Terra Nitrogen Company, L.P. Reports Fourth Quarter and Full-Year Results; Declares Cash Distribution

Business Wire, Feb 8, 2007

SIOUX CITY, Iowa -- Terra Nitrogen Company, L.P. (TNCLP) (NYSE:TNH) today reported net income of $17.5 million, or $.93 per limited partnership unit, on revenues of $118.5 million for the fourth quarter ended Dec. 31, 2006. This compares with a net loss of $8.4 million, or $.45 per unit, on revenues of $117.7 million for the 2005 fourth quarter. For 2006, TNCLP's net income was $46.2 million, or $2.45 per unit, on revenues of $425.1 million, compared to net income of $55.9 million, or $2.95 per unit, on revenues of $455.5 million for 2005.

TNCLP also announced a cash distribution for the quarter ended Dec. 31, 2006, of $.97 per limited partnership unit payable Feb. 27, 2007, to holders of record as of Feb 15, 2007.

Analysis of results

The improvement over the 2005 fourth quarter was mainly due to a $46 million reduction in natural gas costs and higher sales volumes. These factors were partially offset by a $20 million decline from the prior year's ammonia and UAN selling prices.

The decline in TNCLP's 2006 net income was due to lower ammonia and UAN sales volumes and lower UAN selling prices, partially offset by higher ammonia selling prices and lower natural gas costs. The lower sales volumes were mainly due to fewer planted corn acres and reduced fertilizer application rates in the 2006 first half. Natural gas prices decreased 9 percent from those incurred in 2005 due to increased levels of natural gas in storage. Forward natural gas purchase contracts increased 2006 costs by approximately $25.3 million.

Forward natural gas position

TNCLP's forward purchase contracts at Dec. 31, 2006, fixed prices for about 22 percent of its next 12 months' natural gas requirements at $6.5 million above the published forward market prices at that date.

About TNCLP

Terra Nitrogen Company, L.P. is a leading manufacturer of nitrogen fertilizer products.

Forward-looking statements

This news release may contain forward-looking statements, which involve inherent risks and uncertainties. Statements that are not historical facts, including statements about TNCLP's beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements is set forth in TNCLP's most recent report on Form 10-K and TNCLP's other documents on file with the Securities and Exchange Commission. TNCLP undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Note: Terra Nitrogen Company, L.P. news announcements are also available on Terra Industries' website, www.terraindustries.com.

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The amount of net income allocable to the Limited Partners' interest is based on the Partnership's net income and the proportionate share of cash distributed to the Limited Partners and the General Partner.

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(a) After deducting outbound freight costs.

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