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

Business Wire, April 24, 2008

SIOUX CITY, Iowa -- Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net income of $81.6 million ($3.93 per Common Unit) on revenues of $174.5 million for the first quarter ended March 31, 2008. This compares with net income of $35.3 million ($1.87 per Common Unit) on revenues of $128.2 million for the 2007 first quarter.

TNCLP also announced a cash distribution for the quarter ended March 31, 2008, of $4.20 per common limited partnership unit payable May 28, 2008, to holders of record as of May 8, 2008. Cash distributions depend on TNCLP's earnings, which can be affected by nitrogen selling prices, natural gas costs, seasonal demand factors, production levels and weather, cash requirements for working capital needs, and capital expenditures. Cash distributions per limited partnership unit also vary based on increasing amounts allocable to the General Partner when cumulative distributions exceed targeted levels. Those targeted levels were attained in the 2008 first quarter.

Analysis of results

TNCLP's first quarter earnings improvement over last year was due to higher nitrogen products selling prices, partially offset by lower sales volumes and higher natural gas costs. Commodity grain prices and U.S. nitrogen demand continued to be strong in the 2008 first quarter, contributing to the improved selling prices. Ammonia sales volumes decreased primarily because cold, wet conditions early in the application season delayed product shipments. From the 2007 to the 2008 first quarter, TNCLP's:

* Ammonia and UAN selling prices increased by 46 percent and 54 percent, respectively. (Note that Terra previously reported UAN data on a 28% nitrogen basis. Beginning this quarter, we report all UAN data on a 32% nitrogen basis, and have converted all 2007 UAN data for comparison purposes.)

* Ammonia sales volumes decreased by 45 percent.

* Natural gas unit costs increased by 12 percent.

Forward natural gas position

TNCLP's forward purchase contracts at March 31, 2008, fixed prices for about 23 percent of its next 12 months' natural gas requirements at $14.5 million below 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 statement

Certain statements in this news release may constitute "forward-looking" statements within the meaning of the Private Litigation Reform Act of 1995. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak only as of the date they were made and TNCLP undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Words such as "expects," "intends," "plans," "projects," "believes," "estimates," and similar expressions are used to identify these forward-looking statements. These include, among others, statements relating to:

* changes in financial markets,

* general economic conditions within the agricultural industry,

* competitive factors and price changes (principally, sales prices of nitrogen products and natural gas costs),

* changes in product mix,

* changes in the seasonality of demand patterns,

* changes in weather conditions,

* changes in environmental and other government regulation, and

* changes in agricultural regulations.

Additional information as to these factors can be found in TNCLP's 2007 Annual Report/10-K, in the sections entitled "Business," "Legal Proceedings," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in the Notes to the consolidated financial statements.

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

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