Business Services Industry

Terra Nitrogen Company, L.P. Reports Third Quarter Results; Declares Cash Distribution

Business Wire, Oct 25, 2007

SIOUX CITY, Iowa -- Terra Nitrogen Company, L.P. (TNCLP) (NYSE:TNH) today reported net income of $45.6 million, or $2.42 per limited partnership unit, on revenues of $133.2 million for the third quarter ended Sept. 30, 2007. This compares with net income of $13.7 million, or $0.73 per limited partnership unit, on revenues of $92.0 million for the 2006 third quarter. TNCLP's year-to-date 2007 net income was $138.0 million, or $7.31 per unit, on revenues of $438.7 million, compared to net income of $28.6 million, or $1.52 per unit, on revenues of $306.6 million for the 2006 period.

TNCLP also announced a cash distribution for the quarter ended Sept. 30, 2007, of $2.10 per limited partnership unit payable Nov. 26, 2007, to holders of record as of Nov. 8, 2007. Cash distributions depend on TNCLP's earnings, working capital requirements and capital expenditures. TNCLP's quarterly earnings can be affected by nitrogen products selling prices, natural gas costs, production levels and weather.

Analysis of results

Third quarter

TNCLP's third quarter earnings improvement over last year was due to higher ammonia sales volumes and higher ammonia and UAN selling prices, partially offset by higher natural gas costs. The 2007 third quarter benefited from continued strong U.S. nitrogen demand for corn and wheat plantings. From the 2006 to the 2007 third quarter, TNCLP's:

* Ammonia sales volumes increased by 16 percent, and UAN sales volumes decreased by 6 percent.

* Ammonia and UAN selling prices increased by 22 percent and 63 percent, respectively.

* Natural gas unit costs increased by 18 percent.

Year-to-date

TNCLP's year-to-date earnings improvement over last year was due to higher sales volumes and UAN selling prices, and lower natural gas costs, partially offset by lower ammonia selling prices. 2007 year-to-date results were affected by the same factors affecting third quarter results, and lower first quarter 2007 natural gas costs. Year-to-date from 2006 to 2007, TNCLP's:

* Ammonia and UAN sales volumes increased by 32 and 12 percent, respectively.

* UAN selling prices increased by 35 percent.

* Natural gas unit costs decreased by 9 percent.

Forward natural gas position

TNCLP's forward purchase contracts at Sept. 30, 2007, fixed prices for about 38 percent of its next 12 months' natural gas requirements at $12.1 million above published forward markets at that date. TNCLP has entered into these forward gas positions to secure margins on nitrogen products sold forward at fixed prices.

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.