TNH » Topics » Partnership Distributions

These excerpts taken from the TNH 10-K filed Mar 5, 2009.
Partnership Distributions
 
We make quarterly distributions to our unitholders based on available cash for the quarter as defined in our Agreement of Limited Partnership. Available cash is defined generally as all cash receipts less all cash disbursements, adjusted for changes in certain reserves established as the General Partner determines in its reasonable discretion to be necessary. We paid distributions of $376.1 million, $144.2 million and $36.2 million to our unitholders in 2008, 2007 and 2006, respectively.
 
We receive 99% of the Available Cash from Terra Nitrogen, Limited Partnership (the Operating Partnership) and 1% is distributed to its General Partner. Cash distributions from the Operating Partnership generally represent the Operating Partnership’s Available Cash from operations. Our cash distributions are made 99.975% to Common and Class B Common Unitholders and 0.025% to our General Partner except when cumulative distributions of Available Cash exceed specified target levels above the Minimum Quarterly Distributions (MQD) of $0.605 per unit. Under such circumstances, our General Partner is entitled, as an incentive, to larger percentage interests. Pursuant to our Agreement of Limited Partnership, income allocable to the Limited Partner and General Partner is based upon the distributions of Available Cash for the year. Therefore, earnings per unit reflect an annualized allocation rate.
 
On February 10, 2009, the Partnership announced $2.97 per unit distribution to be paid during the 2009 first quarter. We have exceeded the cumulative MQD amounts and will distribute Available Cash as summarized in the following table:
 
                                                 
    Income and Distribution Allocation  
   
                      Class B
             
    Target
    Target
    Common
    Common
    General
       
    Limit     Increment     Units     Units     Partner     Total  
   
 
Minimum Quarterly Distribution
  $ 0.605       0.605       98.990 %     0.985 %     0.025 %     100 %
First Target
    0.715       0.110       98.990 %     0.985 %     0.025 %     100 %
Second Target
    0.825       0.110       85.859 %     0.985 %     13.156 %     100 %
Third Target
    1.045       0.220       75.758 %     0.985 %     23.257 %     100 %
Final Target and Beyond
    1.045             50.505 %     0.985 %     48.510 %     100 %
 
The General Partner is required to remit the majority of cash distributions it receives from the Partnership, in excess of its 1% Partnership equity interest, to an affiliated company.
 
Partnership
Distributions



 



We make quarterly distributions to our unitholders based on
available cash for the quarter as defined in our Agreement of
Limited Partnership. Available cash is defined generally as all
cash receipts less all cash disbursements, adjusted for changes
in certain reserves established as the General Partner
determines in its reasonable discretion to be necessary. We paid
distributions of $376.1 million, $144.2 million and
$36.2 million to our unitholders in 2008, 2007 and 2006,
respectively.


 



We receive 99% of the Available Cash from Terra Nitrogen,
Limited Partnership (the Operating Partnership) and 1% is
distributed to its General Partner. Cash distributions from the
Operating Partnership generally represent the Operating
Partnership’s Available Cash from operations. Our cash
distributions are made 99.975% to Common and Class B Common
Unitholders and 0.025% to our General Partner except when
cumulative distributions of Available Cash exceed specified
target levels above the Minimum Quarterly Distributions (MQD) of
$0.605 per unit. Under such circumstances, our General Partner
is entitled, as an incentive, to larger percentage interests.
Pursuant to our Agreement of Limited Partnership, income
allocable to the Limited Partner and General Partner is based
upon the distributions of Available Cash for the year.
Therefore, earnings per unit reflect an annualized allocation
rate.


 



On February 10, 2009, the Partnership announced $2.97 per
unit distribution to be paid during the 2009 first quarter. We
have exceeded the cumulative MQD amounts and will distribute
Available Cash as summarized in the following table:


 























































































































































































































































                                                 

 

 

Income and Distribution Allocation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B


 

 

 

 

 

 

 

 

 

Target


 

 

Target


 

 

Common


 

 

Common


 

 

General


 

 

 

 

 

 

Limit


 

 

Increment


 

 

Units


 

 

Units


 

 

Partner


 

 

Total


 

 

 
 


Minimum Quarterly Distribution


 

$

0.605

 

 

 

0.605

 

 

 

98.990

%

 

 

0.985

%

 

 

0.025

%

 

 

100

%


First Target


 

 

0.715

 

 

 

0.110

 

 

 

98.990

%

 

 

0.985

%

 

 

0.025

%

 

 

100

%


Second Target


 

 

0.825

 

 

 

0.110

 

 

 

85.859

%

 

 

0.985

%

 

 

13.156

%

 

 

100

%


Third Target


 

 

1.045

 

 

 

0.220

 

 

 

75.758

%

 

 

0.985

%

 

 

23.257

%

 

 

100

%


Final Target and Beyond


 

 

1.045

 

 

 



 

 

 

50.505

%

 

 

0.985

%

 

 

48.510

%

 

 

100

%






 



The General Partner is required to remit the majority of cash
distributions it receives from the Partnership, in excess of its
1% Partnership equity interest, to an affiliated company.


 




These excerpts taken from the TNH 10-K filed Feb 28, 2008.
Partnership Distributions
 
We make quarterly distributions to our partners based on available cash for the quarter as defined in our Agreement of Limited Partnership. Available cash is defined generally as all cash receipts less all cash disbursements, adjusted for changes in certain reserves established as the General Partner determines in its reasonable discretion to be necessary. We paid distributions of $144.2 million, $36.2 million and $55.7 million to our partners in 2007, 2006 and 2005, respectively.
 
We receive 99% of the available cash and 1% is distributed to its General Partner. Cash distributions from the Operating Partnership generally represent our available cash from operations. Our cash distributions are made 99.975% to Common Unitholders and 0.025% to our General Partner except when cumulative distributions of available cash exceed specified target levels above the Minimum Quarterly Distribution (“MQD”) of $0.605 per unit. Under such circumstances, our General Partner is entitled, as an incentive, to larger percentage interests. As of December 31, 2007, the cumulative shortfall on quarterly distributions to holders of Common Units that must be paid before our General Partner receives an incentive payment was $125.3 million, or $6.70 per unit.
 
When cumulative distributions of Available Cash exceed specified target levels above the MQD, our General Partner’s percentage interest in the Partnership’s distributions of available cash at various levels follows:
 
                                                 
    Income and Distribution Allocation  
   
                      Class B
             
    Target
    Target
    Common
    Common
    General
       
    Limit     Increment     Units     Units     Partner     Total  
   
 
Minimum Quarterly Distribution
  $ 0.605       0.605       98.99 %     0.98 %     0.03 %     100.00 %
First Target
    0.715       0.110       98.99 %     0.98 %     0.03 %     100.00 %
Second Target
    0.825       0.110       85.86 %     1.01 %     13.13 %     100.00 %
Third Target
    1.045       0.220       75.76 %     1.01 %     23.23 %     100.00 %
Final Target and Beyond
  $ 1.045             50.51 %     1.01 %     48.48 %     100.00 %
 
On February 7, 2008, the Partnership announced a $4.45 per unit distribution to be paid during the 2008 first quarter. As a result of this distribution, we estimate the pro forma cumulative shortfall that must be paid before the General Partner affiliate receives an incentive payment as of March 31, 2008 is anticipated to be approximately $53.5 million, or $2.86 per unit.
 
Partnership
Distributions



 



We make quarterly distributions to our partners based on
available cash for the quarter as defined in our Agreement of
Limited Partnership. Available cash is defined generally as all
cash receipts less all cash disbursements, adjusted for changes
in certain reserves established as the General Partner
determines in its reasonable discretion to be necessary. We paid
distributions of $144.2 million, $36.2 million and
$55.7 million to our partners in 2007, 2006 and 2005,
respectively.


 



We receive 99% of the available cash and 1% is distributed to
its General Partner. Cash distributions from the Operating
Partnership generally represent our available cash from
operations. Our cash distributions are made 99.975% to Common
Unitholders and 0.025% to our General Partner except when
cumulative distributions of available cash exceed specified
target levels above the Minimum Quarterly Distribution
(“MQD”) of $0.605 per unit. Under such circumstances,
our General Partner is entitled, as an incentive, to larger
percentage interests. As of December 31, 2007, the
cumulative shortfall on quarterly distributions to holders of
Common Units that must be paid before our General Partner
receives an incentive payment was $125.3 million, or $6.70
per unit.


 



When cumulative distributions of Available Cash exceed specified
target levels above the MQD, our General Partner’s
percentage interest in the Partnership’s distributions of
available cash at various levels follows:


 























































































































































































































































                                                 

 

 

Income and Distribution Allocation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B


 

 

 

 

 

 

 

 

 

Target


 

 

Target


 

 

Common


 

 

Common


 

 

General


 

 

 

 

 

 

Limit


 

 

Increment


 

 

Units


 

 

Units


 

 

Partner


 

 

Total


 

 

 
 


Minimum Quarterly Distribution


 

$

0.605

 

 

 

0.605

 

 

 

98.99

%

 

 

0.98

%

 

 

0.03

%

 

 

100.00

%


First Target


 

 

0.715

 

 

 

0.110

 

 

 

98.99

%

 

 

0.98

%

 

 

0.03

%

 

 

100.00

%


Second Target


 

 

0.825

 

 

 

0.110

 

 

 

85.86

%

 

 

1.01

%

 

 

13.13

%

 

 

100.00

%


Third Target


 

 

1.045

 

 

 

0.220

 

 

 

75.76

%

 

 

1.01

%

 

 

23.23

%

 

 

100.00

%


Final Target and Beyond


 

$

1.045

 

 

 



 

 

 

50.51

%

 

 

1.01

%

 

 

48.48

%

 

 

100.00

%






 



On February 7, 2008, the Partnership announced a $4.45 per
unit distribution to be paid during the 2008 first quarter. As a
result of this distribution, we estimate the pro forma
cumulative shortfall that must be paid before the General
Partner affiliate receives an incentive payment as of
March 31, 2008 is anticipated to be approximately
$53.5 million, or $2.86 per unit.


 




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