Terra Industries: An Interesting Fertilizer Play

A few months ago I wrote several articles about the relationship between Terra Nitrogen L.P. (TNH) and Terra Industries (TRA) concerning the earnings and dividends of Terra Nitrogen. You can see the articles here, here and here. For background, until the last quarterly dividend, TNH had a deficit of accumulated minimum dividends to work off. As of the last dividend, the deficit had been repaid and TRA was then entitled to about 44% of TNH’s earnings before dividends were paid to shareholders.

I warned that unsuspecting TNH unit holders may not get the payout they were expecting. This quarter's results vividly show that outcome. Here are the comparative results for the two quarters: