Terra Nitrogen Company, L.P. Reports Third Quarter 2015 Results

Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net earnings of $69.4 million on net sales of $150.2 million for the quarter ended September 30, 2015. This compares to net earnings of $72.0 million on net sales of $135.1 million for the 2014 third quarter. Net earnings allocable to common units was $41.2 million ($2.23 per common unit) and $48.0 million ($2.60 per common unit) for the 2015 and 2014 third quarters, respectively.

Results for the third quarter of 2015 included an unrealized net mark-to-market loss on natural gas derivatives of $17.0 million compared to a gain of $1.8 million in the third quarter of 2014.

For the first nine months of 2015, TNCLP reported net earnings of $227.7 million on net sales of $430.4 million. This compares to net earnings of $275.0 million on net sales of $480.3 million for the first nine months of 2014. Net earnings allocable to common units was $140.0 million ($7.57 per common unit) and $166.8 million ($9.02 per common unit) for the first nine months of 2015 and 2014, respectively. Results for the first nine months of 2015 included a $10.5 million unrealized net mark-to-market loss on natural gas derivatives compared to a loss of $7.1 million for the first nine months of 2014.

Analysis of Results

Net sales for the third quarter of 2015 totaled $150.2 million, compared to $135.1 million for the third quarter of 2014, with increased sales volumes in both UAN and ammonia and a higher selling price in ammonia partially offset by lower realized selling prices in UAN. The increase in sales volumes were driven by higher production volumes compared to the prior year period which was impacted by unplanned plant down time. UAN sales volume increased 27 percent and ammonia sales volume increased 9 percent in the third quarter of 2015 compared to the third quarter of 2014. UAN selling prices were lower due to excess global supply availability in the third quarter, which contributed to a 13 percent decrease compared to the third quarter of 2014.

Comparing the third quarter of 2015 to 2014, TNCLP’s:

• Ammonia average selling prices increased by 3 percent and UAN average selling prices decreased by 13 percent;
• Ammonia sales volume increased by 9 percent and UAN sales volume increased by 27 percent; and
• Realized natural gas cost per MMBtu decreased by 39 percent.

Cash Distribution

Cash distributions depend on TNCLP’s earnings as well as cash requirements for working capital needs and capital expenditures. For the first nine months of 2015, capital expenditures were $81.9 million as compared to $44.3 million in 2014, with the increase primarily due to plant turnaround activities. For the full year 2015, TNCLP is expected to have capital expenditures in the range of $85 million to $95 million.

TNCLP reported on November 4, 2015, the declaration of a cash distribution for the quarter ended September 30, 2015, of $2.81 per common limited partnership unit payable November 30, 2015 to holders of record as of November 16, 2015.

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 volatility of natural gas prices in North America;
• The cyclical nature of TNCLP’s business and the agricultural sector;
• 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;
• Difficulties in securing the delivery, or delays or interruptions in the delivery of raw materials such as natural gas;
• Reliance on third-party providers of transportation services and equipment;
• The significant risks and hazards involved in producing and handling TNCLP's products against which it may not be fully insured;
• Risks associated with cyber security;
• 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 or other environmental items;
• 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;
• Changes in TNCLP’s available cash for distribution to its unitholders, due to, among other things, changes in its earnings, the amount of cash generated by its operations and the amount of cash reserves established by its General Partner for operating, capital and other requirements;
• 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 unitholders 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’ website. 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.

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⁽¹⁾ The nitrogen content of UAN is 32% by weight.
⁽²⁾ Includes the cost of natural gas purchased during the period for use in production.
⁽³⁾ Includes realized gains and losses on natural gas derivatives settled during the period. Excludes unrealized mark-to-market gains and losses on natural gas derivatives.

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