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

Business Wire, Feb 7, 2008

SIOUX CITY, Iowa -- Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net income of $67.8 million, or $3.59 per limited partnership unit, on revenues of $197.6 million for the fourth quarter ended Dec. 31, 2007. This compares with net income of $17.5 million, or $.93 per limited partnership unit, on revenues of $118.5 million for the 2006 fourth quarter. TNCLP's 2007 net income was $205.8 million, or $10.90 per unit, on revenues of $636.3 million, compared to net income of $46.2 million, or $2.45 per unit, on revenues of $425.1 million for 2006.

TNCLP also announced a cash distribution for the quarter ended Dec. 31, 2007, of $4.45 per limited partnership unit payable Feb. 27, 2008, to holders of record as of Feb. 12, 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, as well as cash requirements for working capital requirements and capital expenditures. Cash distributions per limited partnership unit also vary based on increasing amounts allocable to the General Partner when cumulative distributions exceed the targeted levels set forth in the Agreement of Limited Partnership. Those targeted levels will be attained if cash distributions paid for the quarter ending March 31, 2008, are greater than $2.86 per limited partnership unit.

Analysis of results

Fourth quarter

TNCLP's fourth quarter earnings improvement over those of last year was due to higher nitrogen products sales volumes and selling prices, partially offset by higher natural gas costs. The 2007 fourth quarter was characterized by strong commodity grain prices and robust U.S. nitrogen demand for 2008 corn and wheat applications. From the 2006 to the 2007 fourth quarter, TNCLP's:

* Ammonia and UAN sales volumes increased by 21 and 6 percent, respectively.

* Ammonia and UAN selling prices increased by 28 percent and 73 percent, respectively.

* Natural gas unit costs increased by 18 percent.

Full-year

TNCLP's 2007 earnings improvement over those of 2006 was due to higher sales volumes and selling prices, and lower natural gas costs. 2007 results were affected by the same factors affecting fourth quarter results: strong commodity grain prices driven by low global grain inventories and a tight global nitrogen supply/demand balance. From 2006 to 2007, TNCLP's:

* Ammonia and UAN sales volumes increased by 27 and 10 percent, respectively.

* Ammonia and UAN selling prices increased by 10 and 45 percent, respectively.

* Natural gas unit costs decreased by 1 percent.

Forward natural gas position

TNCLP's forward purchase contracts at Dec. 31, 2007, fixed prices for about 38 percent of its next 12 months' natural gas requirements at $4.7 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.

[TABLE OMITTED]

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.

[TABLE OMITTED]

1. After deducting outbound freight costs.

2. Including effect of forward natural gas position.

[TABLE OMITTED]