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Press release from Business Wire

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

Thursday, August 08, 2013

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

07:00 EDT Thursday, August 08, 2013

LOS ANGELES (Business Wire) -- 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.

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.

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.

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

         

Locked-in or

Delivered

East Dubuque Facility

 

Deliveries 1

Ammonia

 

Tons

101,000 or 79%

Average Price

$655

UAN

 

Tons

289,000 or 100%

Average Price

$293

 

Natural Gas in Cost of Sales 2 (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

 

1Through July 31, 2013.

2Through June 30, 2013.

3Average 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#.

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  
 
 
           

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
 

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
 
 
           

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
 
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 Rates 1 :
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 % -
 

1The 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.

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       For the Six
Months Ended Months Ended
June 30, 2013 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

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
 

1Excludes $1.6 million of maintenance capital expenditures at the Pasadena Facility funded by debt.

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
 

1Excludes $15.8 million of maintenance capital expenditures at the Pasadena Facility funded by debt.

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.

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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