SIOUX CITY, Iowa, April 22 /PRNewswire/ -- Terra Nitrogen Company, L.P.
(TNCLP) (NYSE: TNH) today reported net income of $29.8 million on revenue of
$74.2 million for the quarter ended March 31, 1997 compared with net income of
$53.0 million on revenue of $89.4 million for the first quarter of 1996.
Earnings per limited partnership unit were $1.44 for the first quarter of 1997
compared with $1.98 for the comparable 1996 quarter.  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.
    First quarter earnings for 1997 were down 44% from the record earnings
reported in the 1996 quarter due primarily to lower nitrogen solutions
(UAN) sales volumes and higher natural gas costs.  UAN sales volumes declined
26% from the 1996 quarter due to carryover stocks at the dealer level and from
wet weather in the South and Southwest.  In addition, urea and UAN sales
prices were down 17% and 6%, respectively, while ammonia sales prices improved
6% from the prior year quarter.  Natural gas costs increased 90% from the 1996
first quarter due to colder weather.  (Natural gas is the primary raw material
used in the production of nitrogen fertilizer.)  As a result, cost of sales as
a percentage of revenues increased to 57% for the 1997 quarter versus 39% for
the comparable 1996 quarter.
    TNCLP also announced today a cash distribution for the quarter ended March
31, 1997 of $1.02 per common unit to holders of record as of May 5, 1997.
This distribution will be made May 27, 1997. As previously announced, the last
quarterly cash distribution of $0.605 per senior preference unit will be made
as part of the May 27, 1997 redemption of senior preference units.
    The cash distribution for the first quarter includes $18.5 million from
the elimination of the reserve amount required to support four quarters of
minimum quarterly distributions on the senior preference units.  Due to the
redemption of the senior preference units on May 27, 1997, this reserve amount
is no longer necessary.
    Distributions are dependent on TNCLP earnings which are traditionally
highest in the quarter ending June 30, due to the seasonal demand for
fertilizer.  Earnings can also be affected by market prices for nitrogen
products, the cost of natural gas, industry production levels, business
cycles, and weather.
    TNCLP is one of the largest U.S. manufacturers of nitrogen fertilizer
products.

                         Terra Nitrogen Company L.P.
                      Consolidated Statements of Income
                   (in thousands, except per Unit amounts)

                                              Three Months Ended
                                                    March 31,
                                               1997          1996
    Revenues                               $ 74,045      $ 89,304
    Other income                                134           144

    Total net revenues                       74,179        89,448

    Cost of goods sold                       42,509        35,242

    Gross profit                             31,670        54,206

    Operating expenses                        2,970         3,035

    Operating income                         28,700        51,171

    Interest expense                           (434)         (126)
    Interest income                           1,526         1,953

    Net Income                              $29,792       $52,998

    Net income per limited partnership unit:  $1.44         $1.98

    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.
    Prior year amounts have been reclassified to conform to current year
presentation.

    Nitrogen Volumes and Prices         1997                    1996
                                  Sales      Average      Sales      Average
                                 Volumes   Unit Price    Volumes    Unit Price
                               (000 tons)    (ton)      (000 tons)    (ton)
    Ammonia                        85        $207           71        $194
    UAN                           407          90          552          97
    Urea                          114         173          107         208


                         Terra Nitrogen Company, L.P.
                         Consolidated Balance Sheets
                                (in thousands)

                                                March 31,
                                             1997        1996
    Assets

    Cash and cash equivalents            $ 61,371    $ 72,106
    Accounts receivable                       581      23,429
    Inventory                              48,360      28,478
    Prepaid expenses                        2,723       5,458

    Total current assets                  113,035     129,471


    Property, plant and equipment, net    171,378     175,844
    Distribution reserve fund                   0      18,480
    Other assets                           19,387      13,256

    Total assets                        $ 303,800   $ 337,051

    Liabilities and partners' capital
    Accounts payable and
     accrued liabilities                $  63,713   $  42,668
    Current portion of long-term debt and
     capital lease obligations              1,036       1,525

    Total current liabilities              64,749      44,193

    Long-term debt and capital
     lease obligations                      2,869       3,905
    Other long-term liabilities             1,060       3,813

    Partners' capital                     235,122     285,140

    Total liabilities and
     partners' capital                   $303,800    $337,051

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