three and six months ended June 30, 2013, as the closing of the acquisition of Agrifos LLC, occurred on November 1, 2012.

Rentech Nitrogen Partners, L.P.

Consolidated Statements of Income

(Stated in Thousands, Except per Unit Data)

 

     For the Three Months     For the Six Months  
     Ended June 30,     Ended June 30,  
     2013     2012     2013     2012  
     (unaudited)     (unaudited)  

Total Revenues

   $ 103,956      $ 70,643      $ 163,520      $ 109,116   

Cost of Sales

     64,108        24,997        100,953        40,898   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

     39,848        45,646        62,567        68,218   

Selling, general and administrative expense

     4,901        3,884        9,642        6,474   

Depreciation

     908        83        1,856        636   

Other

     (7     75        8        47   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Expenses

     5,802        4,042        11,506        7,157   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

     34,046        41,604        51,061        61,061   

Other Income (Expense), Net

        

Interest expense

     (3,926     (42     (5,729     (142

Loss on debt extinguishment

     (6,001     —          (6,001     —     

Gain on FV adjustments to earn-out contingent consideration

     4,823        —          4,611        —     

Other expense, net

     (96     (334     (7     (318
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Other Expenses, Net

     (5,200     (376     (7,126     (460
  

 

 

   

 

 

   

 

 

   

 

 

 

Income Before Income Taxes

     28,846        41,228        43,935        60,601   

Income tax expense

     125        —          205        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 28,721      $ 41,228      $ 43,730      $ 60,601   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income per Common Unit - Basic

   $ 0.74      $ 1.08      $ 1.12      $ 1.58   

Net Income per Common Unit - Diluted

   $ 0.74      $ 1.08      $ 1.12      $ 1.58   

Weighted-Average Units:

        

Basic

     38,842        38,253        38,840        38,251   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     38,899        38,279        38,910        38,272   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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Rentech Nitrogen Partners, L.P.

Statements of Income by Business Segment

(Stated in Thousands)

 

     For the Three Months      For the Six Months  
     Ended June 30,      Ended June 30,  
     2013     2012      2013      2012  
     (unaudited)     (unaudited)      (unaudited)      (unaudited)  

Revenues

          

East Dubuque Facility

   $ 61,717      $ 70,643       $ 96,266       $ 109,116   

Pasadena Facility

     42,239        —           67,254         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Revenues

   $ 103,956      $ 70,643       $ 163,520       $ 109,116   

Gross Profit

          

East Dubuque Facility

   $ 37,493      $ 45,646       $ 56,239       $ 68,218   

Pasadena Facility

     2,355        —           6,328         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Gross Profit

   $ 39,848      $ 45,646       $ 62,567       $ 68,218   

Selling, General and Administrative Expenses

          

East Dubuque Facility

   $ 1,097      $ 1,530       $ 2,442       $ 2,819   

Pasadena Facility

     1,342        —           2,584         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Selling, General and Administrative Expenses

   $ 2,439      $ 1,530       $ 5,026       $ 2,819   

Depreciation and Amortization

          

East Dubuque Facility

   $ 33      $ 83       $ 106       $ 636   

Pasadena Facility

     875        —           1,750         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Depreciation and Amortization Recorded in Operating Expenses

   $ 908      $ 83       $ 1,856       $ 636   

Other Operating Expenses (Income)

          

East Dubuque Facility

   $ (7   $ 75       $ 8       $ 47   

Pasadena Facility

     —          —           —           —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Other Operating (Income) Expenses

   $ (7   $ 75       $ 8       $ 47   

Operating Income

          

East Dubuque Facility

   $ 36,370      $ 43,958       $ 53,683       $ 64,716   

Pasadena Facility

     138        —           1,994         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Operating Income

   $ 36,508      $ 43,958       $ 55,677       $ 64,716   

Interest Expense

          

East Dubuque Facility

   $ —        $ 42       $ —         $ 142   

Pasadena Facility

     3        —           6         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Interest Expense

   $ 3      $ 42       $ 6       $ 142   

Net Income

          

East Dubuque Facility

   $ 36,044      $ 43,930       $ 53,314       $ 64,604   

Pasadena Facility

     34        —           1,850         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Net Income

   $ 36,078      $ 43,930       $ 55,164       $ 64,604   

 

Page 6 of 13


     For the Three Months     For the Six Months  
     Ended June 30,     Ended June 30,  
     2013     2012     2013     2012  
     (unaudited)     (unaudited)     (unaudited)     (unaudited)  

Reconciliation of Segment Net income to Consolidated Net Income

        

Segment Net Income

   $ 36,078      $ 43,930      $ 55,164      $ 64,604   

Partnership and Unallocated Expenses Recorded as Selling, General, and Administrative Expense

     (2,462     (2,354     (4,616     (3,655

Partnership and Unallocated Income (Expenses) Recorded as Other Expenses, Net

     (1,178     232        (1,390     232   

Unallocated Interest Expense and Loss on Interest Rate Swaps

     (4,019     (580     (5,730     (580

Income Tax Benefit

     302        —          302        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated Net income

   $ 28,721      $ 41,228      $ 43,730      $ 60,601   

Rentech Nitrogen Partners, L.P.

Balance Sheet Data

(Stated in Thousands)

 

     As of
June 30, 2013
     As of
December 31, 2012
 
     (unaudited)         

Cash and Cash Equivalents

   $ 112,764       $ 55,799   

Working Capital

     121,345         23,218   

Construction in Progress

     87,075         61,147   

Total Assets

     489,722         376,645   

Credit Facilities and Term Loan

     —           193,290   

Notes

     320,000         —     

Total Long-Term Liabilities

     323,197         192,961   

Total Partners’ Capital

     105,549         109,404   

 

Page 7 of 13


Key Operating Statistics:

 

    

Three Months Ended

June 30,

    

Six Months Ended

June 30,

 
     2013      2012      2013      2012  

Production Tons (in thousands)

           

East Dubuque Facility:

           

Ammonia

     76         77         150         155   

Ammonia Available for Sale (included in line above)

     35         37         69         75   

UAN

     73         78         150         161   

Other Products (excludes CO2)

     78         76         153         152   

Pasadena Facility:

           

Ammonium Sulfate

     124         —           251         —     

Sulfuric Acid

     122         —           254         —     

Ammonium Thiosulfate

     15         —           31         —     

Delivered Tons (in thousands)

           

East Dubuque Facility:

           

Ammonia

     41         40         52         70   

UAN

     59         92         120         126   

Other Products (excludes CO2)

     20         13         35         26   

Pasadena Facility:

           

Ammonium Sulfate

     114         —           168         —     

Sulfuric Acid

     39         —           80         —     

Ammonium Thiosulfate

     25         —           40         —     

Average Price per Delivered Ton

           

East Dubuque Facility:

           

Ammonia

   $ 741       $ 695       $ 740       $ 686   

UAN

   $ 360       $ 378       $ 330       $ 365   

Pasadena Facility:

           

Ammonium Sulfate

   $ 289         —         $ 299         —     

Sulfuric Acid

   $ 99         —         $ 99         —     

Ammonium Thiosulfate

   $ 187         —         $ 191         —     

Input Costs

           

East Dubuque Facility:

           

Natural Gas

           

Natural Gas Used in Production (Million MMBtus)

     2.7         2.8         5.5         5.6   

Average Natural Gas Cost per MMBtu, including transportation cost

   $ 4.36       $ 3.12       $ 4.17       $ 3.67   

Natural Gas Cost in Cost of Sales

           

(Million MMBtus)

     2.8         3.0         4.4         4.9   

Average Natural Gas Cost per MMBtu, including transportation cost

   $ 4.12       $ 3.64       $ 4.06       $ 3.95   

 

Page 8 of 13


    

Three Months Ended

June 30,

   

Six Months Ended

June 30,

 
     2013     2012     2013     2012  

Input Costs

        

Pasadena Facility:

        

Ammonia

        

Ammonia Used in Production (Thousand Tons)

     34        —          68        —     

Ammonia in Cost of Sales (Thousand Tons)

     32        —          48        —     

Sulfur

        

Sulfur Used in Production (Thousand Tons)

     44        —          92        —     

Sulfur in Cost of Sales (Thousand Tons)

     48        —          78        —     

On-Stream Rates1:

        

East Dubuque Facility:

        

Ammonia

     100.0     100.0     100.0     100.0

UAN

     97.8     100.0     99.1     100.0

Pasadena Facility:

        

Ammonium Sulfate

     83.8     —          82.9     —     

Sulfuric Acid

     95.5     —          97.4     —     

 

1 

The on-stream factors for the ammonia, UAN, ammonium sulfate and sulfuric acid plants equal the total days the applicable plant operated in any given period, divided by the total days in that period.

Disclosure Regarding Non-GAAP Financial Measures

Adjusted EBITDA is defined as net income plus interest expense and other financing costs, loss on debt extinguishment, loss on interest rate swaps, income tax expense and depreciation and amortization, net of gain in fair value adjustment to earn-out consideration. We calculate cash available for distribution as used in this table as Adjusted EBITDA plus non-cash compensation expense and distribution of cash reserves, less the sum of maintenance capital expenditures not funded by financing proceeds, net interest expense and other debt service. Adjusted EBITDA and cash available for distribution are used as supplemental financial measures by management and by external users of our financial statements, such as investors and commercial banks, to assess:

 

   

the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; and

 

   

our operating performance and return on invested capital compared to those of other publicly traded limited partnerships and other public companies, without regard to financing methods and capital structure.

Adjusted EBITDA and cash available for distribution should not be considered alternatives to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA and cash available for distribution may have material limitations as performance measures because they exclude items that are necessary elements of our costs and operations. In addition, Adjusted EBITDA and cash available for distribution presented by other companies may not be comparable to our presentation, since each company may define these terms differently.

 

Page 9 of 13


The table below reconciles net income attributable to Rentech Nitrogen excluding loss on debt extinguishment and gain on fair value adjustment to earn-out contingent consideration to net income for the three and six months ended June 30, 2013 (stated in thousands, except per share data).

 

     For the Three
Months Ended
June 30, 2013
    For the Six
Months Ended
June 30, 2013
 

Net Income

   $ 28,721      $ 43,730   

Less: Income Allocated to Unvested Units

     115        194   
  

 

 

   

 

 

 

Net Income Allocated to Common Unit Holders

   $ 28,606      $ 43,536   
  

 

 

   

 

 

 

Loss on Debt Extinguishment

     6,001        6,001   
  

 

 

   

 

 

 

Gain on Fair Value Adjustment to Earn-Out Contingent Consideration

     (4,823     (4,611
  

 

 

   

 

 

 

Net Income Allocated to Common Unit Holders Excluding Loss on Debt Extinguishment and Gain on Fair Value Adjustment to Earn-Out Contingent Consideration

   $ 29,784      $ 44,926   
  

 

 

   

 

 

 

Net Income per Unit Allocated to Common Unit Holders

   $ 0.74      $ 1.12   

Loss Per Unit on Debt Extinguishment

     0.15        0.16   

Gain per Unit on Fair Value Adjustment to Earn-Out Contingent Consideration

     (0.12     (0.12
  

 

 

   

 

 

 

Net Income per Unit Allocated to Common Unit Holders Excluding Loss on Debt Extinguishment and Gain on Fair Value Adjustment to Earn-Out Consideration

   $ 0.77      $ 1.16   
  

 

 

   

 

 

 

Weighted-Average Common Units Outstanding

     38,842        38,840   

 

Page 10 of 13


The table below reconciles consolidated Adjusted EBITDA and cash available for distribution to net income for the three months ended June 30, 2013 (stated in thousands, except per unit data).

 

     For the Three Months Ended June 30, 2013  
     East Dubuque
Facility
    Pasadena
Facility
    Partnership
Level
    Consolidated  

Net Income

   $ 36,044      $ 34      $ (7,357   $ 28,721   

Plus: Net Interest Expense

     —          3        3,923        3,926   

Plus: Loss on Debt Extinguishment

     —          —          6,001        6,001   

Less: Gain on Fair Value Adjustment to Earn-Out Consideration

     —          —          (4,823     (4,823

Plus: Loss on Interest Rate Swaps

     —          —          96        96   

Plus: Income Tax Expense

     326        101        (302     125   

Plus: Depreciation and Amortization

     2,483        1,905        —          4,388   

Plus: Other

     —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 38,853      $ 2,043      $ (2,462   $ 38,434   

Plus: Non-Cash Compensation Expense

     —          —          523        523   

Less: Maintenance Capital Expenditures1

     (1,912     —          —          (1,912

Less: Net Interest Expense and Other Debt Service

     —          (3     (5,860     (5,863

Plus: Distribution of Cash Reserves for Working Capital

     —          —          1,839        1,839   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Available for Distribution

   $ 36,941      $ 2,040      $ (5,960   $ 33,021   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Available for Distribution, per Unit

   $ 0.95      $ 0.05      $ (0.15   $ 0.85   
  

 

 

   

 

 

   

 

 

   

 

 

 

Common Units Outstanding

     38,849        38,849        38,849        38,849   

 

1 

Excludes $1.6 million of maintenance capital expenditures at the Pasadena Facility funded by debt.

 

Page 11 of 13


The table below reconciles consolidated Adjusted EBITDA to net income for the six months ended June 30, 2013 (stated in thousands).

 

     For the Six Months Ended June 30, 2013  
     East Dubuque
Facility
     Pasadena
Facility
     Partnership
Level
    Consolidated  

Net Income

   $ 53,314       $ 1,850       $ (11,434   $ 43,730   

Plus: Net Interest Expense

     —           6         5,723        5,729   

Plus: Loss on Debt Extinguishment

     —           —           6,001        6,001   

Less: Gain on Fair Value Adjustment to Earn-Out Consideration

     —           —           (4,611     (4,611

Plus: Loss on Interest Rate Swaps

     —           —           7        7   

Plus: Income Tax Expense

     369         138         (302     205   

Plus: Depreciation and Amortization

     4,788         3,207         —          7,995   
  

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 58,471       $ 5,201       $ (4,616   $ 59,056   

The table below reconciles EBITDA to net income for the three and six months ended June 30, 2012 (stated in thousands).

 

     Three Months
Ended June 30,
2012
    Six Months
Ended June  30,
2012
 

Net income

   $ 41,228      $ 60,601   

Plus:

    

Net Interest Expense

     28        112   

Depreciation and Amortization

     3,312        5,777   

Loss on Interest Rate Swaps

     580        580   

Other

     (232     (232
  

 

 

   

 

 

 

EBITDA

   $ 44,916      $ 66,838   

The table below reconciles forecasted EBITDA and cash available for distribution to forecasted net income for the twelve months ending December 31, 2013, for the upper and lower ends of the range of cash distributions contained in the Partnership’s updated guidance for 2013 (stated in thousands, except per unit data).

 

     Forecasted For the Twelve Months
Ending December 31, 2013
 

(Stated in thousands, except per unit data)

       

Net Income

   $ 67,000        —         $ 73,600   

Plus: Net Interest Expense

     16,300        —           16,300   

Plus: Loss on Debt Extinguishment

     6,000        —           6,000   

Less: Gain on Fair Value Adjustment to

Earn-Out Consideration

     (4,600     —           (4,600

Plus: Income Tax Expense

     300        —           300   

Plus: Depreciation and Amortization

     16,900        —           16,900   
  

 

 

   

 

 

    

 

 

 

EBITDA

   $ 101,900        —         $ 108,500   

Plus: Non-Cash Compensation Expense

     2,200        —           2,200   

Less: Maintenance Capital Expenditures1

     (10,200     —           (10,200

Less: Net Interest Expense and Other Debt Service

     (20,100     —           (20,100

Plus: Distribution of Cash Reserves for Working Capital

     5,700        —           4,900   
  

 

 

   

 

 

    

 

 

 

Cash Available for Distribution

   $ 79,500        —         $ 85,300   
  

 

 

   

 

 

    

 

 

 

Cash Available for Distribution, per Unit

   $ 2.05        —         $ 2.20   
  

 

 

   

 

 

    

 

 

 

Common Units Outstanding

     38,846        —           38,846   

 

1 

Excludes $15.8 million of maintenance capital expenditures at the Pasadena Facility funded by debt.

 

Page 12 of 13


About Rentech Nitrogen, L.P.

Rentech Nitrogen (www.rentechnitrogen.com) was formed by Rentech, Inc. to own, operate and expand its nitrogen fertilizer business. Rentech Nitrogen’s assets consist of two fertilizer production facilities owned by its operating subsidiaries. The East Dubuque Facility is located in the northwestern corner of Illinois, and uses natural gas as a feedstock to produce primarily anhydrous ammonia and UAN solution for sale to customers in the Mid Corn Belt. The Pasadena Facility is located in Pasadena, Texas, along the Houston Ship Channel, and uses ammonia and sulfur as feedstocks to produce ammonium sulfate and ammonium thiosulfate fertilizers, and sulfuric acid. Rentech Nitrogen is the largest producer of synthetic granulated ammonium sulfate fertilizer in North America, with sales in the United States and internationally.

Forward-Looking Statements

This press release contains forward-looking statements about matters such as: our forecasted EBITDA and cash available for distribution for the twelve months ending December 31, 2013; the outlook for our nitrogen fertilizer businesses; and the timing of our expansion projects and growth opportunities for the facilities. These statements are based on management’s current expectations and actual results may differ materially as a result of various risks and uncertainties. Other factors that could cause actual results to differ from those reflected in the forward-looking statements are set forth in Rentech Nitrogen’s prior press releases and periodic public filings with the Securities and Exchange Commission, which are available via Rentech Nitrogen’s website at www.rentechnitrogen.com. The forward-looking statements in this press release are made as of the date of this press release and Rentech Nitrogen does not undertake to revise or update these forward-looking statements, except to the extent that it is required to do so under applicable law.

Source: Rentech Nitrogen Partners, L.P.

Rentech Nitrogen Partners, L.P.

Julie Dawoodjee Cafarella

Vice President of Investor Relations and Communications

310-571-9800

ir@rnp.net

 

Page 13 of 13