(17) Selected Quarterly Financial Information (Unaudited):

Summarized quarterly financial data for December 31, 2015 and 2014:



	Year Ended December 31, 2015
	Quarter
	First			Second			Third			Fourth

	(in thousands, except per unit data)
Net sales	$	93,050		$	80,815		$	49,325		$	66,004
Operating costs and expenses:
Cost of product sold (exclusive of depreciation and amortization) – Affiliates	1,818			2,184			1,147			1,552
Cost of product sold (exclusive of depreciation and amortization) – Third parties	23,951			13,240			13,354			7,943
	25,769			15,424			14,501			9,495
Direct operating expenses (exclusive of depreciation and amortization) – Affiliates	1,027			1,195			1,030			841
Direct operating expenses (exclusive of depreciation and amortization) – Third parties	23,387			23,951			32,149			22,476
	24,414			25,146			33,179			23,317
Selling, general and administrative expenses (exclusive of depreciation and amortization) – Affiliates	3,267			3,361			3,661			3,672
Selling, general and administrative expenses (exclusive of depreciation and amortization) – Third parties	1,316			1,162			2,381			1,948
	4,583			4,523			6,042			5,620
Depreciation and amortization	6,819			7,010			7,409			7,214
Total operating costs and expenses	61,585			52,103			61,131			45,646
Operating income (loss)	31,465			28,712			(11,806		)	20,358
Other income (expense):
Interest expense and other financing costs	(1,697		)	(1,717		)	(1,727		)	(1,739		)
Interest income	12			12			10			6
Other income, net	6			5			54			99
Total other income (expense)	(1,679		)	(1,700		)	(1,663		)	(1,634		)
Income before income tax expense (benefit)	29,786			27,012			(13,469		)	18,724
Income tax expense (benefit)	12			(4		)	9			(7		)
Net income (loss)	$	29,774		$	27,016		$	(13,478	)	$	18,731
Net income (loss) per common unit – basic	$	0.41		$	0.37		$	(0.18	)	$	0.26
Net income (loss) per common unit – diluted	$	0.41		$	0.37		$	(0.18	)	$	0.26
Weighted-average common units outstanding:
Basic	73,123			73,123			73,123			73,123
Diluted	73,131			73,131			73,123			73,131



	Year Ended December 31, 2014
	Quarter
	First			Second			Third			Fourth

	(in thousands, except per unit data)
Net sales	$	80,316		$	77,215		$	66,733		$	74,401
Operating costs and expenses:
Cost of product sold – Affiliates	2,246			2,327			2,232			2,619
Cost of product sold (exclusive of depreciation and amortization) – Third parties	19,462			17,109			13,202			12,755
	21,708			19,436			15,434			15,374
Direct operating expenses (exclusive of depreciation and amortization) – Affiliates	753			817			621			833
Direct operating expenses (exclusive of depreciation and amortization) – Third parties	23,436			26,100			25,487			20,911
	24,189			26,917			26,108			21,744
Selling, general and administrative expenses (exclusive of depreciation and amortization) – Affiliates	3,536			3,973			3,035			2,867
Selling, general and administrative expenses (exclusive of depreciation and amortization) – Third parties	1,118			1,297			928			949
	4,654			5,270			3,963			3,816
Depreciation and amortization	6,667			6,792			6,812			6,978
Total operating costs and expenses	57,218			58,415			52,317			47,912
Operating income	23,098			18,800			14,416			26,489
Other income (expense):
Interest expense and other financing costs	(1,659		)	(1,669		)	(1,724		)	(1,731		)
Interest income	6			6			7			11
Other income, net	15			—			33			23
Total other income (expense)	(1,638		)	(1,663		)	(1,684		)	(1,697		)
Income before income tax expense (benefit)	21,460			17,137			12,732			24,792
Income tax expense (benefit)	7			7			13			(55		)
Net income	$	21,453		$	17,130		$	12,719		$	24,847
Net income per common unit – basic	$	0.29		$	0.23		$	0.17		$	0.34
Net income per common unit – diluted	$	0.29		$	0.23		$	0.17		$	0.34
Weighted-average common units outstanding:
Basic	73,113			73,113			73,115			73,117
Diluted	73,145			73,146			73,139			73,133

Factors Impacting the Comparability of Quarterly Results of Operations

During the third quarter of 2015, the nitrogen fertilizer facility completed a major scheduled turnaround and the gasification, ammonia and UAN units were down for between 17 to 20 days each. Overall results during the third quarter of 2015 were negatively impacted due to the lost production during the downtime that resulted in reduced sales and certain reduced variable expenses included in cost of product sold (exclusive of depreciation and amortization) and direct operating expenses (exclusive of depreciation and amortization). Costs of approximately $0.4 million and $6.6 million associated with the 2015 turnaround are included in direct operating expenses (exclusive of depreciation and amortization) for the three months ended June 30, 2015 and September 30, 2015, respectively.

Linde owns, operates, and maintains the air separation plant that provides contract volumes of oxygen, nitrogen, and compressed dry air to the gasifiers. During the third quarter of 2015, the Linde air separation unit experienced downtime, in excess of the downtime associated with the major scheduled turnaround discussed above, that resulted in the gasification, ammonia and UAN units being down for between 16 to 19 days each. Overall results in the third quarter of 2015 were negatively impacted due to the lost production during the downtime that resulted in reduced sales and certain reduced variable expenses included in cost of product sold (exclusive of depreciation and amortization) and direct operating expenses (exclusive of depreciation and amortization) for the three months ended September 30, 2015.

The three months ended December 31, 2014 were positively impacted by a non-recurring reimbursement associated with utility costs. During the fourth quarter of 2014, the Partnership recorded a credit of approximately $3.4 million as a reduction to direct operating expenses (exclusive of depreciation and amortization).

During the three months ended June 30, 2014, the gasification, ammonia and UAN units were taken down for between five to seven days each for a planned installation of a waste heat boiler and for the completion of several key tasks in order to upgrade to the pressure swing adsorption unit. Overall results were negatively impacted due to the lost production during the downtime that resulted in reduced sales and certain reduced variable expenses included in cost of product sold (exclusive of depreciation and amortization) and direct operating expenses (exclusive of depreciation and amortization). The Partnership incurred costs related to the repairs and maintenance and other associated costs of approximately $0.5 million, which were recognized in direct operating expenses (exclusive of depreciation and amortization) during the three months ended June 30, 2014.