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Terra Nitrogen Company, L.P. Reports Fourth Quarter and Full Year 2012 Results



  Terra Nitrogen Company, L.P. Reports Fourth Quarter and Full Year 2012
  Results

Business Wire

DEERFIELD, Ill. -- February 19, 2013

Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings
of $150.0 million on sales of $206.5 million for the quarter ended December
31, 2012. This compares to net earnings of $129.8 million on sales of $201.0
million for the 2011 fourth quarter. Net income allocable to Common Units was
$85.3 million ($4.61 per Common Unit) and $71.5 million ($3.87 per Common
Unit) for the 2012 and 2011 fourth quarters, respectively.

Results for the fourth quarter of 2012 included an unrealized mark-to-market
gain on natural gas derivatives of $1.0 million compared to a loss of $7.5
million in the fourth quarter of 2011.

For the full year 2012, TNCLP reported net earnings of $560.8 million on sales
of $780.1 million. This compares to net earnings of $508.0 million on sales of
$798.9 million in 2011. Net income allocable to Common Units was $315.6
million ($17.06 per Common Unit) and $283.6 million ($15.33 per Common Unit)
in 2012 and 2011, respectively. The company had very strong operating results
during 2012 and set a new ammonia production record.

Analysis of Results

Sales for the 2012 fourth quarter totaled $206.5 million, compared to sales of
$201.0 million for the 2011 fourth quarter. This increase was due to higher
ammonia and urea ammonium nitrate solution (UAN) product volumes and higher
average ammonia selling prices.

Comparing the 2012 to the 2011 fourth quarter, TNCLP’s:

  * Ammonia average selling prices increased by 28 percent and UAN average
    selling prices decreased by 16 percent;
  * Ammonia and UAN sales volumes increased by 17 and 5 percent, respectively;
    and
  * Realized natural gas cost per MMBtu decreased by 16 percent.

Sales for the full year totaled $780.1 million, compared to sales of $798.9
million in 2011. This decrease was due to lower ammonia and UAN volumes and a
lower UAN average selling price. The volume decline was due primarily to the
timing impact of the implementation of a new Services and Offtake Agreement
with CF Industries on January 1, 2011, which resulted in a one-time increase
in sales volume recognized upon adoption of the agreement.

Comparing the full year 2012 to 2011, TNCLP’s:

  * Ammonia average selling price increased by 16 percent and UAN average
    selling price decreased by 4 percent;
  * Ammonia and UAN sales volumes decreased by 4 and 2 percent, respectively;
    and
  * Realized natural gas cost per MMBtu decreased by 23 percent.

Cash Distribution

TNCLP reported on February 8, 2013 the declaration of a cash distribution for
the quarter ended December 31, 2012, of $3.63 per common limited partnership
unit payable February 28, 2013, to holders of record as of February 19, 2013.

Cash distributions depend on TNCLP's earnings, which can be affected by
nitrogen fertilizer selling prices, natural gas costs, seasonal demand
factors, production levels and weather, as well as cash requirements for
working capital needs and capital expenditures. In 2012, capital expenditures
were $46.7 million as compared to $8.7 million in 2011. In 2013, TNCLP is
expected to have capital expenditures in the range of $75 million to $100
million. The capital program includes a rail yard expansion, new ammonia and
UAN storage tanks, and control and electrical system upgrades. Some of these
projects may extend beyond 2013. Cash distributions per limited partnership
unit also vary based on increasing amounts allocable to the General Partner
when cumulative distributions exceed targeted levels. With this distribution,
TNCLP cumulative distributions continue to exceed targeted levels.

This release serves as a qualified notice to nominees and brokers as provided
for under Treasury Regulation Section 1.1446-4(b). Please note that 100
percent of the Partnership's distributions to foreign investors are
attributable to income that is effectively connected with a United States
trade or business. Accordingly, the Partnership's distributions to foreign
investors are subject to federal income tax withholding at the highest
effective tax rate.

About TNCLP

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

TNCLP is the sole limited partner of Terra Nitrogen, Limited Partnership
(TNLP), owner of the Verdigris, Oklahoma manufacturing facility and related
assets. Terra Nitrogen GP Inc., an indirect, wholly-owned subsidiary of CF
Industries Holdings, Inc., is the General Partner of TNCLP and exercises full
control over all of TNCLP’s business affairs.

Forward-Looking Statements

All statements in this communication, other than those relating to historical
facts, are forward-looking statements. These forward-looking statements are
not guarantees of future performance and are subject to a number of
assumptions, risks and uncertainties, many of which are beyond TNCLP’s
control, which could cause actual results to differ materially from such
statements. Important factors that could cause actual results to differ
materially from expectations include, among others:

  * risks related to TNCLP’s reliance on one production facility;
  * the cyclical nature of TNCLP’s business;
  * the global commodity nature of TNCLP’s fertilizer products, the impact of
    global supply and demand on TNCLP’s selling prices, and the intense global
    competition from other fertilizer producers;
  * conditions in the U.S. agricultural industry;
  * the volatility of natural gas prices in North America;
  * reliance on third party transportation providers;
  * weather conditions;
  * potential liabilities and expenditures related to environmental and health
    and safety laws and regulations;
  * future regulatory restrictions and requirements related to greenhouse gas
    emissions, climate change or other environmental requirements;
  * CF Industries’ ability to implement a new enterprise resource planning
    system and the risks associated with cyber security;
  * TNCLP’s inability to predict seasonal demand for its products accurately;
  * risks involving derivatives and the effectiveness of TNCLP’s risk
    measurement and hedging activities;
  * limited access to capital;
  * acts of terrorism and regulations to combat terrorism;
  * risks related to TNCLP’s dependence on and relationships with CF
    Industries;
  * deterioration of global market and economic conditions;
  * control of TNCLP’s General Partner by CF Industries;
  * the conflicts of interest that may be faced by the executive officers of
    TNCLP’s General Partner, who operate both TNCLP and CF Industries; and
  * changes in TNCLP’s treatment as a partnership for U.S. or state income tax
    purposes.

More detailed information about factors that may affect TNCLP’s performance
may be found in its filings with the Securities and Exchange Commission,
including its most recent periodic reports filed on Form 10-K and Form 10-Q,
which are available through CF Industries’ Web site. Forward-looking
statements are given only as of the date of this release and TNCLP disclaims
any obligation to update or revise the forward-looking statements, whether as
a result of new information, future events or otherwise, except as required by
law.

   Terra Nitrogen Company, L.P. news announcements are also available on CF
                 Industries’ Web site, www.cfindustries.com.

                                    
                                    
                                    
TERRA NITROGEN COMPANY, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                    
                                     Three months ended    Twelve months ended
                                     December 31,          December 31,
                                     2012      2011        2012      2011
                                     (in millions, except per unit amounts)
Net sales:
Product sales to an Affiliate of     $ 204.6   $ 200.8     $ 776.7   $ 797.9
the General Partner
Other income from an Affiliate of      0.1       0.1         0.6       0.6
the General Partner
Other income                           1.8       0.1         2.8       0.4    
Total                                  206.5     201.0       780.1     798.9
                                                                      
Cost of goods sold:
Materials, supplies and services       46.9      61.2        180.4     253.8
Services provided by the General       5.8       6.1         21.9      20.6   
Partner and Affiliates
Gross margin                           153.8     133.7       577.8     524.5
Selling, general and
administrative services provided       3.7       3.8         15.0      14.5
by the General Partner and
Affiliates
Other general and administrative       0.1       0.2         2.0       2.1    
expenses
                                                                      
Earnings from operations               150.0     129.7       560.8     507.9
Interest expense (income) - net        -         (0.1  )     -         (0.1  )
                                                                      
Net earnings                         $ 150.0   $ 129.8     $ 560.8   $ 508.0  
                                                                      
Allocation of net earnings:
General Partner                      $ 63.2    $ 56.9      $ 239.7   $ 219.4
Class B Common Units                   1.5       1.4         5.5       5.0
Common Units                           85.3      71.5        315.6     283.6  
Net earnings                         $ 150.0   $ 129.8     $ 560.8   $ 508.0  
                                                                      
Net earnings per common unit         $ 4.61    $ 3.87      $ 17.06   $ 15.33  
                                                                              
                                                                              
                                                                              

TERRA NITROGEN COMPANY, L.P.
CONSOLIDATED BALANCE SHEETS
                                                               
                                               December 31,      December 31,
                                               2012              2011
                                               (in millions, except for units)
ASSETS
Current assets:
Cash and cash equivalents                      $     149.4       $     179.8
Demand deposits with General Partner                 5.4               8.6
Affiliates
Accounts receivable, net                             0.6               0.6
Inventories, net                                     16.9              17.3
Prepaid expenses and other current assets            1.6               -
Total current assets                                 173.9             206.3
                                                                  
Property, plant and equipment, net                   117.0             87.8
Other assets                                         7.7               6.6
Total assets                                   $     298.6       $     300.7
                                                                  
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued liabilities       $     24.3        $     18.4
Other current liabilities                            1.0               12.0
Total current liabilities                            25.3              30.4
                                                                  
Noncurrent liabilities                               1.5               1.0
                                                                  
Partners' capital:
Limited partners' interests, 18,501,576
Common Units authorized, issued and                  238.3             234.8
outstanding
Limited partners' interests, 184,072 Class B
Common Units authorized, issued and                  1.2               1.1
outstanding
General partner's interest                           32.3              33.4
Total partners' capital                              271.8             269.3
Total liabilities and partners' capital        $     298.6       $     300.7
                                                                        
                                                                        
                                                                        

TERRA NITROGEN COMPANY, L.P.
SUMMARIZED OPERATING INFORMATION
                                                                   
                             2012                      2011
                             Sales        Average      Sales        Average
Three months ended           Volumes      Price        Volumes      Price
December 31,                 (000 tons)   ($/ton)      (000 tons)   ($/ton)
Ammonia                          98       $    676         84       $    530
UAN^1                            475      $    289         454      $    343
                                                                     
                                                                     
                             2012                      2011
                             Sales        Average      Sales        Average
Twelve months ended          Volumes      Unit Price   Volumes      Unit Price
December 31,                 (000 tons)   ($/ton)      (000 tons)   ($/ton)
Ammonia                          371      $    550         385      $    473
UAN^1                            1,999    $    286         2,047    $    299
                                                                     
                             Three months ended        Twelve months ended
                             December 31,              December 31,
                             2012         2011         2012         2011
Natural Gas                  $   3.55     $    4.22    $   3.31     $    4.31
Costs/MMBtu^2
                                                                     
                          

      ^1   The nitrogen content of UAN is 32% by weight.
      ^2   Includes the cost of natural gas purchases and realized gains and
           losses on natural gas derivatives.

Contact:

Terra Nitrogen Company, L.P.
Dan Swenson
Senior Director, Investor Relations & Corporate Communications
847/405-2515
dswenson@cfindustries.com
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