LOS ANGELES--(BUSINESS WIRE)--Rentech Nitrogen Partners, L.P. (NYSE: RNF) announced today that its Board of Directors has declared a cash distribution of $0.30 per common unit for the fourth quarter of 2014, payable on February 27, 2015 to holders of record as of February 23, 2015. The total cash available for distribution for the calendar year exceeded the distributions of $0.56 per common unit by approximately $0.21 per common unit.
The fourth quarter cash available for distribution was approximately $0.15 per common unit. The partnership is distributing an additional $0.15 per common unit in one-time proceeds from a settlement agreement and changes in working capital. Cash distributions in 2015 may be reduced by $0.15 per common unit to replenish working capital.
Cash available for distribution for 2014 is lower than previous expectations because of a challenging ammonium sulfate market, with lower product prices and compressed dollar margins compared to those realized in 2013. Unscheduled downtime at the East Dubuque facility and a shortened fall application season also hurt results in 2014. The abbreviated fall application window delayed the shipment of ammonia that was scheduled to be delivered in the fourth quarter of 2014 under prepaid sales contracts. Rentech Nitrogen expects to deliver the unshipped prepaid ammonia tons in the first half of 2015. The weather-related delays in shipments reduced results for the quarter and full year below Rentech Nitrogen’s previous guidance. The partnership estimates that Adjusted EBITDA for the East Dubuque and Pasadena facilities combined was approximately $74 million for 2014, and consolidated Adjusted EBITDA was approximately $65 million. The partnership expects to discuss the outlook for 2015 when it reports its results for 2014 on March 17.
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 is 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.
Disclosure Regarding Non-GAAP Financial Measures
Adjusted EBITDA is defined as operating (loss) plus depreciation and amortization less the impact of the impairment related to goodwill at the Pasadena facility. Adjusted EBITDA is used as a supplemental financial measure 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 should not be considered an alternative to any measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA may have material limitations as performance measures because they exclude items that are necessary elements of our costs and operations. In addition, Adjusted EBITDA presented by other companies may not be comparable to our presentation, since each company may define these terms differently.
The table below reconciles forecasted estimated Adjusted EBITDA to operating income (loss) for the twelve months ended December 31, 2014 for the East Dubuque and Pasadena facilities combined, and for the partnership.
| For the Twelve Months Ending December 31, 2014 | |||||||||||||||
| (Stated in millions) |
East Dubuque & |
Partnership |
Consolidated | ||||||||||||
|
Operating income (loss)1 |
$ | 50 | $ | (9 | ) | $ | 41 | ||||||||
| Plus: Depreciation and amortization | 24 | - | 24 | ||||||||||||
| Adjusted EBITDA | $ | 74 | $ | (9 | ) | $ | 65 | ||||||||
| 1 Excludes the impact of the impairment related to goodwill at Pasadena facility. | |||||||||||||||
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 estimated cash available for distribution and Adjusted EBITDA for 2014. 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 at www.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.
