Terra Nitrogen Company, L.P. Reports First Quarter 2014 Results and Announces Cash Distribution

  Terra Nitrogen Company, L.P. Reports First Quarter 2014 Results and
  Announces Cash Distribution

Business Wire

DEERFIELD, Ill. -- May 7, 2014

Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings
of $102.9 million on sales of $177.7 million for the first quarter ended March
31, 2014. This compares to net earnings of $166.8 million on sales of $224.1
million for the 2013 first quarter. Net income allocable to Common Units was
$60.4million ($3.26 per Common Unit) and $92.2million ($4.98 per Common
Unit) for the 2014 and 2013 first quarters, respectively.

Results for the first quarter of 2014 included an unrealized mark-to-market
loss on natural gas derivatives of $4.0 million compared to an unrealized
mark-to-market gain of $3.7 million in the first quarter of 2013.

Analysis of Results

Net sales for the 2014 first quarter totaled $177.7 million, compared to sales
of $224.1million for the 2013 first quarter. This decrease was due to lower
ammonia and UAN average selling prices and lower UAN volume, which were offset
partially by higher ammonia sales volume. The decrease in ammonia price
compared to the prior year period was due to higher industry-wide inventory
levels at the beginning of the first quarter 2014 as a result of a poor
application season in the fall of 2013. UAN average selling price decreased
due to weaker international nitrogen market conditions. UAN sales volume
decreased due to lower domestic demand as buyers remained cautious in
anticipation of lower prices. Ammonia sales volume increased due to increased
demand from the western Corn Belt and Southern Plains regions.

Comparing the 2014 to the 2013 first quarter, TNCLP’s:

  *Ammonia and UAN average selling prices decreased by 37 and 17 percent,
    respectively;
  *Ammonia sales volume increased by 14 percent and UAN sales volumes
    decreased by 2 percent; and
  *Realized natural gas costs per MMBtu increased by 17 percent.

Cash Distribution

Cash distributions depend on TNCLP's earnings as well as cash requirements for
working capital needs and capital expenditures. In 2014, TNCLP is expected to
have capital expenditures in the range of $70 million to $90 million. A
turnaround of approximately 50% of the plant that was scheduled to occur in
the second half of 2014 is now anticipated to occur in the first half of 2015.

TNCLP reported today the declaration of a cash distribution for the quarter
ended March 31, 2014, of $3.01 per common limited partnership unit payable May
30, 2014, to holders of record as of May 19, 2014.

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;
  *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;
  *risks related to TNCLP’s partnership structure and 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
  *tax risks to TNCLP’s common unit holders 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’ website, www.cfindustries.com.

                                           
                                           
TERRA NITROGEN COMPANY, L.P.
CONSOLIDATED BALANCE SHEETS
                                                            
                                               (unaudited)
                                               March 31,          December 31,
                                               2014               2013
                                               (in millions, except for units)
ASSETS
Current assets:
     Cash and cash equivalents                 $     113.9        $    86.9
     Due from affiliates of the General              36.0              29.0
     Partner
     Accounts receivable                             0.6               1.0
     Inventories                                     5.4               5.9
     Prepaid expenses and other current             4.9              7.8
     assets
            Total current assets                     160.8             130.6
                                                                  
Property, plant and equipment, net                   224.7             214.1
Other assets                                        5.5              5.1
            Total assets                       $     391.0        $    349.8
                                                                  
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
     Accounts payable and accrued              $     33.3         $    27.9
     liabilities
     Due to affiliates of the General                5.6               3.7
     Partner
     Other current liabilities                      -                8.0
            Total current liabilities               38.9             39.6
                                                                  
Noncurrent liabilities                               1.3               1.2
                                                                  
Partners' capital:
     Limited partners' interests,
     18,501,576 Common Units
            authorized, issued and                   286.1             264.5
            outstanding
     Limited partners' interests, 184,072
     Class B Common Units
            authorized, issued and                   1.9               1.5
            outstanding
     General partner's interest                     62.8             43.0
            Total partners' capital                 350.8            309.0
            Total liabilities and              $     391.0        $    349.8
            partners' capital

                                                                
                                                                      
TERRA NITROGEN COMPANY, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

                                                      Three months ended
                                                      March 31,
                                                      2014            2013
                                                      (in millions, except per
                                                      unit amounts)
Net sales:
   Product sales to an Affiliate of the General       $  177.3        $  223.7
   Partner
   Other income from an Affiliate of the General         0.1             0.1
   Partner
   Other income                                         0.3            0.3
Total                                                    177.7           224.1
                                                                      
Cost of goods sold:
   Materials, supplies and services                      64.6            46.6
   Services provided by the General Partner and         5.6            5.6
   Affiliates
Gross margin                                             107.5           171.9
Selling, general and administrative services
   provided by the General Partner and Affiliates        3.9             3.8
Other general and administrative expenses               0.7            1.3
                                                                      
Earnings from operations                                102.9          166.8
                                                                      
Net earnings                                          $  102.9        $  166.8
                                                                      
Allocation of net earnings:
General Partner                                       $  41.5         $  73.0
Class B Common Units                                     1.0             1.6
Common Units                                            60.4           92.2
Net earnings                                          $  102.9        $  166.8
                                                                      
Net earnings per common unit                          $  3.26         $  4.98

                                                       
                                                               
TERRA NITROGEN COMPANY, L.P.
SUMMARIZED OPERATING INFORMATION
                                                               
                                       Three months ended
                                       March 31,
                                       2014                    2013
Sales volumes by product (tons
in thousands)
Ammonia                                       98                      86
UAN ^(1)                                      530                     540
                                                               
Average selling prices
(dollars per ton)
Ammonia                                $      413              $      657
UAN                                           258                     310
                                                               
Natural gas costs/MMBtu ^(2)           $      4.02             $      3.43
                                                               
                                                               
^(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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