Exhibit 99.1
FOR IMMEDIATE RELEASE
Rentech Nitrogen Partners, L.P. Announces Results for Fourth Quarter and Full Year 2014
LOS ANGELES, CA (March 17, 2015) – Rentech Nitrogen Partners, L.P. (NYSE: RNF) today announced financial and operating results for the three months and year ended December 31, 2014.
Keith Forman, CEO of Rentech Nitrogen, said, “Our production volumes in 2014 were below our expectations, which hurt results. We had unplanned downtime at the East Dubuque facility. At our Pasadena complex, we chose to scale back production during the fourth quarter as part of our restructuring plan to bring the facility back to positive EBITDA.”
Mr. Forman continued, “The commodity environment for the first half of 2015 looks favorable. We have locked prices on significant portions of our product deliveries for both facilities and natural gas costs for East Dubuque. We are already seeing the benefits of improved operating margins and a lower cost structure at the Pasadena facility following the restructuring of the plant.”
Mr. Forman added, “We will carefully evaluate strategic alternatives for Rentech Nitrogen under the process that we recently launched.”
Summary of Results
Revenues for the fourth quarter of 2014 were $80.6 million, compared to $54.6 million for the prior year period. Revenues for 2014 were $334.6 million, compared to $311.4 million in 2013.
Gross profit for the fourth quarter of 2014 was $11.8 million, compared to a gross loss of $8.0 million for the same period last year. Gross profit for 2014 was $60.5 million, compared to $71.4 million in 2013.
Adjusted EBITDA for the fourth quarter of 2014 was $13.4 million, compared to an Adjusted EBITDA loss of $8.6 million in the corresponding 2013 period. Adjusted EBITDA for 2014 was $64.7 million, compared to $66.5 million in 2013. A further explanation of Adjusted EBITDA, a non-GAAP financial measure, as used here and throughout this press release appears below.
Net income for the fourth quarter of 2014 was $7.8 million, or $0.20 per basic unit. Net income for the fourth quarter of 2014 was $2.2 million, or $0.06 per basic unit, excluding the loss allocated to unvested units and the Agrifos settlement. This compares to a net loss of $17.4 million, or a loss of $0.45 per basic unit, for the prior year period.
Net loss for 2014 was $1.1 million, or a loss of $0.03 per basic unit. This compares to net income of $4.1 million, or $0.10 per basic unit, for 2013. Net income was $21.1 million, or $0.55 per basic unit, for 2014, excluding the loss allocated to unvested units, the Pasadena goodwill impairment, loss on debt extinguishment and the Agrifos settlement. This compares to $35.5 million, or $0.90 per basic unit, for 2013, excluding income allocated to unvested units, the Pasadena goodwill impairment, loss on debt extinguishment and gain on fair value adjustment to earn-out consideration.
Three Months Ended December 31, 2014
East Dubuque Facility
Revenues for the fourth quarter of 2014 were $47.9 million, compared to $30.9 million for the same period last year. Higher ammonia sales volume contributed to this increase, partially offset by lower natural gas sales and lower ammonia sales prices. A scheduled turnaround and a fire in the fourth quarter of 2013 lowered production volumes in the prior year period.
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Average sales prices per ton for the fourth quarter of 2014 were 4% lower for ammonia and relatively flat for UAN, as compared with the same period last year. These two products comprised 84% of the East Dubuque facility’s revenues for the fourth quarter of 2014 and 78% for the same period last year.
Gross profit was $14.0 million for the fourth quarter of 2014; this compares to a gross loss of $0.5 million for the same period last year. Gross profit margin for the fourth quarter of 2014 was 29%, compared to a gross loss margin of 2% for the same period last year. Gross profit and margin for 2013 were negatively impacted by turnaround expenses totaling $7.8 million, fixed operating costs of $4.3 million while the East Dubuque plant was idle, and a $1.0 million deductible under our property insurance policy related to the 2013 fire. Gross profit for 2014 increased despite an increase in depreciation (included in cost of sales) and increased costs of natural gas and electricity. Natural gas costs reflected higher natural gas prices, increases in sales volumes and a loss on natural gas derivatives of $3.1 million, partially offset by a $2.5 million decline in the cost of natural gas sold. The increase in depreciation expense was primarily due to the completion of the ammonia expansion project in late 2013. Increased electricity costs reflected higher rates and usage, due in part to the new equipment installed as part of the ammonia expansion project.
Adjusted EBITDA for the fourth quarter of 2014 was $17.0 million, compared to $0.3 million in the corresponding period in 2013.
Net income was $12.9 million for the fourth quarter of 2014, compared to a net loss of $2.1 million for the same period last year.
Pasadena Facility
Revenues for the fourth quarter of 2014 were $32.6 million, compared to $23.7 million for the same period last year. Higher sales volumes for ammonium sulfate and sulfuric acid and higher sales prices of ammonium sulfate contributed to the increase. Sales volume for ammonium sulfate increased as we gained market share and demand grew. Sales volume of sulfuric acid in 2014 benefited from higher production compared to 2013, when unplanned outages reduced production.
Average sales prices per ton increased for ammonium sulfate by 21% and remained relatively flat for sulfuric acid for the fourth quarter of 2014, as compared with the same period last year. Factors contributing to higher sales prices for ammonium sulfate include a larger proportion of higher-priced domestic sales and more favorable supply and demand conditions. Ammonium sulfate and sulfuric acid comprised 87% of the Pasadena facility’s revenues for the fourth quarter of 2014 and 68% for the same period last year.
Gross loss was $2.2 million for the fourth quarter of 2014, compared to a gross loss of $7.6 million for the same period last year. Gross loss margin for the fourth quarter of 2014 was 7% compared to a gross loss margin of 32% for the same period last year. Increases of volumes, by 16% for ammonium sulfate and 76% for sulfuric acid, drove improvements in margins.
Adjusted EBITDA loss for the fourth quarter of 2014 was $1.1 million, compared to $7.5 million in the corresponding period in 2013.
Net loss was $3.4 million for the fourth quarter 2014, compared to $9.4 million for the same period last year.
Year Ended December 31, 2014
East Dubuque Facility
Revenues for 2014 were $196.4 million, compared to $177.7 million for 2013. The increase was due to higher sales volumes for ammonia and urea and higher natural gas sales, partially offset by lower sales prices for ammonia, UAN and urea.
Ammonia production capacity increased 23% after we completed the ammonia expansion project in December 2013. This additional ammonia available for sale enabled higher ammonia deliveries in 2014. During the fourth quarter of 2013, production was interrupted due to a planned turnaround and a subsequent fire, which resulted in lower amounts of ammonia available for sale in 2013. Urea sales increased during 2014 due to higher sales of DEF and granular urea.
Average sales prices per ton for 2014 were 16% lower for ammonia and 5% lower for UAN, compared to 2013. These two products comprised 81% of revenues for 2014 and 82% for 2013. The decreases in our sales prices for ammonia and UAN were consistent with the decline in global nitrogen fertilizer prices in the earlier portions of the respective years, partially offset by increases in the latter portions of the respective years. These decreases were caused by significantly higher levels of low-priced urea in the global market, particularly from China. Prices were also affected by additional nitrogen fertilizer production brought on line in North America over the last 12 months.
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Gross profit was $74.8 million for 2014, compared to $80.9 million for 2013. Gross profit margin was 38% for 2014, compared to 46% for 2013. The decreases in gross profit and gross margin were primarily due to lower product pricing and increased costs of natural gas, depreciation and electricity. Gross profit was also negatively impacted by 17 days of unplanned downtime, which reduced the amount of product available for sale.
Adjusted EBITDA for 2014 was $85.8 million, compared to $84.5 million for 2013.
Net income was $69.8 million for 2014, compared to $75.2 million for 2013.
Pasadena Facility
Revenues for 2014 were $138.2 million, compared to $133.7 million for 2013. The increase was due to higher sales volumes for ammonium sulfate, partially offset by lower sales volumes for sulfuric acid and lower sales prices for ammonium sulfate and sulfuric acid.
Ammonium sulfate production increased after we completed the debottlenecking project in December 2013. Also, demand increased due to favorable weather during the planting season and an increase in international orders. After expanding ammonium sulfate production capacity, less sulfuric acid was available for sale, causing a decline in sulfuric acid sales volume during 2014. In October of 2014, we initiated a plan to reduce production and costs, and increase profitability at the Pasadena facility.
Average sales prices per ton decreased by 19% for ammonium sulfate and 6% for sulfuric acid in 2014, compared to 2013. These two products comprised 91% of revenues for 2014 and 90% for 2013. A higher proportion of export sales, priced lower than domestic sales, contributed to the decline in average product prices. Furthermore, higher exports of ammonium sulfate from China put downward pressure on prices. The additional supplies from China originated from new plants that produce ammonium sulfate as a by-product of manufacturing caprolactam.
Gross loss was $14.3 million for 2014, compared to gross loss of $9.5 million for 2013. Gross loss margin for 2014 was 10%, compared to gross loss margin of 7% for 2013. The decreases in gross profit and gross profit margin were primarily due to declines in average sales prices for ammonium sulfate, increases in the unit prices of raw materials, turnaround expenses and other unplanned maintenance expenses.
Adjusted EBITDA loss for 2014 was $12.4 million, compared to $10.1 million for 2013.
Net loss was $47.9 million for 2014, compared to $48.4 million in 2013. Net loss excluding goodwill impairment was $20.7 million for 2014, compared to $18.3 million in 2013.
Outlook
Full Year 2015 Guidance
Rentech Nitrogen provided the following forecast for production, product deliveries, consumption of inputs and capital expenditures for the full year of 2015. The partnership noted that actual results may differ from the forecast for a number of reasons, particularly in the event of unplanned downtime or reduced production due to the possibility of issues related to the ammonia converter at the East Dubuque facility, which is scheduled to be replaced in late 2016.
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Annual Guidance
| | | | |
| | | 2015 | |
Production (in thousand tons) | | | | |
East Dubuque Facility | | | | |
Ammonia | | | 340 | |
UAN | | | 300 | |
Urea (liquid and granular) | | | 190 | |
Nitric acid | | | 120 | |
CO2 | | | 80 | |
Pasadena Facility | | | | |
Ammonium sulfate | | | 500 | |
Sulfuric acid | | | 590 | |
Ammonium thiosulfate | | | 70 | |
Forecasted Deliveries (in thousand tons) | | | | |
East Dubuque Facility | | | | |
Ammonia | | | 200 | |
UAN | | | 300 | |
Urea (liquid and granular) | | | 60 | |
Nitric acid | | | 10 | |
Pasadena Facility | | | | |
Ammonium sulfate | | | 520 | |
Sulfuric acid | | | 210 | |
Ammonium thiosulfate | | | 80 | |
Forecasted Consumption in Deliveries | | | | |
East Dubuque Facility | | | | |
Natural gas (in million MMBtus) | | | 13.0 | |
Pasadena Facility | | | | |
Ammonia | | | 140 | |
Sulfur | | | 220 | |
Sulfuric acid | | | 600 | |
Maintenance Capital Expenditures (in millions) | | | | |
East Dubuque facility | | $ | 10.7 | |
Pasadena facility | | $ | 4.0 | |
Growth Capital Expenditures (in millions)1 | | | | |
East Dubuque facility | | $ | 19.0 | |
Ammonia converter project | | $ | 15.8 | |
Nitric acid project | | $ | 1.3 | |
Pasadena facility | | $ | 1.8 | |
| 1 | We expect to fund growth capital expenditures with borrowings under the partnership’s credit facility. |
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First Quarter 2015 Guidance
The partnership provided the following forecast for product deliveries, consumption of inputs and capital expenditures for the first quarter of 2015.
Quarterly Guidance
| | | | |
| | | 1Q15 | |
Forecasted Deliveries (in thousand tons) | | | | |
East Dubuque Facility | | | | |
Ammonia | | | 32 | |
UAN | | | 49 | |
Urea (liquid and granular) | | | 16 | |
Nitric acid | | | 1 | |
Pasadena Facility | | | | |
Ammonium sulfate | | | 96 | |
Sulfuric acid | | | 37 | |
Ammonium thiosulfate | | | 22 | |
Forecasted Consumption in Deliveries | | | | |
East Dubuque Facility | | | | |
Natural gas (in million MMBtus) | | | 2.2 | |
Pasadena Facility | | | | |
Ammonia | | | 27 | |
Sulfur | | | 42 | |
Sulfuric acid | | | 109 | |
Maintenance Capital Expenditures (in millions) | | | | |
East Dubuque facility | | $ | 2.2 | |
Pasadena facility | | $ | 0.3 | |
Growth Capital Expenditures (in millions)1 | | | | |
East Dubuque facility | | $ | 6.1 | |
Ammonia converter project | | $ | 4.4 | |
Nitric acid project | | $ | 1.3 | |
Pasadena facility | | $ | 1.8 | |
| 1 | We expect to fund growth capital expenditures with borrowings under the partnership’s credit facility. |
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2015 Progress
The partnership provided the following key operating metrics, progress against its forecasted product deliveries and consumption of inputs for 2015 for the East Dubuque and Pasadena facilities:
Locked-in or Delivered
| | | | | | | | | | | | |
| | | Locked-in or Delivered | |
East Dubuque Facility | | | | | | | | | | | | |
Deliveries1 | | | | | | | | | | | | |
Ammonia | | | | | | | | | | | | |
Tons (in thousands) | | | 87 | | | | or | | | | 43 | % |
Average price | | $ | 566 | | | | | | | | | |
UAN | | | | | | | | | | | | |
Tons (in thousands) | | | 74 | | | | or | | | | 25 | % |
Average price | | $ | 279 | | | | | | | | | |
Natural Gas in Cost of Sales1
(million MMBtus) | | | 7.9 | | | | or | | | | 61 | % |
Average cost per million MMBtus
(including transportation costs) | | $ | 4.18 | | | | | | | | | |
Pasadena Facility | | | | | | | | | | | | |
Deliveries and Commitments1 | | | | | | | | | | | | |
Ammonium sulfate | | | | | | | | | | | | |
Tons (in thousands) | | | 186 | | | | or | | | | 36 | % |
Average price | | $ | 237 | | | | | | | | | |
| 1 | Through February 28, 2015. |
Fourth Quarter 2014 Cash Available for Distribution
Cash distribution for the fourth quarter of 2014 was $11.7 million, or $0.30 per unit. The distribution was paid on February 27, 2015 to unit holders of record as of February 23, 2015. The calculation of the cash available for distribution appears below in this press release.
Conference Call with Management
Rentech Nitrogen will hold a conference call today, March 17, 2015 at 7:00 a.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 800-774-6070 or 630-691-2753 and entering the pass code 9432139#. An audio webcast of the call will be available atwww.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 9:30 a.m. PDT on March 17 through 11:59 p.m. PDT on March 24. The replay teleconference will be available by dialing 888-843-7419 or 630-652-3042 and entering the audience passcode 9432139#.
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| | | | | | | | | | | | | | | | |
| | | For the Three Months | | | For the Year | |
| | | Ended December 31, | | | Ended December 31, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Production Tons (in thousands) | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Ammonia | | | 86 | | | | 17 | | | | 324 | | | | 244 | |
Ammonia Available for Sale (included in line above) | | | 53 | | | | 4 | | | | 178 | | | | 106 | |
UAN | | | 56 | | | | 26 | | | | 269 | | | | 262 | |
Other Products (excludes CO2) | | | 64 | | | | 27 | | | | 281 | | | | 265 | |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonium Sulfate | | | 111 | | | | 91 | | | | 522 | | | | 465 | |
Sulfuric Acid | | | 147 | | | | 111 | | | | 447 | | | | 478 | |
Ammonium Thiosulfate | | | 18 | | | | 17 | | | | 63 | | | | 60 | |
Delivered Tons (in thousands) | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Ammonia | | | 47 | | | | 27 | | | | 153 | | | | 103 | |
UAN | | | 53 | | | | 32 | | | | 267 | | | | 269 | |
Other Products (excludes CO2) | | | 17 | | | | 8 | | | | 66 | | | | 57 | |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonium Sulfate | | | 114 | | | | 98 | | | | 572 | | | | 428 | |
Sulfuric Acid | | | 51 | | | | 29 | | | | 112 | | | | 148 | |
Ammonium Thiosulfate | | | 11 | | | | 13 | | | | 67 | | | | 54 | |
Average Sales Price per Ton | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Ammonia | | $ | 558 | | | $ | 582 | | | $ | 549 | | | $ | 650 | |
UAN | | $ | 267 | | | $ | 264 | | | $ | 280 | | | $ | 295 | |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonium Sulfate | | $ | 228 | | | $ | 189 | | | $ | 203 | | | $ | 251 | |
Sulfuric Acid | | $ | 79 | | | $ | 78 | | | $ | 86 | | | $ | 91 | |
Ammonium Thiosulfate | | $ | 178 | | | $ | 184 | | | $ | 153 | | | $ | 189 | |
Input Costs | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Natural Gas | | | | | | | | | | | | | | | | |
Natural Gas Used in Production (Thousand MMBtus) | | | 2,976 | | | | 704 | | | | 11,487 | | | | 8,942 | |
Average Natural Gas Cost per MMBtu, including transportation cost | | $ | 4.85 | | | $ | 4.35 | | | $ | 4.98 | | | $ | 4.18 | |
Natural Gas Cost in Cost of Sales (Thousand MMBtus) | | | 2,914 | | | | 2,795 | | | | 11,335 | | | | 10,085 | |
Average Natural Gas Cost per MMBtu, including transportation cost | | $ | 4.88 | | | $ | 4.19 | | | $ | 5.00 | | | $ | 4.16 | |
Input Costs | | | | | | | | | | | | | | | | |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonia | | | | | | | | | | | | | | | | |
Ammonia Used in Production (Thousand Tons) | | | 31 | | | | 26 | | | | 142 | | | | 126 | |
Ammonia in Cost of Sales (Thousand Tons) | | | 31 | | | | 26 | | | | 155 | | | | 115 | |
Sulfur | | | | | | | | | | | | | | | | |
Sulfur Used in Production (Thousand Tons) | | | 53 | | | | 41 | | | | 163 | | | | 173 | |
Sulfur in Cost of Sales (Thousand Tons) | | | 48 | | | | 38 | | | | 194 | | | | 169 | |
On-Stream Rates1: | | | | | | | | | | | | | | | | |
East Dubuque Facility: | | | | | | | | | | | | | | | | |
Ammonia | | | 93.5 | % | | | 34.8 | % | | | 95.6 | % | | | 83.6 | % |
UAN | | | 93.5 | % | | | 39.1 | % | | | 95.3 | % | | | 84.1 | % |
Pasadena Facility: | | | | | | | | | | | | | | | | |
Ammonium Sulfate | | | 82.1 | % | | | 59.6 | % | | | 82.7 | % | | | 76.2 | % |
Sulfuric Acid | | | 91.4 | % | | | 77.8 | % | | | 87.0 | % | | | 87.5 | % |
| 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. |
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Rentech Nitrogen Partners, L.P.
Consolidated Statements of Operations
(Amounts in Thousands, Except per Unit Data)
| | | | | | | | | | | | | | | | |
| | | For the Three Months | | | For the Year | |
| | | Ended December 31, | | | Ended December 31, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| | | (unaudited) | |
Revenues | | $ | 80,560 | | | $ | 54,576 | | | $ | 334,612 | | | $ | 311,375 | |
Cost of Sales | | | 68,754 | | | | 62,609 | | | | 274,135 | | | | 240,021 | |
| | | | | | | | | | | | | | | | |
Gross Profit (Loss) | | | 11,806 | | | | (8,033 | ) | | | 60,477 | | | | 71,354 | |
Operating Expenses | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses | | | 4,410 | | | | 3,563 | | | | 18,011 | | | | 17,285 | |
Depreciation and amortization | | | 417 | | | | 1,203 | | | | 1,509 | | | | 4,077 | |
Pasadena goodwill impairment | | | — | | | | — | | | | 27,202 | | | | 30,029 | |
Other | | | 16 | | | | 770 | | | | 542 | | | | 806 | |
| | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 4,843 | | | | 5,536 | | | | 47,264 | | | | 52,197 | |
| | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | 6,963 | | | | (13,569 | ) | | | 13,213 | | | | 19,157 | |
Other Income (Expense), Net | | | | | | | | | | | | | | | | |
Interest expense | | | (4,620 | ) | | | (4,373 | ) | | | (19,057 | ) | | | (14,098 | ) |
Agrifos settlement | | | 5,632 | | | | — | | | | 5,632 | | | | — | |
Loss on debt extinguishment | | | — | | | | — | | | | (635 | ) | | | (6,001 | ) |
Gain on fair value adjustment to earn-out consideration | | | — | | | | — | | | | — | | | | 4,920 | |
Other income (expense), net | | | (197 | ) | | | 1 | | | | (197 | ) | | | (6 | ) |
| | | | | | | | | | | | | | | | |
Total Other Income (Expense), Net | | | 815 | | | | (4,372 | ) | | | (14,257 | ) | | | (15,185 | ) |
| | | | | | | | | | | | | | | | |
Income (Loss) Before Income Taxes | | | 7,778 | | | | (17,941 | ) | | | (1,044 | ) | | | 3,972 | |
Income tax (benefit) expense | | | (64 | ) | | | (534 | ) | | | 18 | | | | (96 | ) |
| | | | | | | | | | | | | | | | |
Net Income (Loss) | | | 7,842 | | | $ | (17,407 | ) | | $ | (1,062 | ) | | $ | 4,068 | |
| | | | | | | | | | | | | | | | |
Basic and Diluted Net Income (Loss) per Common Unit Allocated to Common Unitholders—Basic | | $ | 0.20 | | | $ | (0.45 | ) | | $ | (0.03 | ) | | $ | 0.10 | |
| | | | | | | | | | | | | | | | |
Weighted-Average Shares Used to Compute Net Income (Loss) per Common Share: | | | | | | | | | | | | | | | | |
Basic | | | 38,899 | | | | 38,869 | | | | 38,898 | | | | 38,850 | |
| | | | | | | | | | | | | | | | |
Diluted | | | 38,912 | | | | 38,869 | | | | 38,898 | | | | 38,945 | |
| | | | | | | | | | | | | | | | |
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Rentech Nitrogen Partners, L.P.
Statements of Operations by Business Segment
(Stated in Thousands)
| | | | | | | | | | | | | | | | |
| | | For the Three Months | | | For the Year | |
| | | Ended December 31, | | | Ended December 31, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| | | (unaudited) | | | | | | | |
Revenues | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 47,924 | | | $ | 30,862 | | | $ | 196,379 | | | $ | 177,700 | |
Pasadena | | | 32,636 | | | | 23,714 | | | | 138,233 | | | | 133,675 | |
| | | | | | | | | | | | | | | | |
Total Revenues | | $ | 80,560 | | | $ | 54,576 | | | $ | 334,612 | | | $ | 311,375 | |
| | | | | | | | | | | | | | | | |
Gross Profit (Loss) | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 13,969 | | | $ | (470 | ) | | $ | 74,785 | | | $ | 80,883 | |
Pasadena | | | (2,163 | ) | | | (7,563 | ) | | | (14,308 | ) | | | (9,529 | ) |
| | | | | | | | | | | | | | | | |
Total Gross Profit (Loss) | | $ | 11,806 | | | $ | (8,033 | ) | | $ | 60,477 | | | $ | 71,354 | |
| | | | | | | | | | | | | | | | |
Selling, General and Administrative Expenses | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 988 | | | $ | 1,153 | | | $ | 4,165 | | | $ | 4,576 | |
Pasadena | | | 931 | | | | 953 | | | | 5,078 | | | | 4,764 | |
| | | | | | | | | | | | | | | | |
Total Segment Selling, General and Administrative Expenses | | $ | 1,919 | | | $ | 2,106 | | | $ | 9,243 | | | $ | 9,340 | |
| | | | | | | | | | | | | | | | |
Depreciation and Amortization | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 72 | | | $ | 39 | | | $ | 194 | | | $ | 191 | |
Pasadena | | | 345 | | | | 1,164 | | | | 1,315 | | | | 3,886 | |
| | | | | | | | | | | | | | | | |
Total Segment Depreciation and Amortization Recorded in Operating Expenses | | $ | 417 | | | $ | 1,203 | | | $ | 1,509 | | | $ | 4,077 | |
| | | | | | | | | | | | | | | | |
Net Income (Loss) | | | | | | | | | | | | | | | | |
East Dubuque | | $ | 12,877 | | | $ | (2,139 | ) | | $ | 69,803 | | | $ | 75,244 | |
Pasadena | | | (3,380 | ) | | | (9,442 | ) | | | (47,925 | ) | | | (48,357 | ) |
| | | | | | | | | | | | | | | | |
Total Segment Net Income (Loss) | | $ | 9,497 | | | $ | (11,581 | ) | | $ | 21,878 | | | $ | 26,887 | |
| | | | | | | | | | | | | | | | |
Reconciliation of Segment Net Income (Loss) to Consolidated Net Income (Loss) | | | | | | | | | | | | | | | | |
Segment net income (loss) | | $ | 9,497 | | | $ | (11,581 | ) | | $ | 21,878 | | | $ | 26,887 | |
Partnership and unallocated expenses recorded as selling, general and administrative expenses | | | (2,491 | ) | | | (1,457 | ) | | | (8,768 | ) | | | (7,945 | ) |
Partnership and unallocated income (expense) recorded as other income (expense) | | | 5,435 | | | | — | | | | 4,800 | | | | (1,081 | ) |
Unallocated interest expense and loss on interest rate swaps | | | (4,599 | ) | | | (4,370 | ) | | | (18,972 | ) | | | (14,096 | ) |
Income tax benefit | | | — | | | | 1 | | | | — | | | | 303 | |
| | | | | | | | | | | | | | | | |
Consolidated Net Income (Loss) | | $ | 7,842 | | | $ | (17,407 | ) | | $ | (1,062 | ) | | $ | 4,068 | |
| | | | | | | | | | | | | | | | |
Page 9 of 14
Rentech Nitrogen Partners, L.P.
Selected Balance Sheet Data
(Stated in Thousands)
| | | | | | | | |
| | | As of December 31, | |
| | | 2014 | | | 2013 | |
| | | (unaudited) | |
Cash | | $ | 28,028 | | | $ | 34,060 | |
Working capital | | | 14,499 | | | | 21,188 | |
Construction in progress | | | 47,758 | | | | 33,531 | |
Total assets | | | 414,316 | | | | 406,344 | |
Total debt | | | 335,000 | | | | 320,000 | |
Total Partners’ capital | | | 8,891 | | | | 23,125 | |
Disclosure Regarding Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income (loss) plus net interest expense, income tax expense, depreciation and amortization, Pasadena goodwill, Agrifos settlement and fair value adjustment to earn-out consideration. As used in this table, we calculate cash available for distribution as Adjusted EBITDA plus non-cash compensation expense, less the sum of maintenance capital expenditures not funded by financing proceeds, net interest expense and cash reserved for working capital purposes. 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. |
Net income (loss) excluding income (loss) allocated to unvested units, Pasadena goodwill impairment, loss on debt extinguishment, Agrifos settlement and fair value adjustment to earn-out consideration is included to provide management and investors with net income results for Rentech Nitrogen that are more easily compared to the prior year period.
Non-GAAP financial measures should not be considered alternatives to any measure of financial performance or liquidity presented in accordance with GAAP. Non-GAAP financial measures 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.
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The table below reconciles Adjusted EBITDA to net income (loss) for the fourth quarter of 2014. It also reconciles cash available for distribution to Adjusted EBITDA, both of which are non-GAAP financial measures, for the three months ended December 31, 2014.
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended December 31, 2014 | |
(Stated in thousands, except per unit data) | | East Dubuque
Facility | | | Pasadena
Facility | | | Partnership
Level | | | Consolidated | |
| | | (unaudited) | |
Net income (loss) | | $ | 12,877 | | | $ | (3,380 | ) | | $ | (1,655 | ) | | $ | 7,842 | |
Plus: Net interest expense | | | 21 | | | | — | | | | 4,599 | | | | 4,620 | |
Plus: Income tax expense | | | — | | | | (64 | ) | | | — | | | | (64 | ) |
Plus: Loss on debt extinguishment | | | — | | | | — | | | | — | | | | — | |
Plus: Pasadena goodwill impairment | | | — | | | | — | | | | — | | | | — | |
Plus: Depreciation and amortization | | | 4,135 | | | | 2,319 | | | | — | | | | 6,454 | |
Plus: Agrifos settlement | | | — | | | | — | | | | (5,632 | ) | | | (5,632 | ) |
Plus: Other | | | — | | | | 5 | | | | 197 | | | | 202 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 17,033 | | | $ | (1,120 | ) | | $ | (2,491 | ) | | $ | 13,422 | |
Plus: Non-cash compensation expense | | | — | | | | — | | | | 124 | | | | 124 | |
Less: Maintenance capital expenditures | | | (3,157 | ) | | | (905 | ) | | | — | | | | (4,062 | ) |
Plus: Portion of capital expenditures financed | | | — | | | | 478 | | | | — | | | | 478 | |
Less: Net interest expense | | | (21 | ) | | | — | | | | (4,599 | ) | | | (4,620 | ) |
Less: Cash reserved for working capital purposes | | | — | | | | — | | | | 6,332 | | | | 6,332 | |
| | | | | | | | | | | | | | | | |
Cash available for distribution | | $ | 13,855 | | | $ | (1,547 | ) | | $ | (634 | ) | | $ | 11,674 | |
| | | | | | | | | | | | | | | | |
Cash available for distribution, per unit | | $ | 0.36 | | | $ | (0.04 | ) | | $ | (0.02 | ) | | $ | 0.30 | |
| | | | | | | | | | | | | | | | |
Common units outstanding | | | 38,912 | | | | 38,912 | | | | 38,912 | | | | 38,912 | |
The table below reconciles Adjusted EBITDA, which is a non-GAAP financial measure, to net income (loss) for 2014.
| | | | | | | | | | | | | | | | |
| | | For the Year Ended December 31, 2014 | |
(Stated in thousands, except per unit data) | | East Dubuque
Facility | | | Pasadena
Facility | | | Partnership
Level | | | Consolidated | |
| | | (unaudited) | |
Net income (loss) | | $ | 69,803 | | | $ | (47,925 | ) | | $ | (22,940 | ) | | $ | (1,062 | ) |
Plus: Net interest expense | | | 85 | | | | — | | | | 18,973 | | | | 19,057 | |
Plus: Income tax expense | | | 1 | | | | 17 | | | | — | | | | 18 | |
Plus: Loss on debt extinguishment | | | — | | | | — | | | | 635 | | | | 635 | |
Plus: Pasadena goodwill impairment | | | — | | | | 27,202 | | | | — | | | | 27,202 | |
Plus: Depreciation and amortization | | | 15,912 | | | | 8,345 | | | | — | | | | 24,257 | |
Plus: Agrifos settlement | | | — | | | | — | | | | (5,632 | ) | | | (5,632 | ) |
Plus: Other | | | — | | | | 5 | | | | 197 | | | | 202 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 85,801 | | | $ | (12,356 | ) | | $ | (8,767 | ) | | $ | 64,677 | |
| | | | | | | | | | | | | | | | |
The table below reconciles Adjusted EBITDA to net income (loss) for the three months ended December 31, 2013.
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended December 31, 2013 | |
(Stated in thousands) | | East Dubuque
Facility | | | Pasadena
Facility | | | Partnership
Level | | | Consolidated | |
| | | (unaudited) | |
Net income (loss) | | $ | (2,139 | ) | | $ | (9,442 | ) | | $ | (5,826 | ) | | $ | (17,407 | ) |
Plus: Net interest expense | | | — | | | | 2 | | | | 4,371 | | | | 4,373 | |
Plus: Income tax (benefit) expense | | | (294 | ) | | | (240 | ) | | | — | | | | (534 | ) |
Plus: Depreciation and amortization | | | 2,739 | | | | 2,192 | | | | — | | | | 4,931 | |
Less: Fair value adjustment to earn-out consideration | | | — | | | | — | | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 306 | | | $ | (7,488 | ) | | $ | (1,456 | ) | | $ | (8,638 | ) |
| | | | | | | | | | | | | | | | |
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The table below reconciles Adjusted EBITDA to net income (loss) for 2013.
| | | | | | | | | | | | | | | | |
| | | For the Year Ended December 31, 2013 | |
(Stated in thousands) | | East Dubuque
Facility | | | Pasadena
Facility | | | Partnership
Level | | | Consolidated | |
| | | (unaudited) | |
Net income (loss) | | $ | 75,244 | | | $ | (48,357 | ) | | $ | (22,819 | ) | | $ | 4,068 | |
Plus: Net interest expense | | | — | | | | 8 | | | | 14,090 | | | | 14,098 | |
Plus: Pasadena goodwill impairment | | | — | | | | 30,029 | | | | — | | | | 30,029 | |
Plus: Loss on debt extinguishment | | | — | | | | — | | | | 6,001 | | | | 6,001 | |
Plus: Loss on interest rate swaps | | | — | | | | — | | | | 7 | | | | 7 | |
Plus: Income tax (benefit) expense | | | 66 | | | | 141 | | | | (303 | ) | | | (96 | ) |
Plus: Depreciation and amortization | | | 9,239 | | | | 8,073 | | | | — | | | | 17,312 | |
Less: Fair value adjustment to earn-out consideration | | | — | | | | — | | | | (4,920 | ) | | | (4,920 | ) |
Less: Other | | | — | | | | — | | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 84,549 | | | $ | (10,106 | ) | | $ | (7,945 | ) | | $ | 66,498 | |
| | | | | | | | | | | | | | | | |
The table below reconciles net income attributable to Rentech Nitrogen excluding the loss allocated to unvested units and the Agrifos settlement for the three months ended December 31, 2014.
| | | | |
(Stated in Thousands, Except per Unit Data) | | For the Three Months
Ended December 31, 2014 | |
| | | (unaudited) | |
| |
Net income attributable to common unit holders | | $ | 7,842 | |
| |
(Loss) allocated to unvested units | | | (40 | ) |
| |
Agrifos settlement | | | (5,632 | ) |
| | | | |
Net income attributable to common unit holders excluding the Agrifos settlement | | $ | 2,170 | |
| | | | |
| |
Net income per unit attributable to common unit holders | | $ | 0.20 | |
| |
Per unit (loss) allocated to unvested units | | | — | |
| |
Per unit Agrifos settlement | | | (0.14 | ) |
| | | | |
Net income per unit attributable to common unit holders excluding the Agrifos settlement | | $ | 0.06 | |
| | | | |
| |
Weighted-Average Common Units Outstanding | | | 38,899 | |
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The table below reconciles net loss attributable to Rentech Nitrogen excluding loss allocated to unvested units, Pasadena goodwill impairment, loss on debt extingishment and Agrifos settlement for 2014. The table also reconciles net income attributable to Rentech Nitrogen excluding income allocated to unvested units, Pasadena goodwill impairment, loss on debt extinguishment and gain on fair value adjustment to earn-out consideration for 2013.
| | | | | | | | |
| | | For the Year Ended December 31, | |
(Stated in Thousands, Except per Unit Data) | | 2014 | | | 2013 | |
| | | (unaudited) | |
Net income (loss) attributable to common unit holders | | $ | (1,062 | ) | | $ | 4,068 | |
Income (loss) allocated to unvested units | | | (60 | ) | | | 366 | |
Pasadena goodwill impairment | | | 27,202 | | | | 30,029 | |
Loss on debt extinguishment | | | 635 | | | | 6,001 | |
Agrifos settlement | | | (5,632 | ) | | | — | |
Fair value adjustment to earn-out consideration | | | — | | | | (4,920 | ) |
| | | | | | | | |
Net income attributable to common unit holders excluding income (loss) allocated to unvested units, Pasadena goodwill impairment, loss on debt extinguishment, Agrifos settlement and fair value adjustment to earn-out consideration | | $ | 21,083 | | | $ | 35,544 | |
| | | | | | | | |
Net income (loss) per unit attributable to common unit holders | | $ | (0.03 | ) | | $ | 0.10 | |
Per unit income allocated to unvested units | | | — | | | | 0.01 | |
Per unit Pasadena goodwill impairment | | | 0.70 | | | | 0.77 | |
Per unit loss on debt extinguishment | | | 0.02 | | | | 0.15 | |
Per unit Agrifos settlement | | | (0.14 | ) | | | — | |
Per unit loss on fair value adjustment to earn-out consideration | | | — | | | | (0.13 | ) |
| | | | | | | | |
Net income (loss) per unit attributable to common unit holders excluding income (loss) allocated to unvested units, Pasadena goodwill impairment, loss on debt extinguishment, Agrifos settlement and fair value adjustment to earn-out consideration | | $ | 0.55 | | | $ | 0.90 | |
| | | | | | | | |
Weighted-Average Common Units Outstanding | | | 38,898 | | | | 38,850 | |
The table below reconciles net loss attributable to the Pasadena facility excluding goodwill impairment for 2014 and 2013.
| | | | | | | | |
| | | For the Years Ended December 31, | |
(Stated in thousands) | | 2014 | | | 2013 | |
| | | (unaudited) | |
Net loss for Pasadena | | $ | (47,925 | ) | | $ | (48,357 | ) |
Pasadena goodwill impairment | | | 27,202 | | | | 30,029 | |
| | | | | | | | |
Net loss for Pasadena excluding goodwill impairment | | $ | (20,723 | ) | | $ | (18,328 | ) |
| | | | | | | | |
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; it 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 forecasts for 2015; the outlook for our nitrogen fertilizer businesses; and trends in the pricing and demand for our nitrogen fertilizer products. These statements are based on management’s current expectations. 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 on Rentech Nitrogen’s website atwww.rentechnitrogen.com. The forward-looking statements in this press release are made as of the date of this press release. 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.
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Qualified Notice to Nominees and Brokers
This release is intended to serve as a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b). Please note that 100 percent of Rentech Nitrogen’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, Rentech Nitrogen’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.
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
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